Sustainability Is Action — Not Just Words: IISD's Dr Srikanta K. Panigrahi

Dr Srikanta K. Panigrahi is a leading global sustainability thought leader and the distinguished research fellow and director general, Indian Institute of Sustainable Development (IISD) and an IISD Initiative Carbon Minus India (CMI. He is a well-known Indian Policy Maker and Technocrat, who has worked with the Government of India, United Nations Environment Program (UNEP) and The World Bank.

He is a Member to National Strategic Knowledge and few Other Missions on Climate Change; to implement the National Action Plan on Climate Change (NAPCC). He was a Member Secretary to a Prestigious Working Group at Planning Commission (Now NITI Aayog) to Prepare the National Action Plan for Operationalizing CDM in India, based on which CDM rolled in India and the Report of the Committee on Biofuels, Both the Reports are submitted to Indian Prime Minister’s Office (PMO). He is in Few Government Of India & United Nation’s Steering Committees & Task Forces on Technology Transfer, Climate / ESG Risk Finance, Transition Finance and UN-SDGs Implementation.

In an interview with ResponsibleUs, Panigrahi delved into the concept of sustainability, explored real-time challenges in the carbon market, and shared insights on the broader implications of sustainable practices.

What does sustainability mean to you?
Sustainability is a word that most people don’t fully understand. Many feel it’s very theoretical, without defined boundaries — and believe that anything can be listed under sustainability. But that is not true. People are not fully aware of it. Sustainability is a very scientific subject, with boundaries, limitations, and scopes, along with several indicators.

Largely, there are three types of indicators:

1. Social Sustainability: This focuses on people. Anything done for the betterment of society — creating decent jobs, providing fair salaries, enhancing living standards, and ensuring social equity — falls under social sustainability.
2. Environmental Sustainability: This is crucial and focuses on reducing planetary water, carbon, and ecological footprints at individual, community, and institutional levels. To achieve this, lifestyle habits and activities need to be redefined to minimize environmental impact. There are scientific methods for footprint mapping, assessment, disclosure, and management. Unfortunately, many people are unaware of these processes and think sustainability is just a ministry — but it’s much more than that.
3. Economic Sustainability: Without a stable economy, nothing is possible. Economic growth is essential. For example, India has set an ambitious target of achieving a $30 trillion economy by 2047. Such massive growth brings potential risks to sustainability indicators, like increased emissions. However, these challenges are manageable with proper planning, designing, and implementation from the global to the local level.

These three pillars of sustainability were once summarized as "Profit, People, and Planet," but now they’ve evolved into ESG — Environmental, Social, and Governance.

What are the biggest challenges posed by climate change, and why is urgent action necessary?
The biggest challenge is the ongoing climate change crisis. The planet has already reached the 1.5°C threshold, which is considered the maximum tolerable limit. Ocean currents have shifted, air pressure belts have changed, and weather patterns have become unpredictable. Hot currents are turning cold, cold currents are warming up, and seasonal cycles have drastically shifted. Rainfall that used to spread over months now happens in a few days, causing floods and landslides. Nature gives us warnings in subtle ways, but its silence makes it difficult for people to realize the urgency. Immediate action is crucial to mitigate these profound impacts.

How does India’s Business Responsibility and Sustainability Reporting (BRSR) framework promote sustainability in businesses?
The BRSR framework is India’s unique approach to regulating sustainability through law. Initially applied to the top 500 companies, it expanded to 1,000 and is expected to cover every industry. BRSR ensures that companies align their operations with green criteria, preventing investments in projects that harm the environment. It requires companies to conduct social and environmental audits alongside financial audits, creating integrated reports that promote transparency and accountability. This shift encourages businesses to optimize profits while embracing sustainable practices, ensuring that long-term growth aligns with environmental responsibility.

Why is transparency in product sustainability crucial for global competitiveness, and what steps is India taking to address this?
Transparency in product sustainability is vital because modern consumers, especially in Western markets, want to make informed choices and are willing to pay more for eco-friendly products. For example, Khadi faced skepticism abroad due to the absence of clear data on its environmental impact, creating a technical barrier to trade. To address this, India is developing its own sustainability standards in collaboration with the Bureau of Indian Standards (BIS), providing industries with flexibility to gradually meet global benchmarks. QR codes on products can offer instant access to data on water consumption, carbon emissions, and ecological impact, enhancing India’s competitiveness while ensuring accountability in sustainable practices.

What will be the biggest change in sustainability over the next 10 years?
The most crucial change is that sustainability must become a people’s movement. As Prime Minister Modi says, “Jan Andolan” — a mass movement — is essential. Unless every individual becomes serious and starts contributing, sustainability will remain a distant dream.

Take BRSR (Business Responsibility and Sustainability Reporting) as an example. Right now, companies focus heavily on Scope 1 and Scope 2 emissions — direct emissions from operations and indirect emissions from purchased energy. However, Scope 3 is often ignored. This is critical because Scope 3 covers emissions from the entire supply chain — vendors, transportation, product lifecycle, and more. Achieving carbon neutrality requires tackling Scope 1 and Scope 2, but only when Scope 3 is addressed can a company claim to be truly net zero.

Large industries struggle to become net zero because many of their vendors supply high-emission products. To overcome this, they’re investing in startups focused on sustainability and innovation. These startups offer cleaner solutions for the supply chain, and big companies don’t mind supporting them over the long term because it brings them closer to achieving net-zero status.

What about solar energy and new materials like perovskite?
Yes, India is working on these advancements! Perovskite solar cells are a revolutionary new material with the potential to increase solar panel efficiency while reducing costs. Countries like China and Japan are already investing heavily in perovskite technology, and India is catching up. Institutions like the International Solar Alliance (ISA) and India’s Institute of Solar Energy are actively researching these developments, alongside other renewable energy technologies such as wind energy, fuel cells, and thermal energy.

What are the key challenges in the carbon market?
As carbon markets grow, ensuring integrity and transparency is a major challenge. Many companies falsely claim to be carbon neutral without proper verification. Greenwashing — misleading claims about environmental responsibility — is widespread, especially when companies fudge calculations or adopt non-standard practices to boost their market image.

To combat this, there are internationally standardized practices established by the United Nations Framework Convention on Climate Change (UNFCCC). These frameworks provide reliable methods for measuring carbon footprints, verifying emissions reductions, and ensuring that companies truly meet their sustainability claims. Without proper regulation and independent verification, carbon markets risk becoming just another marketing gimmick rather than a genuine tool for combating climate change.

Sustainability isn’t just about ticking boxes or publishing reports. It’s about creating real impact — across supply chains, economies, and everyday life. Only when everyone works together, from policymakers to consumers, can we build a future that’s not only profitable but also planet-friendly.

What role have IIST and CMI played in helping India’s airports achieve carbon neutrality?
IIST and CMI have played a crucial role in helping India’s 30 international airports achieve carbon neutrality at Level 2. The Airports Authority of India (AAI) has already certified major airports like Chennai, Kolkata, and Varanasi at Level 3. Several state capitals and prime cities — including Chandigarh, Jaipur, and Amritsar — have also been certified carbon neutral. Additionally, there’s a growing pipeline of carbon projects creating carbon credits through both voluntary practices and compliance markets, as certified by the United Nations Framework Convention on Climate Change (UNFCCC).

How do carbon markets create incentives for reducing emissions?
The concept behind carbon markets is quite simple: people need monetary incentives to reduce emissions. Unfortunately, human nature tends to lean toward greed — most people aren’t naturally inclined to cut emissions unless there’s something in it for them. After all, nature doesn’t punish them directly for polluting, and policing nature is difficult because it doesn’t raise alarms for itself. This is where carbon markets step in, creating a system where those who reduce emissions get rewarded while those who pollute pay for it.

India is now developing a vibrant internal carbon market, aligning with Articles 6.2, 6.4, and 6.8 of the Paris Agreement. However, there are certain risks associated with investing in carbon markets:

1. Transaction Costs: Setting up carbon projects requires upfront investments. The money spent must be recovered through the sale of carbon credits, but this isn’t always guaranteed.
2. Market Failure: Carbon markets operate on a demand and supply mechanism. If the supply of carbon credits exceeds demand, prices can crash.
3. Historical Precedents: In the early days of carbon markets — when I was leading initiatives not just in India but at the international level — a major market crash occurred. China flooded the market with large-scale hydro projects that weren’t initially listed under the Clean Development Mechanism (CDM). Eventually, a Chinese representative became the CDM Board Chairman and pushed to include these projects. This led to a massive oversupply of carbon credits, causing prices to drop drastically from $133 per credit to just $3.
4. Financial Risk: Imagine investing ₹20 lakhs into a carbon project, only to see carbon credit prices plummet. Without a guaranteed return, the market loses its attractiveness.
5. Lack of Government Control: Since carbon markets are market-driven and rely on supply and demand, the government has limited control over prices.

In essence, carbon markets are a powerful tool for incentivising emission reduction. However, they’re also volatile. Proper regulation, transparency, and ensuring that supply doesn’t outstrip demand are key to making these markets work effectively.

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