Climate change is one of the biggest challenges that humanity is contending today, with economies across the world waking up to it. For the global fight against climate change, India aims to reach net zero emissions by 2070 and achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. With growing technologies in renewable energy, India is poised to lead the global renewables narrative over the next few decades.

Drawing on our firm foundations, and against the backdrop of climate change challenges, we intend to become a Net Zero company before 2050. We aim to achieve this by becoming predominantly a renewable energy company and pivoting towards energy products and services. Today, we are in a strong position to capitalise on India’s growing appetite to reduce emissions.

With our deep sector experience, expertise and portfolio strength, we are working towards our goal to become a 10 GW generating company mainly driven by renewables and are well placed to achieve it ahead of the stated timeline of FY 2025. We aim to double our generation capacity further to 20 GW along with 40 GWh / 5 GW of storage capacity by 2030 and 1 GW of solar module manufacturing capacity by April 2025. These significant milestones demonstrate the ongoing value of our business model in helping tackle the emissions reduction challenge which is critical to our future.

JSW Energy is committed to burgeoning its efforts in propagating the sustainable development for all with innovative products and services. Being an energy provider, the company recognizes the role it plays in low-carbon economy transition and contribution to Net-Zero goals of the country. Robust infrastructure developments and greater integration of mitigation and adaptation plans remains the central fulcrum in JSW Energy’s climate action programmes. The plan to diversify the energy resources will continue to drive business sustainably and increase the operational capacity to 20 GW by FY 2030, and help JSW Energy evolve as a leader in renewable energy technologies. The organization realizes the intensified momentum of climate change risks and is determined to progress further in its climate stewardship plans in alignment with SDG 13 “Climate Action”. The company conducts detailed studies to systematically identify the threats of climate change on the business and adopts strategic plans to perform reliably under wide range of conditions with periodic oversight of board members. The governance for climate change related issues vests with the Board while the Sustainability Committee coordinates actions at the plant level for the implementation of effective management plans. JSW Energy has made good progress in the direction of moving towards its 2030 KPI’s with a 10.5% reduction in carbon emissions compared to the baseline year 2020 figure of 0.76 TCO₂/MWh, we are committed to the reduction of a specific emission of carbon dioxide to around 0.215 tCO₂e/MWh by 2030. The company remains committed to its path of combating climate change and working towards becoming a Net-Zero Company by 2050 in alignment with global sentiment of limiting the average temperature rise of 1.5°C.

1. Offsetting through carbon sequestration
2. Investing in permanent carbon removal technologies such as CCUS.

As India's leading Power producer, JSW Energy, has taken the challenge to combat climate change by incorporating sustainability to its core operations and decision making.

Greenhouse Gas Emissions and Energy Resource Planning

At JSW Energy, the company produces electricity majorly from thermal power plants.  Thermal power plants, using a significant amount of coal, result in high greenhouse gas emissions that have a detrimental effect on the planet. Increased GHG emissions will accelerate any potential negative impacts on climate change. Additionally, the increased emissions will have negative health impacts on the communities around us. Stricter environmental laws and regulations such as the Perform, Achieve, and Trade (PAT) mechanism, Carbon tax, Increased Coal Cess will lead to higher energy costs for our stakeholders and high cost of production and lower profit margins for our operations.

The company’s operations will also have potentially adverse impacts on its social license to operate which is intrinsically tied to its contributions towards the well-being of the wider community and environment affecting our standing with our investors as well as society at large. Thus, mitigating the climate change risk and reducing operating costs has led us to increase the renewable energy capacity. This will lead to reduced costs for the company’s operations and will help to provide clean and affordable energy to the customers.

To prevent a potential increase in costs JSWEL has taken a number of measures. The company is in the process of substituting the coal-based boilers at one of its locations with the waste gases from the Group company, JSW Steel. This avoids the need for fossil fuel thereby reducing the policy and market risks. Our ICP of 12 USD/tCO₂e of carbon will allow us to adopt a balanced view of the feasibility of any proposed low carbon in the near and medium term, ensuring that we continue in our low carbon journey without losing our competitive edge. Additionally, the companys sees the increasing demand for renewable energy as an opportunity for JSW Energy alongside India’s commitment to have 500 GW of fossil free energy by 2030. The company is committed to expand only in the renewable space and by 2030, 85% of its power mix is expected to be from RE which is a significant increase from the current levels.

To mitigate any impact from Greenhouse Gas emissions the company has set a target to reduce our GHG Emissions (Scope 1+2) to 0.215 tCO₂ e / MWh by 2030. In FY 2022-23, our GHG Emissions (Scope 1+2) stood at 0.685 tCO₂e / MWh.

JSWEL is trying to increase the percentage of the Renewable Energy Portfolio to maximise our positive impact through our business activities. The company’s efforts have a significant impact on contributing towards decarbonizing the Grid Power. The company can measure its impact by monitoring the increase in its renewable energy portfolio and the lowering of the grid emissions.

Direct Greenhouse Gas Emissions (Scope 1)

JSWEL has an emission reduction target (Scope 1+2) of 0.680 tCO₂eq/MWh for FY 2022-23.Taking in cognizance the electricity generation of 23,485,116.08 MWh and share equivalent of Scope 1 emissions, JSWEL absolute target during FY 2022-23, translates to 15,943,780.03  tCO₂eq.

Our long term emission reduction target (Scope 1+2) for FY 2030 is 0.215 tCO₂eq/MWh. This is aligned to SBTi

Indirect Greenhouse Gas Emissions (Scope 2)

JSWEL has an emission reduction target (Scope 1+2) of 0.680 tCO₂eq/MWh for FY 2022-23.Taking in cognizance the electricity generation of 23,485,116.08 MWh and share equivalent of Scope 2 emissions, JSWEL absolute target during FY 2022-23, comes out to 26,098.90 tCO₂eq.

Our long term emission reduction target (Scope 1+2) for FY 2030 is 0.215 tCO₂eq/MWh. This is aligned to SBTi.

Climate Change Incentives 
JSWEL provides incentives for the management of climate change issues, including the attainment of targets. 

1. CEO’s incentivization mechanism is associated with targets pertaining to increase in the overall share of renewable energy in the power mix.
2. Development and implementation of mitigation plans of the physical risks  identified under TCFD are part of CRO’s key responsibility areas.
3. Ensuring thermal efficiency of  thermal plant / Heat Rate is a part of the KRA of all Business Unit Managers.

ESG Risk Management :

Emerging Risks

Policy Influence

JSW Energy aims to act in collaboration with stakeholders and create value for them. The company engages with various stakeholders such as industry, government and regulators, customers in the policy advocacy efforts. The organisation has a robust process to assess and determine the importance of public policy issues across all its operational locations.

The Board and the Sustainability Committee oversees policy advocacy issues and lobbying activities, providing an oversight on addressing them. It is ensured that the issues are in alignment with the company’s interests and strategic priorities, in accordance with the applicable policies including, Policy to make our world a better place, Policy on Business Conduct, and Policy on Climate Change.

The company’s direct policy advocacy efforts including lobbying activities are aligned with its policies and strategic priorities and goals. JSW Energy may engage in indirect lobbying through multiple industry organizations and thinktanks at local, regional and global level. These associations include CII, FICCI, ASSOCHAM, Indian Chamber of Commerce etc. The company believes in the power of collective action, especially on challenging topics that cannot be tackled alone, including many environmental and social issues. The company’s membership in any such organization does not imply that they agree with or endorse every position that these groups may take.

JSW Energy works with the other members to ensure that any sort of advocacy or lobbying required should be conducted through trade organizations which reflects company’s values and concerns. The company engages in climate-related advocacy to encourage the reductions in greenhouse-gas emissions and further transition towards net zero through government policies and private sector leadership. Further, the organisation’s efforts are aligned with the Paris Agreement, contributing to limiting average global temperatures to well below 2 degrees Celsius, and include strong support for policies that will incentivize emission reductions.

The company also takes part in providing our alignment on topics such as Greenhouse Gas Emissions, Energy Transitions, Carbon Tax and Carbon pricing, Water and Waste Management including our initiatives on fly ash utilization.  In case of any misalignment, it is ensured that the company’s right to act is reserved as an individual company and transparently communicate its stand to the respective stakeholders.

The company regularly reviews its involvement in industry and trade organizations to assess the relevance of its participation in line with the company’s strategy. The details of JSW Energy’s memberships in trade associations can be found in the Integrated Report.

There were no political contributions made in FY 2019. However, 25 Crores were spent in FY 2020. Furthermore, there were no political contributions made in past two financial years.  We contributed INR 44.46 Lakhs towards our affiliated trade associations and industry bodies primarily comprising annual subscription fees.

TCFD ( Task force on Climate related Financial Disclosures)

Aligning with the TCFD Recommendations

The energy sector is not insulated from climate change impacts and particularly vulnerable to  risks due to its dependency on fossil fuels, energy-intensive production processes, and large carbon footprints. However, the sector becomes a solution to climate change mitigation and  provides with an opportunity for  transition to production of non-fossil based energy, i,e, energy from renewable sources, nuclear energy, hydrogen based energy, etc. As the world is transitioning towards net-zero, energy companies have a critical role to play in this transition by giving the world access to sufficient amount of renewable energy or non-fossil energy.

With renewables becoming a significant part of JSW Energy’s power generation mix of the future, we are on the forefront to cater to growing demand for the cleaner fuel mix leading towards a better tomorrow. Apart from Solar, Wind & Hydro, we are assessing emerging technologies across green hydrogen and its derivatives, offshore wind, and storage solutions, including battery, and pumped hydro storage. We have set our targets to reduce our emissions and contribute in mitigating climate change. We made a commitment to endorse and uphold the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). By aligning with these recommendations in its four pillars, we aim to enhance our understanding of the potential impact of climate change and make well-informed decisions regarding current and future decarbonisation strategies.

Climate Governance

JSW Energy's board of directors demonstrates strong leadership in overseeing climate-related matters, ensuring that they are fully integrated into the company's overall business strategy. At the Board level, the Sustainability Committee and the Risk Management Committee review climate-related matters during biannual meetings and report to the Board of Directors. At the management level, the Executive Committee and corporate function teams oversee climate-related matters. We have a dedicated climate change policy with focus on preventing causes, mitigating impacts, and building resilience to climate change.

Strategy

Our sustainability efforts prioritise non-fossil based energy and sustainable development, along with transparency in operations and investments. Recognising the significance of climate risks in our business strategy and decision-making, we conducted a climate change risk assessment. Scenario analysis as per RCP 4.5 and RCP 8.5 that played an important  role in assessing climate-related risks and opportunities. Where, RCP 4.5 represents a pathway where greenhouse gas emissions are moderately stabilized by the end of the 21st century through significant mitigation efforts. On the other hand, RCP 8.5 depicts a high-emission pathway without adequate climate policies, resulting in substantial increase in greenhouse gas concentration.

By utilising scenario analysis, we gained insights into potential climate-related risks and opportunities. This assessment guides our climate strategy and business planning for the future. It has helped us embed sustainability at the heart of our business strategy.

Physical and transition climate change scenarios

Business-as-usual scenario

IPCC scenarios (Physical Risks)
RCP8.5 scenario
Extremely high emissions scenario with global mean temperature expected to rise by 3.7.C (2.6-4.9.C) by the end of the century. The scenario assumes a high dependence on fossil fuels and no policy-driven mitigation.

WEO-2020 scenarios (Transition Risks)

Stated policies scenario
Incorporates existing and announced climate policies (till mid-2020) including Nationally Determined Contributions from governments across the world. The scenario provides a baseline against which additional actions are required to meet SDS climate goals.

Optimistic scenario

IPCC scenarios (Physical Risks)
RCP4.5 scenario
Intermediate emissions scenario with global mean temperature expected to rise by 1.8’C (1.1-2.6’C) by the end of the century. The scenario considers increased use of renewable energy and strong policy-driven mitigation.

WEO-2020 scenarios (Transition Risks)

Sustainable Development scenario
Provides an energy sector pathway which is consistent with meeting global Net Zero CO2 emissions from the energy system as a whole by around 2070, universal access to energy and reduced air pollution.

Key Risks and Proposed Mitigation

Climate-related opportunities identified

Risk management

Our risk management framework, based on the COSO framework, allows us to identify and assess risks, develop response strategies, and monitor our operations effectively. The framework considers objectives related to operations, reporting, and compliance. Through our Climate Change Risk Assessment Framework, we assess risks and opportunities at both the asset/plant level and corporate level. Mitigation plans and progress towards low-carbon and sustainable development targets are presented to the Executive Committee and board for review and approval. Our 2030 low-carbon and sustainable development plan is a result of our comprehensive risk management process.

Metrics and targets

Metrics and targets play a pivotal role in guiding and evaluating a company's sustainability and climate-related efforts. We have used the following metrics to cater to the high impact climate risks.

1. GHG Emissions Intensity (tCO2e/MWh)
2. Specific Water Consumption (m3 / MWh)
3. Air Emissions (%)
4. RE Percentage (%)
5. Waste Ash Utilisation (%)

The trends of the above are presented in our Integrated Report. Regularly monitoring these metrics is essential for evaluating our company's performance in addressing climate change. In line with this objective, we are dedicated to enhancing the transparency of our climate-related data and improving our overall climate performance. We are actively implementing innovative and sustainable practices throughout our operations to reduce our carbon footprint, minimise energy and water consumption, optimise resource usage, and promote circularity. Through these efforts, we are fulfilling our role as responsible environmental stewards.