The future of business lies in profit with purpose. Experts explore the growing trend of social entrepreneurship and impact investing.
Mr Sujay Ghosh
CEO, First Solar
First Solar is one of the world’s largest manufacturers of solar photovoltaic cells. Our company is headquartered in the US. We make solar panels. You must be aware that climate change is essentially caused by the burning of fossil fuels. Everybody needs energy to grow. Energy is a key part of our lives. We use energy to commute from home to work or to college. We use energy when we cook food. We use energy for entertainment. As our economy grows, we keep consuming more and more energy.
Environmental Toll of Fossil Fuels
When we burn fossil fuels, we get energy and they emit carbon dioxide. The carbon dioxide gets trapped in the atmosphere and it causes the earth to look like a greenhouse. When sunlight falls during the day, the heat does not get dissipated. It remains trapped. That’s what causes the temperature of the earth to rise. If the temperature of the earth rises to about one and a half degrees Celsius more than what it was before the start of the first industrial revolution, we will have permanent changes to the climate system and they will be irreversible.
When the earth heats up, it melts ice caps. The Arctic and the Antarctic ice caps are melting and that’s driving sea levels to rise. When sea levels rise, you get extreme weather events. The cyclones which were happening once in 100 years are now happening once a month. Extreme weather events cause cities to get flooded. Recently, Derna, a city in Libya got flooded in just 30 minutes and 30,000 people lost their lives. When a lot of rainfall happens in a very short span of time, cities built on riverbeds get washed away. We see in Manali, Kullu and Shimla massive landslides, causing damage and destruction.
Extreme weather events can cause drought. If drought happens, we won’t be able to grow food, which means there will be food crisis. We see some of that already playing out in certain countries. It’s going to become more and more acute, if the weather continues to change. So, we have to stop this, without disrupting growth. This is the single biggest problem which confronts humanity.
Climate change doesn’t select a country. Everybody is impacted and we have only one Earth. The weather system happens across the globe. The impact of carbon dioxide emission is boundaryless. Carbon dioxide, whether it is emitted from India or in China, will affect global weather the same way.
Renewable Energy’s Cost Evolution
The only way we can stop this is by transitioning to more sustainable forms of energy. The three primary sources of sustainable energy are water, wind and sun. For hydro power, we use the natural force of the water, through a dam, run a turbine and create electricity. There are no emissions coming out of it. Likewise, when we use the force of wind, to generate electricity, there are no emissions going out. The last but not the least is photovoltaics, where we take the energy of the sun and convert it using semiconductor technology. We convert sunlight into electrons, collect the electrons and then use it to get power, without carbon emission.
Historically, till about five years ago, most forms of renewable energy or sustainable energy were expensive. When we started the solar program in India way back in 2010, when the country’s first solar mission came up, one unit of solar energy was Rs 17.60 per kilowatt hour. At that time, one kilowatt hour of coal power was roughly four rupees. Now, the situation is different. Today’s solar generated anywhere between the two tropics, is the cheapest form of energy on the grid, at about Rs 2.60 per unit. One unit of coal power is now Rs 5.50 and diesel power is Rs 20 per unit.
Clean Energy Transition
Globally, every country is transitioning to renewable form of energy and there are massive policies, plants and investments happening in the sector. In India, by 2030, the government has committed that 50% of our energy will come from renewable sources. At the beginning of 2010, 95% of India’s energy was from coal. Hydro power is very difficult to create, because we have to displace a lot of people to build a hydropower plant. The Prime Minister has made a commitment that India will be net zero by 2070. That means that by 2070, we will be completely carbon free. That’s a massive transformation in our energy sector. Clean Energy Transition represents one of the most compelling opportunities, just like we had the IT boom in the early 90s.
Reserve Bank of India estimates that we will need about 85 lakh crores between now and the end of 2030 to get to 50% renewable energy capacity. The adjacent effect of this is going to be felt on transportation and industrial manufacturing. We will be able to decarbonize our electricity grids and switch to renewable power. So far, we had only trains, which are electric. There is a very clear shift, coming in the mobility side. Two wheelers and three wheelers are now moving to electric, because it’s more affordable. The next step is going to be passenger cars and then buses. This sector will drive job employment, investment and startup opportunities. If you can directly and indirectly contribute to reduction of carbon intensity of the world, it should excite you.
Today, the government of India is not able to find loans, either in debt or in equity, to fund new thermal power capacity. Ironically, NTPC (National Thermal Power Corporation) has pledged that they will build only renewable assets going forward and they’ll stop building coal plants. That’s the kind of transformation which is happening in this sector. It presents a very compelling opportunity to everybody.
Ms. Gayathri Shanmugam
Chief Program Officer, Haqdarshak
I represent a company called ‘Haqdarshak.’ It is an Urdu word that means the ‘pathway to your rights and entitlements.’ We are a very proud for-profit enterprise. We normally don’t find for-profit enterprises in the social sector and we are unapologetic about it. We want to make money out of this, so we can build a sustainable business and attract talent.
What is the problem that we are trying to solve? The government has an annual budget of about nine lakh thousand crores for social welfare that covers sectors like Education, Health, Pensions, Insurance and Social Security. India is a social welfare state. There are a set of marginalized communities that need to be taken care of, so you can get them into the mainstream economy. The government recognizes that and spends. The question is how much of that actually reaches the marginalized? That’s the problem we’re trying to solve. Every year, almost 60 to 70% of this budget remains unutilized. How do we reduce that gap? There are two problems here. One is the problem of awareness. Many people do not know about the schemes the government has designed for them. For instance, the government gives free health insurance—the Ayushman Bharat scheme—but how many people are aware of it? The second problem is ‘accessibility.’ Suppose I create awareness and reach millions of people below the poverty line and I’m able to communicate to them about the schemes they are eligible for. Does it solve the problem? Do they know how to apply for that scheme? Do they know how to fill up a form? Do they know which office to go to avail that scheme? That’s the problem of accessibility. So, there’s a problem of awareness. There’s a problem of accessibility. We are trying to solve these through an assisted tech model. We are a 7.5-year-old startup.
Tech Assisted Solutions
It is a technology that houses all the government schemes across the state and the country. The central government has thousands of schemes. Our country is a federal system. Every state government has its own set of schemes. These are policy documents, sitting in the form of a PDF or probably hardcopies and sometimes, not even soft copies. If it’s a hardcopy sitting on a bureaucrat’s table, how do you get that into a format that a system can read and write?
We have a team that constantly does primary research and secondary research and captures these schemes in a format that is easily readable. We gather details such as: What is the name of the scheme? Which state is it applicable in? What are the eligibility criteria? What are the pre-requisite documents? What is the benefit? How do I apply for it? We capture that in a database. On top of that, we build a rules-engine. For instance, a woman resides in Tamil Nadu, and she has lost her husband. She is in a certain age group and belongs to a community. Her income is below a certain level. Is she eligible for a widow pension? That’s the rules engine that I’m talking about.
The Impact We Create
With this, you have easy discoverability of the scheme. What do I then do? I build a simple app, where I capture basic details about the citizen, name, age, gender, caste, community, occupation, farmer or non-farmer, health, etc. The system will then throw up what schemes that particular individual is eligible for. I would urge you all to go to Google Apps and download the Haqdarshak app. You can use this to help your own domestic help or drivers or whoever it is. You will be able to discover the schemes that the person is eligible for. At the least, we can create the awareness.
With the Haqdarshak app, you can help your domestic help or drivers or whoever it is. You will be able to discover the schemes that the person is eligible for. At the least, we can create the awareness.
We reached out to the remote parts of the country. We have trained community workers and self-help groups on how to use the app, to fill up the forms, to go to the government offices and submit them; to follow up with the government officer and to ensure that the benefit is actually received. So, the problem of accessibility is solved through feet on the street. We have trained about 50,000 women entrepreneurs on the ground so far. In the last seven and a half years, they have reached out to 4 million citizens, unlocking about 5,000 crore worth of benefits for these 4 million citizens. That’s our model.
The Business Side of the Model
Where’s the money in this? How is this even a business? We work with a lot of CSRs. We work with philanthropy, large foundations and corporates, who give us service delivery contracts, to go and do this on the ground. That’s where our money comes from. I found my calling in this sector and in this organization.
We have our investors. They do what is called impact investment or patient capital. They look for SRI (social return on investment). We appeared in Shark Tank India, early this year in January. Three of the four sharks have invested in us and we’ve closed that round of investment. We pitch ourselves in the impact sector and development sector. We are not the only organization. There are a lot of organizations that are trying to do good here. There are a lot of ways one can contribute. There is Tech for Good. If you’re a tech enthusiast, you must know that we are building technology for this. If you’re an operations enthusiast, then there are problems to be solved there as well. And there is money in it.
Q&A
How do you measure and quantify the social impact that you create?
Gayathri Shanmugam: There is a framework for measuring impact. We do monitoring and evaluation. For instance, if I unlock Ayushman Bharat, which is the insurance scheme in the country, what is the possibility that the people will end up using it? For many schemes, the government has direct benefit transfer (DBT). We have a way of calculating the potential unlocked and there is a formula that is unique to every scheme. We then club all that and say for this program, that we have unlocked so much benefit. We measure the impact in terms of critical success factors. As a business, the scale, the quality of the application, the scheme diversity that we have covered, getting people out of poverty are some of the critical success factors.
What are the challenges you foresee in scaling up renewable energy adoption in India?
Sujoy Ghosh: Rather than challenges, I would rather say these are opportunities. Energy is a commodity and the final output has to be affordable. The first thing we look at is cost. Our solutions must be cost competitive. That is the one challenge we constantly look at. Everything across the value chain must be cost competitive. Otherwise, people will immediately switch to the next lowest cost of energy and then we lose the whole plot in the fight against climate change. The other aspect when you’re dealing with scaling up renewable energy, is that the renewable energy by its nature, is infirm power. You cannot accurately predict if the sun is going to shine or if there would be clouds tomorrow. Whenever it’s bright and sunny, you get solar power and whenever it’s windy, you will get wind power.
But as a consumer, the light should come on when we flip the switch. We want the energy to be reliable, and available on demand. That’s where there’s a gap today. For this, we need to build storage systems. If the whole world has to switch to net zero and completely go away from conventional energy, then storage would be the limiting factor.
What advice would you give to young professionals and students interested in pursuing a career in social entrepreneurship and making a meaningful impact on society?
Gayathri Shanmugam: That’s exactly why I’m here today. There are a lot of fellowships in the country, focussed on social impact, for example the Ashoka Fellowship programme. People come for internships. But you must realise that impact is created on the ground and not in offices. So, you will have to be there out on the ground, be there with the people, understand their problem and then solve for it. We are always open to internships.
In Delhi, there is an organisation called ISDM (Indian School of Development Management). They have a two-year MBA program, just for social development. Even working with small NGOs, you can learn a lot and become more socially aware. Then, you can make a conscious decision whether you want to move into this sector.
How do you navigate the market differences, working in various countries?
Sujoy Ghosh: We are a global company and operate across 45 different countries. Yes, climate change and sustainability are global concerns. Today, China monopolizes about 90% of the global supply chain for solar panels and wind turbines. They dominate in the areas of lithium battery, critical minerals, and semiconductors. Post-covid, everyone has felt the need for resilient supply chains and most of the nations are working on it.
