Academic journal article IUP Journal of Business Strategy

Climate Change and Business Strategies: The Case of Automobile and Associated Ancillary Sectors in Madhya Pradesh

Academic journal article IUP Journal of Business Strategy

Climate Change and Business Strategies: The Case of Automobile and Associated Ancillary Sectors in Madhya Pradesh

Article excerpt


Climate change is a burgeoning issue which is believed to alter the environmental and economic landscape. World over, policymakers, politicians and climatologists are coming to a consensus that climate change can have a catastrophic influence on our society. Although the threat to our future existence cannot be measured, most of us are convinced that it will have a huge bearing on the livelihood patterns, agriculture and businesses. The externalities emanating from climate change are new. All over the world, governments, businesses and environmentalists are joining hands to combat the adverse effects of climate change. The journey from Kyoto to Bali has been a long and winding one, where after every summit, more and more nations are coming up with commitments to reducing Greenhouse Gas (GHG) emissions.

In the initial rounds of climate talks, the "common but differentiated responsibilities" heavily relied on the developed world to adhere to stringent quantifiable carbon emission targets. In the recent years, even countries like India and China have not been able to escape the pressures of reducing carbon emissions. Carbon footprints across business houses and nations are getting mapped and measured. Governments are designing policies, and increasingly corporate and business houses are becoming a major stakeholder in climate change issues. The corporate and business sector accounts for the vast majority of GHG emissions. The onus of mitigating greenhouse emission rests on them. These corporations control the financial, organizational and technological resources. If these resources are used judiciously they can have a huge bearing on GHG reductions (Rothenberg and Levy, 2012) and other climate change activities. While the inherent risk to the viability of business needs to be measured, corporations around the world need to rethink and redesign their business strategies.

The automobile industry is one such sector responsible for substantial emissions and is among the most prominent non-state actors in the emerging international regime to address climate change (Winter, 1998 as referred by Rothenberg and Levy, 2012). Understanding the risks and opportunities that automobile sector face due to climate change and its mitigation can advance the efforts to engage automobile industry in achieving the global emission reduction targets. This paper makes an attempt to understand the challenges and perceptions of automobile industry in central India and the steps taken by them to face the challenges posed by climate change and its influence on business strategies.

Literature Review

A spate of literature on various aspects of climate change exists. These relate to challenges, strategies and capacity building emanating from climate change. The phenomenon of rising temperatures and warming of climate systems, and rising sea levels on account of anthropogenic activities has led to global warming. All this has led to an increase in atmospheric concentration of carbon dioxide (CO2). The Intergovernment Panel on Climate Change (IPCC) projects a temperature change by 2100 between 1.5°C (2.7F) and 4.8°C (8.6F) (IPCC, 2013). The IPCC defines climate change as "a change in the state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties, and that persists for an extended period, typically decades or longer" (IPCC, 2013). According to the report published by The NOAA Earth System Research Laboratory, the current concentration of GHG in the atmosphere is equivalent to around 394.23 parts per million (ppm) CO2 as compared to 392.04 ppm in October 2012, making CO2 as the major contributor in GHG (2014). The International Energy Agency (Tanaka, 2010) announced that global CO2 emissions from energy use in 2010 reached 30.2 Giga tons, its highest in history, which rose by 5% from the previous recorded year of 2008 (Okereke et al., 2012). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.