Study on Triple Bottom Line of Adani Green Energy Limited (AGEL)
Adani Green Energy Limited
Adani Green Energy Limited (AGEL) is India’s largest renewable energy company playing a vital role in enabling the clean energy transition. The company develops, owns, and operates utility-scale grid-connected solar, wind, and hybrid renewable power plants. With a locked-in portfolio of 20.6 Gigawatt (GW) and operating renewable capacity of 8.4 GW spread across 12 states, offsetting over 41 million tonnes of CO2 emissions cumulatively. AGEL is committed to its target of achieving 45 GW by 2030 aligned with India’s decarbonization goals. The company is focused on leveraging technology to reduce the Levelized Cost of Energy (LCOE) and facilitate the widespread adoption of affordable clean energy. AGEL’s operating portfolio is certified “water positive for plants of more than 200 MW capacity”, “single-use plastic free,” and “zero waste-to-landfill,” showcasing its commitment to sustainable growth.
Triple Bottom Line
Historically, businesses operated in service solely to their financial bottom line. In 1994, author and entrepreneur John Elkington introduced the triple bottom line (TBL) concept with hopes of transforming the financial accounting-focused business system to a comprehensive approach that measures impact and success. As a result of the triple bottom line theory and application, some businesses began to recognize the connection between environmental health, social well-being, and an organization’s financial success and resilience.
Fast facts about the triple bottom line
- It is a transformation framework to help businesses and organizations move toward a regenerative and more sustainable future.
- TBL offers tools to help an organization measure, benchmark, set goals, and evolve toward more sustainable systems and models.
- It illustrates that if an organization is only focused on profit, while ignoring people and the planet, it cannot account for the full cost of doing business and thus will not succeed long term.
The triple bottom line can be broken down into “three P’s”: profit, people, and the planet. Firms can use these categories to conceptualize their environmental responsibility and determine any negative social impacts to which they might be contributing.
From there, companies can integrate sustainable practices into every facet of their business operations — including supply chains, business partners, and renewable energy usage — to positively impact society and the environment in addition to turning a profit.
Profit
In a capitalist economy, a firm’s success most heavily depends on its financial performance or the profit it generates for shareholders. Strategic planning initiatives and key business decisions are generally carefully designed to maximize profits while reducing costs and mitigating risk.
In the past, many firms’ goals have solely focused on economic impact and growth. Now, purpose-driven leaders are discovering they have the power to use their businesses to effect positive change in the world without hampering financial performance.
People
The second component of the triple bottom line highlights a business’s societal impact or its commitment to people.
It’s important to make the distinction between a firm’s shareholders and stakeholders. Traditionally, businesses have favored shareholder value as an indicator of success, meaning they strive to generate value for those who own shares of the company. As firms have increasingly embraced sustainability, they’ve shifted their focus toward creating value for all stakeholders impacted by business decisions, including customers, employees, and community members.
The Planet
The final component of the triple bottom line is concerned with positively impacting the planet.
Since the birth of the Industrial Revolution, large corporations have contributed a staggering amount of pollution to the environment, which has been a key driver of climate change and environmental concerns. The International Energy Agency report found that the global energy industry released 135 million tonnes of methane into the atmosphere in 2022.
While businesses have historically been the greatest contributors to climate change, they also hold the keys to driving positive change. Many business leaders are now recognizing their social responsibility to do so. This effort isn’t solely on the shoulders of the world’s largest corporations — virtually all businesses have opportunities to make changes that reduce their carbon footprint. Adjustments like using ethically sourced materials, cutting down on energy consumption, and streamlining shipping practices are steps in the right direction toward long-term sustainability.
TBL of Adani Green Energy Limited
The triple bottom line concept refers to a company’s performance in three key areas: profit, people, and planet.
Profit
Financial Growth
AGEL boasts a rapidly expanding project portfolio, currently at 20.4 GW, with an operational capacity of 8.4 GW. This translates to significant revenue generation, further bolstered by long-term Power Purchase Agreements (PPAs) with government entities.
Investment and Expansion
The company actively seeks and secures investments from established players like TotalEnergies, solidifying its financial standing and fueling its ambitious growth plans of reaching 45 GW by 2030.
Debt Concerns
Some analysts raise concerns about the Adani Group’s overall debt levels and their potential impact on AGEL’s future financial stability. This is an aspect to keep an eye on.
People
Job Creation
AGEL’s operations create jobs in local communities, contributing to economic development and poverty reduction.
Community Development
The company actively invests in community development initiatives, focusing on education, healthcare, and skill development programs, empowering residents near its projects.
Social Impact
By providing clean energy, AGEL helps combat climate change and air pollution, leading to improved public health and well-being.
Planet
Renewable Energy Leader
AGEL stands as India’s largest and one of the world’s leading renewable energy companies. Its projects displace fossil fuels, significantly reducing greenhouse gas emissions and mitigating climate change.
Environmental Sustainability
AGEL prioritizes minimizing the environmental impact of its projects. This includes responsible waste management practices, biodiversity conservation efforts, and adopting cutting-edge technologies to reduce its ecological footprint.
Land Acquisition and Ecosystem Concerns
Large-scale renewable energy projects often face challenges regarding land acquisition and potential disruption to local ecosystems. AGEL needs to ensure transparent and responsible land acquisition processes while addressing community concerns about environmental impact.
Balancing the Triple Bottom Line
Finding the right balance between profit, people, and the planet is an ongoing challenge for any company. AGEL demonstrates a strong commitment to all three aspects of the triple bottom line. Its focus on clean energy generation contributes to India’s sustainability goals, while its community development initiatives and job creation efforts create positive social impacts. However, addressing debt concerns and ensuring responsible land acquisition and environmental practices remain crucial for AGEL’s long-term success and its commitment to the triple bottom line.
Conclusion
The Triple Bottom Line (TBL) concept emphasizes a holistic approach to business success, considering profit, people, and the planet. Adani Green Energy Limited (AGEL) exemplifies this by showcasing financial growth, positive societal impacts, and environmental leadership. While AGEL’s commitment is evident, challenges like debt concerns and responsible environmental practices need ongoing attention to ensure a balanced TBL and long-term success. In the pursuit of a sustainable future, AGEL’s efforts underscore the importance of aligning financial prosperity with social and environmental responsibility.
References
https://finshots.in/markets/adani-green-and-the-bet-on-indias-solar-future/
https://www.adanigreenenergy.com/windpower
https://www.adanigreenenergy.com/-/media/Project/GreenEnergy/Sustainability/latest-report.pdf
