Outlook Planet C3: MSMEs Not Required to Go Green, But Must for Survival says TERI’s Ajay Shankar

Ajay Shankar, former secretary of the Department of Industrial Policy, stated on Tuesday that it is unfair to expect Micro, Small and Medium Enterprises (MSMEs) to prioritise environmental sustainability solely to help save the planet, especially when their primary focus is on generating revenue and sustaining their business. However, he emphasised that adopting green practices will eventually become essential for all enterprises to survive, as the entire industry moves towards sustainability norms.

Shankar made these remarks during a panel discussion at the Outlook Planet C3 summit when asked about the disconnect between policy design and the challenges faced by businesses on the ground. He acknowledged that for MSMEs, survival often takes precedence over broader concerns such as climate change, sustainability and decarbonisation. “Any MSME aiming to survive and thrive within a supply chain must consider how to become environmentally sustainable—and do so promptly,” he added.

Shankar further highlighted that the cost of adopting sustainable practices has decreased significantly, challenging the widely held belief that going green requires substantial investment. He explained that while sustainability was once perceived as costly, this is no longer entirely the case. For instance, installing solar panels in enterprises can now be made easier through customer demand and supportive systems that facilitate the transition to greener operations.

Also Read: MSMEs Need Tools to Tackle Green Challenges, Not Just Capital, Says SBI MD Ashwini Tewari

Role of Government and Customers

Adding to the discussion, Rajiv Chawla, Founder & Chairman, IamSMEofIndia explained the role of the union government, state government, regulations and customer demands in sustainable ecosystem implementation.

“While there are central government schemes like GIFT and SPICE, state governments are also playing a significant role. Notably, in Haryana, the state government has linked its various incentives for MSMEs to Z-certification. For instance, while Udyog registration is mandatory at the central level to avail of schemes, Haryana requires both Udyog registration and Z-certification to access state incentives. Incentives are undoubtedly effective, but beyond that, entrepreneurs should also recognise the potential for opportunity and profitability in adopting such measures,” Chawla said.

Also Read: Outlook Planet C3: Vishwa Carbon Promises to Cut ESG Compliance Time for MSMEs

Concluding the discussion, DG of MCCIA Prashant Girbane said, “The MSME industry has strong teams. They simply need to expand their reach. It is essential to leverage industry associations—not just within our organisation, but across the country—so they can act as an extended arm in raising awareness and driving implementation. Germany exemplifies this approach effectively, and we can learn from their model.”