Environmental, Social and Governance (ESG) - Principles and Practice · Environment

Renewable Energy and Energy Efficiency for ESG Paper

Updated 11 October 2026 · Fact-checked

Renewable energy comes from sources that replenish naturally, such as solar, wind, hydro and biomass. Energy efficiency means doing the same work with less energy. Together they cut emissions and costs. In the exam, define the term, name India's policy tools, then show what a company should do and how it reports it.

Understand Renewable Energy and Energy Efficiency

Energy use is the largest source of greenhouse gas emissions for most companies. Burning coal, oil and gas releases carbon dioxide. The energy transition is the shift from these fossil fuels to cleaner sources, while still meeting demand.

Renewable energy comes from sources that replenish naturally. The main ones are solar, wind, hydro, biomass and geothermal. Their running emissions are very low. They also reduce dependence on imported fuel, which matters for India.

Energy efficiency is a different lever. It means using less energy for the same output, for example by installing efficient motors, LED lighting and better insulation. Energy conservation is the wider habit of avoiding waste. Efficiency is often the cheapest first step, because the saved energy never has to be generated.

India backs this with law and policy. The Energy Conservation Act, 2001 created the Bureau of Energy Efficiency (BEE), which sets standards and runs programmes such as star labelling of appliances and the Perform, Achieve and Trade (PAT) scheme for energy-intensive industries. The Act was amended in 2022 to enable a carbon market and to widen the use of non-fossil sources. The National Green Hydrogen Mission, approved in 2023, aims to make India a producer and exporter of green hydrogen, which is hydrogen made by splitting water using renewable electricity. India has also announced a target of 500 GW of non-fossil electricity capacity by 2030.

For a company, the steps are: measure energy use, cut waste, switch to renewable supply (own plant, open access, or power purchase agreements), and report progress. These feed into BRSR disclosures on energy consumption and intensity, and into the company's carbon targets.

Key rules to remember

Energy intensity: Energy intensity = Total energy consumed ÷ Output (or turnover); BRSR asks for energy intensity per rupee of turnover. A falling value shows better efficiency.
Share of renewable energy: Renewable share (%) = (Renewable energy consumed ÷ Total energy consumed) × 100; Use the same unit for both, such as GJ or kWh.
Energy saving: Saving (%) = (Old consumption − New consumption) ÷ Old consumption × 100; Use it to show the effect of an efficiency measure.
Unit conversion: 1 kWh = 3.6 MJ; Needed when a question mixes kWh and joules.
Green hydrogen: Green hydrogen = hydrogen produced by electrolysis of water using renewable electricity; Hydrogen from fossil fuels is not green.

How to solve Renewable Energy and Energy Efficiency questions

Use this order for any theory or case question on this topic. It keeps the answer structured and covers what an examiner looks for.

1Define the key term in one line: renewable energy, energy efficiency, conservation or green hydrogen, as asked.
2State why it matters: emissions, cost, energy security and ESG expectations.
3Name the relevant Indian law or policy, such as the Energy Conservation Act, 2001, BEE, PAT or the green hydrogen mission.
4Apply it to the facts: identify the company's sector, energy use and available options.
5Recommend specific measures, such as an energy audit, efficient equipment, renewable power purchase and monitoring.
6Link to reporting: BRSR energy disclosures, targets and board oversight.
7Conclude in one or two lines with the recommended course of action and the role of the Company Secretary.

Quickest way: Define, Law, Act, Report

When to use it: Use it when time is short and the question asks for a short note or a brief case answer.

Define the concept in one sentence.
Name one law or policy with its body or scheme (Energy Conservation Act, BEE, PAT, green hydrogen mission).
List three to four company actions in bullets.
End with the disclosure link: BRSR and board oversight.

Common mistakes in Renewable Energy and Energy Efficiency

Treating energy efficiency and renewable energy as the same thing.
Both are called green measures and appear together in the chapter.
Fix: Say that renewables change the source of energy, while efficiency reduces the quantity used. Give one example of each.
Calling all hydrogen green hydrogen.
Students remember the mission but not the production method.
Fix: Write that green hydrogen is made by electrolysis of water using renewable electricity. Hydrogen from fossil fuels is not green.
Saying the Energy Conservation Act, 2001 deals only with appliances.
Star labels are the most visible part of the Act.
Fix: Mention that the Act set up BEE, covers standards, designated consumers, building codes and, after the 2022 amendment, carbon markets.
Writing only theory in a case question.
Students recall notes and skip the facts given.
Fix: Use the company's sector and figures in your answer. Then recommend steps that fit that business.
Mixing units or reversing the percentage formula in calculations.
Pressure, and data given in kWh and MJ together.
Fix: Convert to one unit first. Divide the change by the old value, not the new one.

Worked examples

Example 1

A manufacturing company consumed 40,00,000 kWh of electricity last year, of which 6,00,000 kWh came from its rooftop solar plant. After installing efficient motors and LED lighting, its total consumption this year is 36,00,000 kWh, of which 9,00,000 kWh is solar. Calculate the renewable share this year and the percentage saving in total energy, and comment.

Show the solution

Last year's renewable share = 6,00,000 ÷ 40,00,000 × 100 = 15%.
This year's renewable share = 9,00,000 ÷ 36,00,000 × 100 = 25%.
Energy saving = (40,00,000 − 36,00,000) ÷ 40,00,000 × 100.
4,00,000 ÷ 40,00,000 × 100 = 10%.
Comment: efficiency measures cut total use, and more solar raised the renewable share, so both levers worked.

Answer: Renewable share rose from 15% to 25%, and total energy use fell by 10%. The company improved on both efficiency and clean-energy sourcing.

Example 2

Explain how a Company Secretary can advise the board of an energy-intensive steel company on improving energy efficiency and moving to renewable energy, with reference to Indian policy.

Show the solution

Start with the context: steel is energy-intensive, so energy cost and emissions are material ESG issues.
Cite the Energy Conservation Act, 2001: BEE sets efficiency norms, and large industrial users are designated consumers who have to meet energy-intensity requirements under schemes such as PAT.
Advise an energy audit to find losses, then efficient equipment, waste heat recovery and process upgrades.
Advise renewable sourcing through rooftop or captive solar and wind, or long-term power purchase agreements.
Mention the National Green Hydrogen Mission as an option for cleaner steelmaking in the longer term.
Recommend setting targets, board oversight and disclosure of energy consumption and intensity in the BRSR.
Conclude that the Company Secretary should track the applicable rules, ensure compliance and report progress to the board.

Answer: The Company Secretary should advise a mix of efficiency measures and renewable sourcing. These must comply with the Energy Conservation Act, 2001 and be tracked through targets and BRSR disclosure under board oversight.

Exam tips

Always separate the two ideas: source (renewable) versus quantity (efficiency). Examiners reward that clarity.
Name the Energy Conservation Act, 2001 and BEE in any India-specific answer. Add the 2022 amendment if you remember it.
In case questions, use the company's sector and figures. Generic answers lose marks.
Close with the reporting link: BRSR energy disclosures and board oversight.
In calculations, show the formula, convert units first and write the final comment in one line.

Practice questions from Environment

Renewable Energy and Energy Efficiency: frequently asked questions

What is the Energy Conservation Act, 2001 in simple terms?

It is the Indian law that promotes efficient use of energy. It set up the Bureau of Energy Efficiency, which develops standards, labelling and programmes for large energy users. It was amended in 2022 to support a carbon market and wider use of non-fossil energy.

What is the National Green Hydrogen Mission?

It is a national mission approved in 2023 to build India's capacity to produce green hydrogen. Green hydrogen is made by splitting water using renewable electricity. It is aimed at cutting fossil fuel use in sectors like fertilisers, refining and steel.

How do companies improve energy efficiency under ESG?

They begin with an energy audit and then fix the biggest losses. Common steps are efficient motors and lighting, better process control and waste heat recovery. They then set targets and report energy use and intensity in the BRSR.

What is the difference between energy efficiency and energy conservation?

Energy efficiency means getting the same output with less energy through better technology. Energy conservation is the wider effort to reduce use, including behaviour such as switching equipment off. In answers, treat efficiency as a technical measure and conservation as the broader aim.