The Textile & Apparel sector looks to build capabilities to drive the transition to a circular economy – Coverage of CAIF in Business India’s Special Edition Nov Issue 2021

Intellecap Acquires 100% Stake In NR Management Consultants
Intellecap, the advisory arm of Aavishkaar Group announced 100% acquisition of NR Management Consultants India Private Limited (NRMC) to drive capital towards Natural resource driven Carbon Sequestration solutions to mitigate Climate change.
Intellecap is a global consulting firm dedicated to finding solutions that mitigate global risks of inequity in areas such as Impact investing, Climate Change and Gender. NRMC has deep research focus and understanding of natural resources and rural development in India and South East Asia. Drawing on its focus on nurturing entrepreneurship, Intellecap, through this acquisition looks to strengthen its Global positioning in Climate Change by incubating new initiatives and channelize strategic pools of capital to achieve tangible outcomes.
Speaking about the acquisition, Vikas Bali, CEO, Intellecap said, “Our objective of acquiring NRMC is focused on strengthening our resolve to build an effective Natural Resource based climate resilience strategy and drawing capital and delivering inclusive interventions through them. We see Climate change as humanities biggest challenge and Intellecap and Aavishkaar Group are committed to being significant part of the solution to this global problem. I invite all likeminded institutions, DFIs, Donors and commercial investors with focus on Climate Change to join hands with us, as together we can deliver real change and impact”
Speaking about the acquisition, Vineet Rai, Founder and Chairman, Aavishkaar Group said, “I am thrilled by this acquisition by Intellecap. Aavishkaar Group identifies Climate Resilience Investing as a Global Mega trend for the next decade and Intellecap has a big responsibility to lead the group in showing us solutions that would help us allocate capital effectively to combat Climate risk and offer true Resilience.”
“Intellecap and through it, the Aavishkaar Group offers a wide umbrella to NRMC expertise in Natural Resources. We all acknowledge that Climate change is the biggest challenge humanity is facing and with this partnership we would be able to use our knowledge and deep understanding of associated development challenges to drive capital toward real solutions that address climate resilience,” said Jayesh Bhatia, Founding Director, NRMC.
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Leveraging community leaders to build resilience against climate change in urban areas (Comment)
While cities cover only two per cent of the global land area, they contribute around 70 per cent of the global greenhouse emissions, one of the main drivers of climate change.
The UN forecasts that urbanisation and population growth could add another 2.5 billion people to urban populations by 2050, with almost 90 per cent living in Asia and Africa. Consequently, the urban contribution to greenhouse gas emissions and climate change will only increase with time.
As a response, various stakeholders have designed climate change resilience products including cool roofs, home insulations, drip irrigation solutions and solar home systems that have seen heightened interest in India. While such products have seen a market, the uptake is concentrated among the richer sections.
The urban poor, who constitute almost 30 per cent of India’s urban population, do not have the knowledge or the capacity to pay for such products. It has always been a challenge to symbiotically combine all four components (informed customer targeting, low-cost marketing, innovative distribution and sales, and nurturing consumer goodwill) to design a marketing strategy for the urban poor. As a response, some organisations have started leveraging community-level leaders (CLLS) as marketing channels for such products.
The rationale for the CLLs comes from the effectiveness of the model in building long-term products resilient to climate change while simultaneously creating livelihoods. Some best practices that can be used to strengthen the efficacy of the CLL mode are:
* Design a product identification framework tool: Each product should be analysed on the basis of four parameters: a) demand for the product (number of households), b) affordability (price), c) profitability (percentage of price), and d) scalability (potential demand across different urban agglomerations). On the basis of analysis, only those products which score high on all parameters should be offered to the market.
* Conduct on-ground demand assessment: Understanding the customer becomes more important in such cases, particularly since the customers knowledge of the product is limited. Hence awareness levels, willingness to pay and customer demand becomes more critical. Such an on-ground assessment can help further shortlist products for a particular set of homogeneous households.
* Provide easy financing options: It is beneficial to help CLLs establish close networks with MFIs and other financial institutions to provide financing facilities to potential consumers, hence enhancing their ability to pay and increasing uptake.
* Segment CLLs based on skillsets and motivation: Classification of CLLs as per their sales skills and motivation is essential for success. Selling different products require different skillsets and a quick analysis can help in this matchmaking. Some parameters which can be used to assess skills include age, educational qualification, business experience, and technical skillsets.
* Capacity building: CLLs need a certain degree of training and it is observed that CLLs find it easier to sell better when trained rather than through close association with their communities.
* Build ownership in CLLs: Instead of making the product available free-of-cost, CLLs should be asked to invest in the product. If required, finance should be made available by partnering with co-operative banks and MFIs; that way one can build ownership in CLLs.
* Design standardised operational procedures (SOPs): Since the business model includes partnerships both with CLLs and product manufacturers, it is necessary to design SOPs to simplify the entire delivery process.

Inexpensive Impact: The Case for Frugal Innovations
Over 4 billion people around the world face unmet needs in core areas such as food, water, energy, health-care and housing. The market potential for these low-income populations is huge: Approximately 4.5 billion low-income people globally represent an annual purchasing capacity of US$ 5 trillion (PPP), with India, East Africa and South East Asia accounting for a sizable chunk of this market. Yet servicing this market is fraught with challenges, including customers’ limited ability to pay, poor infrastructure and latent demand. Catering to this market requires frugal innovation, which is about transforming adversity into opportunity, enhancing value and ultimately doing more with less, thereby impacting more people.
Many firms – both startups and corporates – have begun to design frugal, market-based solutions that include product and business model innovations to meet the unmet needs of billions of underserved customers. In Kenya, for example, Pad Heaven makes re-usable sanitary towels from banana fibers, and Ecopost uses plastic and agricultural waste as a resource to manufacture sustainable materials for the building, construction and transport industries. India is also a hotbed of frugal innovations, which spread across sectors. For example, Saral Designs markets an automatic machine that allows organizations to produce low-cost sanitary napkins, Bhagwan Mahaveer Viklang Sahayata Smiti provides the Jaipur foot – a low-cost prosthetic leg, and Banka Bioloo sells sanitation systems that eliminate the need for off-site disposal of human waste. Each of these products highlights how such innovations can be game changers.
But frugal innovations are not just about products: Great potential also lies in business model innovation. Frugal innovations in services can include deep specialization in a niche segment of a huge market, tiered pricing systems and efficient use of human capital. These innovations respond not only to a lack of skilled human capital, but to an institutional void. For instance, Unilever’s small, affordable detergent sachets are priced at a more palatable level for the low-income populations in India and Africa. And Aravind Eye Care’s approach to performing cataract surgeries at large scale without compromising on quality highlights how process innovation can ensure inclusivity and service delivery in a sustainable manner.
Frugal innovation is also not limited to low–tech sectors. It can require, or be combined with, frontier science and technology. Products like Swach a high-tech portable water filter developed by Tata, HealthCubed Inc.’s Health Cube – an integrated, tablet-based, portable point-of-care diagnostic test device, and Agatsa’s pocket-sized 12-lead electrocardiogram have demonstrated how technology can not only be an enabler but an amplifier to both product and process innovations.
Lessons for the Circular Economy
While frugal innovations are commonly associated with developing economies, these innovations are not only for resource-constrained users – and they also address the issue of resource scarcity. The current “take, make and dispose” economy is not sustainable. Economic productivity is already being curbed by the rapid depletion of existing and readily available natural resources. These constraints require a shift in thinking towards a more circular model focusing on resource productivity, and a shift towards a “make, share and remake” model. This will be a key driver towards sustainability for frugal innovations of the future.
Principles from frugal innovations are directly applicable to this circular economy, as generating value from waste is common across African and Indian startups. For example, Kodjo Afate Gnikou built a $100 3D printer from electronic waste. And in Europe, the firm Qarnot has developed QH.1, a high-performance computing server that uses “waste heat” from its microprocessors to heat homes and other buildings.

Smart villages: Driving development through entrepreneurship
Over 68 percent of India’s population lives in rural areas. There has been a gradual increase in migration from villages to cities primarily for livelihood opportunities, better education, and healthcare facilities, among others. The rising burden on urban cities due to migration emphasises the need to transform villages so that they can meet the critical as well as aspirational needs of the villagers. This can be done using innovative technologies and transforming the service delivery models for villages. Transformed villages are called Smart Villages.
While the phrase ‘Smart Village’ has become a buzzword in policy and rural development discussion, there is no universal definition of such villages. Two things that are common to all Smart Villages are the extensive use of technology and integration of several key interventions in infrastructure and service delivery.
It’s an integrated approach of delivering access to skills and quality basic services including education, e-health, 24×7 power, safe food, among others.
There are numerous initiatives supported by the government, and spearheaded and supported by corporate social responsibility (CSR) initiatives and philanthropic institutions.
The Government of India launched the Shyama Prasad Mukherji Rurban Mission (SPMRM) in 2016, with the objective to spur social, economic and infrastructural development in rural areas. The mission aims at making villages smart and growth centers of the nation. In its first phase, it targeted to develop a cluster of 300 Smart Villages over the next three years across the country. Sansad Adarsh Gram Yojana, which envisages integrated development of selected villages was another step taken by government in this direction.
While the government-led initiatives rely on integration and convergence of the existing central and state government schemes to develop these Smart Villages or clusters, the CSR initiatives are generally more innovative in terms of implementation and use of technologies. For example, smartphone-maker Nokia has launched a Smartpur project which aims to create a sustainable ecosystem where community members can leverage digital tools to bring efficiency in daily lives. It aims to bring transparency in governance, economic prosperity for households and ease of access to various government services and information.
Tata Trusts supports agriculture intervention for tribal communities under its Lakhpati Kisan – Smart Villages program. While these CSR or philanthropic institutions do work closely with government institutions, their model of engagement and the partnership with the government vary significantly.
These initiatives have provided key learnings to empower institutions, build engagement models and frameworks for planning, and developing implementation strategies for Smart Villages.
We suggest learning from the Smart Cities mission, but we also caution that these learnings must be contextualised and synthesised, as Smart Villages are very different from Smart Cities. The latter are more focused on increasing the overall efficiency and improvement in civic infrastructure, while Smart Villages envisage the need of building the facilities from scratch.
One of the key challenges in developing Smart Villages is ensuring their sustainability. This can only be addressed if we build our Smart Village strategy with entrepreneurship at its core. Thankfully, India has one of the most vibrant entrepreneurial ecosystem that is working towards addressing rural development challenges using innovative technologies and business models.
We have enterprises that are addressing healthcare needs (Glocal Healthcare Systems, mHealth, iKure), delivering quality education (Gyanshala, Hippocampus, Avanti), providing decentralised energy solutions (Sun Moksha, Mera Gao Power, Mlinda), transforming agriculture productivity (Ekgaon, Jain Irrigation, Milk Mantra), providing drinking water and sanitation services (Sarvajal, Svadha, Banka Bioloo), creating livelihood opportunities for women (Dharma Life, Frontier Markets, Sudiksha Knowledge Solutions), and so on. The need is to integrate this approach for the Smart Village vision.
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Building the supply chain infrastructure for a Circular Apparel industry
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Building the supply chain infrastructure for a Circular Apparel industry
Mumbai, 13th February –Siddharth Lulla, Principal, Circular Apparel Innovation Factory (CAIF), Intellecap was recently featured on the Times of India blogs through his article, “Building the supply chain infrastructure for a Circular Apparel industry” which highlights how CAIF is working with upstream supply chain partners primarily SMEs to reduce carbon emissions,
Under the aegis of UN Climate Change, brands and retailers worked during 2018 to identify ways in which the broader textile, clothing and fashion industry can move towards a holistic commitment to climate action. As a result, industry players made bold commitments to enable circularity, reduce 45% emissions by 2030 and achieve net-zero by 2050. Initially these commitments were focused on Scope 1 and Scope 2 emissions, which are produced by the companies directly or through the purchase of energy. However today, most companies have pledged to reduce their Scope 3 emissions generated in the upstream and downstream value chain. This is a crucial step since, for many companies, Scope 3 accounts for 80% of their overall climate impact.
Given the scale of the problem, it is imperative to set ambitious targets and implement a well thought approach to deliver on them. Achieving net-zero for Scope 1 and Scope 2 themselves requires overcoming formidable economic and technical challenges. Scope 3 presents an additional layer of complexity such as aligning internal stakeholders on goals and milestones; working collaboratively with supply chain partners, customers; keeping all partners engaged in multiyear change efforts; non-transparent carbon accounting and tracking mechanisms.
An in-depth assessment through in-person consultations with Textile & Apparel (T&A) stakeholders, which included industry leaders such as H&M, IKEA, Marks and Spencer and their manufacturing partners, and learning’s from our initiatives have identified key gaps that need to be addressed to develop the supply chain infrastructure for circular and net-zero apparel:
Hence Intellecap, through its initiative Circular Apparel Innovation Factory (CAIF), is working with upstream supply chain partners primarily SMEs to reduce carbon emissions, through testing, validating and commercial adoption of circular and low-carbon solutions in resource efficiency (energy, water), alternate materials (low-carbon dyeing alternatives, etc.), and from recovering value from waste (fiber2fiber recycling). Based on our learnings, we believe that four steps need to be followed by organizations that are committed to multiplying their own efforts and decarbonizing the supply chain through supplier engagement. They are:
Research findings have indicated that existing solutions which include renewable electricity, sustainable materials and processes, alternate fuels, etc., have the potential to reduce supply chain carbon emissions by 47%. However, for the balance there is a need to test, validate and adopt innovative technologies and business models such as next generation materials, waterless dyeing, dry processing just to name a few. In order to address this, through our ongoing initiatives we have successfully worked towards building a strong business case for low carbon / circular supply chain solutions available in India. Project ACE, a two-year program (2021-2023), designed as a common action platform with the singular purpose of establishing a business case (economic value creation for the private sector organizations while reducing their environmental footprint). To create a robust business case, CAIF designed demonstration pilots with multiple stakeholders (brands and their manufacturing partners) to test, validate and commercially deploy high potential low-carbon solutions in areas including energy efficiency, water efficiency, alternative dyes and chemicals, digital solutions in textiles waste traceability, etc.
In the last 12 months alone, we have undertaken six pilots and delivered the below outcomes:
(work to measure the impact on carbon footprint is currently in process)
According to our private sector partners, three key aspects were critical in design /execution of the pilots along with expediting the buy-in from leadership / board teams for eventual long-term commercial contracts:
Hence based on these learnings we believe there is a need for and are working towards designing long term transformation programs with brands and their supplier networks to lay the foundation of a circular supply chain infrastructure and catalyze their journey to NetZero.

Voluntary carbon trades to start in 2023 -Intellecap report featured in Mint
Mumbai 24th Jan– Mint’s story (Print and Online) titled ‘Voluntary Carbon trades to start in 2023’ featured the Intellecap report on carbon markets and highlighted the India’s carbon trading framework with details from Bureau of Energy Efficiency (BEE) with whom the Intellecap Climate team works extensively.
India’s carbon trading framework is getting ready for its rollout, with the Bureau of Energy Efficiency (BEE) picked to administer the market. The framework may be released this year and the market for voluntary carbon trading too will open during the year.
“BEE will be the administrator. It will formulate the complete framework, set the systems, along with the methodologies for both voluntary market and the compliance market for certain sectors, which will come later,” BEE director general Abhay Bakre said in an interview.
BEE will assist the ministries of power and environment, which will separately come up with notifications on the carbon market, he said, adding an inter-ministerial body will take the final decision on the framework.
“We expect that within this year 2023, the framework will be rolled out and the voluntary market will be there. The compliance market will take time because targets and timelines need to be given to the industries. It would take about 2-3 years,” he said, adding that the current Perform, Achieve and Trade (PAT) scheme would be transitioned into the compliance market.
PAT is a flagship BEE programme under the National Mission for Enhanced Energy Efficiency, and is a regulatory instrument to reduce the specific energy consumption in energy-intensive industries.
“We are doing compliance-backed trading in PAT; so, we have to transit it to the compliance carbon market. We have to give the industry time to gear up for that.”
Power exchanges which enable the trading of the energy saving certificates (ESCerts) converted from the excess energy savings, are likely to be the trading platform for carbon credits too, under the carbon market framework, Bakre said.
Last month, the Indian Energy Exchange announced the setting up of a wholly-owned subsidiary, International Carbon Exchange Pvt. Ltd, to explore business opportunities in the voluntary carbon market.
Parliament passed the Energy Conservation (Amendment) Bill, 2022 on 12 December 2022, setting the stage for a carbon market in the country.
The draft blueprint of the national carbon market was released for stakeholder consultations in 2021. It proposed to initiate the development of a voluntary carbon market in India to overcome the barriers of ‘ESCerts’ market and to encourage voluntary entities to participate in meeting Nationally Determined Contributions commitments of India.
As per the draft, developing a voluntary carbon market from the existing PAT scheme will be spread over three phases, increasing the demand in the existing ESCerts market in the first phase, by focusing on making the instrument more fungible, adding more participant into the pool, and linking other markets in India with the proposed voluntary market, increasing the supply in the voluntary carbon market in the second and moving to a cap-and-trade system in the third phase. Under the cap-and-trade system, sectors and sectors-specific companies are earmarked for only a specific amount of emissions.
According to a report by Intellecap, a carbon market would help as many leading Indian corporates have made commitments to become carbon-neutral and the market will provide flexibility to entities in hard-to-abate sectors and with high reduction costs to supplement their own reduction efforts with credits from the carbon market.
The market would incentivize entities with low reduction costs to reduce emissions beyond their mandate. Trading in the carbon market could reduce the overall cost of emission reductions in India, it said.

Vineet Rai, Founder and Chairman, Aavishkaar Group joins the Sustainability Task Force as part of G20 India Presidency
Mumbai, 23rd Jan: Vineet Rai, Founder and Chairman, Aavishkaar Group has joined the sustainability task force as part of the new engagement group StartUp20, initiated under India’s presidency of G20.
The Inception Meeting for #Startup20 marks the beginning of an incredible journey to foster innovation and growth in the global startup ecosystem. At this historic event, we will be introducing the 3 task forces that will drive the vision and mission of Startup20 India
One of the key ways that startups promote a nation’s growth and economic stability is through the aspect of employment creation. Startup20 is a significant step in the direction of encouraging innovation and entrepreneurship on a global scale, which will ultimately result in more job opportunities.
Startup20 Inception Meeting – Hyderabad
Date – 28 – 29 January 2023
To know more – Click Here
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