Why Green Policy Needs a Startup Rehash!

If there’s one thing I’ve learnt from working with startups, it’s this: execution eats theory for breakfast. You can have all the vision in the world, but if the real-world tools don’t match the ambition, progress stays stuck on paper.

That’s exactly where we are with India’s green transition. The ambition is bold. The targets are clear. But when it comes to how small businesses can participate meaningfully, we’re still miles away from getting it right.

And that’s a problem! 

Because behind every breakthrough in clean energy, every pivot to sustainability, and every decarbonisation pledge… there’s a founder trying to make sense of how to make it work in real terms. I’ve seen this up close, at AUCL, and with dozens of MSMEs we advise. These are businesses that want to do the right thing. But more often than not, the system doesn’t meet them halfway.

Let me give you an example. 

The Energy Conservation (Amendment) Act, 2022, and the Renewable Purchase Obligations look like great moves on the surface. But to a small or medium enterprise, they often read like another compliance form, another reporting burden. Not as tools to grow or compete better. And that’s the crux of the issue. The language of our policies isn’t written in the voice of an entrepreneur; it’s crafted in the ethos of an enforcer.

Now let’s talk money, because sustainability doesn’t run on good intentions alone.

We keep hearing about how ESG investing hit $41 trillion globally in 2022. But in the same breath, there’s a $530 billion credit gap for MSMEs in India (IFC, for context). Think about that. These businesses are supposed to green their processes, adopt new tech, and retool supply chains but can’t even access the capital that’s supposedly flooding the market. Why? Because the instruments are either too complex, too large-scale, or just not designed for the mid-segment founder hustling out of a two-floor unit from a tier two or three city. 

This isn’t a gap but a canyon.

And here’s what nobody tells you: green innovation won’t scale through mandates. It’ll scale through enablement. Through trust, flexibility, and smart legal design. Through financing structures that don’t just reward scale but recognise intent, effort, and context.

In my experience, most entrepreneurs are not looking to dodge responsibility. What they need is a framework that reflects their realities, one where policies are co-created with those who live them daily. Where sustainability isn’t a separate vertical but part of the growth strategy.

This means we need to rethink everything, from how policies are draughted to how ESG outcomes are measured. From how startups access green credit to how their contributions are valued in national reporting.

Let’s be honest: India’s MSMEs aren’t footnotes in our sustainability story. They’re the plotline. They’re the ones rethinking packaging, switching to renewables, and redesigning processes for circularity. And yet, they’re asked to follow rules that weren’t even created with them in mind.

We need to shift gears, from a compliance-first to a capability-focused model. That’s where the real magic happens. Where laws don’t just regulate but empower. Where green innovation doesn’t just come from labs—but from local founders, mechanics, and factory-floor thinkers who know how to build for resilience because they’ve had to.

I’m not asking for less ambition. I’m asking for smarter scaffolding. A system that supports entrepreneurs as allies in the climate fight, not as subjects of a top-down mandate.

Because if we’re serious about this green transition, and I believe we are, we’ve got to realise this: policy alone doesn’t move mountains.

People do.

And in India, that means millions of entrepreneurs waiting not for permission but for a chance to build something better.