Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity
• Governance
• Social License to Operate
• Water & Waste Management
• Employment
• Materials & Procurements
• Energy and Emissions
• Business Growth
• Innovation
• Safety & Security Compliance

Environmental Achievements

• Avoided 7.8 million tonnes of CO2 equivalents since inception
• 40% reduction in water consumption per MWh generated in FY2020
• Net carbon neutral company

Social Achievements

• 16,040 man-hours of training during the reporting period
• INR 36 million allocated for charity for 2019-2020
• 21 smart classrooms installed in FY2019-20
• 400+ streetlights for communities installed in FY2019-20
• Skill development training offered to over 1,240 individuals in local villages during FY2019-20
• Distributed food to more than 6,000 beneficiaries across five states during COVID-19
• Commissioned manufacturing of over 100,000 masks and PPE

Governance Achievements

• All projects comply with World Bank Equator Principles and IFC Performance Standards
• Compliance with SEC, NYSE, SGX governance standards
• Gender diversity at the Board level
• 344 audits in FY2019-20, reported with no significant noncompliance

Climate Goals & Targets

Environmental Challenges

• Customer concentration (large portion of contracted MWs committed to three offtakers)
• Counterparty credit risk (PPAs customers may default)
• Solar demand dependence on Indian government's ability to meet capacity targets
• Exchange/Currency risk (exposure to Rupee depreciation)
• Competition from other renewable and diversified IPPs
• Project development challenges (securing land or financing)
• Transmission infrastructure limitations in India
• Debt burden and refinancing risk of a $500mn green bond maturing in 2022

Mitigation Strategies

• Effective hedging strategies for interest rate and foreign exchange risks
• Systematic approach to identify, measure, and manage risks
• Synchronized decision-making, administrative, and control functions
• Work from home policy and COVID-19 response team during pandemic
• Partnerships with medical facilities and government-approved COVID testing centers
• Dedicated CSR fund for COVID-19 community support

Supply Chain Management

Supplier Audits: 341 internal and 3 external audits

Responsible Procurement

• Supplier code of conduct requiring compliance with anti-bribery, child labor, non-discrimination, and other policies
• Preference for ISO accredited suppliers (35% have ISO 14001 certifications)
• Detailed screening and vendor onboarding process including financial, technical, and reference checks

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core Option

Certifications: ISO 9001:2008, ISO 14001:2015, ISO 27001

Sustainable Products & Innovation

• Automated module cleaning robots

Awards & Recognition

• Most Sustainable Solar Company by World Finance - Sustainability Awards 2020
• Top 10 global renewable energy company for sustainability by Sustainalytics
• AA rating for sustainability by MSCI
• Best Employer Brand Awards 2019
• Top Organizations with Innovative Practices ETNOW Industry Leadership Award 2019
• National Excellence Award from the Ministry of New & Renewable Energy (MNRE) in 2016

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Waste Management
• Diversity and Inclusion
• Occupational Health and Safety
• Supply Chain Sustainability
• Corporate Social Responsibility
• Governance

Environmental Achievements

• Achieved carbon neutrality since 2019
• Reduced net water consumption from 122 L/MWh in 2017-18 to 49 L/MWh in 2020-21
• Offset 28% of water consumption through rainwater harvesting
• Recycled 600+ tons of broken solar modules
• Planted 30,000 trees in Rajasthan

Social Achievements

• Provided employment opportunities to 2500+ local community members
• Upskilled 3,500+ beneficiaries from the local community
• Distributed food packets and cooked food to more than 32,000 beneficiaries during COVID-19 pandemic
• Supplied medical equipment (ventilators, oxygen concentrators, oximeters, PPE kits) to hospitals
• Achieved 97% employee vaccination rate
• Increased board diversity from 0% to 22%

Governance Achievements

• Established a Sustainability committee of the board
• Obtained ISO 45001 (Occupational Health and Safety) certification
• Implemented an EV policy to transition to 100% EVs by 2030
• Formulated an Enterprise Risk Management (ERM) framework

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic
• Supplier data limitations on GHG emissions and other environmental metrics
• Lack of government guidelines for solar panel recycling

Mitigation Strategies

• Developed Azure SHIELD application for sustainability performance management
• Implemented robotic dry cleaning to reduce water consumption
• Developed concrete mix designs with curing compounds to reduce water use during construction
• Engaging with suppliers to improve data reporting
• Responsible disposal of accumulated broken solar modules

Supply Chain Management

Supplier Audits: E&S audits conducted before starting new procurement

Responsible Procurement

• Supplier code of conduct
• Preference for ISO accredited suppliers
• ESG work assessment

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 27001

Third-party Assurance: TÜV India Private Limited

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 6 (Clean water and sanitation)
• Goal 8 (Decent work and economic growth)
• Goal 13 (Climate action)
• Goal 4 (Quality education)
• Goal 1 (No poverty)
• Goal 10 (Reduced inequalities)

Azure Power's initiatives contribute to these goals through renewable energy generation, community development programs, skill development initiatives, and environmental stewardship.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Greentech Effective Safety Culture Award 2021
• EQ -Rajasthan State Annual Solar Award 2020-21
• CII Performance Excellence Awards 2020
• Grow Care India OH&S Award 2021
• Best Employer Brand Awards 2019
• Top Organizations with Innovative Practices Award
• ET NOW Industry Leadership Award 2019
• National Excellence Award from MNRE 2016
• Most Sustainable Company in the Solar Energy Industry -World Finance Magazine Sustainability Award 2020

Environmental Metrics

ESG Focus Areas

• Water Neutrality
• Carbon Neutrality
• Waste Management
• Biodiversity
• Safety
• Community Investment
• Workforce Diversity
• Governance

Environmental Achievements

• Net water consumption reduced from 122 ltr/MWh (2017-18) to 49 ltr/MWh (2020-21). Aim to be net water neutral by 2023
• Carbon neutral status maintained since 2019, retired UN Certified Emission Reductions (CERs) to offset Scope 1 and 2 emissions
• Successfully recycled all broken and damaged modules accumulated in last 10 years (>600 tons) through government approved recyclers
• Enhanced local biodiversity by planting 5,000 native tree species; committed to plant 50 tree saplings per MW in all future projects

Social Achievements

• Zero Fatality /Lost time injury reported in the quarter. Safety score of 99% against target of 80%
• All employees fully vaccinated for COVID
• Majority of CSR projects completed, impacting 2000+ beneficiaries
• Skill development of 640+ beneficiaries progressing successfully
• Preparation for SA8000 certification audit completed

Governance Achievements

• Sustainability Report for 2020-21 published. Third Party assurance by TUV India
• Sustainability committee of the Board provides guidance to enhance sustainability of the company
• All projects comply with World Bank Equator Principles. Comply with SEC, NYSE, SGX governance standards
• Gender diverse Board
• 240 internal SHES audits reported no significant noncompliance
• ESG score improved from “Medium Risk” to “Low Risk”

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• COVID-19 pandemic and lockdowns
• Power curtailments by Indian state electricity authorities
• GIB matter (impact on transmission lines)

Mitigation Strategies

• Phase-wise delivery of projects to mitigate supply chain and cost pressure issues
• Refinancing projects with interest rate savings
• MNRE application for modification of GIB order
• Applications filed by Industry Associations to exclude Potential Area from the ambit of the order

Supply Chain Management

Climate-Related Risks & Opportunities