Build net zero momentum with limited resources

This case study is part of the “Beyond The Guide Deepdive: Pharma & Life Sciences Supply Chain,” an initiative that connects the dots between the Sustainable Procurement Pledge Champion Program and the Pharmaceutical & Life Sciences Chapter. It brings together real-world insights and experiences from across the industry to support procurement teams in transforming sustainability goals into tangible actions. Learn more here.

Espi Industries & Chemicals Pvt. Ltd. is a Hyderabad-based pharmaceutical manufacturer specializing in oral liquid formulations and formulation development. Espi is working with leading global pharmaceutical companies, including Pfizer.

Espi began its journey at “Day 0” with low sustainability maturity – no emissions data or targets, limited in-house expertise, and tight budgets. As a small-sized pharmaceutical manufacturer in India, it faced challenges common to SMEs: fragmented processes, and little prior focus on environmental impacts. To tackle climate goals, Espi’s leadership committed to a stepwise plan: measure first, then improve. The company set an ambitious 42% reduction in Scope 1&2 emissions by 2030, informed by the SBTi criteria, and sought external advice. This approach leveraged internal champions (the EHS Manager and Engineering Lead) plus an external partner (Sprih) to guide the effort. In doing so, Espi aimed not only to decarbonize itself but also to inspire other resource-constrained SMEs by proving what is achievable even with limited capital and personnel.

Espi launched a comprehensive decarbonization programme centered on its core operations. The key steps were:

1. An Energy Audit: Engaged qualified auditors to assess electricity and fuel use. The audit pinpointed inefficient processes and equipment (e.g. inefficient motors, lighting, HVAC settings etc.).

• Implementation of Audit Recommendations: Espi invested USD 4,126 in the audit and USD 9,908 in implementation of few of the identified recommendations, yielding roughly 50,000 kWh saved per year (∼USD 4,663/yr) with an estimated 3-year payback. These retrofits cut about 36 tCO₂e annually.

• Solar Deployment: Installed a 300kW rooftop solar PV plant (~USD 139,878 capex). The system is grid-tied, generating ~3.9 lakh kWh/year (about 33% of site demand). This is projected to avoid roughly 280 tCO₂e per year (actual grid factors may vary). By selling excess via net-metering or offsetting diesel use, Espi expects total ~333% ROI on this capital throughout the project life and ~6-year payback period.

• Tree Plantation: Launched a green cover program planting 217 native trees. This effort (cost USD 3,322) is estimated to have a long-term carbon sequester potential of >320 tCO₂e. The project also restored ~28,000 sq. ft. of green space and engaged local workers (57 people and 15+ small enterprises) in planting and maintenance, yielding social and biodiversity co-benefits.

• Leadership Engagement: The Whole-Time Director was personally involved in every step of the journey, from target-setting to project reviews. His active participation sent a strong signal across the organization, building trust and encouraging teams to stay committed throughout the transition.

• Expert Guidance: Espi collaborated with external sustainability experts for technical planning, particularly on target-setting using SBTi methods and project design.

• Digital Tools: The company deployed monitoring software to track emissions, energy and water use, and waste generation. Regular dashboard reviews ensured accountability.

Concurrently, Espi measured its baseline Scope 1&2 emissions (primarily from grid electricity, fuel use refrigerants, & fire suppressants) and formalized the 42% reduction goal by 2030 under a science-based framework. In late 2023 it secured SBTi approval for its targets, affirming that its plan aligns with global 1.5°C climate goals. Espi was 1 of only 11 Indian companies as of October 2023 in the Pharma, Biotechnology and Life space to have targets published on the SBTi website and was the only Indian SME to have published targets in this space as on the said date. Through these combined actions, Espi dramatically lifted its maturity from zero to five (highest level) in Pfizer’s CMO maturity assessment.

Sustainability impact

Climate

The initiatives target Espi’s direct emissions (Scope 1&2), aiming for a 42% reduction by 2030 versus the baseline year. Already, the 300 kW solar installation supplies ~33% of annual electricity, slashing GHG emissions by roughly 280 tCO₂e/year. The energy-efficiency measures from the audit further cut about 36 tCO₂e/yr. Together these steps result in a reduction of 300+ tCO₂e per year, a substantial share for an SME. Over time (by 2030), the company is on track to meet its science-based target of ~42% cuts.

Nature

The tree-planting program enhanced local biodiversity and climate resilience. Espi planted 217 native trees, converting nearly 28,000 sq ft to green cover. Trees provide wildlife habitat and ecosystem services; they can capture CO₂ as they grow. These trees will sequester an estimated 320+ tCO₂e over their lifetimes. The planting also reinvigorated soil, improved air quality, and created greener surroundings for the people.

Social

Espi’s tree-planting initiative was designed not just to benefit the environment, but also the local community. The project directly engaged 57 local workers, creating 224 man-hours of employment during the planning, planting, and maintenance phases. In addition, the initiative supported 15+ small local enterprises, stimulating the local green economy. These included nurseries, sapling suppliers, tractor and truck rentals, compost providers, irrigation equipment suppliers, food vendors, farming equipment dealers, service providers like fuel stations, mobile repair shops, and stationery suppliers. By intentionally sourcing locally and focusing on native species, Espi strengthened community livelihoods, supported micro-enterprises, and promoted inclusive, nature-positive development.

Figure 1: Local workers transporting saplings from the nursery to the plantation site.

Business impact

Benefits

Espi realized multiple strategic benefits:

• Operational savings:

  • Approx. USD 4,663/year from implementing energy audit recommendations.

  • Approx. USD 36,368/year from solar energy projects.

  • These savings improve cash flow and represent a positive ROI on the solar investment, enhancing profitability.

• Enhanced market standing:

  • Obtained SBTi validation and improved sustainability practices.

  • Vendor maturity score (e.g., with Pfizer) rose from 0 to 5 within 6 months.

  • Strong EHS and GHG performance is valued by multinationals—Pfizer, for example, audits supplier safety and environmental practices rigorously (pfizer.com).

• Preferred supplier status:

  • Meeting high safety and environmental criteria has positioned Espi as a preferred supplier.

• Leadership in climate action:

  • Publicly setting a 1.5°C-aligned science-based target distinguishes Espi as a leader among SMEs.

  • Globally, companies with such targets report gains in innovation, confidence, and brand reputation.

Figure 2: In-house solar panel deployed above the roofs of the Espi production facility

Costs

To achieve this impact, Espi invested in a sequence of projects:

• Energy audit:

  • Cost: USD 4,126

  • Implementation of recommendations: USD 9,908

  • Payback period: ~3 years

• Solar PV system:

  • Capital expenditure: ~USD 139,878

  • Annual operating cost: ~2% of capex (~USD 2,798/year over 25 years)

  • ROI: ~333%

  • Payback period: ~6 years

• Tree planting project:

  • Cost: USD 3,322

• Total investment:

  • Approx. USD 227,302

  • Offset timeline: ~5.5 years through energy savings and improved productivity

These are substantial investments for a small company, but they were implemented incrementally and strategically to ensure feasibility.

Typical business profile

This initiative is well-suited for SMEs in energy-intensive sectors like pharmaceuticals or manufacturing, especially those early in their sustainability journey. It is most relevant for companies in regions with high solar potential and growing pressure from global customers to improve ESG performance. Businesses with limited internal expertise but strong leadership commitment can adopt this step-by-step, cost-effective approach to build climate maturity and align with global frameworks.

Approach

The implementation followed a clear step-wise roadmap:

1. Conduct Energy Audit: Engage qualified auditors and review historical energy bills. Espi subcontracted an external consultant to perform a thorough site audit and benchmark energy use.

2. Implement Recommendations: Prioritize and execute the audit’s top suggestions (e.g. upgrade motors, optimize HVAC and lighting). Quick wins (like controls and timers) were executed first to build momentum. Each measure was analyzed for payback; funds were allocated starting with those initiatives which offered under a 5‑year payback.

3. Deploy Solar: Based on the audit’s identification of high daytime loads, design and install an additional 100 kW rooftop solar system on top of 200 kW already present.

4. Initiate Tree Planting: Partner with a local NGO to plan a native reforestation program. Procure saplings of indigenous species, involve local community and workers in planting, and set up a maintenance plan.

5. Measure Emissions: Calculate current Scope 1&2 CO₂ emissions using grid electricity bills, fuel logs and refrigerant & fire suppressants filling logs. The emission calculation process led to the successful SBTi target-setting.

6. Set Realistic Targets: Align goals with global best practice. Espi committed to a 42% cut by 2030 and sought SBTi validation. A detailed emissions reduction plan was prepared.

7. Engage Leadership: The Whole Time Director and senior managers launched awareness training and tied sustainability metrics into performance reviews. Regular “green” meetings ensured management oversight.

8. Seek Expert Advice: Espi continued working with Sprih (external experts) for GHG emission measurement and to navigate SBTi requirements.

9. Utilize Digital Tools: The company adopted simple and intuitive software to track emissions, energy and water use and waste generation. Energy meters were installed where needed, and solar production was tracked online.

10. Monitor and Adjust: Progress is reviewed monthly. Espi uses this monthly review process to tweak operations wherever needed and to plan future projects.

Figure 3: Actual and projected emissions, indicating Espi is on track to achieve its 2030 SBTi emissions reduction targets ahead of schedule (sourced from our partner Sprih's GHG accounting software).

Stakeholders involved

• Internal Champions:

  • EHS Manager and Engineering Lead coordinated day-to-day implementation.

• Leadership:

  • Whole-Time Director provided strategic direction and approved investments.

• External Sustainability Partner:

  • Sprih

    • Offered technical expertise.

    • Supported GHG measurement via an AI-enabled software product.

    • Guided Espi through the SBTi validation process.

  • NGO Partner:

    • Led the tree plantation initiative.

    • Engaged 15+ local micro-enterprises to supply plants and materials for greening work.

Key parameters to consider

Other SMEs can adopt Espi’s approach by assessing their own sustainability maturity and resource context. Critical factors include initial energy demand (e.g. electricity vs. fuel mix), available capital, and local climate/utility conditions (which affect renewable yields). Sector-specific issues (e.g. sterile pharmaceutical processes) may constrain measures. Alignment with external standards (like SBTi) and early leadership buy-in were vital to Espi’s success; similar alignment and high-level commitment are recommended. In practice, companies should prioritize high-ROI projects first, sequence actions to free up cash (audit → efficiency → solar → offsets), and set targets in line with credible frameworks.

Implementation and operations tips

• Incremental Progress: Espi broke the program into manageable phases to match cash flow. Starting with a low-cost audit which created quick savings and helped justify the larger solar outlay.

• Leverage Expertise: Limited in-house skills were supplemented by onboarding experts for the audit, emission accounting, tree plantation and SBTi process.

• Engage Stakeholders: Continuous communication (e.g. monthly accounting and review) kept momentum going.

• Use Metrics and Tools: Track energy use and emissions rigorously. Use monitoring to “refine strategies” and maintain continuous improvement.

• Community Involvement: The NGO engaged for the tree plantation program involved local workers in the process, generating local goodwill and enhancing local biodiversity.