How can the Indian corporate sector drive net-zero?
28th Apr 2022
Indian companies are becoming increasingly climate conscious, with growing numbers joining the SBTi to cut their emissions in line with science. India leads emerging economies in the number of SBTi commitments, with 79 Indian companies joining the initiative as of April 2022.
Since 2020, uptake of science-based targets in India has been supported by CDP India’s Science Based Targets Incubator with funding from the MacArthur Foundation. The two-year project has provided technical support, information and campaigns to encourage companies to set science-based targets, with a particular focus on those in high-emitting sectors.
Two Indian cement companies – ACC Limited and UltraTech Cement Limited – have approved near-term targets. Additionally, Indian multinational information technology services and consulting company Wipro was one of the first companies worldwide to achieve a validated net-zero target. In March 2022, CDP brought together Indian corporate executives and NGO leaders to explore the barriers and opportunities in achieving net-zero. Participant organizations are listed below.
The session was chaired by Koushik Chatterjee, Executive Director and Chief Financial Officer of Tata Steel Limited and moderated by Prarthana Borah, Director of CDP India. Here are some insights from the discussion.
Urgent, ambitious action must be taken to achieve net-zero
While speaking at COP26 in Glasgow, Indian Prime Minister Narendra Modi announced the intention for India to achieve net-zero emissions by 2070. Participants agreed that this timeline, despite being 20 years after the 2050 goal set out by the IPCC, still requires transformation of the economy. This includes the power sector becoming completely renewable by 2050, transportation sector moving towards electricity away from fossil fuels, implementing a carbon trading system and investing massively in new green technology.
Participants agreed that companies must still take urgent action to decarbonize at the pace and scale set out in science. Indian corporates should not see themselves as having the luxury of delaying action for net-zero by two decades. They should instead lead the national economy to go further, faster.
Data and disclosure are crucial
Participants agreed that data is critical for the growth of science-based targets. Companies that are setting science-based targets need accurate data about their current emissions. Accurate calculation of GHG inventories is therefore crucial. Participants also felt that disclosure by companies that are more advanced in progress towards their targets is important for encouraging more Indian companies to get onboard.
The SBTi was seen as playing a key role in helping companies to align their internal emission reduction targets with global requirements defined by climate science in both the near- and long-term.
Decarbonizing high-emitting industries
India is the second largest producer of both cement and steel, after China. By 2050, almost 20% of the steel produced globally is expected to come from India, compared to around 5% today. Eight companies from India’s cement and steel sectors in have joined the SBTi and committed to or set science-based targets, but there remain major challenges to decarbonization. Participants felt that among the measures that can be taken, strong policy signals could set investors, steel producing companies and end users on the path to net-zero. One suggestion was a public procurement policy where 30% of GDP is spent on sustainable suppliers, which could leverage the government’s purchasing power to encourage industry to transform.
Increasing green finance
Participants strongly agreed that corporates need to work with state government to understand how developmental funds and public finance can be leveraged to increase the uptake of private finance. They believed existing successful models must be identified and scaled up to support the mainstreaming of green finance. In addition, clear and robust definitions of what is ‘green’ for financial and non-financial reporting is needed for accountability.
Indian companies wishing to help drive decarbonization towards net-zero can participate in the SBTi’s sector development projects for steel, cement and buildings, and commit to a net-zero science-based target.
- KI energy Services Ltd.
- Reliance Jio Infocomm
- GCCA India
- ATL & AGEL
- Tata Power
- Tech Mahindra
- Galaxy Surfactants
- Apraava Energy Limited
- Shakti Sustainable Energy Foundation (SSEF)
- Climate Catalyst