India ranks 6th globally in corporate climate action: Report

India ranks sixth globally in corporate climate action, with 127 companies committed to science-based net-zero targets, according to a report by ICRA ESG Ratings. These companies, primarily from sectors like textiles, software, and pharmaceuticals, are contributing to India’s growing role in the global fight against climate change. However, challenges remain, as high-emission industries such as power and cement still show limited commitment to net-zero targets, highlighting the need for greater action to meet climate goals.

India ranks sixth globally in corporate climate action, with 127 companies committed to the Science-Based Targets initiative (SBTi) and net-zero targets, according to a report by ICRA ESG Ratings. These companies span various sectors, predominantly from non-hard-to-abate industries such as textiles, software, and pharmaceuticals. Around 7% of these companies are from high-emission sectors like construction materials and mining, while the rest are from sectors typically associated with low to medium carbon footprints.

SBTi is a voluntary initiative where companies commit to science-based targets, which are independently assessed and validated. The initiative sets sector-specific guidelines to encourage companies to reduce their carbon emissions in line with climate science. The report highlights that India’s commitment to net-zero is a significant step toward aligning with global climate action efforts. While India ranks sixth, the United Kingdom leads with the highest number of companies making these commitments, while China, despite being the largest emitter, has fewer companies pledging net-zero targets.

A key trend observed in the Indian corporates is the shift towards renewable energy adoption, especially in the power sector. Companies committed to net-zero targets have reduced emissions by increasingly relying on renewable energy sources. The report also highlights that the cement sector, which traditionally has high emissions due to clinker production, is mitigating its carbon footprint through alternative fuels and carbon capture technologies. The metal and mining sectors show varied adoption of sustainable practices, with companies that have committed to net-zero targets leading the way in adopting greener practices.

ICRA’s analysis reveals that while the net-zero commitments are increasing, tangible results in emission reductions have been modest. Over the past six years, only a few companies have managed to reduce their absolute emissions, with an 11% decline recorded in some cases. However, many companies have managed to stabilize or slightly reduce their emission intensities. Despite the growing number of companies with net-zero targets, the report notes that less than 10% of companies from sectors contributing approximately 55% of India’s overall emissions (such as power, energy, and cement) have made such commitments. This gap suggests that, while there is progress, it may not be enough to meet India’s net-zero goals.

Sheetal Sharad, Chief Ratings Officer at ICRA ESG Ratings, emphasized the importance of continued innovation and regulatory support to accelerate net-zero efforts. She pointed out that climate strategies should account for India’s infrastructure-led growth and evolve in a way that encourages more high-emission companies to commit to net-zero targets. This would help accelerate the country’s progress toward its climate goals.