MUMBAI, DEC 4 (IANS) — About 127 companies in India are committed to net-zero targets, according to a report.
The report by ICRA ESG Ratings’ showed that about 7 per cent of these belong to high emissions sectors like construction materials and mining, while others are from sectors like textiles, software, and services -- typically considered to have low to medium levels of carbon footprint.
The report on science-based target initiative (SBTi) commitments by Indian companies reveals a significant shift towards renewable energy in the power sector particularly among companies with net-zero commitments, resulting in reduced emissions.
SBTi is a voluntary target-setting initiative whereby companies can commit to setting science-based targets and have their objectives independently assessed and validated. Commitments and target taking are done through stated sector-wise guidelines by SBTi.
The UK leads globally with the highest number of companies committed to SBTi net-zero targets, and India ranks sixth. On the other hand, China was found with the lowest share of companies with such commitments. This is despite being the largest emitter, the report said.
“Our findings emphasise the importance of committing to net-zero targets and how aligning with SBTi is a good way to enhance climate strategies, promote transparency and accountability, and highlight the need for continued innovation and regulatory support,” said Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings.
“Such initiatives and standards should acknowledge the role of India as a key actor in climate change action,” she added.
Sharad suggests that when developing guidelines towards target setting, they “should consider the infrastructure-led growth in developing nations like India. This will encourage more entities towards alignment”.
About 25 companies in India were from the power, cement, and mining sectors -- indicating a marked shift towards renewable energy adoption in the power sector even while coal-based generation remains prevalent.
In the cement sector, high emissions due to clinker production are being mitigated through alternative fuels and carbon capture technologies.
The metal and mining sector shows varied emission levels, with higher adoption of sustainable practices among companies with net-zero commitments.
Further, the report showed that only a handful of corporate companies have managed to reduce their absolute emissions (about an 11 per cent decline) in the last six years. However, they have managed to stabilise or decline the emission intensities to a certain extent.
The report noted that less than 10 per cent of companies from the power, energy, and cement sectors -- contributing about 55 per cent to India's overall emissions -- have committed to net-zero targets through SBTi.
This indicates that it may not be sufficient to meet the net-zero goal as the high-emitting companies are still not fully committed.