In line with India’s ratification of the Paris Climate Agreement, there is an increased focus on setting voluntary emission-reduction and renewable energy targets among top domestic companies
Almost a fourth of India’s top 200 listed firms have set voluntary emission-reduction targets to transition to a low carbon economy, said a new report released on October 25. India on October 2 ratified the Paris Agreement that aims to restrict global warming within 2 degrees Celsius from pre-industrial times.
Large Indian companies are increasingly looking to set an internal price on carbon as part of risk mitigation, said the report by Carbon Disclosure Project India (CDP India), a not-for-profit environmental data platform. As many as 58 Indian companies responded to requests for information by CDP in 2016, of which 47 were among BSE top 200 companies. Another 11 companies came forward on their own to disclose their climate impact to CDP. The total reported emission from all these large firms totalled 293 million tonnes of carbon dioxide equivalent, CDP said.
“We are enthused to note that the quality of disclosure and efforts by Indian companies are improving year on year. Especially noteworthy is the fact the companies are adopting science-based targets. There is clearly hope and we encourage companies to do more which will future-proof the growth trajectory,” Damandeep Singh, Director, CDP India, said in a statement.
The India Climate Change Report 2016 was jointly prepared by CDP India and Environmental Resources Management, a global provider of environmental, health, safety, risk, social consulting services and sustainability related services.
Wipro Ltd, one of India’s top information technology services companies, saw a growth of 15% over a five-year period along with a 24% drop in emissions, with overall emissions intensity falling by as much as 33%. The company has introduced new virtualization technologies across its servers, resulting in huge annual energy savings, the report said. Other Indian firms that have demonstrated a decoupling of emissions and growth are Tata Motors and ITC Ltd.
However, these targets are lacking in long-term ambition, with just 14% of companies having set goals for 2030 or beyond. It is encouraging that Wipro, Tech Mahindra and Aditya Birla Chemicals have set science-based targets, CDP said.
With the ratification of the Paris treaty, India has set ambitious targets for itself. The country intends to affect a 33-35% reduction in greenhouse gas emissions per unit of gross domestic product.
Along with emission-reduction targets, local firms are also setting renewable energy targets, CDP said. Nearly 94% of responding companies see risks due to regulations related to climate change. Taxes and regulations, renewable energy requirements and cap and trade schemes are perceived as the top three regulatory risks, according to the CDP report.
At the same time, 89% of responding companies see opportunities arising out of climate change. The industrial sector saw the highest number of opportunities on an average, followed by utilities, financial services and information technology companies.
The challenge of climate change and how to address it is now firmly on the corporate agenda, according to CDP. “Given that this data is mostly based on calendar year 2015, and so predates the Paris Agreement, we may reasonably hope to see a jump in longer term targets in the next report, which will be based on data generated after the Paris Agreement,” the CDP report said. “The amount of emissions reductions pledged by companies has been increasing steadily from 2011 to 2015 and we hope to see it rise at a faster rate in future years, as company targets become more ambitious in response to the regulatory certainty offered by the Paris Agreement.”