Key Takeaways
➢ Indian corporates are actively integrating sustainability into their operations by setting emissions reduction targets and committing to global climate initiatives. The number of companies with climate commitments has quadrupled from 2019 to 2022.
➢ A significant portion of companies that have made climate commitments have demonstrated progress in fulfilling these commitments by reducing their carbon emissions. Several key factors contribute to the success of companies in achieving their climate commitments and reducing their carbon footprint. These factors include the company’s market capitalization (MCAP), their greenhouse gas (GHG) emissions, the presence of comprehensive sustainability roadmaps, and the recognition of climate change as a material risk.
➢ It was found that larger market capitalization companies have had more success in achieving emissions reduction targets. The top 200 Indian corporates perform better in climate commitments compared to other listed companies.
➢ Another key reflection is that companies belonging to ‘Hard-to-abate’ sectors, such as energy and utilities, are lagging in their decarbonization efforts.
➢ Companies with both long-term and short-term climate goals have a higher likelihood of success.
➢ Energy, real estate, and utilities sectors are actively identifying climate risks in their materiality assessments; however, it is companies belong to IT, Materials, Industrials, Consumer Discretionary, and Consumer Staples sectors that are proactively committing to ambitious climate targets.
➢ The Information Technology (IT) sector has established ambitious climate targets and is making notable strides towards achieving them. Due to its relatively low carbon-intensive operations, companies in this sector have a favorable position to readily adopt and implement decarbonization initiatives.
➢ Sectors such as Energy, Utilities, Industrials, and Materials encounter difficulties in reducing their carbon footprint as a result of the carbon-intensive characteristics inherent in their operations.
