Indian companies may be high on talking about ESG and reducing carbon footprint but only a handful of corporates have managed to reduce their absolute emissions in the last six years, a new study by ICRA ESG Ratings.

“Less than 10 per cent of companies from sectors contributing 55 per cent to India’s overall emissions (power, energy, cement) have committed to net-zero targets through Science Based Targets initiative (SBTi). This indicates that despite the large number of companies setting up targets, it may not be sufficient to meet the net-zero goal as the high-emitting companies are still not fully committed,” ICRA ESG Ratings said.

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 initiative has guidelines for setting emission reduction targets for various sectors. India ranks sixth globally, with 127 companies committed to SBTi net-zero targets but these are primarily from non-hard-to-abate sectors like textiles, software, and pharmaceuticals. 

Adani Energy cuts absolute emissions by 11 per cent

Notably, none of the top three contributors of emissions in the power sector have committed to SBTi targets, and of the six companies under SBTi, only Adani Energy Solutions has managed to reduce absolute emissions by 11 per cent in the last six years by transitioning towards renewable energy and adopting energy efficiency measures. With a capacity of 14,707 MW, Tata Power Ltd., which has a self-declared net-zero target, witnessed a 15 per cent increase from FY19 to FY24. This was aligned with the industry trend, resulting from increasing production capacities and demand for electricity and power across the nation, Icra ESG Ratings said.

Within the cement sector, 11 companies have applied to SBTi stating their commitment to reduce their emission level, with nine companies having public disclosures. Of these companies, only one entity has been successful in reducing absolute emissions by 11 per cent from 2019 to 2024

Hindalco, Jindal ‘steel’ the show

In the metals space, Hindalco and Jindal Steel, have been able to reduce their emissions by 3 per cent and 40 per cent, respectively, by increasing their renewable energy capacity, and integrating green energy and green hydrogen into their production processes.

“On analysing major contributors of emissions from the top emission-producing sectors of India, it was observed that only a handful of corporates managed to reduce their absolute emissions in the last six years. The Indian corporates considered for this study have been implementing innovative strategies by transitioning to renewable energy and implementing energy efficiency measures, which have led to a stability/decline in their emission intensities to a certain extent. However, they still require concrete action plans to reduce absolute emissions for a longer period, going forward,” ICRA ESG Ratings said.

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