In June 2023, temperatures in several parts of India soared to over 45 degrees Celsius. In a little over two decades, the country’s climate is estimated to exceed survivability limits. Water crisis continues to escalate, with experts warning that India’s groundwater table risks steady depletion over the next two decades — this has a cascading effect on irrigation, agricultural production and livelihood. Despite the challenges, India is one of few economies on track to accomplishing nationally determined contributions or national plans to limit global warming to 1.5 degrees Celsius.

Climate risk is today a dominant theme, appearing consistently on the World Economic Forum’s Global Risks Report since its first instance in 2011 and one which we seem least prepared for. At the recently concluded 2023 United Nations Climate Change Conference (COP28) in Dubai, the first-ever global stocktake — an effort to assess progress against the Paris Agreement — determined that the world is not on track to meet our climate goals. Global problems need coordinated and collaborative solutions. Any course correction will require the combined efforts of government and business and thoughtful action at an individual level.

Climate action was one of the priority subjects during India’s G20 presidency. At COP28, Prime Minister Narendra Modi called for technology transfer and funding for developing nations to tackle the crisis. In the spirit of democratising climate action, the Prime Minister announced the launch of the Green Credit Programme, which incentivises positive environmental action to improve the “Earth’s Health Card.”

The role of government is to set the vision and create an enabling policy framework to achieve national and global goals. However, while the policy is the bedrock of change, the responsibility is not the government’s alone. Businesses must act immediately and in an accelerated manner.

Business action today has prioritised efforts on reducing their carbon footprint — or climate mitigation. What is also needed is climate adaptation strategies. While the total number of companies with commitments to science-based targets rose more than six-fold from the end of 2020 to August 2023, fewer than 20 per cent of the world’s top 1,000 companies had science-based targets aligned with a 1.5 degrees Celsius pathway. Almost 40 per cent had no net-zero commitment. However, in their growing presence at climate gatherings, businesses are signalling their need to understand how the situation is evolving.

Businesses are not immune to the effects of climate change. A survey of over 100 Forum partners with a cumulative market value of over $20 trillion and revenue of $8 trillion in 2022 reported that the impact of climate change is equivalent in cost to 10 per cent of annual sales and 4 per cent of market value. But there is also opportunity — an incentive to tap into the climate economy by innovating products and services.

Steps for business

This is how businesses can double down on efforts.

Unlock climate finance: The World Bank estimated that developing nations will need an average of $2.4 trillion per year between now and 2030 to address the global challenges of the pandemic, conflict and climate change. With multilateral development banks and governments currently being the main contributors to climate finance, there is an opportunity to mobilise large banks and private capital towards adaptation finance.

Facilitate innovation of products and practices: India has a thriving start-up ecosystem, the third largest in the world. Venture capitalists and entrepreneurs can catalyse funds, expertise and support to fuel climate technology innovation and align start-up efforts to meet net zero targets. Larger companies can also mainstream such innovation.

Amplify the demand for value chain interventions: The Forum’s First Movers Coalition is the world’s largest private sector grouping, signalling demand for emerging climate technologies. Renew Power from India is one of 96 members of the coalition which has collectively made purchase commitments, which by 2030 will represent an annual demand of $16 billion for emerging climate technologies. The Forum also recently launched the First Movers Coalition for Food, a coalition of over 20 corporate and research partners — including UPL Ltd from India — which aims to create aggregated market demand for sustainably produced and low-emission agricultural commodities.

The Forum and its partners from India launched the Alliance of CEO Climate Leaders India Chapter to supercharge India’s climate action and decarbonisation efforts. The Alliance comprises leading Indian business voices, releasing a joint study to enable India’s roadmap to green hydrogen and addressing private sector investment in nature-based solutions.

The way forward

As consensus emerges on the urgency and magnitude of the transformation needed to decarbonise the global economy and reduce climate impacts, India’s role will be critical if the world is to achieve its targets. Following its noteworthy pledge at COP26 to reach net-zero emissions by 2070 and its 2030 commitments, the Indian government has expedited efforts to sprint towards those goals, achieving 50 per cent of its 500 gigawatt renewable energy target, setting an inspiring example by launching global movements such as the International Solar Alliance, Coalition for Disaster Resilient Infrastructure and Global Biofuels Alliance.

Collective action, strong public-private collaboration and business leadership will be important to secure net-zero ambitions and build a nature-positive world. As the international organisation for public-private cooperation, the Forum’s purpose is to convene stakeholders to generate impact through purpose-driven communities and platforms. The Forum is committed to supporting India in its vision and efforts to drive climate action and environmental sustainability.

Viraj is Head, Regional Agenda, India and South Asia, and Aditi is Head of Business Engagement, India and South Asia, World Economic Forum