Top Indian companies have reaffirmed their commitment to fighting climate change by taking bold emission reduction targets and promoting renewable energy that has put the country on the path to achieving its global commitment well ahead of the Paris Agreement targets.
This was the observation of Carbon Disclosure Project-India’s (CDP) annual report of 2018, titled “Corporates #StepUp Climate Action”.
The CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions.
In India, 25 companies committed to science-based targets in alignment with the Paris Agreement by December 2018, propelling the country to the fifth position after the US, Japan, Britain and France in corporate climate action.
Of these, Wipro, Hindustan Zinc Ltd and Mahindra Sanyo have approved targets.
In 2018, 52 Indian companies responded to CDP’s climate change questionnaire, of which eight companies came forward on their own volition to disclose their climate impact to the CDP.
Their responses were analysed through the fresh lens of governance and strategy, including scenario analysis, risks and opportunities, emissions and targets, engagement with value chain and verification and assurance, said the CDP.
Fifty companies have board-level oversight of climate-related issues of their operations and 44 of them provide incentives to the management for achieving targets.
To guide their climate oversight, 40 per cent of the Indian companies either used the two degrees scenario of the Intergovernmental Panel on Climate Change or India’s Nationally Determined Contributions for their climate-related scenario analysis.
“These actions match the requirements of Task Force of Climate-related Financial Disclosures,” CDP-India Director Damandeep Singh told IANS.
“It is also important for companies to assess their short, medium and long-term climate-related risks and opportunities — 83 per cent of the responding companies identified these as having substantive financial or strategic impact on their businesses.”
In 2018, the 52 reporting companies accounted for total reported emissions of 299.7 MtCO2e or metric tonnes of carbon dioxide equivalent.
Ninety-five per cent of these companies had emissions reduction initiatives active within the reporting year.
A total of 69 targets have been undertaken by the responding companies, comprising of both absolute and intensity targets.
Setting science-based targets in conformity with the Paris Agreement provides companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions.
The combined market capitalisation of all companies that have joined the Science Based Targets initiative (SBTi) is nearly $10 trillion, comparable to the NASDAQ stock exchange, said the report.
Nearly a fifth (17 per cent) of Fortune Global 500 companies have now committed to set science-based emissions reduction targets which includes companies from the heavy emitting sectors.
There has been a 46 per cent increase in the number of companies joining the initiative in 2018, from 2017.
An important tool for managing climate risk, companies are increasingly adopting internal carbon price.
In line with this approach, 37 reporting companies (from all samples) have an internal carbon price or intend to put one in place within the next two years.
The number of companies incorporating an internal carbon price has increased from 11 in 2017 to 13 in 2018, along with 24 companies anticipating adopting it in the next two years, as compared to 20 companies in 2017.
Mahindra & Mahindra, ACC and Infosys are the first few trendsetters from India.
Additionally, India had committed that by 2030, as much as 40 per cent of its installed energy capacity will be non-fossil fuel based.
In 2018, the responding companies in India consumed a total of 86 TWh electricity in their operations, of which six per cent (5.5 TWh) came from renewable energy sources.
Companies find renewable electricity targets as an important tool to challenge them and benchmark its performance against peers. Seventeen companies have reported renewable energy targets.
In India, five companies — Infosys, Dalmia Bharat, Tata Motors, Hatsun Agro Products and Mahindra Holidays — have committed to using 100 per cent renewable electricity in their global operations by joining RE100.