A new report has called for hard-to-abate industries to demonstrate commitment to achieving net-zero targets.
A new ICRA report shows that India’s power sector is significantly transitioning towards renewable energy. Still, it underscores the need for increased commitment from high-emission industries to achieve net-zero targets.
According to an According to the ICRA ESG Ratings report, less than 10% of Indian businesses that have committed to net-zero goals are in high-emission industries like mining, cement, and electricity.
The majority of the 127 Indian companies with net-zero commitments come from low- to medium-carbon industries like software, pharmaceuticals, and textiles, according to the study, which focuses on businesses that follow the Science-Based Targets Initiative (SBTi).
Through the voluntary SBTi framework, businesses can set independently evaluated and validated science-based emission reduction targets.
In terms of the number of businesses devoted to the SBTi net-zero targets, India comes in sixth place worldwide; however, a sizable disparity still exists in high-emission industries, which contribute roughly 55% of the country’s overall emissions. These industries have been slow to adopt the global climate goals, especially cement and energy, the ICRA report states.
According to the findings, the power industry is moving toward renewable energy, and firms like Tata Power and Adani Energy Solutions are making progress in cutting emissions. But for the majority of businesses, coal-based power generation still dominates.
Similar to this, the cement industry is using carbon capture technologies and alternative fuels to reduce its emissions, which are a significant source because of the production of clinker.
The report emphasizes that, in spite of some advancements, very few corporations in the mining, cement, energy, and power industries have made a commitment to cutting emissions. Even though these industries may have internal objectives, fewer of them are in line with the SBTi, which may make it more difficult for India to meet its more comprehensive net-zero targets by 2070.
Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings, noted, “The lack of comprehensive commitment from high-emission industries indicates that while progress is being made, it may not be enough to meet net-zero targets. Greater regulatory support and innovation are needed to accelerate the transition in these sectors.”
In terms of corporate net-zero commitments, Europe leads the way, followed by Asia and North America, according to the report, which also highlighted global trends. It’s interesting to note that, despite being the world’s biggest emitter, China has comparatively few businesses dedicated to achieving net-zero emissions.
Although India has made progress toward net-zero, the report concludes that in order to meet the 2070 target and comply with international climate commitments, more thorough and sector-wide engagement is required, particularly from high-emission industries.
