India Ranks 6th Globally in Corporate Net-Zero Commitments

India has emerged as the sixth-ranked nation globally in corporate climate action, with 127 companies pledging to achieve net-zero targets under the Science-Based Target Initiative (SBTi), according to a report by ICRA ESG Ratings.

Most of these companies belong to sectors like textiles, software, and pharmaceuticals, which have relatively low to medium carbon footprints. In contrast, only about 7 per cent of the committed companies are from high-emission industries such as construction materials and mining.

The report highlights a significant transition towards renewable energy in India’s power sector, particularly among firms with net-zero commitments, leading to notable emission reductions. SBTi is a voluntary framework enabling companies to set science-based climate targets that are independently assessed and validated, following sector-specific guidelines.

While the United Kingdom leads globally in the number of companies aligning with SBTi net-zero goals, India’s position underscores its growing role in global climate action. Interestingly, despite being the world’s largest emitter, China lags in corporate net-zero commitments compared to its peers.

The report also sheds light on specific industries, observing that while coal-based power generation remains prevalent, there is a clear shift towards renewables. In the cement sector, emissions from clinker production are being addressed through alternative fuels and carbon capture technologies. Similarly, the metal and mining industries are adopting sustainable practices, with varying emission levels among companies.

However, challenges persist. Less than 10 per cent of companies from high-emission sectors like power, energy, and cement—responsible for roughly 55 per cent of India’s total emissions—have committed to net-zero targets through SBTi. Notably, only a small fraction of corporates achieved a reduction in absolute emissions, showing an 11 per cent decline over the past six years. Yet, many have managed to stabilize or slightly decrease their emission intensities, reflecting incremental progress.