Carbon emissions reduction: India Inc is already on the job

India Inc. is helping boost the country's ambition to reduce carbon emission. Around 80 per cent of the big companies have emission reduction targets in place, says a recent survey by Carbon Disclosure Project (CDP).

According to the recent report, 47 companies of the BSE 200 index have disclosed information on climate change. The survey found 38 companies reporting current targets for cut in emissions. It said that companies were increasing focus on setting up emission reduction and renewable energy targets besides putting up an internal price on carbon as part of risk mitigation

India recently signed the Paris Agreement for combating climate change and became the 62nd country to do so. The countryaccounts for about 4.5 per cent of global greenhouse gas emissions and is the fourth largest emitter of greenhouse gasses.

The CDP survey records the contribution of large companies such as Tech Mahindra, Wipro, Infosys, Tata group, Godrej and ITC in the endeavour. In fact Tech Mahindra and Wipro lead the list and have been awarded a position on the Climate A list by CDP.

It also noted the significant interest in captive renewable electricity consumption by companies this year. The information technology (IT) sector along with materials and energy sector firms clocked the highest share in consuming all the renewable energy they produced.

Wipro, for instance, saw a growth of 15 per cent over a five-year period alongside a 24 per cent drop in emissions, with overall emissions intensity falling by 33 per cent. It has introduced new virtualisation technologies across its servers, resulting in huge annual energy savings.

Other companies that have demonstrated a decoupling of emissions and growth include Tata Motors and ITC.

Damandeep Singh, director, CDP India pointed to the science-based targets being adopted by companies to reduce emissions. “There is clearly hope and we encourage companies to do more which will future-proof the growth trajectory,” he said.

Along with emission reduction targets, companies have also reported on setting renewable energy targets. Infosys and Tata Motors have committed to a 100 per cent renewable energy consumption target by 2018 and 2030 respectively.

Mitigation strategies

The companies are deploying an internal price on carbon as one of the key risk mitigation strategies. These firms have seen the value of how an internal price on carbon helps in making the business case for low-carbon investments, and are now shifting their use of the tool towards delivering company-wide strategic advantage and meeting their climate targets.

In India, 15 per cent of the responding companies have put a price on their carbon emissions and 43 per cent are planning to set a price on carbon in the next two years.

Six companies have also joined the World Bank’s Carbon Pricing Leadership Coalition. These include Infosys, YES Bank, Mahindra & Mahindra, Dalmia Cement, Arvind and Hindustan Construction Company.

Less long-term ambition

According to the report, 85 per cent of businesses already have at least one target in place to reduce their greenhouse gas emissions. However, these targets are lacking in long-term ambition, with just 14 per cent of companies having set goals for 2030 or beyond. Moreover, only 9 per cent of the companies have committed to aligning their targets with the latest climate science for a 2˚C pathway.

The way forward

The government has announced new emissions control measures for thermal power plants and advanced the tightening of vehicular emission standards by stating it will skip Bharat Stage V and move to Bharat Stage VI by 2020. This will impact auto manufacturers and the oil & gas sector.

The Bureau of Energy Efficiency and power ministry also announced widening of the Perform Achieve and Trade (PAT) scheme to include more sectors and units with stringent standards.

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