As India Chases 2070 Net Zero Goal, Most Companies Promise Big, But Lack Clear Plans: Report

As India remains steadfast in its climate action and Net Zero goal of 2070, a growing gap is emerging between corporate promises and real action. While most Indian corporates have announced Net-Zero targets to limit emissions, most of these ambitions to help combat climate change often stay on paper.

According to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), while most companies have announced net-zero or emission reduction targets, few explain how these targets will be achieved. The latest analysis covers 33 companies across six highly-polluting sectors – power, steel, cement, chemicals, commodities, and oil and gas, and found these plans lacking in clear, quantified, time-bound action.

Only seven of the 33

companies clearly linked emission targets with specific actions planned over different time periods. Just 11 companies conducted climate scenario analysis to understand how different future climate situations could affect a company, limiting the usefulness of disclosures for investors assessing transition risk and resilience. Despite widespread Environmental, Social and Governance (ESG) frameworks, only 10 companies have dedicated senior sustainability leadership, and just nine link climate or ESG performance to executive incentives.

“Only a limited number link their goals to capital expenditure plans, revenue assumptions or changes in business strategy, making it difficult for investors and lenders to assess the feasibility of transition pathways,” said Shantanu Srivastava, research lead, sustainable finance and climate risk, IEEFA South Asia.

The report highlighted that India needs about 10 trillion in investments to reach Net Zero emission target by 2070. To attract this kind of capital, companies need to have clear and credible climate transition plans, but companies still have weak plans, and many act on climate issues, mainly to meet regulations, not as part of a long-term strategy. “The absence of dedicated transition plan disclosures within the Business Responsibility and Sustainability Reporting (BRSR) framework, combined with limited guidance on financial materiality and forward-looking metrics, has resulted in disclosures that are difficult to compare, verify, or use meaningfully for investment and lending decisions,” the report stated.

WHERE IS THE PROBLEM?

The analysis identified three systemic weaknesses in India’s current transition planning landscape. First, companies often announce ambitions, but rarely back them up with clear numbers, timelines and funding plans. These targets are rarely linked to their spending, earnings or risk management. Second, governance structures exist on paper, but they are often weak in practice. And thirdly, climate disclosures are scattered and focused on past actions, making them less useful for investors and lenders.

Financial disclosures also remain a major gap. Companies fail to quantify the potential financial impacts of climate-related risks and opportunities. “While most companies report board- or management-level oversight of sustainability issues, few provide evidence of clear accountability, decision-making authority or incentive structures linked to transition outcomes,” said co-author Tanya Rana, energy analyst, IEEFA – South Asia.

Experts recommend that companies move beyond high-ambition statements and develop transition plans that clearly link emissions targets to capital expenditure, operational changes, financing needs and risk management processes. For regulators, the report recommends that SEBI explicitly integrates transition planning expectations within the Business Responsibility and Sustainability Report (BRSR) framework, including clearer guidance on forward-looking metrics, financial materiality and the linkage between climate targets and business strategy.