Indian Companies Exhibit Strong Net Zero Ambitions but Face Implementation Hurdles
A comprehensive study has highlighted a significant gap in the corporate sector of India, where firms demonstrate high aspirations for achieving net zero emissions but encounter substantial weaknesses in practical implementation. This research underscores the critical need for bridging ambition with actionable strategies to meet climate goals effectively.
Procedural ESG Structures Lack Accountability and Execution
The investigation reveals that a majority of Indian companies have established environmental, social, and governance (ESG) oversight frameworks. However, these arrangements are often procedural in nature and have not evolved into robust systems that ensure clear accountability, align incentives, or build execution capacity for delivering on climate transition objectives.
Key findings from the study indicate:
- Most firms have formal ESG oversight structures in place, but these remain largely superficial.
- There is a notable absence of clear accountability mechanisms to drive climate action.
- Incentive structures are not adequately aligned with net zero goals, hindering progress.
- Execution capacity for implementing climate transition plans is insufficient across many organizations.
The Urgent Need for Enhanced Climate Governance
This gap between ambition and implementation poses a serious challenge to India's broader climate commitments. As the country strives to meet its international environmental targets, the corporate sector must move beyond procedural compliance and develop more substantive approaches to ESG governance.
The study emphasizes that without stronger accountability and execution frameworks, Indian companies risk falling short of their net zero promises, potentially impacting both environmental outcomes and investor confidence.
To address these weaknesses, experts recommend:
- Strengthening board-level oversight of climate transition plans.
- Implementing clear performance metrics and incentives tied to net zero objectives.
- Investing in capacity building to enhance execution capabilities.
- Fostering a culture of transparency and accountability in ESG reporting.
As the global focus on climate action intensifies, Indian firms must prioritize closing this implementation gap to not only meet regulatory requirements but also to capitalize on the economic opportunities presented by the transition to a low-carbon economy.
