India Inc demonstrate leadership in shift towards low carbon economy
Indian companies are way ahead in the region in disclosing their carbon emissions and setting performance targets for mitigation of GHG emissions.
44 Indian companies have responded to the Carbon Disclosure Project (CDP) this year. In the disclosure, companies reported on their carbon emissions data, reduction targets, associated risks and opportunities and increasingly board level managerial resources are spearheading the execution of climate change strategies within their organisations.
The most significant change from last years’ is that the responses have been improving both in terms of content and comprehensiveness.
The CDP report substantiates the significance of climate change from India’s policies to the corporate boardrooms. The report brings out the challenges Indian companies are facing and outlines how they have integrated the long term value and costs of climate change impacts into their assessment of financial health and future prospects for their business. The disclosures are based on their commitments towards the environment and averting climate change. The disclosure process was carried out by the CII-ITC Centre of Excellence for Sustainable Development and WWF-India in partnership with the Carbon Disclosure Project (CDP). The project is supported by the British High Commission.
The report brings out the challenges companies are facing and outlines how they have integrated the long-term value and costs of climate change impacts into their assessment of financial health and future prospects for their businesses. The company’s disclosures are based on their commitments towards the environment and averting climate change. CDP is a platform which enables them to share and highlight such initiatives amongst stakeholders both at local and global levels.
This year CDP was backed by 475 global institutional investors (representing more than US $55 trillion of funds under management), including Indian investors such as Yes Bank Ltd, IDBI Bank Ltd, and Infrastructure Development Finance Company Ltd (IDFC).
For CDP 2009, a total of 44 companies from as many as 13 sectors responded to the information request, while two companies provided partial information and three declined to participate. This year six of the 44 respondents are from the public sector.
However, compared to CDP6 (2008), there was also a significant improvement in the quality of disclosure this year. A larger number of companies have not only started disclosing information on their GHG emissions, but they are also adopting more accurate methodologies for doing so and are providing categorical break-downs of their GHG emissions.
Ms. Seema Arora, Head & Principal Counsellor, CII-ITC Centre of Excellence for Sustainable Development, “the CDP Report is a means to encourage companies to voluntarily disclose their GHG emissions and also highlight the various risks and opportunities posed by climate change. Reports such as this send out clear signs that industry in India has adopted an approach that can help India leapfrog to a low carbon economy”.
Key findings of the analysis:
- 63% of the companies disclosed their GHG emissions in CDP 2009, which is almost double as compared to only 33% in CDP6 (2008)
- The overall total GHG emissions reported by the respondents of CDP 2009 stands at 68.9 million metric tones (MT), which is almost double the GHG emissions reported in the last two years
- 68% of the respondents to CDP 2009 have reduction plans in place for slashing either their energy or GHG emissions as compared to 61% last year
- 84% of the companies don’t consider existing regulatory mechanisms as a risk but rather as an opportunity for triggering long term investment in energy efficient technologies. However, these companies do acknowledge that in future, the regulations may affect their businesses
- 82% of the companies acknowledge physical risks such as damage, disruption and displacement resulting due to climate change as some of the major challenges that could result in financial losses.
- This year a larger number of companies have not only started disclosing information on their GHG emissions, but they are also adopting more accurate methodologies for doing so and are providing categorical break-downs of their GHG emissions. While only 0.4 MT of Scope 2 emissions were reported in CDP6 (2008), the figure rose by ten times to 4 MT in CDP 2009.