Mumbai: India has ranked 5th among the countries surveyed for corporate commitments to science-based targets (SBT), ahead of Germany and Sweden, according to a report by a non-profit organisation released here on Monday.
The report found that investors are demanding better disclosure of climate change risk from Indian companies which has spurred better disclosure from India Inc.
The Carbon Disclosure Project (CDP) India annual report, which examines carbon reduction activities of companies, shows a whopping 58 Indian companies, 98 per cent of the 59 firms surveyed between 2018 and 2019, have board-level oversight of climate-related issues.
Increasing climate activism and the growing band of climate-conscious investors have ensured that almost all boards of top responding Indian companies now have committees and members designated to addressing climate risk, the report said.
"Scores of investors are actively engaging companies to disclose their climate risk and helping them to do better," said Damandeep Singh, Director CDP India.
"This can only benefit the companies through green innovation and help clean up our environment. The unlikely duo of world's teenagers and investors seem to be pushing the world, we now need to pick up the pace," Singh said in a statement.
Over 6,900 companies with over 55 per cent of global market capitalisation disclosed environmental data through CDP in 2018.
The report shows India is now the fifth country, and the first developing economy with maximum number of companies committing to SBT.
The US and Japan topped the list with 135 and 83 companies, where as the UK ranked third with 78 countries, and France took the fourth spot with 51 companies.
By December last year, 38 Indian companies have been committed to SBT, which is significant growth from 25 companies in 2018, according to the report.
Germany and Sweden had 30 and 27 companies respectively, while as Switzerland and Spain had 23 and 22 companies respectively. Netherlands was 10th on the list with 18 companies in SBT initiatives.
According to the report, top corporate managements in India have integrated climate concerns in performance evaluation of key personal, with nearly 90 per cent providing incentives to senior staffers to help meet targets.
As many as 71 per cent, or 42 Indian companies, provided monetary rewards, and 37 gave non-monetary rewards for recognising, monitoring and overseeing progress in climate-related targets, it found.
"Indian companies have reaffirmed their commitment to addressing the challenge of climate change by taking bold emission reduction targets and promoting renewable energy which has put India on the path to achieving its commitments under the Paris Agreement," said R Mukundan, MD & CEO of Tata Chemicals Ltd. and a Board member of CDP India.
"The 2019 disclosure statistics show that 57 out of the 59 Indian companies that responded to CDP have incorporated this approach in their business strategy," he said.
In 2019, up to 57 of the 59 responding companies stated that they have a process for risks assessment, the researchers said.
Of the 43 responding companies that assess risks annually, 29 (67 per cent) also consider risks for more than six years into the future, clearly promoting a long-term vision, they said.