New Delhi, March 27, 2024: More than half (52%) of the businesses surveyed in India have decarbonization plans that are acutely aligned with the Paris Agreement, and the majority of them (92%) believe that the targets are attainable, according to a new study.
On the path to meet their goal to achieve net zero emissions by 2070, 91% of Indian businesses have set targets to reach net zero, however, the 2030 deadline the country has set for itself seems unrealistic, said the study launched by global management consultancy Kearney.
The study titled “Regenerate: an Asia Pacific study on sustainability and beyond” revealed that to achieve progress on the sustainability front, Indian companies need to adjust strategies and set achievable timelines.
The report indicates the country’s relatively healthier pace of progress towards global net zero targets when compared with other APAC countries surveyed.
The study, surveyed nearly 1,000 business leaders across diverse industry sectors in nine Asia Pacific (APAC) countries: India, Australia, China, Indonesia, Japan, Malaysia, the Philippines, Singapore, and Thailand. The report aimed to capture regional business executives’ views on sustainability initiatives within their organizations, covering target setting, decarbonization pathways, and hurdles impeding progress.
The comprehensive report comes at a time when closing the gap between ambition and action is imperative, as businesses urgently need to align their sustainability goals with tangible measures to mitigate environmental impact. This is particularly true in APAC, where climate change presents an existential threat amid high exposure to extreme weather events, such as flooding, heatwaves, and droughts, which have the potential to disrupt decades of economic progress.
While Asia-Pacific businesses are optimistic about achieving their decarbonization targets, India is at the forefront of leading the region towards achieving net zero
Businesses across APAC are actively setting target dates for achieving net zero. A significant 85% of companies perceive the decarbonization targets set by their organizations as attainable, with over one-third (37%) indicating they are highly achievable. This optimistic outlook is most commonly held by leaders in Thailand and India, where 56% and 51%, respectively, say their targets are highly achievable.
However, decarbonization goals often fail to align with the Paris Agreement, signalling a mismatch between the pace of company aspirations and global objectives aimed at limiting global warming to 1.5°C. The majority of businesses in India (71%) believe that enhanced technologies would accelerate their decarbonization initiatives, with the highest in Thailand (76%) and Malaysia (73%). Additionally, over half (57%) consider support from the government crucial for expediting decarbonization efforts, with the Philippines ranking the highest (63%) followed by Singapore (58%) and India (57%). India had the highest number of leaders (69%) suggesting the need for a better ability to measure emissions.
In India, the pursuit of broader sustainability objectives also experiences hurdles such as complexities in overcoming technical challenges (65%), limited capabilities including the quality and quantity of resources (63%1), and businesses frequently grappling with the challenges of cross-team collaboration (57%1).
To overcome these obstacles, there is a clear need for improved understanding by Board members; only 37% of respondents strongly agree that sustainability trends are well understood by their Board members and executive teams.
Arun Unni, Partner and APAC Sustainability Co-lead, Kearney, said: “Energy transition is not just a challenge but presents one of the greatest investment opportunities in the coming decades. It is positive to see businesses across the Asia Pacific actively setting targets for achieving net zero. However, these targets need to be aligned with global standards, even if the approach is highly local. If timed right, not only can they harness the full benefits of clean energy technologies and energy-efficient practices, but they can also add significantly to their bottom-lines and valuations."
Concerns about greenwashing are prompting companies to invest more in sustainability, 86% say that greenwashing concerns have motivated their organization to increase investment in sustainability resources and capabilities. However, the study also found that 78% say it has made their organization more hesitant to discuss sustainability plans publicly. 87% of leadership in India has expressed concerns about greenwashing. To tackle this issue, business leaders in India are motivated to change their approach towards: more conscious supplier and partner arrangements (92%), more cautious in emissions management plans/target setting (92%) and tighten sustainability policies and processes (91%).
In addition, almost three-quarters (72%) of companies continue to view sustainability efforts as a cost to business rather than a value-creating opportunity. This sentiment is particularly strong in India (78%), followed by Australia and Indonesia (77%). More than half of the businesses in India (52%) view sustainability trends as a risk rather than an opportunity. This leads to companies adopting short-term sustainability plans (61%) and most (81%) having sustainability ambitions influenced by meeting societal expectations and keeping up with competition.
Kate Hart, Partner and APAC Sustainability Co-lead, Kearney, said: “The perception of sustainability as a cost instead of an opportunity is unfortunately a short-term business focus which hinders the full integration of sustainability into operations. Closing this gap requires strong leadership, innovation, and a resilient culture which demands more than just sustainability; it requires embracing regenerative principles.”
Asia remains especially vulnerable to climate impacts and as growth continues to surge, there is an urgent need for the region to transition towards development that is not only carbon-neutral but also climate-resilient. Regenerative businesses are at the forefront of adopting this transformative approach. More than 40% of surveyed companies perceive themselves as embracing regenerative practices, led by companies in Indonesia (57%), India (54%) and Thailand (54%).
Notably, among the 54% of companies across India acknowledging the potential for regenerative practices to improve profit and long-term growth, 52% aspires to achieve regenerative practices within the next 1-3 years.
Arun Unni, Partner and APAC Sustainability Co-lead, Kearney, said: “In India, where sustainability is an increasing focus, businesses are exploring creative ways to achieve their decarbonization goals. By leveraging clean energy technologies supported by government interventions, Indian businesses are using immediately available greening opportunities to reduce their footprint.”
India is ranked fourth in the world for its renewable energy installed capacity, and Improved technology, better ability to measure emissions, and increased government support will fuel momentum in driving investments in energy efficiency, expanding renewable energy generation, as well as the use of green hydrogen for energy storage.
