Low-carbon economy transition plans announced by Indian industries rarely result in quantified, time-bound and financially integrated pathways, with limited linkage between targets, investments, revenues and risk management, according to a new report.
The Institute for Energy Economics and Financial Analysis (IEEFA) report examined transition planning practices in the Indian corporate sector through a comprehensive assessment of 33 companies operating in six high-emissions sectors: power, steel, cement, chemicals, raw materials, and oil and gas.
The lack of dedicated transition plan disclosures in the Corporate Responsibility and Sustainability Reporting (BRSR) framework, combined with limited guidance on financial materiality and forward-looking measures, has resulted in information that is difficult to compare, verify, or meaningfully use for investment and lending decisions.
India requires cumulative investments of $10 trillion (Rs 883 lakh crore) to achieve net zero emissions by 2070; Credible corporate climate transition planning is quickly becoming an essential condition for mobilizing capital.
IEEFA’s analysis identifies three systemic weaknesses in India’s current transition planning landscape. First, transition ambition rarely translates into quantified, time-bound and financially integrated pathways, with limited linkage between objectives, capital expenditure, revenues and risk management.
Second, governance structures are present in form but weak in substance; and finally, the information provided is fragmented and retrospective, reducing its usefulness for capital providers.
The assessment finds that while most companies have announced net zero or emissions reduction targets, few explain how these targets will be achieved.
“Only a limited number of them link their targets 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,” says Shantanu Srivastava, head of research, sustainable finance and climate risk, South Asia.
Financial disclosure also remains a major gap. Companies rarely quantify the potential financial impacts of climate-related risks and opportunities. Scenario analysis, when disclosed, is qualitative and lacks transparency regarding assumptions, time horizons, timing or financial implications.
Governance disclosures further weaken the effectiveness of transition planning. “While most companies report oversight of sustainability issues at board or executive level, few provide evidence of clear accountability, decision-making authority or incentive structures linked to transition outcomes,” says Tanya Rana, energy analyst at IEEFA – South Asia.
Overall, the sectoral review reveals significant heterogeneity in the maturity of disclosure of transition plans across India’s top emitting industries. A consistent trend is emerging: a handful of large listed or globally exposed companies are demonstrating relatively advanced practices, while the majority are still at an early stage of transition planning.
“Disclosures are strongest on high-level ambition statements, and weakest on quantification at leverage level, financial integration and Scope 3 coverage,” says Srivastava.
Governance structures are often in place, but operational integration, capacity building and climate-related remuneration remain limited. Commitment to workforce and community transition continues to be defined as corporate social responsibility rather than just transition, and external assurance practices vary significantly depending on company size.
