Indian net-zero pledges lack bankable plans

IEEFA flags weak incentives, disclosure gaps and poor stress testing.

India’s corporate net-zero pledges are failing to convert into credible, finance-linked transition plans, leaving investors without visibility on climate risks and delivery pathways, according to a new IEEFA report.

The core issue lies in disclosure. Shantanu Srivastava, Research Lead, Sustainable Finance & Climate Risk, South Asia at IEEFA, said India’s Business Responsibility and Sustainability Reporting framework “covers wide aspects of environmental, social and governance aspects of the business with very scantily covering the climate specific metrics.”

This allows companies to set ambitious targets without mapping execution. “A lot of companies come up with net zero targets and other decarbonisation targets, but I'm not required to back them up with what they're going to do in the short and medium term in terms of operational changes and financial decisions,” he said.

Incentives are another structural weakness. Srivastava noted that across six high-emitting sectors, fewer than 10% of firms link key management incentives to climate goals. “Until, unless there are the right set of incentives and enumeration which link the achievement of climate targets to incentives for the board and key management personnel, they will not be the right set of levers,” he said.

Disclosure hesitancy, or “green hushing,” further clouds transparency, alongside capacity constraints among mid-sized firms.

For investors and lenders, ambition without detail is insufficient. Tanya Rana, Energy Analyst, South Asia at IEEFA, said: “Having a long term net zero target is just not enough.” Firms must identify “clear transition levers” and show how they affect operations and financial strategy so “the investors and lenders can see what are the climate related risks and opportunities over their investment horizon.”

Yet many companies fail to link those levers to stated climate goals. Rana said “this particular scenario analysis and stress testing part is the weakest area in the Indian transition planning disclosure space.”

Governance gaps compound the risk. Srivastava said firms must define roles from board level down, assess skills gaps and align remuneration with climate targets, but such information “is almost non-existent.”