It’s not easy to get companies to do something they are not required to. Just ask Damandeep Singh. As the India director of CDP, a London-based climate assessment nonprofit, Singh’s job over the past decade has been to convince India’s largest companies to voluntarily disclose their carbon emissions and commit to reducing them.
He expected Covid to make his task harder, with at least a 25% drop in disclosures. Surprisingly, they actually went up. “By 20%,” says Singh.
Out of India’s 200 most valuable companies, 60 responded to CDP’s request for climate disclosures in 2020, compared to 50 in 2019. “The sharper focus on ESG was definitely a big factor in that,” he adds.
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“I’m not getting the aggressive pushback from companies I used to get earlier, when they would say, ‘Who are you to ask us to report when the government isn’t asking us to?’” says Singh.
The year 2020 is also significant in India Inc’s timetable in other ways. It was the first year in which Indian companies received CDP’s highest climate disclosure ratings. In addition, India now has the sixth-largest number of companies that have set emission-reduction targets or have agreed to do so.
All things to be hopeful about. However, the optimism needs to be tempered.
Sustainability in India evolved as an extension of corporate social responsibility, says Anand Krishnamurthy, co-founder of ESG consultancy Envint. “Climate disclosures are a recent phenomenon.”
Not surprisingly, the quality of most companies’ CDP disclosures is average or worse. And inconsistent. Some companies belonging to a conglomerate had no problem making disclosures, but others decided to stay away. The Aditya Birla Group and the Adani Group are cases in point.
India’s most valuable company decided not to join the party, either. Reliance Industries Limited (RIL), the oil refining and petrochemicals behemoth, did not respond to CDP’s request in 2020.