India's 78% firms think achieving net zero is cost to business, 52% say it's risky: Report

 A leading global management consulting firm working with more than three-quarters of the Fortune Global 500, as well as with government bodies and nonprofit organizations, has said that while vast majority of Indian businesses surveyed (91%) claim they have set targets to reach net zero, with 51% of them viewing these targets as “highly achievable”, ironically, most of them (78%) consider sustainability as a cost to business rather than opportunity.

The report regrets, “More than half of the businesses in India (52%) view sustainability trends as a risk rather than an opportunity”, as against the average of 51% of the nine countries the consulting firm has studied. “This leads to companies adopting short-term sustainability plans (61%)”, with most firms (81%) “having sustainability ambitions influenced by meeting societal expectations and keeping up with competition”, it rues.
The Chicago-based firm, Kearney, in its report, "Regenerate: an Asia Pacific study on sustainability and beyond", which surveyed a total of 975 top business executives across nine countries in the Asia Pacific -- Australia, China, India, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand -- between November and December 2023, said, India’s 52% of the executives said their firms had “decarbonization plans acutely aligned with the Paris Agreement” and 92% believed the targets were “attainable.”
However, there is a catch, it suggests. Most of the executives (91%) said that they will be able to meet achieve net zero emission only by 2070, and the 2030 deadline the country has set for itself – limiting global warming to 1.5°C – seems “unrealistic.” Even to achieve the net zero emission 2070, the report indicates, the companies would “need to adjust strategies and set achievable timelines”, but for this several “hurdles” would need to be crossed.

Identifying the hurdles, the report said, 71% of businesses in India believed that enhanced technologies alone would accelerate their decarbonization initiatives. But, it underlines, over half (57%) do not think this would be possible without “support” from the government – which according to the executives is “crucial for expediting decarbonization efforts.”
Further, the report said, 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%), and businesses frequently grappling with the challenges of cross-team collaboration (57%).”
According to the report, most companies viewing sustainability primarily as a cost or a risk “also have “lack of alignment with corporate purpose and values.” Thus, India’s 81% of executives said their sustainability ambitions are largely influenced by meeting societal expectations and keeping up with competition rather than alignment with corporate purpose or vision – suggesting their “corporate ambitions about sustainability are not fully aligned with strategies.”

While the report says that to overcome businesses’ obstacles to achieve the net zero goal “there is a clear need for improved understanding by board members”, yet the fact is, to quote from the report, “only 37% of respondents strongly agree that sustainability trends are well understood by their board members and executive teams.”
The report also expresses huge concerns about “greenwashing” – defined as an “act of making false or misleading statements about the environmental benefits of a product or practice” – among the businesses. Thus, India’s 87% executives (as against the average of 83% in the surveyed countries) express concern about greenwashing. Yet, these firms are “hesitant to discuss sustainability plans publicly”, it admits.
Kate Hart, a co-author of the report, is quoted as saying: “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.”

Arun Unni, a co-author of the report, says that while it is “positive to see businesses across the Asia Pacific actively setting targets for achieving net zero”, the targets “need to be aligned with global standards, even if the approach is highly local.” He adds, “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."