A recent comprehensive analysis by the Indian Institute of Management Bangalore (IIM-B) has brought to light a significant increase in the climate footprint of India's leading corporations. The study, which evaluated Business Responsibility and Sustainability Reporting (BRSR) filings from 982 companies across 22 sectors, indicates that the top 1,000 listed Indian firms are projected to see a 53% jump in their operational greenhouse gas emissions by the 2024-25 fiscal year.
This surge in emissions is largely attributed to escalating power demand within Indian industries, coupled with a persistently low adoption rate of renewable energy sources. The findings underscore a critical challenge for corporate India's environmental sustainability goals.
Rising Operational Emissions and the Power Sector's Role
The IIM-B study, conducted by the institute's Supply Chain Management Centre, found that absolute Scope 1 and Scope 2 emissions climbed by 4.29% year-on-year. A substantial 53.1% of companies reported an increase in their direct operational footprint. The power sector emerged as a primary contributor, accounting for approximately 32.9 million tonnes of carbon dioxide equivalent (tCO₂e) out of the total 53.7 million tCO₂e net increase.
- Scope 1 emissions cover direct emissions from sources owned or controlled by the company, such as boilers, furnaces, and company vehicles.
- Scope 2 emissions account for indirect emissions from the generation of purchased electricity, steam, heating, and cooling.
This data highlights the disproportionate impact of energy-intensive industries on the nation's corporate climate trajectory.
The Challenge of Supply Chain Emissions (Scope 3)
While direct operational emissions are on the rise, the study also shed light on the vast scale of Scope 3 emissions, which encompass value chain and supply chain emissions. Total disclosed Scope 3 emissions reached 1.48 billion tCO₂e, officially surpassing the combined Scope 1 and 2 emissions of 1.31 billion tCO₂e. This confirms that supply chain footprints significantly dwarf direct operational emissions.
Despite a 44% year-on-year growth in Scope 3 reporting, marking a notable governance improvement, a significant reporting gap persists: 57.1% of listed entities still fail to report their Scope 3 data entirely, making it challenging to get a complete picture of their environmental impact.
Low Renewable Energy Adoption and Expanding Consumption
A key finding from the IIM-B analysis is the structurally low adoption of clean energy across corporate India. Approximately 68.43% of the evaluated companies derive less than 20% of their total energy consumption from renewable sources. Concurrently, absolute energy consumption is expanding, with 37.58% of firms reporting a year-on-year increase of over 10%.
Although the share of renewable energy is growing faster than overall energy consumption, indicating a gradual positive shift, the baseline remains low. Furthermore, energy intensity per rupee of turnover improved, suggesting that economic output outpaced energy growth for most reporting firms. However, significant reporting gaps remain, with 47.15% of companies failing to report physical output energy intensity and nearly one-third unable to provide year-on-year changes in their renewable energy share.
Increasing Water Demand and Inadequate Treatment
Beyond carbon emissions, the study also revealed concerning trends in corporate water usage. Industrial water demand continues to expand, with 33.60% of companies recording a water withdrawal increase of over 10% year-on-year. A striking 76.07% of firms consume 80% to 100% of the water they withdraw, indicating that corporate water use is almost entirely consumptive, with minimal return flows to natural systems.
Wastewater treatment coverage is critically inadequate. A significant 77% of companies either do not treat their discharge or lack the necessary metrics to report on it. Only 19.35% of firms successfully treat 80% to 100% of their discharged water. Moreover, treatment quality appears to be worsening, with 323 companies reporting a year-on-year decline of over 10% in their treated discharge ratio.