Stronger corporate transition planning can unlock India’s decarbonisation finance

Mumbai: With India requiring cumulative investments of $10 trillion (Rs 883 lakh crore) to achieve net-zero emissions by 2070, credible corporate climate transition planning is fast becoming a critical requirement for mobilising capital. Yet, transition planning in India’s corporate landscape remains fragmented, and largely driven by compliance, finds a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

The absence of dedicated transition plan disclosures within the Business Responsibility and Sustainability Reporting (BRSR) framework, combined with limited guidance on financial materiality and forward-looking metrics, has resulted in disclosures that are difficult to compare, verify, or use meaningfully for investment and lending decisions.

IEEFA’s report examines transition planning practices across India’s corporate sector through a comprehensive assessment of 33 companies operating in six high-emitting sectors — power, steel, cement, chemicals, commodities, and oil and gas.

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 targets, CapEx, revenues, and risk management. Second, governance structures are present in form but weak in substance; and finally, disclosures are fragmented and backward-looking, reducing their usefulness for capital providers.

The assessment finds that while most companies have announced net-zero or emission reduction targets, few explain how these targets will be achieved. “Only a limited number link their goals 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, research lead, sustainable finance and climate risk, South Asia.

Financial disclosures also remain a major gap. Companies rarely quantify the potential financial impacts of climate-related risks and opportunities. Scenario analysis, where disclosed, is qualitative and lacks transparency around assumptions, time horizons or financial implications.

Governance disclosures further weaken the effectiveness of transition planning. “While most companies report board- or management-level oversight of sustainability issues, few provide evidence of clear accountability, decision-making authority or incentive structures linked to transition outcomes,” says Tanya Rana, energy analyst, IEEFA - South Asia, and the report’s co-author.

Overall, the sectoral review reveals significant heterogeneity in transition plan disclosure maturity across India’s key emitting industries. A consistent pattern emerges where a handful of large, listed, or globally exposed companies demonstrate relatively advanced practices, while the majority remain at an early stage of transition planning.