Net Zero Transition Is About Being Competitive in a Changing World

Let’s separate geopolitics into the US and the rest of the world. In the US there is high level of political narrative that climate change is a hoax. The narrative is—we are not going to act on it (climate), pull out of Paris Agreement, and all that. At the corporate level, what we see is continued commitment to net-zero transition by very many companies. That approach has not changed. We see that in our data. We (SBTi) have 10,000 companies with committed targets—1,000 of them in the US. None of them are leaving the framework. We have hundreds of US companies setting targets last year, since the time the current administration came in. 

There is a political narrative (against climate). But corporates continue to act as the business case remains very strong. The business case is that we will be in carbon constraint world. Transforming businesses is five, ten or even fifteen years project - which goes beyond the years of the current administration. Businesses continue to work towards transforming themselves in medium-to-long term. That is sensible thing to do. We will be living in a world where carbon will be constraint (for doing business). 

India is at a very good point to grow from here. Hundreds of Indian companies work with us, but there should be several hundred more. There is a journey when you are with SBTi. There is commitment and then you prepare for your targets and that is validated by SBTi. That is what is happening in India. So, we have companies that have submitted their targets and there are companies that are working towards submitting targets.  

There are many good things happening in India. The success stories in renewable generation investment, green buildings, cement industry energy efficiency improvements, are among the things that really stand out. Not worried about the gap. We will be watching them carefully and work with the companies to translate the commitments into targets.

They are making good progress in many ways. But the hardest thing has got to do with the SME supply chain. That is true of many countries. We will reflect on how to deal with the SME challenge in India. 

We are here to learn about Indian context, reflect and develop our approach to India. Clearly, one size does not fit all. As a global organisation we can’t say do the same as other countries. There are questions about power generation and coal-fired power, how quickly one moves on the electric vehicles market, among other things. 

But our advice is clear. It makes very good economic sense to engage in the transition. The world is changing. Companies which fail to change will be at competitive disadvantage.  

How we adapt our framework (for India) is something we will reflect. But there is lot of potential in working with more Indian companies in this transition. 

We are working with a network of major business groups already. We want to extend our coverage to all companies in those groups, to their supply chains. We also want to work with more companies—beyond the existing groups we work with. We are going to grow significantly in the next couple of years.  

The world is changing. The net zero transition makes economic sense. Not only if you are exporting to Europe, but also when you are supplying to the domestic market and other Asian markets also. This is not about companies saving the world, but about companies being competitive in a changing world. 

I inherited very good organisation. As we go ahead, we will focus on action and implementation. Once companies set their target, we will work on how to support them on the journey. We will expand in India, among other countries. We will strengthen our partnerships as we need to work together.