- A report from the World Economic Forum explores why India’s largest businesses must invest more in natural climate solutions.
India’s economy is highly dependent on nature and extremely vulnerable to climate risks. A third of its GDP comes from sectors greatly reliant on nature. Research has found that the climate crisis could cost the country from 6.4% to more than 10% of its national income by 2100, taking 50 million more people back into poverty.
India’s economy is one of the most nature-dependent in the world. Some 33% of its GDP is generated in sectors classed as highly dependent on nature. These include forestry; agriculture; fisheries and aquaculture; food, beverages and tobacco; energy and water utilities and construction. Many of these are threatened directly by the impacts of climate change, including rising sea levels, receding glaciers and unpredictable monsoon patterns. Agricultural output alone is predicted to drop by 16%, equivalent to a 2.8% GDP loss by 2030.
India has set itself ambitious national abatement goals for 2030, including emission reductions of 45% from 2005 levels, generating 50% of power capacity from non-fossil fuels and increasing its carbon sink by a fifth through additional tree cover. However, as of December 2023, Climate Action Tracker rated India’s efforts towards achieving these targets as “highly insufficient”.
The Forum has now looked at the role that the private sector can play in advancing emission reductions in India through NCS. It quotes research that, for example, 94% of investments made in forest restoration efforts in India between 2011 and 2017 were the result of government interventions. This underlines that there are vast opportunities for the private sector to work together with government and other stakeholders to deploy natural climate solutions.
Based on a sample of India’s largest companies, the Forum finds that private sector organizations are strongly committed to reaching these goals. Almost 9 in 10 companies (89%) have dedicated sustainability strategies and nearly half have set themselves net-zero emission goals.
What is holding corporate NCS investments back?
Asked about the main barriers to increasing their investments in NCS, the most cited ones were a lack of a clear regulatory framework, a dearth of high-quality NCS projects, uncertain returns on investment and limited access to funding or financial incentives.