According to a report by CDP (formerly Carbon Disclosure Project), top Indian companies estimate an economic impact of about Rs.7.14 lakh crore (nearly $100 billion) over the next five years. This will be due to the risks posed by the climate crisis. CDP is an organization that works on a global disclosure system for investors, companies, cities, states and regions.

Titled ‘Building Back Greener’, the report said that the numbers were based on responses by 42 of 220 Indian companies that responded to investor requests and disclosed climate data.

Nearly 60 companies out of the 220 companies covered by CDP are among BSE’s top 200, while 67 of them are large businesses and the rest are micro, small and medium enterprises.

The report also pointed about the growing disclosure requirements. These requirements were prompting more Indian businesses to wake up to the threat of the climate crisis, and commit to reducing their carbon footprints.

Around 88 percent of 67 large companies covered by CDP reported incentivizing top management for climate-related issues, the report mentioned.

However, the number of companies that identified the financial or strategic impact of climate-related risks rose from 88 percent in 2019 to 94 percent this year. Some of the principal areas of concern were direct operations which was followed by emerging regulation and market risks.

“Forty-two of 67 responding companies have monetised the economic impact of climate risks. The rest didn’t monetise the risks but did mention the risks they were facing. Most companies said they faced economic impacts from current and emerging regulations... They also fear emerging regulations like emission caps or emission trading schemes,” said Damandeep Singh, Director CDP India.

Damandeep further added that there were other risks such as the impact of the climate crisis where valuation of their companies may fall, the future of the oil and gas sector, and impact on their reputations for being seen as not doing enough.