A report titled Decoding India’s Scope 3 Emissions Landscape: Reporting Maturity and Sectoral Progress released by ICRA ESG Research, highlights how Indian companies are responding to increasing expectations on value‑chain emissions transparency. The report evaluates Scope 3 disclosures by the top 200 listed companies, assessing participation trends, category‑wise reporting patterns, sectoral variations, and emerging gaps as India prepares for mandatory value‑chain disclosures under the SEBI Business Responsibility and Sustainability Reporting (BRSR) framework.
In the last three decades developing economies have recorded emissions growth of approximately 3–4%, which signifies the need for acceleration of their low carbon transition. In India, the power sector continues to be the largest contributor to overall emissions, at 34%, followed by agriculture at about 21% and manufacturing at 19%. India acts as a major upstream emissions hub, with USD 437 billion of merchandise exports in FY2023‑24, dominated by carbon‑intensive sectors embedding significant emissions into the global value chains. This signifies the need for a study which evaluates the value chain emission reporting maturity among Indian companies.
The study highlights rapid advances in Scope 3 reporting maturity among Indian corporates. Across the NSE Top 200 companies, the number of entities disclosing Scope 3 emissions has risen by 58.7% over the last four years—from 75 to 119—accompanied by a 119% increase in reported emissions. This progress reflects improved methodologies, expanded coverage across Scope 3 categories, and greater alignment with global reporting best practices.
Among reported emissions, the upstream categories show the strongest disclosures (80%+ for Purchased Goods & Services, Energy, Waste, Business Travel, and Employee Commuting). In contrast, downstream categories remain significantly underreported (7-36%) because upstream categories are more material across industries and easier to estimate, while downstream data is more complex and standards such as PCAF are still evolving.
A deep dive into reporting trends among companies with consistent disclosures for at least three years shows that Scope 3 intensity patterns in the manufacturing sector remain highly diverse. The automobile sector has achieved a modest 10% reduction in Scope 3 intensity, supported by a shift toward rail‑based logistics. In contrast, the cement sector has seen a sharp 67% increase, driven by changes in product mix and fluctuating demand. Metals and mining companies report a 32% rise, due to expanded reporting boundaries and logistics‑related factors. Meanwhile, the oil and gas sector has recorded a 29% increase in Scope 3 intensity, reflecting sustained emissions across the upstream fuel value chain.
Similarly, among service‑sector companies, the BFSI (banks and NBFCs) shows a sharp rise in Scope 3 (excluding financed emissions) intensity (+71%) and emissions (+112.6%) against a +37.5% revenue increase, driven by improving reporting maturity, expanded category coverage, and better data. However, for early adopters of financed‑emission disclosures, intensity levels rise multiple times above operational categories, underscoring the dominance of portfolio emissions and the growing need to track them effectively. The IT sector remains comparatively stable, recording a modest 2% decline in Scope 3 intensity as revenue growth outpaced emissions—supported by virtual collaboration, hybrid work models, and cleaner digital infrastructure—though supplier‑related emissions continue to pose a key challenge.
Providing more insights, Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings Limited, said: “As Scope 3 reporting gathers pace across India Inc., strengthening BRSR disclosures and evolving global frameworks such as the GHG Protocol, SBTi, and IFRS S2 are steadily raising the bar for value‑chain transparency. Companies are making strong progress on upstream value‑chain emission reporting, but the real test now lies in improving visibility on downstream emissions and collaborating more closely with suppliers to support their decarbonisation journey. Strengthening these areas will be essential for Indian businesses to remain credible, mitigate risks effectively, and stay competitive in a global landscape where international standards increasingly shape investor expectations.
