Transitional Climatic Risk Assessment of Indian Firms Listed in BSE 100

Abstract

The global economies are battling the global climatic change, and so is India. By signing the Paris Agreement in 2015, India is one among the 196 countries trying to reduce greenhouse gas (GHG) emissions and reach the desired climatic temperature of 2°C above pre-industrial levels. During this global transition, the role of the financial sector is crucial and cannot be undermined. The purpose of this study is (a) to analyse the sustainable finance practices in India, (b) to analyse the physical climatic risk exposure that India is into, (c) to analyse the transitional climatic risk exposures faced by Indian firms, (d) to analyse the policy initiatives by Indian government and global reporting standards on sustainability and, finally, (e) to perform a climate scenario analysis using the Paris Agreement Climate Transition Assessment (PACTA) model to materialize the transitional climatic risks faced by Indian firms in BSE 100. The study uses an inductive approach for its analysis. The study addresses few issues related to sustainable finance practices in India and questions the credibility of the sustainable reporting practices. The findings of this study evidently proves that Indian firms are not prepared to align themselves with climate-oriented investment plans for the future and insists for strong mandatory climate-relevant disclosure standards in India.