Top Challenges in GHG Reporting for Indian Companies and How to Overcome Them

As sustainability becomes a key priority globally, Indian businesses are increasingly adopting Greenhouse Gas (GHG) reporting to meet environmental goals, comply with regulations, and enhance their reputation. However, implementing GHG reporting in the Indian context poses unique challenges due to the country’s regulatory landscape, diverse industries, and varying levels of preparedness. This blog highlights common GHG reporting challenges for Indian companies and offers practical solutions to overcome them.

1. Evolving Regulatory Landscape

In India, environmental reporting and sustainability disclosures are evolving rapidly. Companies listed under the top 1,000 by market capitalization are mandated to submit Business Responsibility and Sustainability Reports (BRSR) under SEBI guidelines. BRSR includes GHG emissions disclosure, but the framework is still relatively new, leading to confusion and implementation delays.

Solution:
Stay updated with SEBI and Ministry of Environment, Forest and Climate Change (MoEFCC) guidelines. Partner with ESG consultants who can interpret these regulations and help align your reporting practices with mandatory frameworks like BRSR and voluntary ones like the Carbon Disclosure Project (CDP).

2. Data Availability Across Diverse Sectors

Indian industries, from manufacturing to agriculture, operate with varying degrees of digitization and record-keeping. Collecting accurate emissions data across such diverse sectors can be daunting, especially when dealing with small-scale suppliers or outdated practices.

Solution:
Adopt digital tools for centralized data collection and ensure suppliers are educated about their role in GHG reporting. For example, industries in India can leverage government initiatives like the Perform, Achieve, and Trade (PAT) scheme, which promotes energy efficiency and provides incentives for reporting and reducing emissions.

3. Complexities in Scope 3 Emissions Reporting

Indian companies face significant challenges in calculating Scope 3 emissions due to fragmented supply chains and limited data-sharing practices. Indirect emissions often constitute the majority of a company’s carbon footprint, making accurate measurement vital yet complex.

Solution:
Engage with supply chain partners to promote transparency and collaboration. Use tools like the GHG Protocol’s Scope 3 Evaluator and align with frameworks such as India’s Nationally Determined Contributions (NDCs) under the Paris Agreement. Focus on high-impact categories like logistics and material sourcing.

4. Lack of Internal Expertise in Sustainability Practices

For many Indian companies, particularly small and medium enterprises (SMEs), expertise in GHG reporting and sustainability is limited. This lack of knowledge often results in incomplete reporting or non-compliance with regulations.

Solution:
Invest in capacity-building programs to train staff on sustainability and reporting standards. Collaborate with industry bodies like CII or FICCI, which offer training and workshops on GHG reporting and energy efficiency. Hiring ESG consultants can also bridge the expertise gap and accelerate compliance efforts.

5. Ensuring Compliance with Multiple Standards

Indian companies with global operations or export interests must comply with international standards like ISO 14064, while also adhering to local regulations. Balancing these requirements can be challenging without a structured approach.

Solution:
Develop a unified framework for reporting that incorporates both Indian regulatory requirements (e.g., BRSR, PAT scheme) and international standards like GHG Protocol or CDP. This integrated approach ensures compliance across multiple jurisdictions without duplicating efforts.

6. Resource Constraints in SMEs

Indian SMEs often operate on tight budgets and lack the financial resources to adopt sophisticated GHG reporting systems or hire specialized personnel.

Solution:
Leverage government schemes and subsidies aimed at promoting sustainability in industries. SMEs can also start small by focusing on Scope 1 and 2 emissions, gradually expanding to Scope 3 reporting as resources become available. Affordable GHG management tools tailored for SMEs can help simplify the process.

How PQSmitra Supports Indian Companies in GHG Reporting

PQSmitra offers end-to-end ESG consulting services tailored to the needs of Indian businesses. Our team specializes in navigating the complexities of Indian laws like SEBI’s BRSR and global standards like ISO 14064 and CDP. We provide comprehensive support for GHG reporting, ensuring compliance with both local and international frameworks. By partnering with PQSmitra, Indian companies can confidently address the challenges of GHG reporting, enhance their sustainability efforts, and contribute to national and global climate goals.