Net zero as strategy: How decarbonisation is reshaping growth, risk, and value creation

The transition to a low-carbon economy is one of the defining opportunities of our time. It is reshaping how businesses operate, deploy capital, and create value. Today, climate action is assessed not only by the ambition of targets, but by its ability to improve efficiency, strengthen resilience, and unlock lasting competitive advantage. In that sense, the transition is as much economic as it is environmental.

India’s net-zero target for 2070, announced at COP26, has propelled a far greater urgency and direction. It signalled a fundamental shift in the operating environment, with decarbonisation emerging as a key determinant of regulatory direction, capital flows, customer choices, and supply chain standards. The question for businesses is no longer whether climate action is necessary, but where investments can create the greatest strategic and economic value while accelerating the transition to a more sustainable future.

Hence, net zero deserves to be approached as a strategic business choice that will be shaped by execution, through investments that protect value, build readiness, and support long-term growth.

Protecting value through operational excellence

The strongest decarbonisation outcomes often come from a relentless focus on operational excellence. Investments in renewable energy, energy efficiency, process innovation, logistics optimisation, and resource stewardship are helping businesses reduce their environmental footprint while enhancing competitiveness, strengthening resilience, and creating sustainable value over the long term.

In India, per capita electricity consumption rose to 1,460 kWh in 2024-25, a sharp increase over the past decade. As demand continues to rise, the value of using energy well and shifting to cleaner sources where possible will only become more evident. For companies, this is about running steadier, more cost-conscious operations while reducing exposure to volatility in energy and input markets.

The transition to a lower-carbon economy is reinforcing the importance of energy as a source of competitive advantage. Companies that invest in efficiency, electrification, and cleaner energy solutions are creating a more predictable cost structure in an increasingly uncertain operating environment.

Early decarbonisation initiatives distinguish themselves by aligning sustainability with financial discipline. They reinforce the dual aspects of responsibility and performance.

Building resilience in a more accountable world

Decarbonisation as a strategy contributes to a business environment that emphasizes greater disclosure and accountability. India is moving towards an architecture of ESG disclosure requirements, the Net Zero Portal, and the Carbon Credit Trading Scheme. Together, these developments indicate an evolution that will become increasingly organised, quantifiable, and transparent over time.

Globally, only about one in four listed companies has committed to a science-based decarbonization pathway. In India, the proportion remains below one in ten. Climate considerations carry greater weight in regulation, financing, procurement, and partnership decisions. Companies without a credible transition plan may therefore find themselves responding late to shifts already underway.

Moving early offers a clear advantage. Businesses that invest now in better emissions tracking, stronger governance, and cleaner operations will resonate more with regulators and investors and remain trusted partners across the value chain. In the years ahead, resilience will depend not only on scale or efficiency, but on preparedness as well.

Unlocking growth and competitive advantage

The case for net zero does not end with compliance or cost savings. Its broader significance lies in the way it can influence innovation, market access, and future growth.

The direction of capital provides a valuable indicator. India’s green bond market grew from $1.2 billion in 2013 to $21 billion in 2023. That expansion reflects a broader market conviction that companies with credible low-carbon strategies are better prepared for the future, operationally stronger, and more attractive as long-term investments.

A company’s actions on sustainability deliver measurable value beyond brand perception. Today, they play a critical role in influencing supplier selection, qualifying for tenders, building customer confidence, and unlocking opportunities within global value chains. In regulated, export-facing, and partnership-driven sectors especially, decarbonization is becoming a source of commercial relevance.

Also, for many businesses, the majority of the emissions lie beyond their own operations. Achieving net zero therefore requires deeper collaboration across the value chain, helping suppliers build capability, improve transparency, and transition towards lower-carbon operations. The companies that pull ahead will be those that turn climate ambition into better products, stronger partnerships, and sharper market positioning.

From climate action to capital allocation

Net zero is increasingly shaping investment decisions, operational priorities, and the choices that will define long-term business success in a rapidly changing world.

Viewed as capital stewardship, climate action presents a significant opportunity to create value beyond emissions reduction. The strongest investments simultaneously improve operational performance, reinforce resilience, support regulatory preparedness, accelerate transformation, and enhance market competitiveness.

The transition to net zero presents one of the most significant opportunities to reimagine how businesses create value while strengthening their footprint towards sustainable growth. As India pursues its low-carbon transition, success will depend not only on ambition, but on the ability to deliver meaningful outcomes at scale.

(The author is Executive Director, Global CFO and Head of IT and API Plus SBU, Lupin. Views are personal.)