Insights from a closed-door CII–DI Denmark industry discussion at the CII ICONN Summit 2026 on Scope 3 emissions, industrial decarbonisation, circularity, reporting frameworks, and the challenges of translating climate commitments into business decisions.
A company has committed to achieving net zero by 2030. It is now October 2026.
Scope 1? Some progress. Scope 2? Fairly manageable. Scope 3? Well, that’s where things get interesting.
The company is still trying to figure out how to get its suppliers to understand sustainability, let alone measure emissions, invest in cleaner processes, and report their progress. And there are roughly four years left until the deadline.
Welcome to the rather complicated world of industrial decarbonisation.
On October 21, I attended the CII ICONN Summit 2026 in Chennai, where I was invited to observe a closed-door industry discussion involving representatives associated with the Confederation of Indian Industry (CII), and its IGBC and Green Business Centre Ecosystems. The session was facilitated by CII GreenPro, and Dansk Industri (DI), the Confederation of Danish Industry.
The discussion focused on the practical challenges manufacturers face in meeting sustainability and net-zero commitments, particularly those targeting 2030.
A striking contrast emerged. Some companies had established sustainability programmes, engaged suppliers, and demonstrated commercial benefits from decarbonisation. Others had made ambitious commitments but were still struggling to address Scope 3 emissions.
The discussion raised fundamental questions about corporate readiness, financial feasibility, supply-chain accountability, regulatory certainty, and the frameworks required to support industrial decarbonisation.
1. Scope 3: The Challenge Beyond Factory Boundaries
Several participants reported progress in managing Scope 1 and Scope 2 emissions through operational improvements, energy efficiency, and changes in energy sourcing.
However, Scope 3 remained a significant challenge.
Manufacturers depend on extensive networks of suppliers, vendors, logistics providers, and raw-material processors. Many smaller suppliers lack the technical expertise, resources, and reporting capabilities required to measure and reduce emissions.
Companies must therefore extend sustainability requirements beyond their direct operations, often to suppliers several tiers removed from their procurement relationships.
Participants highlighted the need for supplier education, technical assistance, and stronger policy support. L&T representatives shared experiences of successful sustainability engagement, while similar initiatives have been observed within Mahindra’s supply chain.
Yet such progress is uneven across Indian industry.
A central concern was the commercial burden of supplier decarbonisation.
Suppliers investing in cleaner technologies, alternative materials, renewable energy, or environmental monitoring may charge a green premium. While some manufacturers can absorb these additional costs, others operate under significant pricing constraints.
This creates a fundamental problem: suppliers are expected to decarbonise without guaranteed commercial returns.
Long-term procurement commitments, shared investment arrangements, concessional financing, and technical assistance could help distribute transition costs more equitably.
Without these mechanisms, Scope 3 targets risk becoming obligations transferred to suppliers without adequate financial support.
2. Why Are Sustainability Teams Still Working in Silos?
Another recurring concern was the lack of coordination between sustainability teams and other corporate departments.
Participants described the difficulty of educating finance, procurement, marketing, operations, and engineering teams about sustainability priorities. Management decisions remained heavily influenced by costs, profitability, and operational performance.
This prompted a question I raised during the discussion.
Why are companies struggling with stakeholder alignment when established sustainability planning methodologies already incorporate stakeholder engagement, materiality assessments, emissions hotspot identification, and decarbonisation prioritisation? Materiality assessments identify significant sustainability impacts, risks, and opportunities. Emissions inventories locate major sources of greenhouse gases, while marginal abatement cost curves help evaluate emissions-reduction measures according to their estimated costs and effectiveness. These exercises should inform practical transition roadmaps, including investment priorities, operational responsibilities, and implementation timelines.
The response was that such frameworks may be effective theoretically but are difficult to implement within Indian corporate environments, where financial considerations dominate decisions. However, financial feasibility should be integral to decarbonisation planning rather than treated as a separate obstacle.
L&T representatives described how sustainability initiatives had generated commercial benefits through improved resource efficiency and operational performance.
Not every intervention produces immediate financial returns. Some require substantial capital expenditure, long payback periods, or regulatory incentives. Nevertheless, companies need to distinguish between initiatives that reduce operating costs, those that strengthen long-term competitiveness, and those requiring external support. The larger issue is whether sustainability assessments are influencing capital allocation, procurement policies, operational planning, and management accountability.
A net-zero commitment cannot remain the responsibility of the sustainability department alone.
3. Industrial Symbiosis: When One Industry’s Waste Becomes Another’s Resource
One of the more substantive discussions concerned industrial symbiosis and the need for comprehensive frameworks to assess circularity.
Industrial symbiosis enables waste materials, by-products, excess heat, water, or other residual resources from one industrial process to become inputs for another.
For example, a manufacturer’s production residue may replace virgin raw materials in another industry’s manufacturing process.
Such exchanges can reduce waste disposal, demand for primary materials, and potentially the emissions associated with resource extraction and processing.
However, participants raised important questions about measurement and accountability.
- How should the environmental benefits of these exchanges be calculated?
- How should circularity and end-of-life impacts be incorporated into product assessments?
- And critically, which company should account for the emissions reductions when waste from one factory becomes a resource for another?
Consider two manufacturers.
Company A generates an industrial by-product and supplies it to Company B, which processes it into a substitute for virgin raw material.
- Company A may reduce waste treatment or disposal requirements.
- Company B may reduce its consumption of virgin materials and the associated upstream emissions.
But can both companies claim the same avoided emissions?
The answer depends on the accounting methodology, system boundaries, and nature of the claim.
- Corporate greenhouse gas inventories generally account for emissions associated with each company’s activities and value chain. Avoided emissions from substituting conventional materials are typically assessed separately through consequential or comparative methodologies.
- Life-cycle assessment can help quantify environmental impacts across material extraction, manufacturing, use, recovery, and disposal.
- Standards such as ISO 14040 and ISO 14044 provide methodological foundations for these assessments.
However, industrial symbiosis requires careful treatment of allocation, material processing, transportation, substitution assumptions, and end-of-life impacts. The objective should be to establish credible evidence of environmental benefits without double-counting reductions within the same accounting framework. This creates a strong case for sector-specific guidance on industrial by-product utilisation, circularity measurement, and emissions attribution.
It also demonstrates why waste management should be integrated into industrial decarbonisation strategies rather than treated solely as a compliance function.
4. Green Engineering and the Need for Sector-Specific Standards
The discussion also explored whether manufacturers could receive credible recognition for incorporating environmental considerations during product conceptualisation and design.
Green engineering aims to reduce environmental impacts through choices involving materials, manufacturing processes, energy consumption, product durability, repairability, recyclability, and end-of-life management.
These decisions can influence environmental performance throughout a product’s life cycle.
Existing approaches include ISO 14006 for ecodesign management, ISO 14040 and ISO 14044 for life-cycle assessment, and ISO 14067 for product carbon footprints. However, these standards serve different purposes and do not constitute a single universal certification for green product design.
Participants also discussed the limitations of applying identical sustainability reporting approaches across industries.
A chemical manufacturer, automotive component supplier, steel producer, and textile processor have different emissions sources, production technologies, material requirements, and waste streams. A common accounting framework can improve consistency and comparability, but practical implementation requires industry-specific methodologies.
Such guidance should cover data collection, emissions factors, product-level accounting, circular material flows, verification, and applicable regulatory requirements.
The challenge is to create a standardised foundation without ignoring sector-specific industrial realities.
5. CBAM and the Challenge of Regulatory Predictability
With DI Denmark participating in the discussion, I raised a question about the European Union’s Carbon Border Adjustment Mechanism (CBAM).
The EU has introduced simplification measures, including a 50-tonne annual import threshold that exempts many smaller importers while retaining coverage of most embedded emissions. These changes reduce administrative burdens without removing CBAM’s underlying carbon-pricing objectives.
Nevertheless, they raise an important concern for Indian exporters.
How should manufacturers plan long-term decarbonisation investments when international compliance requirements continue to evolve? Exporters supplying CBAM-covered products may need reliable emissions data, monitoring systems, verification processes, and closer coordination with European customers. Additional customer-driven sustainability requirements can create further reporting obligations.
While formal CBAM obligations generally fall on relevant EU importers, Indian producers may need to supply the underlying emissions information.
Regulatory simplification is valuable, but exporters also require predictable requirements and clear implementation guidance.
Industry associations could help bridge this gap through sector-specific compliance resources, common data templates, technical training, and structured engagement with European industry bodies.
The objective should be to reduce unnecessary reporting complexity while supporting credible emissions reductions.
6. The Net-Zero 2030 Readiness Gap
During the meeting, CII sought to understand participants’ sustainability commitments and progress.
The responses revealed substantial differences in organisational maturity.
Some companies had established comprehensive programmes involving suppliers, internal stakeholders, and operational improvements. Others had committed to ambitious targets but lacked clarity on how to begin addressing significant portions of their value-chain emissions.
This led to another question I raised.
How can CII support companies at such different stages of decarbonisation readiness, particularly when several are working towards 2030 commitments?
Industrial transitions require time.
Capital investments must be assessed, financed, commissioned, and integrated into production systems. Suppliers need technical assistance, commercial incentives, and reliable measurement capabilities.
Companies also need to establish emissions baselines, identify reduction opportunities, develop transition plans, and allocate responsibilities.
Not all 2030 targets cover the same emissions scopes or organisational boundaries. Nevertheless, every credible target requires clarity on coverage, implementation pathways, financing, and milestones.
A company still developing its Scope 3 strategy in 2026 faces a very different challenge from one already implementing advanced supplier decarbonisation programmes.
Treating both organisations as equally prepared would overlook critical differences in capability and resources.
7. Can Peer Learning Become an Implementation Mechanism?
In response, CII representatives discussed developing a closed platform where participating companies could exchange knowledge, learn from peers, review approaches, and seek practical guidance.
Such a platform could facilitate valuable knowledge transfer between sustainability leaders and companies beginning their transition.
However, knowledge sharing alone may not resolve financing, technical, operational, and organisational barriers.
An effective implementation platform could support companies through distinct stages that I suggest:
- Baseline assessment: Establishing emissions inventories, materiality priorities, and data-collection capabilities.
- Transition planning: Identifying emissions hotspots, evaluating abatement opportunities, and preparing sector-specific roadmaps.
- Organisational integration: Aligning finance, procurement, operations, engineering, and management responsibilities.
- Supplier engagement: Building supplier capabilities, reporting systems, and commercial incentives.
- Technology and financing: Connecting manufacturers with suitable solutions, technical experts, and financing mechanisms.
- Performance measurement: Monitoring verified reductions, circularity outcomes, and progress against milestones.
Industrial symbiosis could also become an important component, connecting manufacturers whose waste streams and material requirements offer opportunities for resource exchange.
The platform’s effectiveness should ultimately be measured through implementation outcomes rather than participation alone.
Check out the list of comprehensive corporate strategies I have laid out for organisations
8. From Climate Commitments to Industrial Execution
The discussion highlighted a central challenge facing Indian manufacturing.
Industrial decarbonisation is not constrained solely by technology availability or awareness of sustainability principles.
It is shaped by capital allocation, procurement economics, supplier capabilities, organisational incentives, reporting requirements, and regulatory predictability.
Existing methodologies provide foundations for identifying impacts, evaluating interventions, and measuring progress.
But frameworks create value only when translated into operational decisions.
Industry associations have an opportunity to bridge the gap between advanced sustainability practitioners and manufacturers still developing foundational capabilities.
That requires moving beyond awareness and peer learning towards practical transition support, sector-specific guidance, financing pathways, and measurable accountability.
With 2030 approaching, the more relevant question is no longer simply how many companies have announced net-zero commitments.
It is whether those companies have the financial resources, organisational structures, supplier relationships, and implementation plans necessary to deliver them.
The credibility of industrial decarbonisation will ultimately be determined not by the targets companies announce, but by the emissions they demonstrably reduce.
Disclaimer
This article reflects my observations and analysis following a closed-door industry discussion held alongside the CII ICONN Summit 2026 in Chennai. The views expressed are personal and do not represent official positions of participating organisations.
Credits
This article is written by Deepa Sai, the founder of EcoHQ