Tackling Climate Change: Building National Level, Realistic and Comprehensive Climate Targets Based on Materiality Reporting under the ESG framework

Abstract

Climate change presents an urgent and complex global challenge, exacerbated by fragmented governance, inconsistent reporting standards, and a disconnect between national commitments and local-level sustainability action. This policy paper addresses the inadequacies in current climate target-setting approaches by proposing a bottom-up framework grounded in Environmental, Social, and Governance (ESG) materiality reporting. The aim is to develop realistic, comprehensive, and regionally responsive Nationally Determined Contributions (NDCs) by leveraging corporate ESG disclosures and integrating them into national policy formulation. Drawing from India’s regulatory context and rapid industrial growth—particularly under the Production Linked Incentive (PLI) scheme and the evolving circular economy policy—the paper critically analyses the limitations of Corporate Social Responsibility (CSR) as a compliance-driven model and advocates for a transition to ESG-led systems that emphasize measurement, accountability, and long-term value creation. Using a qualitative review of policy frameworks, industry case studies, and international disclosure standards (GRI, TCFD, BRSR), the paper illustrates how ESG materiality can guide waste management, resource use, and emissions tracking across sectors. The results suggest that adopting a structured, micro-level ESG-based materiality matrix—aggregated across geographies and industries—can generate context-specific national climate targets that are more accurate and enforceable. Besides, joining SMEs and the casual division through digital tools and localized approach rebellious improves inclusivity and affect. In conclusion, this system not only bridges the gaps between deliberate corporate activities and national commitments but too positions developing economies to lead in worldwide climate administration by adjusting financial advancement with supportability and versatility objectives.