With more than half its standalone revenue already coming from climate-friendly businesses, the engineering major is betting on green hydrogen, carbon capture, renewable energy and sustainable finance to achieve carbon neutrality by 2040.
When Prime Minister Narendra Modi committed India to achieving net-zero emissions by 2070, he challenged Indian industry to play a central role in the country’s climate transition. Larsen & Toubro (L&T), however, has set itself a significantly more ambitious target. Under the leadership of Chairman and Managing Director S N Subrahmanyan, the engineering and infrastructure major is aiming to become carbon neutral by 2040 and water neutral by 2035—30 years ahead of India’s national net-zero goal.
The targets underscore how sustainability has evolved from a compliance requirement into a core business strategy for one of India’s largest engineering companies. Today, L&T’s green business portfolio spans renewable energy, green hydrogen, carbon capture technologies, sustainable infrastructure and climate-focused engineering solutions.
That transformation is increasingly reflected in the company’s financials. During FY26, L&T’s Green Business portfolio stood at ₹787 billion, while 51% of its standalone revenue was generated from climate-friendly and sustainable businesses. In effect, more than half of the company’s core business is now linked to building a lower-carbon economy.
The company’s sustainability agenda extends beyond the projects it executes for clients. L&T has been progressively reducing the environmental footprint of its own operations, with around 19% of the Group’s electricity consumption now sourced from renewable energy. During the year, it planted more than one million saplings to support biodiversity while implementing large-scale initiatives aimed at reducing carbon emissions, improving water security, enhancing recycling and reuse of materials, increasing energy efficiency, controlling air pollution and conserving natural resources.
Subrahmanyan has also pushed to integrate sustainability into the company’s governance framework. Safety performance is linked to annual business evaluations, strengthening accountability across businesses, while enhanced Prevention of Sexual Harassment (POSH) mechanisms and grievance redressal systems are aimed at promoting workplace diversity and inclusion. The company has also strengthened technology-driven financial and non-financial disclosures, with ESG performance monitored across business verticals through its Integrated Annual Report. Beyond its own operations, L&T is encouraging suppliers and vendors to adopt similar sustainability standards across its value chain.
The company has simultaneously emerged as one of India’s early movers in sustainable finance. L&T launched India’s first listed Sustainability-Linked Bond under SEBI’s ESG Bond Framework to mobilise ₹500 crore and has also entered into a US$700 million Sustainability-Linked Trade Facility with Standard Chartered, reflecting growing investor interest in sustainability-linked financing.
Much of L&T’s climate strategy is centred on technologies expected to play a pivotal role in India’s energy transition.
Alongside executing engineering, procurement and construction (EPC) projects in renewable energy and supporting grid modernisation to facilitate higher renewable energy penetration, the company is helping industries reduce emissions through customised carbon capture, utilisation and storage (CCUS) solutions.
L&T is also supporting the government’s National Green Hydrogen Mission by manufacturing indigenous alkaline electrolysers designed for industrial-scale production of green hydrogen and green ammonia, technologies expected to play an increasingly important role in decarbonising hard-to-abate sectors.
The company’s clean-energy ambitions extend beyond India as well. L&T is among the Indian participants in the International Thermonuclear Experimental Reactor (ITER) project in France, one of the world’s largest multinational scientific collaborations aimed at demonstrating the commercial viability of nuclear fusion as a virtually limitless source of clean energy. L&T is manufacturing several critical engineering components for the project.
At the centre of this strategy are the company’s twin sustainability commitments, achieving water neutrality by 2035 and carbon neutrality by 2040. Under Subrahmanyan’s leadership, L&T continues to focus on lowering carbon emissions, improving water availability, promoting recycling and circularity, enhancing energy efficiency, reducing air pollution and strengthening resource conservation across its businesses.
As governments and investors increasingly place sustainability at the centre of economic growth, L&T is positioning itself not merely as an engineering and infrastructure company but as one of India’s leading climate-transition businesses. By targeting carbon neutrality three decades ahead of the country’s own net-zero deadline, the company is signalling that sustainability is no longer peripheral to industrial growth, it is becoming one of its principal drivers.
