ESG Champions of India 2024

12 | ESG Champions of India 2024 [ ESG AND ITS RELEVANCE IN THE CURRENT SCENARIO ] CHALLENGES TO ESG ADOPTION – IS INDIA INC. READY? While ESG is now becoming a mandatory part of company disclosures, it is been viewed largely as a compliance measure. Most companies are yet to adopt the true ethos and spirit of ESG practices into their vision and culture. Evidently then, if these practices are not ingrained into the core strategy or corporate vision, companies would continue to struggle on the compliance front, as it would merely mean checking up the boxes to meet baseline requirements. ESG Preparedness According to an ESG preparedness survey conducted by Deloitte India in 2023, only 27% Indian companies felt that they are adequately equipped to meet their ESG strategy and compliance requirements. Besides, merely 15% of the businesses surveyed believed their suppliers were prepared to comply with the organizations’ ESG requirements. This reveals a yawning gap in preparedness and action on the ESG front by Indian companies. On the positive side, 68% companies said they have made significant progress in integrating ESG strategies into their operations. Understanding and Implementing ESG A substantial number of companies lack a deep comprehension of ESG practices and struggle with the intricacies of implementation and reporting. As per the Deloitte Report, 49% of the respondents said that they had a thorough understanding of ESG reporting mechanisms and regulations in India. Industry-Specific ESG Issues ESG challenges and priorities differ across companies and industries, necessitating a focused approach on relevant issues and stakeholder interests. Data Management for ESG Reporting In the context of ESG reporting, it is pertinent to point out how data assumes critical importance for tracking and reporting. Once a company is able to shortlist issues that are material to its operation, the next step is to formulate key performance indicators. Accordingly, sources of data need to be identified in order to assess the performance indicators. Thus, data collection, management and regular updating is important to help companies keep in line with the ESG compliances and reporting mandates. Financial and Resource Constraints Cost is another key factor that is causing a significant hindrance to ESG adoption among Indian companies. Although large companies have the resources to align with the ESG norms, small and mid-sized companies that are boot-strapped are struggling to meet the expenses of not only integrating ESG practices into their operations but also in collecting, collating, calculating and presenting this information to various stakeholders from time to time, not to mention costs related to audits and assurances of disclosures. There is also a dearth of skilled and trained ESG professionals in the industry. With an ever evolving and dynamic landscape, the challenges are galore – keeping abreast of the changing regulations, dealing with various stakeholders and advising appropriate ESG solutions based on the industry in which the company operates. Businesses across India are grappling with the shortage of such skilled professionals and would continue to be a significant factor in the days to come when it comes to ESG readiness of India Inc. ENHANCING ESG PRACTICES IN INDIA: A ROADMAP FOR SUSTAINABLE GROWTH India’s implementation of ESG principles has put it in a strong position to compete on a global scale in the backdrop of a rapidly changing business environment where sustainability and ethical business practices are crucial. Even while Indian businesses are tackling environmental issues, improving governance procedures, conducting significant social responsibility activities and implementing ESG initiatives, there are still a number of significant obstacles that need to be overcome. India’s ESG landscape will be Dun & Bradstreet