ESG Champions of India 2024

ESG Champions of India 2024 | 13 [ ESG AND ITS RELEVANCE IN THE CURRENT SCENARIO ] shaped by industry stakeholders’ cooperative efforts, technology improvements, and emphasis on sustainable development. These factors will result in more ethical and sustainable investment practices that have a positive impact on society and long-term value creation. Following are some steps that are required to be taken in order to promote a sustainable growth and ensure implementation of ESG principles: Strengthening Regulations and Enforcement While the regulatory body is gradually pushing for mandatory reporting on ESG parameters for listed companies, there is a pressing need for more clarity and handholding by the government on the ESG mandates. This would encourage smaller businesses to adopt ESG practices and improve openness and comparability throughout the industry. Additionally, subsidies, rebates, credits, or deductions for businesses investing in sustainable technologies, renewable energy projects, etc. would also be helpful in encouraging companies to devote funds to environmental sustainability. In addition, green bonds and sustainable financial products will also be instrumental in building environmentally friendly projects and driving up investments in the sector. Positive policy thrust would bolster investor and consumer confidence and propel further investments into sustainable and environment-friendly businesses. Building Capacity and Infrastructure Finance, skill development, technological investment and removal of bottlenecks is essential to build an effective and efficient ESG-compliant business world. The regulatory agencies need to make investments in training programs and capacity- building activities to give firms the knowledge and skills they need to operate. There is also a yawning gap between industry and academia that needs to be bridged to keep pace with these developments. Through these initiatives, businesses will gain knowledge about the significance of implementing ESG practices and receive guidance on how best to integrate these elements into their reporting frameworks. Additionally, it is imperative that funds be allocated toward the advancement of technological platforms and data infrastructure. These investments will help in improving the quality and dependability of ESG disclosures by streamlining the processes of data collection, analysis, and reporting, and to achieve the nation’s ambitious targets for renewable energy, investments in green infrastructure, and smart city programs. Enhancing Data Quality and Reporting The main barriers to ESG reporting for Indian organizations are the intricacies of data collecting and reporting systems, legacy-based regulatory and enforcement frameworks and lack of transparent and real-time technological infrastructure. There is also a need for more clarity on ESG reporting criteria in line with international standards, which are necessary to give businesses a direction for consistent and correct ESG reporting. Regulations of this kind ought to require businesses to reveal all ESG- related information in an open and transparent manner, guaranteeing that ESG factors are integrated into business operations. Penalties should be imposed on businesses that are discovered to be giving false or deceptive ESG information while voluntary disclosures should be encouraged and even rewarded to improve the quality of ESG Reporting. Encouraging Collaboration and Knowledge Sharing Awareness among businesses about the benefits of sustainable practices on long-term profitability would help in wider acceptance of the norms. Towards this, collaboration between industry players including corporations, investors, rating agencies, and regulators is necessary. Knowledge exchange between industry associations and players across the borders can play a crucial role in this regard. Dun & Brad treet