India’s TOP 500 Companies 2021

INDIA’S TOP 500 COMPANIES 2021 111 Another crucial factor is the growing shift towards alternative energy sources. Companies are actively pursuing decarbonisation and opting for lower-carbon alternatives amidst increased regulatory thrust towards renewables and reduced costs of solar, wind and other renewable energy. According to International Energy Agency, as the world seeks ways to accelerate the pace of transformation in the energy sector, India is in a unique position to pioneer a new model for low-carbon, inclusive growth. As a part of its climate policy agenda, India has pursued a mission-based approach inmany areas, including solar, water and energy. In 2018, the government set a target of installing 175 GW of renewable energy capacity by 2022, which includes 100 GW from solar power, 60 GW from wind power, 10 GW from bio-power and 5 GW from small hydropower. In view of the increased regulatory support and increasing demand for electrification of transport and industries, there exists a plethora opportunity for companies to capitalize on the decarbonization plans. India doesn’t have a long history of ESG-focused regulations. However, the country is now taking several steps to make ESG compliance the norm. In 2012, SEBI had introduced the Business Responsibility Reports (BRRs) in the spirit of widening sustainability reporting practices. It was made mandatory for the top 100 listed companies based on market capitalisation to report BRR in their Annual Reports. In 2015, the scope of reporting was expanded to the top 500 listed companies. To keep up with the UN’s Sustainable Development Goals (SDGs), the most recent circular issued by SEBI in May 2021 has announced that the BRR has been modified to Business Responsibility and Sustainability Reporting with compliance reporting for top 1000 listed companies. This circular prescribes disclosure requirements to cover aspects like material ESG risks and opportunities along with financial implications, besides other aspects like resource usage, GHG emissions, circular economy, waste generation and management, value chains and communities. Under social related disclosures, entities will need to made disclosures about gender and social diversity including measures for differently abled employees and workers, turnover rates, median wages, welfare benefits to permanent and contractual employees/workers, occupational health and safety, trainings. Likewise, at community level, disclosures will need to be made on Social Impact Assessments (SIA), Rehabilitation and Resettlement, Corporate Social Responsibility, among others. Although SEBI has said that the reporting would be mandatory from FY23 onwards, companies are being encouraged to be early adopters of BRSR. With respect to ESG funds, as of March 2021, there were about 10 funds available in India. However, it is interesting to know that sustainable funds in India attracted about ` 36.9 bn of investment in FY21, a jump of 76% over the preceding fiscal. This clearly points towards the rising popularity of ESG investing in India. End Note All in all, going forward, businesses that have a clear focus on improving on ESG parameters are likely to emerge as winners in the post-pandemic world. The transition to a zero-carbon economy is critical not only for the success of businesses but also for our Planet, as a whole. Over the long run, robust ESG frameworks and compliance will prove to be indispensable to rebuild the economy and to help companies better withstand upcoming crises in the future. Companies that incorporate ESG compliance into their operations and realign their business models to meet their stakeholder expectations are the ones that will stay ahead of the curve over the long run and create more value for the entire eco-system. Dun & Bradstreet