Environmental News from India:
Companies need to adapt to the ever-evolving framework of ESG to make sure that the criteria are consistently and adequately met.
With the spotlight on measures taken by businesses to safeguard the environment, the implications of covering the environmental, social, and governance (ESG) criteria are being acknowledged by them, their investors, and even regulators. ESG, used interchangeably with sustainability, is about pursuing responsible and ethical business practices with attention to social and environmental equity along with economic development. It is about measuring sustainability based on quantitative or semi-quantitative data.
In India, when we talk about sustainability, there have been two watershed moments—Corporate Social Responsibility (CSR) reporting and spending, the first such initiative globally, being made mandatory under the Companies Act, 2013; and the Securities and Exchange Board of India (SEBI) making the Business Responsibility and Sustainability Report (BRSR) mandatory for the top 1,000 listed companies by market capitalization.
The BRSR, which came into effect on April 1 this year, is expected to lead to the development of a business responsibility sustainability index for companies in the country’s work-in-progress ESG framework. Namita Vikas, the founder and managing director of advisory firm auctusESG, says, “The BRSR is a big starting point as it mandates disclosures on material ESG risks and opportunities and their financial implications and risk management.”
India’s steps towards building a strong ESG framework is in line with developments in other parts of the world. The European Union, for instance, has asked industry and financial institutions to factor in ESG in decision-making and disclosures. Countries like the UK and New Zealand have already transitioned from voluntary to mandatory climate-related financial disclosures.
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Source: Outlook