ESG Investing In India: Pioneering Sustainable Growth With Top 10 Companies
Environmental, Social, and Governance (ESG) investing has become a significant global trend in recent years, with an increasing number of investors, companies, and governments recognizing the importance of incorporating ESG factors into their decision-making processes. India, with its diverse economy and rapidly growing market, is no exception.
The country has witnessed a surge in ESG investments, driven by both domestic and international investors.
This article will explore ESG in India, with a focus on ten companies that have implemented exemplary ESG initiatives.
The Emergence of ESG in India
The ESG movement in India has gained momentum in recent years, fueled by several factors, including:
Growing awareness of climate change and its potential impact on businesses, economies, and societies
Pressure from investors and regulators for companies to adopt sustainable practices
A growing middle class with increasing disposable income and a desire for more ethical consumption
10 Exemplary ESG Implementations by Indian Companies
The following ten companies have taken significant steps towards integrating ESG principles into their business practices, setting benchmarks for their peers in the industry:
Tata Steel
Tata Steel, a leading steel manufacturing company in India, has made significant progress in reducing its environmental impact.
Between 2016 and 2020, the company managed to reduce its carbon emissions by 13%.
Additionally, Tata Steel has initiated a project to increase the utilization of waste plastic in its steelmaking process, thereby reducing its dependency on coal and cutting down on CO2 emissions.
Infosys
Infosys, a global leader in next-generation digital services and consulting, has been at the forefront of implementing sustainability initiatives.
The company has achieved carbon neutrality in 2020, 30 years ahead of the target set by the Paris Agreement.
Infosys also invests in renewable energy, with 44% of its electricity consumption in India coming from renewable sources in 2020
ITC Limited
ITC, a conglomerate with businesses across multiple sectors, including FMCG, hotels, and paper, has been a pioneer in sustainability practices in India.
The company has been water positive for 18 consecutive years and carbon positive for 15 years.
ITC’s afforestation program, covering more than 800,000 acres, has contributed to creating over 147 million person-days of employment for rural communities.
Mahindra & Mahindra
Mahindra & Mahindra, an automotive and farm equipment manufacturer, has consistently demonstrated a commitment to ESG.
The company is a signatory to the United Nations Global Compact and has set ambitious targets to become carbon neutral by 2040.
Mahindra & Mahindra has also focused on water conservation, achieving a 76% reduction in freshwater consumption per vehicle produced between 2016 and 2020.
Wipro
Wipro, a leading global information technology company, has demonstrated its commitment to ESG through various initiatives, including reducing its greenhouse gas emissions intensity by 46% from the 2008 baseline.
The company has also invested in renewable energy, with 40% of its global energy consumption coming from renewable sources in 2020.
HDFC Bank
HDFC Bank, one of India’s largest private sector banks, has made significant strides in ESG by focusing on financial inclusion, sustainability and governance.
The bank has financed over 7.6 million rural households and provided vocational training to over 850,000 people under its Sustainable Livelihood Initiative.
In addition, HDFC Bank has committed to reducing its carbon emissions intensity by 30-35% by 2030.
Adani Green Energy Limited (AGEL)
AGEL, part of the Adani Group, is a leading renewable energy company in India.
It has an ambitious goal of achieving 25 GW of installed renewable energy capacity by 2025.
As of 2020, AGEL has achieved a total renewable energy capacity of 14 GW, demonstrating its commitment to clean energy and sustainable growth.
Hindustan Unilever Limited (HUL)
HUL, a leading FMCG company in India, has made significant progress in ESG through its ‘Unilever Sustainable Living Plan.’
HUL has achieved 100% water abstraction reduction in its manufacturing processes by 2021 and has committed to reducing its greenhouse gas emissions by 100% in the same period.
Furthermore, HUL has pledged to improve the health and well-being of over 1 billion people by 2025.
Bharti Airtel
Bharti Airtel, a leading telecommunications service provider, has been proactive in adopting ESG practices. Airtel has committed to achieving net-zero greenhouse gas emissions by 2050.
The company has also implemented various energy conservation measures, such as installing solar power systems at its telecom towers and switching to energy-efficient technologies, resulting in a 15% reduction in energy consumption per terabyte of data between 2017 and 2021.
Larsen & Toubro (L&T)
L&T, a leading engineering, construction, and technology company, has been focusing on ESG through various initiatives.
The company has achieved a 22% reduction in greenhouse gas emissions intensity between 2016 and 2021.
L&T has also implemented water conservation measures across its facilities, resulting in a 36% reduction in freshwater consumption between 2016 and 2021.
India’s ESG landscape is evolving rapidly, driven by increasing awareness, regulatory changes, and investor demand for sustainable investments.
The ten companies highlighted in this article are leading the way in implementing ESG initiatives that contribute to long-term value creation and sustainable growth.
As India continues to grow and develop, the importance of ESG in the country’s business landscape will only increase, paving the way for a more sustainable and equitable future.