At the intersection of environmental stewardship, social responsibility, and corporate governance lies the ESG framework—a powerful tool for guiding businesses towards sustainable practices. In the context of Circular Economy principles, adopting an ESG framework becomes essential for organizations committed to creating long-term value while minimizing environmental impact and fostering social equity. ESG reporting help organisations communicate their progress in environmental, social or governance issues to stakeholders, particularly investors.
If organisations can’t communicate progress in any ESG-related work – no matter how strong – will not translate to verifiable results.
Why is ESG Critical
Climate change: India is particularly vulnerable to climate change impacts, including rising sea levels and extreme weather events. Companies with strong environmental practices, like adopting renewable energy and reducing emissions, can help mitigate risks and contribute to a greener future
Social challenges: With its large and diverse population, India faces social challenges such as poverty, inequality, and lack of basic needs. Companies that prioritize social responsibility can drive positive societal change, creating a more inclusive economy
Governance: Strong corporate governance, including transparency and ethical conduct, is essential for economic growth. Companies with sound governance practices can rebuild trust, attract investments, and foster a stable, sustainable economy.
Benefits of ESG
In 2020, the World Economic Forum and the International Business Council (IBC) urged major global corporations to adopt ESG standards for their 2021 reports, further highlighting the growing importance of ESG planning. While ESG reporting has seen considerable growth with heightened awareness from companies, investors, and regulators, it’s essential for organizations to make this reporting both meaningful and actionable for stakeholders.
Adopting ESG practices offers significant advantages, including improved financial performance, cost savings, competitive edge through brand loyalty and talent attraction, regulatory compliance, and enhanced long-term resilience. ESG also helps address pressing issues, such as climate vulnerability, social inequality, and governance concerns, making it a key factor in India’s future development and global leadership.
Timeline of Sustainability regulations in India
- 2009: The Ministry of Corporate Affairs (MCA) issues the “Voluntary Guidelines on Corporate Social Responsibility”.
- 2011: MCA issues the “National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business, 2011” and provides framework for reporting.
- 2012: The Securities and Exchange Board of India (SEBI) mandates the top 100 listed companies by market capitalization to file business responsibility report (BRR).
- 2016: The requirement for filing BRR is extended to the top 500 listed companies by market capitalization.
- 2017: A SEBI circular advises that integrated reporting may be adopted on a voluntary basis from FY2018 by the top 500 companies required to prepare BRR.
- March 2019: The updated NVGs is released as the “National Guidelines for Responsible Business Conduct.”
- December 2019: SEBI extends BRR requirements to the top 1000 listed companies by market capitalization from 2020.
- 2021: The Business Responsibility and Sustainability Reporting (BRSR) framework is introduced to the top 1000 companies by market capitalization to voluntarily. This becomes mandatory from FY2023.
- 2023: SEBI introduces BRSR core, which applies to the top 150 listed companies by market capitalization from FY2024.
Take our course on ESG
ESG and Corporate governance course is perfect for analysts who would like to better understand how a company manages risks and opportunities that shifting market & non-market conditions create in today’s world. This course has been built for beginner and intermediate level research analysts, banking and investment professionals, or business and finance students seeking to gain further insight into ESG. The concepts of compliance in corporate governance will be useful for any business analyst that wishes to advise public market clients on ESG strategies and improved disclosures.
Course Highlights
- Explaining the concept of ESG and its relevance to making financial decisions
- In-depth knowledge of each ESG factor
- Role of governance and stakeholders in corporate ESG performance
- Analyze ESG risks and opportunities
- ESG reporting standards and its competitive advantage
- Case studies to assess company performance using publicly available information
- Compliances for corporate governance