Why ESG is Gaining Ground
In today’s rapidly evolving business environment, financial performance alone no longer defines success. Stakeholders now look beyond profits to evaluate companies based on environmental impact, social responsibility, and governance standards. This growing shift has made ESG (Environmental, Social, and Governance) reporting a critical part of modern business strategy.
India’s Turn Toward Sustainable Business Practices
For Indian companies, ESG reporting is no longer optional. With regulatory bodies like SEBI pushing for structured disclosures through frameworks like the Business Responsibility and Sustainability Report (BRSR), the expectation to report on non-financial metrics is growing. Even unlisted firms are starting to feel the pressure from investors and clients to demonstrate their ESG credentials.
Breaking Down ESG: What Does It Really Mean?
ESG is an umbrella term covering:
- Environmental: How a business manages energy use, waste, emissions, and environmental risks.
- Social: Policies on employee welfare, diversity, and community engagement.
- Governance: Ethical business practices, board diversity, transparency, and compliance.
Each pillar offers insight into how responsibly a company operates.
Global Benchmarks and India’s Regulatory Response
Globally, ESG reporting standards like GRI, SASB, and TCFD have set high bars for disclosure and transparency. India, too, is aligning with these frameworks, with SEBI requiring top listed companies to file BRSR reports. These changes are signaling to Indian businesses that ESG isn’t just for global giants anymore.
The Role of Chartered Accountants in ESG
Chartered Accountants can play a pivotal role in:
- Conducting ESG risk assessments
- Assisting in materiality mapping
- Designing frameworks for data collection and verification
- Assuring ESG reports for credibility
This places CAs at the heart of a company’s sustainable transformation journey.
How to Start ESG Reporting: A Practical Approach
Starting small is key. Businesses should begin with a materiality assessment to identify key ESG risks and opportunities. Next steps include:
- Setting measurable ESG goals
- Tracking performance data
- Choosing the right reporting framework (e.g., GRI or BRSR)
- Leveraging ESG software for automation and accuracy
Common ESG Pitfalls to Avoid
While ESG adoption is on the rise, businesses must steer clear of:
- Greenwashing: Misleading claims about environmental efforts
- Data inconsistency: Poor data governance erodes trust
- Lack of stakeholder engagement: ESG must reflect real business values
Transparency, accountability, and honest storytelling are crucial.
Looking Ahead: ESG as a Business Advantage
Early adopters of ESG reporting in India are already seeing benefits — from attracting international investors to gaining a competitive edge. As policies evolve and awareness deepens, ESG is set to become a core part of corporate governance.
Conclusion: ESG as a Long-Term Investment
ESG reporting isn’t just a compliance exercise — it’s an investment in long-term business value. For Indian companies ready to lead with purpose, and for advisors like CAs ready to guide them, ESG is the path forward.
