SUSTAINABILITY TAKES ESG PATH

While big corporates are taking the lead on ESG goals, smaller players are hoping for a trickle-down effect to get their efforts going.

- P.B. JAYAKUMAR

₹5.4 LAKH CRORE. That is the amount India’s premier oil and gas explorer Oil And Natural Gas Corporation (ONGC) and three public sector oil marketing companies, IOC, BPCL and HPCL, plan to invest in reducing their carbon footprint. Ironically, their mandate is to either explore or refine carbon-producing fuels—oil and gas.

The enthusiasm shown by these energy giants is not surprising. For past few years, corporate governance has been defined to a large extent by ESG (environment, social and governance), a framework that covers a set of practices organisations implement to limit the negative impact on environment, society and governance. It has also become part of strategic vision in India Inc. boardrooms, fuelled changes in global business environment, demand from MNC customers and government’s backing to climate-friendly businesses.

That’s the vision. The reality is a bit different. An ‘ESG preparedness survey’ of 150 Indian corporates in May by Deloitte India found that while commitment to ESG principles is high, there is a significant gap in preparedness and action. The survey found that merely 27% Indian organisations feel adequately equipped to meet their ESG strategy and compliance requirements and only 15% believe their suppliers are prepared to comply with their ESG requirements.

“Organisations are grappling with evolving expectations on ESG compliance and disclosure from investors, boards, governments and consumers,” says Viral Thakker, partner and sustainability leader, Deloitte India.

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