The growing awareness of environmental sustainability has led to a significant increase in corporate environmental reporting. This practice involves disclosing a company’s environmental performance and impacts, and it is gaining momentum across the country. While progress has been made, challenges remain in ensuring accurate, comprehensive, and standardised reporting. Environmental, social, and governance factors are crucial in advancing sustainability and enhancing India’s reputation as a global leader in environmental stewardship.
Shailesh Haribhakti, chairman of Shailesh Haribhakti & Associates and a leading expert in ESG, says that, despite several challenges, India is making strides in meeting global standards and integrating sustainability into business practices. The increasing awareness among Indian corporates has led to the generation of accurate data in ESG reports.
“We have noticed a significant change between last year and this year. The consciousness and ability to track sustainability parameters have grown immensely among corporate India. The reports from the current 2,000 companies will be far superior to what we have seen in the past,” he says.
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Why environmental reporting matters
As the world confronts the looming threat of climate change, achieving net-zero emissions has become essential for nations and businesses alike. This effort needs the involvement of governments, corporations, individuals, and communities. All entities contributing to greenhouse gas emissions or pollution must take action to reduce their impact and strive for net positivity.
In this context, ESG initiatives play a central role. Investors, consumers, and other stakeholders increasingly consider ESG factors when evaluating companies. Those that demonstrate strong ESG performance are often viewed as more sustainable and ethical, leading to increased investor interest, improved brand reputation, and enhanced customer loyalty. Corporations are beginning to see environmental reporting not as a costly burden but as an opportunity for competitive advantage. Forward-thinking companies recognise that integrating environmental, social, and governance factors into their strategies is both ethical and financially beneficial.
India is clearly benefiting from environmental reporting, which is having a significant impact. Corporations that lack sufficient reporting are increasingly embarrassed by their undefined sustainability journeys. Companies are becoming more aware of their carbon footprints, water usage, pollution levels, and the materials they contribute to the environment. Over the years, corporations have improved significantly, and it is expected that within three to five years, India will reach an exceptional level of corporate environmental awareness.
India is one of the few nations with a deep-rooted consciousness about sustainability, which is ingrained in its traditions. It is a part of Indian culture to avoid polluting air or natural bodies of water. However, embedding this mindset in corporate India will take time.
Countering the perception that corporations prioritise profits over environmental responsibility, Haribhakti said his on-ground experience has led him to believe that it is possible to do good for the environment while also achieving business success. “It is crucial to understand that these goals are not opposing forces; they are in synergy with each other.”
To Indian businesses’ credit, all of the top 1,000 companies have reported on their environmental impact. “Companies like Tata Group, Dabur, Marico, Asian Paints, Hindustan Unilever, and Reliance are leading the way. The Adani Group, in particular, has excelled in sustainability reporting, with Adani Green setting a strong example,” Haribhakti remarked.
Currently, India’s ESG reporting standards are comparable with global practices. The ESG reporting is based on the Global Reporting Initiative (GRI). While general sustainability-related disclosures (S1) and climate-related disclosures (S2) are gaining traction globally, India has not yet fully adopted them, presenting an opportunity for improvement. The country has informed global authorities that it encompasses S1 and S2 within its ESG framework. Nonetheless, the quality of sustainability reporting from large companies in India is world-class.
This is not to suggest that there is no room for improvement. The journey for large corporations has been promising, but they must now integrate Scope 3 emissions and engage MSMEs and their supply chains in the process. Three major trends can be expected in environmental reporting: more corporations will integrate ESG into their work ethics, an increasing number will seek international certification, and there will be heightened awareness of circular economy principles.