One Planet, One Responsibility

Top representatives from the government, regulators, PSUs and corporates deliberated on how to push the envelope on Environmental, Social and Governance (ESG), at a high-level conference in Mumbai recently. The discussions focused on how to standardise the measurements of ESG; how the approach of the companies will have to change on ‘E’ in the immediate future;  the importance of ESG in improving bottom line of companies; the need for enhancing investments in science and technology; and the key role of the media in spreading awareness about ESG.

The ‘National Conference on ESG for Industry Transformation: Environmental – Social – Governance for Aatmanirbhar Bharat’ was organised by the National Productivity Council (NPC) along with the Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Commerce and Industry (MoC&I), and the Ministry of Environment, Forest & Climate Change. Indian Potash was the industry partner for the event.

“When it comes to ESG, we have a two-track approach,” said Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India (SEBI).  “The first track includes our ecosystem’s significant enterprises that want to receive foreign finance and need to comply with international norms. For an economy that is capital deficient and needs foreign capital, there is no alternative but to align with global standards, which is absolutely essential.”

Buch elaborated, “The second element is that we know and understand how this space of ESG is evolving in the context of investment.  The movement of global capital is relatively new and new rules are being written as we speak. In this context, it is imperative that emerging markets like India have their own independent view of what ESG means to them.”

SEBI is going to play an important role in the coming times on ESG. The market regulator has introduced the Business Responsibility and Sustainability Report (BRSR) as new standard for sustainability reporting. Top-1,000 enterprises must comply with BRSR regulations starting fiscal year 2022–23.

Other speakers at the day-long conference included  Sundeep Kumar Nayak, Director General, NPC;  Rajiv Jalota, Chairman, Mumbai Port Authority; Pravin Darade, Principal Secretary, Environment Department, Government of Maharashtra; P.S. Gahlaut, Managing Director, Indian Potash; Sujit Kumar Bajpayee, Joint Secretary, Ministry of Environment, Forest & Climate Change; and Sushma Keskar, President, Pune Divisional Productivity Centre.

The importance of aligning business goals with ESG and blending it with the company strategy was also discussed.

Bajpayee said the government believes the whole concept of ESG compliances and reporting should be self-regulatory and, therefore, there is need for greater sensitisation and potential customisation of reporting. Bajpayee said, “We must care for the planet. People are its biggest stakeholders. Profits are important because without that businesses can’t survive...If there is anything the pandemic has taught us, it is to overcome social and environmental challenges. All of us need to take ownership of our future. Being a spectator is not an option.”

Gahlaut highlighted the impact of urea and fertilisers on the environment. He said that ESG compliance is just one part as the results will only be generated with greater investments in science and technology.

Participants in the conference that aimed to raise public awareness about the different facets of sustainability included professionals, implementers, practitioners, and representatives from businesses and industries involved in ESG and sustainability functions.

The participants discussed reporting and BRSR compliance, while exchanging good practices in corporate governance and resource efficiency. The experts also examined the issues and difficulties that different industries confront while highlighting a number of strategies through which Indian firms and industries can advance their industrial transformation and become global sustainability leaders. The imperative of being resilient while being BRSR compliant was also discussed at the conference.

NPC has launched a new service to assist corporates in adhering to SEBI’s BRSR mandate. “In a rapidly changing environment, we are committed to provide assistance on BRSR. Our ESG initiative Saptapadi provides an end-to-end ESG service,” said Nayak.

The seven step method of SAPTAPADI devised by NPC seeks to promote ESG adoption by business operations and to make enterprises sustainable, competitive.

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Key Takeaways

How to standardise measurements of ESG: A universally recognised ESG standard would raise the level of comparability and quality of disclosure, enabling commerce and investment.

How the approach of companies will have to change on ‘E’ in the immediate future: ‘E’ represents the environmental component of ESG like energy and resources consumed by a business, its waste discharge and GHG emissions. Managing ‘E’ won’t only reduce operational costs but reduce regulatory pressure on firms.

Importance of ESG in improving bottom line of companies: ESG can enhance a company’s overall financial performance in addition to making it more appealing to investors. Sustainability initiatives can boost a company’s bottom line and return on investment.

Requirement of greater investment in science and technology: Innovation and research in materials with low-carbon footprint will help a company raise its ESG bar.

Role of media in spreading awareness about ESG: Compelling stories about ESG initiatives led by a company not only inspire other companies but also strengthen its reputation.

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NPC: A key enabler in ESG

The National Productivity Council (NPC) is an autonomous organisation under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. NPC has extensive experience of working in the space of agri-business, energy management, environment management and waste management.

NPC has assisted more than 25,000 organizations in the areas of energy and environment. NPC is now emerging as a leader in promoting the Environment, Social Governance (ESG) discourse and action in the country. NPC has launched an end-to-end product for ESG solutions called Saptapadi or seven steps for businesses to become ESG-friendly. Here are the seven steps:

Step 1: Setting up the foundation

Step 2: Setting the human and technical components along with ESG policy

Step 3: Identifying opportunities and lacunae

Step 4: Developing an ESG - based plan of action

Step 5: Implementing a plan of action

Step 6: Taking stock of action, documenting it and reviewing it

Step 7: Elaborating need of improvement, and future course of action

NPC regularly organises high-level conferences and workshops to create awareness on ESG related issues. In its New Delhi workshop, NPC invited PSUs to sensitise them on various aspects of ESG and how to integrate it in their operations and offered to handhold PSUs through its network of  regional offices to embark on their ESG journey. Another workshop aimed at private sector was held in Chennai in partnership with Confederation of Indian Industry (CII).