According to Deloitte India’s ESG preparedness survey, only 27% of Indian businesses believe they are adequately prepared to satisfy their ESG strategy and compliance needs. Furthermore, only 15% of firms polled believe their suppliers are prepared to meet the organisations’ ESG needs. These findings highlight the difficulties that Indian enterprises may face in the future. While there is a high level of commitment to ESG principles, the poll reveals a considerable gap in preparedness and implementation.
Deloitte Touche Tohmatsu India LLP (Deloitte India) conducted a survey of 150 organisations to assess their preparation for ESG requirements (policies, regulations, disclosures, and compliances) and to evaluate their ESG strategy and activities. Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), Chief Sustainability Officers (CSOs), heads of Corporate Social Responsibility (CSR), and management and operations executives comprised the response pool. Over 70% of these companies are also traded on Indian stock exchanges.
From a sector standpoint, the Consumer business was found to lag, with only 7% of organisations exhibiting robust preparedness for ESG criteria. On a more positive note, approximately 80% of firms in the Energy, Resources, and Industrials (ER&I), Financial Services, and Life Sciences and Health Care industries (LSHC) have a positive attitude.
ESG preparedness
According to Viral Thakker, Partner and Sustainability leader at Deloitte India, “Organisations are grappling with evolving expectations on ESG compliance and disclosure from investors, boards, governments, and consumers.” Within a few years, they must account for rising global legislation on sustainable finance, climate disclosures, biodiversity, and social and governance factors such as gender diversity and living wages. A strong ESG culture will lead to improved top-line growth, cost savings, decreased regulatory load, enhanced efficiency, and improved investment quality and asset optimisation. ESG is a big value generator, and incorporating it into business processes is a crucial differentiation.”
In terms of obstacles, 65 percent of organisations polled identified shifting ESG rules as a major impediment to establishing ESG preparation.
ESG is becoming more popular in India.
The study report provides an upbeat assessment of ESG’s growing importance in India. Almost 88 percent of enterprises believe that sustainability standards have a direct influence on their operations. Over 75% agreed that ESG had become an essential boardroom agenda item, and 90% agreed that ESG reporting would assist the organisation by increasing brand perception.
In terms of ESG reporting, 81% of firms actively report their ESG efforts, with sustainability reports leading the way (81%) followed by ESG reports (50%) and Business Responsibility and Sustainability Report (BRSR) and integrated reports (44%). Nearly 75% said their firm promotes its ESG initiatives through awareness programmes (85%), followed by annual meetings (76%), and investor decks (50%).
In the social sphere, more than 90% of organisations devoted a portion of their investments to community welfare activities. However, the organization’s readiness to fulfil rising public, investor, and government demands for inclusion, diversity, and equity is subpar. Only 25% of organisations believe they are well prepared in this regard, with the rest believing they are somewhat prepared (45%) or somewhat prepared (29%). Furthermore, only 27% of firms considered themselves to be industry leaders in employee welfare, with the rest being competent (53%) or less than adequate (20%).
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