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MUMBAI (India ESG): The Securities and Exchange Board of India (SEBI) has recently instituted new ESG (Environment, Social, and Governance) rules, causing quite a stir among India’s corporate leaders. While these new mandates have been welcomed as steps in the right direction for aligning India with global sustainability standards, they have also been termed as tough and rigorous. According to industry experts, the newly imposed guidelines will require significant “handholding and knowledge sharing” for companies to adapt fully.
An Unexpected Shift
Pradeep Panigrahi, head of corporate sustainability at L&T, expressed concern that Indian corporations were not fully prepared for these sweeping changes. He emphasized the need for supportive measures, stating, “A lot of handholding and knowledge sharing are required for the companies.” The new regulations demand a pivot from conventional business practices and challenge companies to integrate environmental and social responsibility into their governance structures.
Companies Already on the Path
Certain corporations, like ITC, have long-standing sustainability practices that put them ahead of the curve. According to Madhulika Sharma, vice president and chief sustainability officer at ITC, the company had set 100 key performance indicators related to sustainability nearly two decades ago. “It’s a good start; there is intent. It is not that the organizations don’t want to be transparent, but I think it is a process,” she stated. Companies like ITC are better equipped to navigate the new regulatory landscape, thanks to their proactive commitment to sustainability.
Uniformity and Transparency in ESG Disclosures
Sanjay Khajuria, director of corporate affairs and sustainability at Nestlé India, welcomed the new regulations as a platform for greater transparency. He argued that many companies already have good practices in place but need standard disclosure requirements to make them comparable. “This is going to improve transparency. Most companies are already doing the right things, but the new disclosure standards will [allow] a comparison,” he remarked.
Science-Based Targets for Reporting
Sanjeev Panchal of AstraZeneca Pharma India, and Hetal Gandhi of CRISIL, advocated for science-based targets to underpin ESG reporting. “We must have science-based targets so that it becomes very natural for us to report,” said Panchal. Such methodical planning and verified data, according to Gandhi, contribute to corporate transparency and fulfill international investor expectations.
Conclusion
In summary, while the new ESG rules by SEBI are stringent, they are recognized as a necessity for aligning India’s sustainability practices with global standards. Though there is an evident need for knowledge sharing and supportive measures, the industry is overall optimistic.
(Copyright@IndiaESG)
