ESG
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What is ESG?
ESG stands for Environmental, Social, and Governance.
It’s a framework that helps companies measure and report their impact on sustainability, ethics, and governance practices.
In India, ESG has become a key part of corporate compliance and investor evaluation, especially
E = Environmental
Focuses on how a company affects the planet.
Includes:
- Greenhouse gas emissions (Scope 1, 2, and 3)
- Energy efficiency & renewable energy use
- Waste and water management
- Pollution control (air, water, soil)
- Biodiversity conservation
Example: Installing d’carbonizing or hydrogen-based systems to reduce CO₂ emissions supports ESG environmental goals.
S = Social
Covers how a company treats people — employees, customers, and the community.
Includes:
- Health, safety, and working conditions
- Diversity and inclusion
- Human rights and labor practices
- Community development programs
- Customer data protection
Example: Providing employee safety training or supporting rural employment through green tech services.
G = Governance
Relates to how a company is managed ethically and transparently.
Includes:
- Board structure and independence
- Anti-corruption policies
- Risk management and compliance
- Transparency in financial reporting
- Stakeholder engagement
Example: Disclosing ESG metrics regularly and following SEBI or BRSR reporting norms.
ESG Regulations in India
SEBI – BRSR
- Mandatory for the top 1000 listed companies (by market capitalization) since FY 2022–23).
- Replaces the old Business Responsibility Report (BRR).
- Companies must disclose ESG metrics across environment, social, and governance parameters.
- Latest version: BRSR Core (mandatory from FY 2023–24).
BRSR Core – Key Focus Areas
- Greenhouse Gas (GHG) emissions (Scope 1 & 2 mandatory; Scope 3 recommended)
- Water consumption
- Waste generation
- Energy intensity
- Gender diversity
- Employee well-being
- Supply chain sustainability
- Governance transparency
Net Zero 2070 Roadmap
- India committed to achieving Net Zero Carbon Emissions by 2070 (announced at COP26).
- Companies are aligning ESG practices to contribute toward this national target.
NABL / MoEFCC / CPCB Linkages
- CPCB-IV+ norms govern emission levels.
- NABL-accredited testing validates ESG environmental metrics.
- MoEFCC oversees national compliance under environmental laws.
- MoEFCC oversees national compliance under environmental laws.
Why ESG Matters
Enhances brand
Enhances brand reputation and investor trust.
Improves access
Improves access to green finance & ESG funds
Ensures compliance
Ensures compliance with SEBI and global sustainability norms.
Helps organizations
Helps organizations align with UN SDGs (Sustainable Development Goals).
Environmental
Focuses on sustainability and pollution control.
Includes:
- CO₂ and GHG emissions (Scope 1, 2, 3)
- Energy efficiency, renewable power use
- Waste and water management
- Pollution reduction (air, water, soil)
- Climate risk management
Example: Using hydrogen-based d’carbonising systems to cut emissions.
Social
Looks at people and communities.
Includes:
- Employee safety and welfare
- Diversity and inclusion
- Human rights and labor policies
- Community development
- Customer privacy and satisfaction
Example: Job creation through clean-tech services and rural outreach.
Governance
Ensures ethical, transparent management.
Includes:
- Board accountability
- Anti-bribery and compliance measures
- Risk management
- Transparency in ESG disclosures
Example: Regular ESG performance reporting following SEBI norms.
ESG Rules in India
SEBI’s BRSR (Business Responsibility & Sustainability Report)
Mandatory for top 1000 listed companies.
- Covers Environmental, Social, and Governance metrics.
- Includes BRSR Core parameters like emissions, water, energy, diversity, supply chain, and ethics.
Net Zero 2070 Commitment
India’s national target for carbon neutrality.
CPCB & NABL Standards
emission norms, testing, and verification for industrial compliance.
Why It Matters
Builds investor and public trust.
Qualifies for ESG-based funding.
Supports SEBI, MoEFCC, and global sustainability mandates.
Helps businesses show progress toward Net Zero and SDGs.
