In recent years, Environmental, Social, and Governance (ESG) factors have become critical for businesses worldwide. Investors, regulators, and consumers now expect companies to act responsibly beyond profits.

What is ESG?

• Environmental: Sustainable resource use, carbon reduction, and renewable energy adoption.

• Social: Employee welfare, diversity, consumer rights, and community impact.

• Governance: Transparency, compliance, and ethical business conduct.

ESG in India

SEBI has mandated Business Responsibility and Sustainability Reporting (BRSR) for top listed companies. This signals a shift towards sustainability-driven business models.

Why ESG Matters

1. Investor Attraction: Global investors prioritize ESG-compliant companies.

2. Regulatory Compliance: Avoids penalties and ensures long-term stability.

3. Brand Reputation: Consumers prefer brands aligned with sustainable values.

4. Risk Mitigation: Helps businesses manage climate, social, and compliance risks.

Challenges in ESG Adoption

• High implementation costs for SMEs.

• Lack of standardized reporting.

• Resistance to change in traditional industries.

Conclusion

Businesses that integrate ESG into their core strategy not only ensure compliance but also future-proof themselves in a sustainability-driven global market.