The emerging framework known as ESG helps stakeholders comprehend how a company is handling opportunities and risks associated with environmental, social, and governance standards (also known as ESG factors). ESG in India has been striving to build a comprehensive stance to spur sustainability and encompass more than just environmental concerns.
Other historical movements that concentrated on corporate philanthropy, pollution reduction, and health and safety issues gave rise to ESG in India. Many of the biggest asset managers and financial services companies in the world now base their capital allocation choices on ESG. A new generation of ESG experts is entering the market and promoting the objectives of carbon neutrality and net zero.
ESG Standards and Regulations in India
ESG standards and regulations in India have been developed as a result of the growing global attention on ESG transformation. In India, the Securities Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA), among others, have established a number of market-specific rules and regulations in addition to adopting international norms. Depending on the jurisdiction in which they operate, companies are required to adhere to the given standards and promote ESG in India while maintaining ESG Standards and Regulations.
Businesses have embraced ESG elements in their business strategy as a result of these requirements and stakeholder expectations. Boards of Directors (BoDs) worldwide have since acknowledged ESG as a crucial topic for boardroom debate.
Guidance and help may be necessary for a considerable number of Indian corporations in order to integrate all rules, laws, and reporting standards into the commonly called ESG report determining the future of ESG in India.
The “ESG Guidebook and Ready Reckoner for Boards of Directors” was earlier introduced by the Confederation of Indian Industry (CII) after a discussion with independent directors and board members.
The Guidebook on Environmental, Social, and Governance, created in collaboration with PwC, offers a new path for ESG in India. It is said to be an useful, step-by-step guide to sustainability and ESG tactics based on industry best practices worldwide and the Indian context. In order to accomplish ESG transformation, the Guidebook seeks to assist Indian corporate organizations in implementing ESG inside their organizational structure, procedures, and performance.
Importance of the “ESG Guidebook and Ready Reckoner for Boards of Directors”
This “ESG Guidebook and Ready Reckoner for Boards of Directors” seeks to close the gap and provide a comprehensive understanding of the foundations of ESG. Starting with a summary of ESG principles, the Guidebook explores the reporting basics in further detail and aids in understanding the ESG ecosystem and fate of ESG in India.
The Guidebook gives the BoDs practical insights to execute requirements in their organizations at every stage. Additionally, an ESG Ready Reckoner with a checklist that serves as a guide to confirm that the company complies with the standards and guidelines is included. Board members will be able to re-align their organization’s purpose and incorporate ESG as a crucial component of their growth strategy with the help of this manual, which will also help them identify risks and opportunities.
India’s overarching legislation, the Environment (Protection) Act, 1986, has issued a number of regulations and notifications that enable the central government to take different actions to enhance the environment and reduce pollution while promoting ESG in India.
These include the following: Coastal Regulation Zone Notification 2019 (and related 2021 procedure for violation of the CRZ Notification); Bio-Medical Waste Management Rules 2016; Plastic Waste Management Rules – 2016 and Amendment Rules of 2021 and 2022; Solid Waste Management Rules 2016; Construction and Demolition Waste Management Rules 2016; Hazardous and Other Waste (Management and Transboundary Movement) Rules 2016, as amended in 2019 (HW Rules); Bio-Medical Waste Management Rules 2016; Batteries (Management & Handling) Rules 2001 (and the proposed draft Battery Waste Management Rules 2020).
Guidelines and Implement Laws About Emissions
As the federal organization in charge of carrying out and monitoring India’s environmental regulations, the Ministry of Environment, Forests, and Climate Change (MoEFCC) is essential.
As the primary regulatory body, the Central Pollution Control Board (CPCB) has the jurisdiction to create guidelines and implement laws pertaining to emissions, waste management, and industrial pollution across the country.
In union territories, enforcement is also devolved to pollution control committees or State Pollution Control Boards (SPCBs). Although this aims to support regional governance, it has created problems, such as uneven rule enforcement, a lack of transparency, poor regulatory compliance, and sometimes corruption making ESG in India a certain bottleneck.
With a single application process for a Consent to Establish (CTE) and subsequently a Consent to Operate (CTO) under the Water Act and Air Act, India has an integrated permit system.
By centralizing applications with the CPCB, the Extended Producer Responsibility – Authorization for Producers, which was created by the E-Waste (Management) Rules 2016, streamlines the procedure. Furthermore, because the CPCB views an environmental clearance (EC) as being equal to a CTE, it has waived separate CTEs for industrial units that need one.
