Building ESG-focused business strategies is crucial for navigating the increasingly volatile landscape of regulations and environmental concerns. By integrating ESG principles into operations, companies can mitigate risks, enhance reputation, and secure long-term sustainability. This involves aligning business practices with societal and environmental goals, such as reducing carbon emissions, promoting diversity and inclusion, and ensuring ethical governance.
Businesses are becoming resilient by integrating ESG principles and adapting to the changing market dynamics and global challenges. Rooted in ecological consciousness, sustainable business models are steering leadership to come up with advanced solutions and ESG strategies to enhance their appeal as socially responsible organisations and thereby build stronger connect with key stakeholders. The benefit of adopting these models is already evident—ESG investments in India have grown from USD330 million in 2019 to USD1.3 billion in 2023.1 As stakeholders invariably raise the bar on ESG and more opportunities emerge for socially responsible firms, the adoption of sustainable practices among Indian businesses will increase further, driving the landscape of conducting business in line with ESG goals.
India’s transition to a sustainable future
India is committed to sustainability, aiming to achieve net-zero emissions by 2070. Indian businesses are helping the country advance in this endeavor by widely adopting the principles of resource efficiency, waste reduction, sustainable supply chains, and green IT practices. Companies are strategically differentiating their products and services, and maximising resource efficiency, thereby attracting ESG-conscious consumers and investors. For instance, leading retail and e-commerce companies have adopted eco-friendly materials in packaging while promoting local artisans and farmers through direct sourcing.2 They scale up their product delivery through electric vehicles, which led to a reduction of 7,012 tonnes of carbon emissions in a year.3 Furthermore, India's energy sector decreased carbon emissions by 33 per cent over 14 years4 through the usage of renewable energy. This commitment is supported by the country’s shift towards non-fossil-based sources, which now constitutes 43.9 per cent of the total installed power capacity.5
Additionally, technology plays a vital role in helping Indian firms attain desirable output on the ESG front. A major chemical company, for instance, enhanced the safety for manpower, minimised the environmental impact, improved facility performance by employing technologies such as analytics, IoT, AI and digital twins. This technology implementation led to significant annual cost savings.
Scaling ESG advancement
The development of sustainable business models is rapidly transforming the business landscape in India. Further, Indian companies can deploy a strategic long-term lens in addition to following the ESG frameworks mandated by regulatory authority. Businesses should be cognizant of the fact that, in the current environment, stakeholders demand accurate ESG data, measurable impact and transparency, when it comes to the implementation of ESG practices. Organisations that gained a stronger grip over key ESG parameters by demonstrating these improvements will be better placed to tap into future opportunities.Additionally, technology plays a vital role in helping Indian firms attain desirable output on the ESG front. A major chemical company, for instance, enhanced the safety for manpower, minimised the environmental impact, improved facility performance by employing technologies such as analytics, IoT, AI and digital twins. This technology implementation led to significant annual cost savings.
[1] Investment opportunities and challenges vis-a-vis ESG regulation: Tracing India in the global canvas - Sustainability News | The Financial Express
[2] Apple's Sustainable Store in India: A Model for Global Retailers
[3] Bigbasket Releases The Green Report, Showcasing Commitment to Sustainability in Indian Retail - Indian Retailer
[4] India succeeds in reducing emissions rate by 33% over 14 years, sources say, ET EnergyWorld
[5] India's Renewable Energy Growth: Solar Power & More | IBEF
