From Reporting to Reform: The ESG Imperative for Indian Industry

by Pooja Verma.

As global scrutiny intensifies and stakeholder expectations rise, Environmental, Social, and Governance (ESG) is evolving from a peripheral concern to a strategic imperative. Expanding on Corporate Social Responsibility (CSR), ESG is a competitive, data-driven strategy that shapes corporate decision-making, prioritising risk management, boosting resilience, enhancing reputation, and driving long-term value creation. For Indian enterprises navigating a dynamic landscape, ESG serves as a blueprint for translating goals into concrete actions for sustainable growth. However, despite this growing significance of ESG, only 27% of Indian organisations are adequately equipped to comply with ESG mandates.

Here, we explore the state of ESG adoption in India, evaluate gaps in current practices, and identify ways to strengthen the ecosystem.

ESG reporting trends in India

As sustainability gains prominence, Indian enterprises are increasingly prioritising ESG reporting to meet investor expectations, comply with evolving regulations, and align with global standards for transparency and accountability.

One of the most significant regulatory developments in this space is the Business Responsibility and Sustainability Reporting (BRSR), developed by the Securities and Exchange Board of India (SEBI). Now mandatory for the top 1,000 listed companies, it is emerging as the primary ESG disclosure framework in India. Although BRSR covers key ESG parameters, its metrics are specifically tailored to India’s policy and regulatory landscape rather than focussing on sector-specific benchmarks, making it comprehensive in intent but generic in execution. This lack of sectoral granularity can stand in the way of measuring and managing sustainability performance with the precision needed for meaningful impact. Further, BRSR’s strong domestic focus limits its applicability and acceptance at the global level.

Gaps in ESG regulations

Despite growing awareness and regulatory momentum, several systemic gaps continue to undermine the credibility and effectiveness of ESG reporting in India. These challenges not only hamper meaningful sustainability outcomes but also increase the risk of greenwashing. The following are some of the key areas of concern:

1. Metrics gaps: With numerous ESG frameworks available, identifying the most appropriate one often feels like navigating a complex maze. The absence of a unified framework allows companies to cherry-pick metrics and choose a standard that best suits their agendas, leading to selective disclosures that misinform stakeholders. This further complicates the comparison and evaluation of sustainability performance across organisations.
2. Reporting gaps: While many organisations realise the value of ESG reporting, challenges in data management continue to hinder accurate and comprehensive reporting. Many companies still rely on manual tools, with nearly 35%–65% of organisations globally using spreadsheets to manage their ESG data, a trend that India likely mirrors or exceeds. There remains a significant gap in streamlining data management and reporting due to the absence of dedicated sustainability data systems and analytics, hampering reliable, timely, and comprehensive reporting.
3. Limited sustainability expertise: Many organisations continue to face difficulties in integrating sustainability strategies into their broader business frameworks. This challenge is primarily driven by resource constraints and departmental silos, often stemming from a shortage of specialised sustainability talent, thereby slowing ESG integration.
4. Financial hurdles: Small and medium enterprises often struggle to adopt green practices due to limited access to financing. This restricts their ability to hire specialised sustainability talent and obtain third-party certifications, ultimately slowing their progress towards sustainable growth.
5. Inconsistent assessment ratings: ESG ratings often vary across agencies due to differences in the evaluation criteria, leading to inconsistent assessments and ambiguity for stakeholders. These disparities in reporting criteria and standards create loopholes that allow organisations to selectively disclose their positive environmental or social impacts while withholding negative data.
6. Shifting goal posts: Organisations often try to obscure responsibility and create the impression of progress by regularly revising their sustainability targets or switching the ESG frameworks they use for disclosure. This can blur accountability and conceal stagnation or even regression.

To bridge the gaps in BRSR and align with global sustainability standards, many Indian organisations are adopting alternative international frameworks, such as the Global Reporting Initiative (GRI) — widely known for its comprehensive sustainability reporting; the Sustainability Accounting Standards Board (SASB) — preferred for its industry-specific ESG metrics with a major focus on financial performance; and the Task Force on Climate-Related Financial Disclosures (TCFD) — commonly used by manufacturing, finance, and energy companies that face significant climate-related risks.

Embracing the positive outlook of ESG

When implemented with rigour and integrity, ESG can significantly enhance brand reputation, attract investment, unlock new revenue streams, and improve operational resilience. It also enables companies to mitigate long-term risks, particularly those linked to resource scarcity and climate change.

At this juncture, the need for a standardised ESG framework that fosters accountability, transparency, and innovation is undeniable. However, it cannot be considered a silver bullet. To realise the full potential of ESG, the deeper structural issues need to be resolved. We must look beyond checklists and compliance to focus on building institutional capacity and strengthening policy and regulatory ecosystems. Without these measures, ESG risks becoming a superficial label — more about optics than impact. With the right systems in place, ESG can evolve from a box-ticking exercise into a powerful driver of accountability, resilience, and transformative change.

The author works in the area of sustainability at the Center for Study of Science, Technology and Policy (CSTEP), a research-based think tank.

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