The big and rapidly growing world of ESG Compliance
Vijay Balakrishnan
Independent Director| Board Member | C- Level Executive | Thought Leader | Marketing Transformation | Change Management | Ex Tata Consumer Products, Tata Tetley, Airtel, Docomo, Ujjivan and Cambridge International
As India’s economic and growth ratios attract investors and top global conglomerates, the exciting news of ESG compliance and its immense potential in the Indian capital markets is attracting attention and interest like never before.
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Top ESG Rating providers like MSCI London Stock Exchange, besides the Big FOUR consultancies, are known to have joined proxy advisory firms in the race. Experts believe that almost 50 % of these consulting firms' revenues could come directly or indirectly from ESG Compliance or Advisory Business.
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Why is this so attractive and lucrative?
?India’s market regulator, the Securities and Exchange Board of India (Sebi), has mandated the top 1,000 companies by market capitalization to disclose their ESG activities under its Business?? Responsibility and?? Sustainability?? Reporting?? (BRSR) framework.
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ESG is crucial for the long-term sustainability and continuity of any organization as it systemically integrates all the non-financial aspects that impact the business’s bottom line
Gone are the days when organizations would conveniently take the easy way out of outsourcing environmentally or socially risky operations.
Now, the regulator demands full accountability through defined mandates and transparency frameworks, which are also of interest to various stakeholder groups.
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A company’s commitment to environmental metrics is a structural symbol of its commitment to green practices ( India is a prominent signatory to zero carbon) and enhances its brand reputation and equity.
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By combining social factors like human rights, fair labour practices, anti-bribery laws, employee health, and work-life balance, you get the complete picture.
?The consequences of not being compliant can thus have serious consequences; hence, all companies have an ESG sub-committee on their boards.
According to industry experts, the costs of BRSR software can reach Rs 100 Lakhs, and BRSR reports can set a company back Rs 50 lakhs.
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No wonder more interested stakeholders want to get on the ESG Compliance gravy train.
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