Why is the Buzz around ESG?
The inspiration comes from paradigm-shifting by Investors to look at the non-financial indicators same as financial parameters. This is the Key inspiration for CEOs looking towards ESG, as it can attract capital when infused with business strategy. BRSR (Business Reporting and Sustainable Reporting) is mandatory for the top 1000 companies in market capitalization by 2022-23. BRSR aims to gauge Companies performance by measuring ESG parameters by asking companies 150 questions across nine fundamental principles.
In India, Grasim has built technology to recycle cotton. What has also happened is that green products also give a lot of opportunities for good business. Sustainability and business value have merged, as Grasim is further venturing into greener technology.
Circularity, where the waste of one industry can be used as raw material for another industry, is a huge opportunity that can be further fueled by the principles of ESG. Another major ESG issue in the fashion industry is transparency. Grasim has applied Blockchain technology for end-to-end traceability since transparency has become an essential part of ESG today. Like Grasim, Welspun has become one of the first home textile manufacturers to use a Blockchain and AI-based traceability platform at such a large scale, which is set to capture all its product lines as major Sustainability-related data points. These include ESG metrics such as water usage, fair pay, power consumption, gender equality, among others.
Sustainability reporting presents an excellent opportunity to accelerate a business’s ESG evolution, becoming more resilient to climate change and less reliant on fossil fuels and other finite resources. By measuring and reporting ESG risks, companies show shareholders and other stakeholders that they can manage these risks better and deliver more excellent long-term value, thus enhancing their license to operate.
Net-zero touches every part of a business. Decarbonization plans must, therefore, acknowledge the enormous impact upon the entire value chain, including R&D, product design, manufacturing and operations, as well as key relationships with suppliers, distributors, logistics providers, retailers, and other business partners.
India has pledged to cut its emissions to net-zero by 2070 at the COP26 Summit at Glasgow. However, achieving this target could be a tough grind for India as its energy demand is expected to rise sharply over the next decade as the economy continues on its growth trajectory.