ESG Buzz and Blockchain Traceability

India has introduced new environment, social, and governance (ESG) reporting requirements for the top 1,000 listed companies by market capitalization. The Securities and Exchange Board of India (SEBI) stipulates that the disclosure must be made through a new format, namely the Business Responsibility and Sustainability Report (BRSR). BRSR reporting has been voluntary for FY 2021-22 but will be mandatory from FY 2022-23.

Latest announcements from reliance, which aims to become a net carbon zero company by 2035 and has allocated Rs 75,000 crore for capital expenditure on new energy, have fuelled ESG positivity in the country.

In 2020, SEBI mandated Business and Responsibility Reporting as voluntary till 2022 and compulsory from 2023 for the top 1,000 listed companies in the market. 

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.

OECD*, finding on use cases on Blockchain Technologies as a Digital Enabler for Sustainable Infrastructure highlights four major blockchain use cases. 

*OECD(The Organisation for Economic Co-operation and Development is an intergovernmental economic organization with 38 member countries, founded in 1961 to stimulate economic progress and world trade)
  1. A decentralized financing infrastructure could enable the full spectrum of investors to invest directly in sustainable infrastructure through a blockchain-based platform, transforming illiquid assets into tradeable digital assets and increasing financing flows for sustainable development. Two financing methods proposed  
    1. Projects that issue security tokens where investors receive a return on investment according to project performance; 
    2. And a utility token through which purchasers receive access to future services provided by the infrastructure project. Tokenisation of infrastructure also enables automation of processes and reduced reliance on intermediaries, with reduced cost of administrative functions.
  2. Emissions certificate trading systems could be made more efficient by providing transparency and reliable data through a global blockchain layer. This helps to control quota rules effectively, certificate circulation, promote market integrity and robust carbon accounting while also automating transactions and increasing overall efficiency. Regulatory, compliance and administrative functions can be codified in the system, creating a transparent book of accounts on emissions. A blockchain-enabled platform could also link treaty-level registries supporting the Paris Agreement, particularly relating to Articles 2.1c and 6.
  3. A blockchain-based infrastructure contract management system, which verifies and tracks the valid and legally binding versions of contracts in infrastructure projects, could immensely improve transparency in current multi-party contract agreements. Involved parties adopting such IT systems can benefit from the certainty of knowing which contract version is valid and reviewing the conditions at any given time, leading to more streamlined and automated processes. This solution would work in tandem with existing IT environments, like document management systems, enabling high security for sensitive documents while providing a trusted single view on multi-party contracts.
  4. An underlying blockchain base protocol layer could allow decentralized applications to be built by any organization to support the governance, alignment and monitoring of various infrastructure standards. Decision-makers, including investors, require access to truthful, standardized, and up-to-date infrastructure assets. This could include data on financial performance and ESG criteria or climate-related disclosures. 

Given that existing data is fragmented and maybe unaligned with climate objectives, a blockchain-enabled platform would provide the digital backbone needed to support data transparency for sustainable infrastructure development. The process also enables automated compliance checks, data standardization, and integration with other digital technologies like AI, IoT and Satellite Imagery. 

References/Sources 

ESG Reporting in India to be Mandatory for Big Firms from

 https://www.india-briefing.com/

Ey.com, cnbc.com, etc-group.com

Perspectives from KPMG in India – KPMG India. 

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Sailaja

Sailaja is a successful entrepreneur who believes in her passion and dedication. She has a master in business management from Herriot Watt University. She worked as a CEO for a Pharma chain in Hyderabad, and years later, she pursued her dream for pastry and got a degree in pastry from Le Cordon Bleu College, London. She started and established her patisserie in Hyderabad, getting the tastes from Global travel, infused her finesse to products taking her brand a notch higher.

Neelima Ponuku

Neelima is a techno management professional, Trainer and Educator with 15+ years of combined experience in Public Sector Enterprise – Govt. of India, academia and corporate. She has done her Masters in Computer Applications and started her career as a Senior Engineer with the Indian Defence undertaking Public Sector shipbuilding company.
Armed with a management degree, her corporate experience has given her an opportunity to have been a proven leader with demonstrated success in building market strategies, identifying & acquiring key accounts & fostering customer relationships through structured engagement, customer focus & team management.
Her current position as VP Sustainability, she is engaged to promote the ESG agenda and actively contributes in providing sustainability management solutions. She firmly believes that business-decision making approach is not just maximizing profit or financial value only but to an integrated value, which combines financial, social, and environmental value.
Neelima cherishes the goal to combine her range of experience and abilities to be an enthusiastic, intelligent and compassionate person who will make a positive contribution towards a sustainable society.

Krishna Vallapu

Krishna Vallapu is a technology evangelist and Entrepreneur, graduated from Nagarujuna University and trained in IIM, Ahmedabad. Proven track record in building futuristic products, surpassing goals, and expectations for quality. Superior expertise with developer supervision and client relations. Out of box thinker who thrives in collaborative environments, working across business and technical teams.

Inder Davalur

Inder has an MBA in Finance in India. Utilizing his Finance background he rose through the ranks in the banking sector in the US and then after receiving his MS in Healthcare Services Administration he started his career in healthcare at the Tufts Medical Center, Boston. 

Inder’s growing understanding of the expanding role of technology in healthcare caught the attention of the bureacracy and was invited to work on the Patient Privacy and Electronic Records Committee for the State of Massachusetts and later on at the State of Georgia Department of Health and Human Services. These were in the years immediately preceding the development and roll-out of Health Insurance Portability and Accountability Act (HIPAA).

Sensing a rise in ERP movement, Inder joined a software company and worked on managing ERP solutions projects in the manufacturing sector where his clients included the Coca Cola Company, Sara Lee, International Paper, Siemens (Canada) etc .

In 2008 he came to India with the aim of realizing his cherished dream of working in India. He served as the CEO of a EMR software company, and later on led the Digital Transformation at several hospital groups as a group CIO and Vice President. Inder has to his credit, several published articles in national and international healthcare technology management and as an invited speaker at various private and government conferences. He has also been cited in several articles and studies including one at the National Library of Medicine in the USA. 

In his spare time Inder indulges in travel and reading.

Puru Modani

A versatile and passionate leader with 20+ years of expertise in IT Business & Product Strategy, Market Access & Distribution models and Talent Acquisition. Seasoned Investor.  Founded multiple successful businesses & Angel Networks.

An IIM – K alumnus, before embarking on his successful multi sector entrepreneurship journey, Puru served various Fortune 500 companies in Senior Leadership roles. His last corporate stint was with Bank of America.

Suraj Teja P.

Suraj is an entrepreneur, with more than 2 decades of experience in creating various successful enterprises, a seasoned investor funded multiple startups, specialize in creating healthcare delivery infrastructure, board member and strategic advisor, skilled in Healthcare, Telecom, IT Strategy and Market outreach.

Naveen Kadiyala

A Technology Leader and Entrepreneur with a proven track record of building and managing innovative solutions in digital content delivery. Demonstrated history of delivering strategic solutions in Cable, Media & Entertainment industries. Expertise in building interactive ad solutions, advertising platforms, Live Streaming(QAM, OTT, PPV), subscription-based Video (SVOD, AVOD, TVOD) services, Cloud DVR, and Broadband/WiFi services at scale across a multitude of infrastructure options(On-Prem, Hybrid Cloud, Cloud Native, Cloud Agnostic). A strong business development professional and an entrepreneur at heart with a Master of Technology focused in Computer Science from Birla Institute of Technology.

Prabir Mishra

An Investment Banker, Startup coach, Mentor, Strategic planner. Sector expertise  Social, Agritech, Edutech, Healthcare, eGov Strategic Planner, M&A, Transaction Structuring, negotiations and valuation, An IIM-A Alumni with more than two decades of experience.