ESG risk management has moved from a voluntary exercise to a board-level priority. For Indian companies — especially those with global supply chains, listed status, or foreign investors — understanding and disclosing ESG risks is now essential.
1. Water Stress and Resource Scarcity
India is one of the most water-stressed countries in the world. For manufacturing, pharma, and agribusiness companies, water risk is both an operational and reputational issue.
- Measure water withdrawal, consumption, and discharge at the facility level
- Identify sites in high water-stress zones using tools like the WRI Aqueduct
- Set reduction targets and invest in recycling and rainwater harvesting
2. Supply Chain Emissions (Scope 3)
As global customers and investors demand Scope 3 disclosures, Indian companies face growing pressure to account for emissions across their entire value chain.
- Engage key suppliers on emissions data collection
- Prioritise high-spend, high-emission categories
- Consider supplier ESG assessments as part of procurement
3. Regulatory Non-Compliance (BRSR and Beyond)
SEBI's BRSR mandate is expanding in scope and rigour. Companies that treat it as a compliance checkbox risk material gaps when deeper assurance is required.
- Build data collection systems that go beyond minimum disclosure
- Prepare for BRSR Core and third-party assurance requirements
- Stay updated on SEBI circulars and NGRBC guidance
4. Climate Physical Risks
Extreme weather events — floods, heat waves, cyclones — are increasing in frequency and severity across India. Physical climate risk affects assets, supply chains, and workforce.
- Conduct a climate risk scenario analysis aligned with TCFD
- Identify vulnerable assets and operations
- Build adaptation measures into capital planning
5. Social and Labour Risks
Labour conditions, gender equity, and community relations are under increasing scrutiny — from both investors and the BRSR framework itself.
- Track and disclose workforce diversity metrics
- Audit contract labour and supply chain labour standards
- Engage communities in areas where operations have significant impact
6. Governance and Anti-Corruption
Weak ESG governance — including board oversight and whistleblower mechanisms — is a red flag for institutional investors and rating agencies.
- Establish a board-level ESG committee or assign oversight to an existing committee
- Implement and communicate a clear anti-corruption policy
- Ensure ESG disclosures are reviewed and approved at the board level
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Vivek Asthana
Founder, Vedannt EHS Advvisors