ESG stands for Environmental, Social, and Governance — the three pillars used to evaluate how a company manages its impact on the world and how it is managed internally. Once considered a niche concern for large multinationals, ESG is now central to how businesses in India are regulated, funded, and evaluated.
The Three Pillars
### Environmental (E)
How a company interacts with the natural environment:
- Greenhouse gas emissions (Scope 1, 2, and 3)
- Energy consumption and renewable energy use
- Water use and discharge
- Waste generation and disposal
- Biodiversity impact
### Social (S)
How a company manages relationships with people:
- Employee health, safety, and wellbeing
- Workforce diversity and inclusion
- Community engagement
- Human rights and supply chain labour standards
- Customer data privacy
### Governance (G)
How a company is led and controlled:
- Board composition and independence
- Executive compensation and accountability
- Anti-corruption and ethics policies
- Transparency and disclosure quality
- Whistleblower mechanisms
Why ESG Matters in India Now
Regulation: SEBI has mandated the Business Responsibility and Sustainability Report (BRSR) for the top 1000 listed companies. ESG disclosure is no longer voluntary at this level.
Investor expectations: Domestic and foreign institutional investors are increasingly using ESG scores and ratings to make investment decisions. Poor ESG performance can affect cost of capital and access to funding.
Customer and supply chain pressure: Global customers — particularly in Europe and North America — are asking Indian suppliers to demonstrate ESG performance as part of procurement requirements.
Risk management: ESG risks — climate change, water scarcity, social unrest, governance failures — are material business risks. Managing them proactively protects long-term value.
Talent: A growing proportion of professionals, especially younger employees, consider ESG performance when choosing employers.
Where to Start
For most companies, the journey begins with understanding your current position:
- Review your BRSR obligations (if listed) or voluntary reporting options
- Conduct a materiality assessment to identify your most significant ESG issues
- Establish baseline data for key metrics
- Set targets and build a roadmap
New to ESG? [Contact us](/contact) to discuss where your organisation stands and how to get started.
Vivek Asthana
Founder, Vedannt EHS Advvisors