'It's early days, but India's ESG ecosystem is growing rapidly'
This makes India a major market for sustainability solutions and green finance, and makes it critical to the evolution of the ESG ecosystem worldwide.
To understand the drivers of India's ESG push, the challenges, and the opportunities for businesses, Eco-Business spoke to Shantanu Srivastava, energy finance analyst with think tank Institute for Energy Economics and Financial Analysis, who covers listed companies in the Indian energy sector, analyzing their transition strategy, financing needs and ESG profiles.
Several companies have started disclosing their ESG profiles and sharing ESG incorporation and improvement roadmaps.
On the corporate side, the compliance with ESG disclosures and incorporation of ESG strategy varies widely across sectors.
Close to US$1.7 trillion worth of ESG debt was raised globally in the year 2021, as per BNEF. Indian companies have also seen several notable ESG issuances, primarily in offshore markets.
Several large banks such as State Bank of India, ICICI, HDFC and Axis have all claimed to be working on incorporating ESG practices in their lending and investing decision-making process, but it is still early days for ESG performance garnering a lower cost of debt.
A robust ESG strategy includes having a dedicated workforce for ESG matters, headed by a chief sustainability officer and with board oversight through the relevant ESG and climate risk committees.