There exists a misconception that corporate sustainability is only addressing environmental issues. Environmental and social issues and economic viability – all three topics are equally important when discussing the ESG performance of sustainability programs of business corporates.
The Business Responsibility and Sustainability Report (BRSR), introduced by SEBI, applies to the top 1000 listed Indian companies and aims to establish links between their financial results and ESG performance. Although BRSR reporting was voluntary for FY2021-2022, it will be mandatory starting from FY2022-2023.
It is interesting to note that the increased focus on ESG in India reflects a global trend. The recent 25th edition of the CEO Study conducted by IBM Institute of Business Value with 3000 CEOs worldwide reveals that sustainability is the fastest-rising issue on the enterprise agenda.
Historically, CEOs have ranked environmental issues low on the list of forces impacting their enterprises. However, 39% of the CEOs interviewed say that increasing sustainability is one of the highest priorities for their organization in the next 2 to 3 years.
Figure 1. CEO perspective on factors affecting enterprises over the years.
The intense pressure of environment disruptions affecting the economic and social fibre of the world has forced sustainability issues on top of agenda- ahead of Regulation which has been previously the top of CEOs agenda.
Figure 2
BRSR disclosure is a mandatory “regulation” in India. With the expectation of accountability and transparency , it puts intense pressure on the CEO and the Board Leadership to understand and address the sustainability challneges and opportunities for their busiess.
When the steep learning curve on sustainability is multiplied with the uncertainty and rising pressures of a post covid, warn torn global economy , it creates a complex context for CEOs to navigate. It is therefore important to acknowledge that running a responsible business with sustainable business practices is like a journey with a lot of new learnings – on environment, social and governance – to be experienced and shared.