In recent years, the importance of Environmental, Social, and Governance (ESG) criteria has dramatically surged, particularly in contexts where emerging economies are striving to enhance their competitive edge. One notable study that delves deeply into this phenomenon is about the ‘E’ in ESG—focusing on the environmental dimensions within India. Authored by Mohanty, Priya, and Paithe, this seminal research emphasizes the pressing need for transparent reporting mechanisms that embrace environmental sustainability. Acknowledging that India is grappling with substantial environmental challenges, the authors advocate for a systematic approach toward integrating these ESG elements into corporate reporting practices.
This comprehensive study illuminates the current landscape of ESG reporting in India, illustrating how businesses are beginning to realize that their operational consequences extend far beyond mere economics. The ‘E’ component focuses on how firms manage their impact on the environment, embodying a spectrum of considerations, from resource consumption to waste management. The literature indicates a strong correlation between exemplary environmental practices and an organization’s overall performance, indicating an emerging paradigm that aligns profit with planet stewardship.
As companies begin to engage with ESG considerations, they also face mounting pressure from investors, regulators, and stakeholders who demand greater accountability and transparency. This is particularly pertinent in a rapidly developing nation like India where economic growth often clashes with environmental degradation. The study emphasizes that the traditional business models relying solely on financial profits are increasingly viewed as unsustainable, necessitating the incorporation of environmental metrics into performance assessments.
The authors highlight the evolution of ESG reporting frameworks, noting that various standards and guidelines such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) are gradually gaining traction in India. These frameworks aim to provide companies with measurable benchmarks that can enhance their transparency regarding environmental practices. Yet, the study reveals a stark contrast in the adoption rates between large corporations and small to medium enterprises (SMEs), with the latter typically lagging. This discrepancy raises concerns about the inclusivity of such reporting practices and the potential marginalization of smaller players in the market.
A significant barrier to implementing effective environmental reporting in India is the lack of standardized metrics. Without consistent variables to assess and compare environmental performance, companies may resort to inadequate self-reporting mechanisms that paint an overly favorable picture of their environmental impact. This lack of standardization undermines comparability across industries and reduces the overall credibility of reported data. Mohanty and colleagues advocate for a concerted effort to establish universally accepted metrics and guidelines that would enhance the quality of ESG reporting.
Moreover, the paper examines the role of corporate governance in facilitating robust ESG reporting. Good governance structures are imperative for ensuring that environmental considerations are integrated into business strategies. The authors argue that boards should actively engage with environmental issues, embedding sustainability into risk assessment and strategic decision-making processes. Such alignment could not only mitigate risks associated with environmental legislation but also enhance corporate reputations and consumer trust.
The research further discusses the emerging trends in investor behavior, highlighting how ESG factors increasingly inform decision-making processes among institutional investors. There is a growing recognition that companies with strong environmental practices may not only mitigate regulatory and reputational risks but can also unlock new revenue opportunities. Investors are beginning to favor companies that demonstrate proactive environmental strategies, pushing firms to prioritize sustainability as not merely a compliance requirement but as a core aspect of their business effectiveness.
Additionally, the findings underscore the significance of public awareness and societal pressure as catalysts for change. With rising environmental consciousness among consumers, businesses face repercussions for environmentally harmful practices. The study finds that brands adopting proactive ESG policies not only enhance their market appeal but can also achieve a competitive advantage. Sustainability aligns with consumer values, making economic sense for companies that want to thrive in today’s market.
As the discourse on ESG continues to evolve, there remains a critical need to investigate the unique socio-economic context of India. The authors stress the importance of customizing global ESG frameworks to reflect local realities, thereby enhancing their relevance and effectiveness. This localization could involve recognizing indigenous models of environmental stewardship and integrating them into mainstream practices, thus fostering a more inclusive approach to sustainability.
Lastly, while the paper presents an optimistic view of the potential for ESG transformation within India, it also stresses the importance of continuous dialogue and collaboration among various stakeholders. Policymakers, corporations, civil society, and academia must work in concert to promote sustainable development practices that address India’s unique challenges. As the country navigates its development trajectory, the adoption of robust environmental, social, and governance practices may well determine not just corporate success, but the future of the environment itself.
In summation, the research conducted by Mohanty and his colleagues serves as a clarion call for Indian businesses to actively engage with environmental considerations as part of their corporate strategies. As the landscape continues to shift towards sustainability, the integration of the ‘E’ in ESG reporting could well be the linchpin for ensuring long-term viability and success in an increasingly environmentally-conscious world.
Subject of Research: Environmental, Social, and Governance (ESG) Reporting in India
Article Title: ‘E’ of Environmental, Social, and Governance (ESG) in India: reporting, review and future prospects
Article References:
Mohanty, A., Priya, V.K., Paithe, U.N. et al. ‘E’ of Environmental, Social, and Governance (ESG) in India: reporting, review and future prospects.
Discov glob soc 3, 136 (2025). https://doi.org/10.1007/s44282-025-00288-0
Image Credits: AI Generated
DOI: https://doi.org/10.1007/s44282-025-00288-0
Keywords: ESG, Environmental Reporting, Sustainability, Corporate Governance, India
