In recent years, Environmental, Social and Governance (ESG) principles have evolved from boardroom discussions to actionable strategies, becoming integral to corporate agendas worldwide. While debates about ESG often drift into ideological or political spheres, the tangible business case for sustainability is growing stronger.
Sustainability as a Profit Driver
Traditionally framed under the “three Ps” of People, Planet, and Profit, sustainability is no longer just about compliance—it’s a growth enabler. Businesses that integrate sustainability into their operations experience tangible benefits, including improved operational efficiency, enhanced brand value, and increased stakeholder confidence.
In India, where industrial growth and shifting consumer preferences are reshaping markets, ESG principles offer companies a strategic pathway to meet global standards while addressing local challenges such as resource scarcity, energy efficiency, and labor equity. By embedding sustainability into core business models, Indian companies are not only contributing to a greener future but also positioning themselves for long-term profitability and resilience.
ESG serves as a framework to evaluate critical risks such as climate change, labor standards, and corporate transparency—factors that are important for ensuring long-term business success. In India, the adoption of responsible business practices has been accelerating significantly. The energy sector has witnessed substantial progress, marked by a shift towards renewable energy solutions. Labor laws are also being modernized, with the introduction of new labor codes replacing outdated regulations to better align the workforce with contemporary needs. Similarly, the Companies Act was revamped after nearly seven decades, reflecting the evolving requirements of India’s corporate landscape.
India’s Growing ESG Momentum
Globally, sustainability frameworks are redefining industries, and India is no exception. Corporate India is aligning with ESG goals through regulatory frameworks like the Business Responsibility and Sustainability Reporting (BRSR), now mandatory for the top 1,000 listed entities under SEBI regulations. This demonstrates a strong commitment to integrating sustainability into business operations.
The growth of sustainability-linked financing, green bonds, and emerging carbon markets highlights the evolution of corporate responsibility in India. For example, the government’s promotion of renewable energy through initiatives like the National Green Hydrogen Mission, along with stricter waste management regulations, is encouraging businesses to adopt sustainable practices. Companies that integrate Environmental, Social, and Governance (ESG) criteria into their supply chains are experiencing benefits such as increased investor confidence, improved operational resilience, and greater cost efficiency.
Social and Governance: The Overlooked Stars of ESG
While environmental considerations often dominate ESG discussions, the Social and Governance components are equally critical. India’s workforce, one of the youngest globally, highlights the importance of fostering diversity and inclusion. By emphasizing equitable employment opportunities and community upliftment, businesses can create long-term value and stability in a country with vast socio-economic disparities.
Governance is the foundation of Environmental, Social, and Governance (ESG) criteria, ensuring ethical practices, transparency, and accountability. Indian businesses, often involved in complex global supply chains, are increasingly using technology for supplier audits. This approach enhances compliance throughout the value chain, reduces inefficiencies, and improves operational efficiency. Such focus is especially important in industries like manufacturing, textiles,automotives and fast-moving consumer goods (FMCG), where addressing ESG issues is vital for meeting global supply chain expectations.
India’s ESG Journey
India’s ESG trajectory is poised for significant growth. The government’s emphasis on clean energy, such as the goal of achieving 500 GW of renewable capacity by 2030, and stricter environmental norms for industries reflect a larger global alignment. Industries like IT, manufacturing, and retail are facing increasing scrutiny from global investors to adopt ESG practices.
The introduction of sustainability-linked loans, greater regulatory pressure, and digital advancements offer Indian companies an unprecedented opportunity to lead the global ESG movement. For example, sectors such as textiles and apparel, with high environmental footprints, are transforming their operations to align with circular economy principles, while manufacturing companies are leveraging green technologies to meet global supply chain expectations.
The profitability of sustainability is no longer speculative—it’s a measurable reality. For Indian businesses, embedding ESG principles offers a roadmap to reduce operational costs, enhance brand reputation, and meet the rising expectations of stakeholders, regulators, and global partners. By embracing ESG, companies in India can achieve a triple win—benefiting People, Planet, and Profit—while positioning themselves as global leaders in a rapidly evolving economic landscape. As India’s ESG narrative unfolds, businesses have a chance to not only contribute to a sustainable future but also thrive in the process.
The author is Regional Director – APAC, Achilles Information