The Role of ESG in Driving Sustainable Economic Development: The Indian Perspective

In the past 24 months, the ESG perspective has firmly established itself in what sustainable economic growth means for emerging economies such as India. Prior to this, ESG was an element of voluntary corporate social responsibility, but it quickly evolved into a real-world applied strategic tool used within the process of economy planning at the national level, regulatory adherence, and a long-term value creation mechanism. This paper provides a qualitative evaluation of the role of ESG as a facilitator of resilient and inclusive economic growth in the case of India. It explains how the embedding of ESG considerations into public policy, and by association corporate governance, can improve productivity, diminish systemic risk, and create sustainable investment streams. India has made resolute policy efforts to institutionalize ESG frameworks through, for example, regulations, specifically SEBI’s Business Responsibility and Sustainability Report (BRSR), and statutory corporate social responsibility (CSR) mandates under the Companies Act 2013. These policies have forced Indian business to differentiate itself for sustainability, how it relates to its stakeholders, and how it reports back to the stakeholders through what it reports in its financial statements. The article also conducts case studies of Indian business champions like Infosys, Wipro, TCS, Tech Mahindra and Reliance Industries to illustrate how adopting ESG lead to realised economic benefits. The four benefits are heightened investor confidence, access to green money, enhanced brand perception, and competitive advantage through innovation. While linking ESG targets to national growth target, these firms demonstrate the monetary value of sustainable business. Furthermore, the paper posits that the emergence of the ESG may allow India the opportunity to reconcile economic growth and climate resilience, social justice and organizational capacity. The increasing emphasis being placed on ESG by global markets will hinge on India’s ability to ensconce ESG at a corporate and policy level in positioning India for sustainable development.