Trilegal and the Federation of Indian Chambers of Commerce and Industry (FICCI) filed “ESG – Into the Mainstream” – a report detailing the key issues Indian industry faces if it is to meet environmental, social and governance requirements.
The report was released by Rajesh Verma, Secretary at the Department of Corporate Affairs, at the FICCI ESG 2022 Summit in March. This comes as environmental, social and governance (ESG) considerations increasingly influence how companies measure success. At the same time, the expectations of key business stakeholders such as investors, regulators, customers and employees are also increasing.
The report says India needs to improve its preparedness to access and deliver climate finance from all available sources – ranging from policy and strategic readiness in the form of a national green policy to planning and allocation. Resource. Investable projects should also be created with measurement and disclosure standards adopted within a legal framework that allows for innovative financing structures and minimal risk investment opportunities.
With a population of 1.3 billion and ranked third largest emitter of greenhouse gases in the world, the report says India needs investments of $20 billion a year to meet its climate goals and finance its green transition. The first chapter of the report, entitled “Unlocking Green Finance”, analyzes the potential sources of financing and structuring.
India already produces 20% of its electricity needs from renewable sources. The recently introduced Production Linked Incentives (PLI) program for solar panels will reduce reliance on imported components, allowing supply chains to be more resilient.
India has announced the “One Sun, One World, One Grid” program with the UK’s Green Grids Initiative (GGI) to connect clean energy grids across continents. The report identifies this as an opportunity for India to participate in the global renewable energy value chain.
The narrative around ESG has shifted significantly over the past two years, moving from being a compliance imperative to being central to boardroom discussions and driving investment decisions and business strategy. Chapter 2 of the report, “Redefining corporate citizenship – the path to sustainability”, addresses this topic.
Embedding net zero targets into national policy and sectoral interventions will bring regulatory clarity for investors to finance India’s decarbonization plans, according to the report’s authors.
Regulators are integrating ESG and sustainability factors into the legal framework that will change how businesses operate. These are detailed in Chapters 3 and 4, which explore the topics of ESG crisis preparedness and the regulation of ESG rating providers in India.