ESG Reporting in India: Current Scenario

The paper describes the development of reporting on Environment, Social and Governance (ESG) issues in India and analyse the current situation with respect to ESG reporting. This paper uses a review of academic studies on sustainability/ESG reporting practices among Indian companies as well as surveys undertaken by professional accounting and credit rating firms such as KPMG, PWC, Ernst & Young and CRISIL. While a few large Indian companies have been reporting on their ESG performance for quite some time now, many more have begun reporting in recent years as it allows them to showcase their commitment towards the sustainability agenda. The rising trend in ESG Disclosures is a result of the increasing demand from stakeholders for relevant and accurate data on the one hand and the increasing regulatory imperatives on the other. The lack of regulatory requirements so far has resulted in less attention being paid to the E and S issues as compared to the mandatory G factors. A systematic study of the developments in Sustainability/ESG reporting in the context of India specially after the recent changes in the regulatory landscape is expected to add to the knowledge on the subject. Massive environmental changes happening across the globe, technological advances and the global pandemic have brought about a noticeable change in the way stakeholders assess the resilience and sustainability of businesses. The conventional financial metrics reported by corporates are no longer perceived as tools to understand the value a company can create and the business corporates are expected by stakeholders and regulators to report about the Environmental, Social and Governance aspects of their business. This study highlights the need for understanding the large part of corporate reporting which has not yet been incorporated into the mainstream accounting and reporting knowledge and curriculum frameworks.