It is clear that no business today can ignore the benefits of ESG risk management or the risks of ESG underperformance. This is especially true for Indian businesses that have aspirations to compete with other global market leaders while operating in an emerging market context impacted by specific environmental and social issues.

India is a global economic leader with its Gross Domestic Product (GDP) sitting just below the world’s top 5, at number 6. The country’s economy is also growing rapidly. Its GDP is growing at a rate of nearly 9%, and India hosts the 3rd highest number of unicorn startups in the world, and, after nearly a decade of growth, its foreign direct investment (FDI) is expected to reach $100 billion in 2030.

Many of the world’s leading businesses now have ESG targets and capital is being devoted to reaching them. Increasingly businesses are also tying executive pay to ESG outcomes, with some of the most common being diversity, equity, and inclusion (DEI) targets and GHG reduction targets, such as goals to reach net zero emissions by a certain date. This increase in ESG data and DEI claims, including their external visibility and ties to investment, has also led to greater scrutiny. KLM and Deutsche Bank are under investigation for greenwashing, while Google and Tesla are under investigation for racial discrimination.