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The Importance of ESG Framework and Integration into Business

WriteCanvas News


Two GoI officials recently underscored the significance to integrate ESG into business practices and the significance of an ESG framework.

The two officials are V Anantha Nageswaran, Chief Economic Advisor; and Inderdeep Singh Dhariwal, Joint Secretary, Corporate Affairs Ministry, Government of India. They addressed CXOs at an Indian Institute of Corporate Affairs (IICA) conference recently.

Integrating ESG into Business:

Mr Nageswaran emphasized India’s need for improved ESG practices, citing resistance from international bodies and forums to these measures.

He said that responsible business in India differs from Western interpretations, and urged companies to consider ESG integration into their business practices.

The CEA said that India should prioritize climate adaptation over emission mitigation, as it is not the primary contributor to emissions.

He alleged that developed countries are imposing standards on developing countries after reaching a certain income threshold at national and social level.

He took a dig at global leaders and organization heads for flying private jets to attend climate change or ESG conferences, stating that such behavior undermines credibility.

“In the process of earning the current top line and bottom line if businesses end up destroying the productivity and income earning capacity of today’s younger cohort then down the road it rebounds on businesses in terms of much lower aggregate demand and economic growth. It becomes a lose-lose proposition down the road,” he said.

Mr Nageswaran said that imposing costs on MSMEs may hinder their freedom of operation and global competition, and should be balanced based on national and social context.

The ESG framework:

Mr. Dhariwal said that the government wants to set guidelines for businesses regarding ESG practices, rather than imposing regulations.

According to him, the regulations might need to be sector-specific and different for mining companies and service-oriented businesses.

“We will provide a framework. The companies must contribute to evolve it. It is a trust-based relationship. We are listening to the stakeholders. The requirement has to echo from the source,” he said.


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Climate action: Adapting or Mitigating?

Renjini Liza Varghese


A crucial question recently struck me after a conversation with an industry expert: are we truly tackling climate change through mitigation, or are we merely adapting to its consequences?

While both perspectives have merit, the reality is unsettling – most current efforts lean heavily towards adaptation, a reactive approach to immediate and near-term crises.

This isn’t to downplay the importance of resilience. Responding to floods, droughts, and other climate events is vital. However, it shouldn’t overshadow the urgent need for proactive mitigation strategies. We must move beyond short-term fixes and implement a long-term vision with concrete deadlines. Sadly, COP28, which concluded in Dubai on December 8th, 2023, lacked this crucial element.

The gap in mitigation action stems from a confluence of factors. These include:

Data Gaps: While scientific evidence paints a clear picture of the climate crisis, we lack micro-geographical data for enabling communities to effectively prepare for local impacts.

Flawed Strategies: Many countries, regardless of their development status, have nominal mitigation plans riddled with loopholes that allow them to avoid accountability for missed targets.

Technological Lag: Despite efforts to develop climate prediction tools, a significant gap remains. Initiatives like India’s focus on precise climate forecasting for extreme weather events represent promising steps.

Unreliable Finance: While financial commitments are made, developed nations often fall short in mobilizing the necessary climate funds. The newly established “damage and loss” fund offers a glimmer of hope, but its scope is limited. Green funds, too, face challenges like greenwashing, making it difficult to track their actual utilization in mitigation efforts.

Implementation Delays: Reports before COP28 highlighted widespread lags in countries meeting their climate goals. A drastic course correction is needed, demanding a top-down approach that prioritizes community-level benefits while fostering global collaboration and joint action.

Bridging these gaps requires a multi-pronged approach:

  • Strengthening Green Initiatives: Investing in green technologies, renewable energy, and sustainable practices is essential.
  • Maximizing Green Funds: Effective allocation and utilization of these funds, along with robust monitoring mechanisms, is crucial.
  • Leveraging Native Knowledge: Indigenous communities hold invaluable knowledge about living in harmony with nature. Incorporating their wisdom can empower local adaptation and resilience.
  • Micro-data Driven Strategies: Focusing on acquiring and utilizing geospatial data will equip communities with the precise information they need to prepare for and manage local climate impacts.

Above all, we need a collective commitment to move beyond adaptation and embrace mitigation. I believe that the year 2024 will be a turning point, marked by the emergence of innovative technologies and a renewed focus on mitigation. Let’s work together to ensure that this year becomes a defining moment in our collective fight against climate change.


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