Praveen Kumar (IAS), DG & CEO, Indian Institute of Corporate Affairs
We are planning to develop an ESG index for rating companies: Praveen Kumar of IICA
India has consciously followed a gradual approach from voluntary disclosure, mandatory reporting to assurance on reporting, and in the next stage companies would be made accountable.
About The Episode
Welcome to the full Episode 14 of Sustainability Karma, India’s first and only talk show on sustainability on All India Radio.
In this episode of Sustainability Karma, Praveen Kumar (IAS), DG & CEO, Indian Institute of Corporate Affairs (IICA), delves into the creation of an enabling ecosystem to ensure firms become ESG-compliant and globally competitive.
Mr Kumar highlights IICA’s multifaceted approach to creating an enabling ecosystem for Environmental, Social, and Governance (ESG). The institute acts as a think tank, contributing to the formulation of national voluntary guidelines for responsible business conduct. Additionally, IICA is involved in the development of reporting frameworks such as Business Responsibility and Sustainability Reporting (BRSR) guidelines for specific sectors like textiles.
Looking ahead, he adds, IICA aims to establish a decision matrix for courts to evaluate decisions from the ESG perspective. The institute is also working on an ESG index to rate companies, which will allow them to leverage their ESG performance.
Talking about the evolving ESG regime, Mr Kumar commends the gradual approach taken by Indian regulators, moving from voluntary guidelines to mandatory reporting. He acknowledges the need for assurance and accountability in ESG reporting, indicating a potential shift towards value-based reporting.
He emphasises the importance of Indian companies embracing ESG not just for compliance but as an integral part of their operations and culture. He advises companies to identify core areas relevant to their business, engage with stakeholders, and benchmark against global ESG parameters. He underscores the potential benefits, including increased operational efficiency, risk reduction, and improved profitability.
Addressing the challenges faced by Indian SMEs, Mr Kumar acknowledges their resource constraints but highlights the competitive edge ESG compliance can provide. He suggests stepwise approaches for SMEs, starting with awareness generation, focusing on key areas, and developing a gradual strategy to become ESG compliant.