Key Impact Points:

• Sustainability Regulations: 88% of organizations believe sustainability regulations will directly impact their businesses.
• Boardroom Discussions: Over 75% of organizations agree that ESG is a critical topic in boardroom discussions.
• Investor Ratings: Nearly 75% of organizations stated that their investors rate their ESG performance.
• ESG Goals: Almost 60% of organizations place high importance on establishing ambitious ESG goals for the future.

Climate change is an urgent issue impacting the global economy and human societies through extreme weather events and their economic repercussions. Deloitte’s ESG Preparedness Survey highlights the necessity for businesses to adopt ESG frameworks to mitigate these impacts and create sustainable value. This report encapsulates responses from 150 organizations across India, providing a snapshot of their ESG readiness.

Executive Summary

Deloitte India’s ESG Preparedness Survey reveals that Indian businesses are increasingly recognizing the value of sustainability and ESG capabilities. Key insights from the survey include:

1. Impact of Sustainability Regulations:
   • 88% of organizations believe that sustainability regulations will directly impact their businesses.
2. ESG as a Boardroom Discussion:
   • More than 75% of organizations agreed that ESG is a significant topic in boardroom discussions.
3. Improved Brand Reputation through ESG Reporting:
   • Nearly 90% of organizations believe ESG reporting will enhance their brand reputation.
4. Investor Ratings on ESG Performance:
   • Nearly 75% of organizations stated that their investors rate their ESG performance.
5. Voluntary Participation in ESG Ratings:
   • 71% of businesses voluntarily participate in ESG ratings.
6. High Importance on Establishing ESG Goals:
   • Almost 60% of organizations place high-level importance on establishing ambitious ESG goals for the future.

However, the survey also highlights areas where progress is needed:

• Only 27% of businesses are well-prepared to meet ESG requirements.
• Only 15% of organizations’ suppliers are ESG ready.
• Less than half (49%) of organizations are well-aware of ESG reporting mechanisms and regulations in India.
• While 83% of organizations have a designated sustainability leader, only 33% have both internal ESG champions and sustainability leaders.

Despite these challenges, 68% of organizations have been able to formally integrate ESG strategies and mechanisms into their operations. Additionally, 80% of organizations report on their ESG efforts through various methods such as sustainability reports (81%), ESG reports (50%), and BRSR and integrated reports (44%).

The Evolution of ESG Reporting in India

The trajectory of ESG reporting in India has seen significant development, driven by increasing demands from investors, regulators, and stakeholders. Key milestones include:

• 2009: Introduction of voluntary CSR guidelines by the Ministry of Corporate Affairs (MCA).
• 2011: SEBI mandated the Business Responsibility Report (BRR) for the top 100 listed companies.
• 2015: Extension of BRR reporting to the top 500 listed companies.
• 2019: Introduction of National Guidelines on Responsible Business Conduct (NGRBC) by the MCA.
• 2021: SEBI mandated the Business Responsibility and Sustainability Report (BRSR) for the top 1,000 listed companies.

Emerging Challenges and Growth Opportunities

The report identifies several challenges, including evolving ESG regulations and the complexity of multiple ESG frameworks. Organizations highlighted the need for simplification of ESG compliance and reporting procedures.

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The Deloitte India ESG Preparedness Survey underscores the importance of ESG frameworks in building sustainable businesses. While progress has been made, there is a need for continued efforts to enhance ESG readiness among organizations. By embracing ESG principles, businesses can not only mitigate risks associated with climate change but also unlock new growth opportunities and create long-term value for all stakeholders.