By Srinath Sridharan
The Indian capital markets regulators request information on ESG from the top 1,000 listed entities. This is in the form Business Responsibility and Sustainability Reporting. This will be an integrated format of sustainability information gathering, relevant to all business stakeholdersinvestors, shareholders, regulators, and other stakeholders. BRSR is based on India’s goal of Net Zero by 2070. It makes it clear that sustainability reporting has the same importance as financial reporting. The Environment Social Governance (ESG), standards are used to examine, according to the name, all aspects of corporate governance, including social and environmental. These criteria are used by many investors to make investment decisions. Investors must disclose not only the ESG risk, but also the mitigation strategy for each risk and the financial implications.
Indian companies will need separate ESG teams to collaborate with all stakeholders as the corporate and investing worlds adopt ESG practices. This function will require talent who are familiar with business regulations, business practices, hurdles, and trends in their sector and allied areas. ESG teams are made up of motivated business professionals who are able to work with purpose-driven plans with measurable results. The current talent supply has increased the demand for strategists, analysts, and other skilled personnel to address environmental, governance, and social issues.
ESG should be the core principle of all ESG jobs. The demand for ESG talent is growing rapidly. This would mean that the roles could be as broad as data collection, analysis, development of ESG frameworks, and measurement in the entire organisation. [email protected] to apply if your ability to talk about ESG in five minutes and sound intelligent. We will send your appointment letter within the hour. No questions asked. It is absurd to assume that ESG is all about compliance.
Many companies have fallen for the false belief that hiring strategy experts will result in ESG solutions. Few companies are just adding an E & G label to their CSR teams and expecting them to run the ESG business function. It won’t be possible for the organisation to develop a culture that supports ESG-thinking. Companies must be open-minded when assessing the required competency, mapping with existing talent pools, and acquiring market-driven talent. It is easy math that can estimate the shortage of ESG professionals at senior management and leadership levels for corporate India. Even if the top 1000 listed entities require five mid-to senior ESG professionals in their teams of professionals, there is still a need for 5,000 professionals who are knowledgeable about ESG. These 1,000 entities will need junior management teams, ESG auditors, and external knowledge partners. This could translate into another 100,000 ESG professionals. But where is the talent supply of such expertise, experience and delivery mindset? We need to develop academic content, attitudinal and practical frameworks for ESG professionals. The Indian regulatory framework could make it mandatory for all listed entities that they adhere to these BRSR standards within the next decade. This could mean that nearly 7,000 of the currently listed entities (and hopefully 10,000 by 2032) will need to be onboarded.
The right leadership is essential in an environment where ESG, the new global investing order, is advancing with full force. ESG leadership roles can be performed by leaders who have business experience, can deal with VUCA world perspectives, and are able to work with multiple stakeholders. These roles require a combination of understanding strategy, compassion and finance as well as regulations. The same group of leaders must also know what investors want, how they can improve reporting and proactive communication in the market. They must be high-ranking enough to get the attention and support of the board of directors as well as other stakeholders. This requires someone with business experience, crisis management skillset, communication skillset, passion and a deep interest in creating positive societal impacts.
CXOs may want to take on the role of ESG champion. They are better at understanding their people, processes and culture than anyone else. They can now implement the mandate to achieve business transformation using ESG as the guiding lights. Is corporate India ready to train and develop new talent for ESG responsibilities Are these people the most passionate? If not, are we going to train future leaders, while current business leaders can assume ESG responsibilities and learn on-the-job?
The writer is a corporate advisor and independent market commentator. Views are purely personal. Twitter: @ssmumbai