50% of large Indian companies succeed, but only 29% of SMEs, reveals survey, ETCFO

<p>ESG integration: 50% of large Indian companies succeed, but only 29% of SMEs, reveals survey</p>
ESG integration: 50% of large Indian companies succeed, but only 29% of SMEs, reveals survey

Large Indian companies are making significant strides in sustainability initiatives, with 75 per cent setting clear sustainability goals and 84 per cent voluntarily sharing their targets. While 50 per cent of large companies have successfully integrated ESG into their business strategy, the commitment drops significantly among small and medium-sized enterprises (SMEs), with only 29 per cent establishing clear sustainability goals, according to a recent survey report by Uniqus Consultech and IMA India on the state of ESG maturity within Corporate India.Contrary to popular belief, only 30 per cent of respondents stated that investors drive their ESG efforts.

This comprehensive survey, featuring feedback from over 150 companies spanning all key sectors in India and including responses from both large enterprises and SMEs, underscores the growing significance of ESG strategies in India Inc.

According to the survey report, a notable 61.3 per cent of manufacturing companies expect to see measurable outcomes from their ESG initiatives in the medium to long term, with 13.3 per cent anticipating results in the very near term (0-1 years).

The progress

Large companies report that their ESG strategies are fully integrated into their organizational frameworks, while SMEs still have progress to make. Nearly half of the companies have established dedicated ESG teams, highlighting the increasing institutionalization of ESG practices, the survey report said.

Ethical responsibility and corporate citizenship are cited as the primary drivers of ESG adoption by 85 per cent of respondents. More than half of the respondents are leveraging or exploring green finance and technology for their ESG efforts, although progress in these areas is still in its early stages. To boost internal capabilities, half of the respondents are open to collaborating with external experts and consultants.

“The fact that a majority of companies have embedded ESG into their core strategies and are taking concrete steps towards sustainability is a testament to the growing importance of ESG in India,” said Jamil Khatri, Co-Founder & CEO of Uniqus Consultech.

“It is encouraging to see that nearly half of the companies have established dedicated ESG teams and that ethical responsibility and corporate citizenship are primary drivers of ESG adoption,” Khatri added.

Leading sectors

The survey also revealed that the manufacturing and chemical sectors are leading in sustainable practices. Despite these positive trends, 25 per cent of Indian companies, predominantly SMEs, avoid ESG discussions in their Board of Directors meetings. Additionally, only 29 per cent of companies report their ESG initiatives and seek stakeholder feedback.

ESG integration varies across industries: while 50 per cent of automotive companies and 33 per cent of manufacturing companies have fully integrated ESG, only 25 per cent of healthcare companies can say the same.

“We are optimistic about the growth in ESG consciousness and action in India, especially with new technologies poised to be a game-changer in driving positive trends across industries,” Khatri said.

As the focus on ESG continues to grow, the need for SMEs to catch up with their larger counterparts becomes increasingly critical, ensuring that sustainability goals and practices are embraced across the board for a more sustainable future.

  • Published On Jul 11, 2024 at 12:23 PM IST

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