Building a very Indian approach to ESG challenges

It really doesn’t take much to be overwhelmed by the scale of India’s diversity. Ask any first-time visitor to India for a first impression of the country, you are likely to get two standard responses – colours and the sheer size of humanity, a euphemism for our population. Food, language, arts, religion, festivals, landscape...it is a long list, and yet unified by something hard to define.

This complex diversity that we celebrate, and which we must, also brings with it a unique set of contemporary challenges. This is particularly relevant when it comes to ESG or Environment, Social, and Governance issues that institutions in India are learning to deal with. While these challenges are universal, the solutions we seek to overcome them can be very local.

Even by a conservative estimate, nearly a third of India’s population is categorised as poor. Therefore, the targets we have set for ourselves such as building a $5 trillion economy by 2025 are vital to ensure that we continue to pull more Indians out of poverty every year. While the industrial landscape of the country undergoes fundamental transformations, largely aided by cutting-edge technology, we should continue to invest in more traditional sources of livelihood like agriculture. Let us not forget that half of India’s working population depends on agriculture for livelihood.

Large industrial groups in India understand the importance of such a balanced approach to economic growth. There are innumerable shining examples of corporates strengthening rural livelihoods through their corporate social responsibility (CSR) initiatives. Many of these rural interventions are also focused on creating an ecosystem of sustainable agriculture that is more environment-friendly. Today, there are also several financial startups in India that are exclusively focused on micro-credit and financial products designed to support rural livelihoods, largely around agriculture.

India offers some unique and successful models and solutions for governance challenges too. For example, there are over 6.6 million self-help groups (SHGs) in India with more than 70 million members. The value of these SHGs became apparent during the Covid-19 pandemic when thousands of women were producing facemasks, running community kitchens, delivering essential food supplies, sensitising people about health and hygiene, and combating misinformation, according to a World Bank report published last year.

There can be little doubt that ESG is a real and existential challenge that affects all of us. Issues like climate change, social inequities, and flawed or weak governance models are universal. It is quite natural to look for templatised solutions to these global challenges. But when we go looking for answers, we should also consider local realities such as social and governance models that are more suitable for a country like India. While there is a strong case to be made about learning from other countries, we should not forget our own unique strengths. Perhaps there is something we can offer the world, a very Indian approach to today’s ESG challenges.