The sustainability challenge is serious. Indian businesses are today forced to respond to a multitude of pressure points- from civil society pushing for action, governments (at both the Centre and the states) willing to engage on conducive climate-friendly policies to persuasive regulators seeking accountability.
Articulating these noteworthy changes and more, Dr Mukund Rajan, a go-to guide on sustainability practices, shared insights at a recently concluded FE Insurance Summit, 2025 in Mumbai. An author and chairperson of ECube Investment Advisors to catalyse Environmental, Social and Governance (ESG) changes in corporate India, Dr Rajan painted the changing landscape and the lead taken by some of India’s forward-looking companies and in the process unfolding new opportunities for the insurance sector to craft and promote suitable product offerings.
For a country that needs organisations to have green practices ‘built in’ and not ‘bolted-on’ business operations, the pace of climate change is being felt across the planet and on the sub-continent. “The year 2024,” he reminded, “was the warmest in recorded history and it is evident that global warming and heightened frequency of extreme climatic events are stoking anxiety around the world.” The painful visuals of home owners watching their properties go up in smoke in the forest fires of California to flood affected communities all across India.”
Today, a variety of domestic stakeholders in India are picking up on these and driving Indian businesses to up their game on sustainability and climate performance.
Supreme Court Order
The activism of civil society, concerned judiciary and media has led to important business outcomes. One of these was the Supreme Court order for the auto industry in 2018 to migrate from BS4 to higher BS6 fuel emission norms bypassing the intermediate BS5 stage altogether.
From the government perspective, there have been a motley of measures taken and announced too. To Dr Rajan, who co-authored the book “OUTLAST- how ESG can benefit your businesses’, it is through both enacting legislations and defining policies matter and these have taken the form of promotion of renewable energy, electrification of transport fleet, extended producer responsibility in sectors like plastics and electronics. Follow these up with the targets set by the Central government under the Paris climate treaty that include 2070 as the target date for India to achieve net zero status. But more importantly, in the shorter term holding out the promise to generate 500 gigawatts of non-fossil fuel-based electricity capacity by 2030 with 50 per cent of the energy mix coming from renewable by the same year.
Albeit, some of the listeners at the summit also saw glimpses of the endeavours in this direction with the announcement by the power sector on September 30th last that the total installed electricity capacity in the country had already reached 500.89 GW with non-fossil fuel-based sources accounting for 256.09 GW or over 51 per cent.
Dr Rajan finds it significant that India at this juncture is showcasing its commitment in being a global stateman in finding a climate resolution for climate change by taking on the role of a driving force behind the International Solar Alliance and the coalition for disaster-resilient infrastructure.
Beyond SEBI’s BRSR
On the regulatory front, the most notable being that of the Securities and Exchange Board of India (SEBI) having mandated the top 1000 listed companies in India to produce the Business Responsibility and Sustainability Reports (BRSR).
The emphasis on stronger disclosures combined with the operation of the stewardship courts defined by all three regulators – SEBI, IRDAI (Insurance Regulatory and Development Authority of India) and the PFRDA (Pension Fund Regulatory and Development Authority) – equip the custodians of public funds (mutual funds, insurance companies, pension funds, asset management companies and the alternative investment funds) to press for faster pro-climate change within the business community.
Quoting the Reserve Bank of India, Dr Rajan referred to the report on currency and finance brought out last year by the central bank recognising climate change as a huge threat to financial stability. “It noted that extreme weather events could reduce India’s GDP by 2 per cent to 6 per cent annually by 2030” and the report estimated that a delayed climate transition could raise financial costs by as much as 20 per cent to India’s companies exposed to climate risks.
All of these adding up to a wide range of pressure points for Indian businesses is now making them respond and this, to Dr Rajan, is evident from a growing number of Indian companies getting better ESG (Environmental, Social and Governance) ratings steadily over the past five years. How? This, to him, is with first a focus on the governance structure. “Most companies in India,” he says, “are now assigning responsibility within the same management team for sustainability. At the level of board of directors, market leaders like Infosys, Airtel and Tata Steel for instance, have all created ESG or Sustainability committees of their boards.”
Many in the industry know Dr Rajan as the first brand custodian of the Tata Group, its former chief ethics officer and chairman of the Tata Global Sustainability Council apart from having served as the member of the group executive council at Tata Sons.
