By Saurav Kumar and Roopam Dadhich
The 2023 G20 Summit in New Delhi marked a significant milestone in the global commitment to Environmental, Social, and Governance (ESG) goals. The New Delhi Declaration, emanating from the summit, encapsulates a unified pledge towards sustainable development, with a pronounced emphasis on integrating ESG principles into the broader economic and developmental agenda.
The environmental commitments in the New Delhi Declaration are a response to the urgent need for progress on the United Nations Sustainable Development Goals (SDGs). The G20 leaders have resolved to pursue low greenhouse gas (GHG) and low-carbon emissions pathways, acknowledging the macroeconomic risks stemming from climate change. This commitment is underpinned by a comprehensive approach that includes designing a circular economy, implementing clean and sustainable energy transitions, and conserving ecosystems. The declaration also highlighted the importance of developing international collaborations for hydrogen research and technology, recognizing hydrogen as a key element in the transition to cleaner energy sources. Additionally, the inclusion of India’s LiFE (Lifestyle for Sustainable Development) strategy in the declaration highlights a grassroots approach to sustainability, encouraging individual and community participation in achieving environmental SDGs.
In the social sphere, the New Delhi Declaration underscores the importance of equitable growth and social inclusivity. The G20 leaders agreed to continue Official Development Assistance (ODA) to support developing nations, recognizing the pivotal role of this assistance in achieving social equity and sustainable development. This commitment is particularly significant as it acknowledges the increased responsibilities of developed countries in fostering global social progress. Additionally, the declaration emphasizes bridging gender gaps and enhancing women’s participation in the economy. The alignment of these initiatives with corporate social responsibility (CSR) programs is notable, especially in areas such as elevating rural communities and promoting STEM education for girls. These social initiatives, backed by international support and corporate engagement, reflect a comprehensive approach to addressing the ‘Social’ component of ESG, ensuring that development is not only sustainable but also equitable and inclusive.
Governance reforms, as articulated in the declaration, are geared towards enhancing corporate accountability. The establishment of a global biofuel alliance and a $1 billion investment fund to expedite energy transition are indicative of the G20’s commitment to governance structures that support sustainable economic growth. The declaration also underscores the significant role of digital infrastructure and artificial intelligence (AI) in achieving governance objectives. These technologies are seen as key enablers in streamlining processes, enhancing transparency, and facilitating informed decision-making, which are essential for effective governance.
The New Delhi Declaration’s emphasis on ESG goals resonates profoundly with India’s recent legal and regulatory developments in this domain. India has been proactive in integrating ESG principles into its legal framework, reflecting a commitment to sustainable development that aligns with the global agenda set by the G20. Notably, the Securities and Exchange Board of India (SEBI)’s introduction of mandatory ESG reporting for top-listed companies is a significant step towards enhancing corporate transparency and accountability. Indian corporates are thus positioned at the forefront of the ESG movement, playing a crucial role in driving governance reforms that are not only beneficial for the environment and society but also vital for their long-term business sustainability and growth. Furthermore, the recent focus on digital infrastructure and AI in governance, as highlighted in the New Delhi Declaration, finds its parallel in India’s push for digitalization in governance processes, enhancing efficiency and transparency.
The New Delhi Declaration reflects a holistic understanding of the ESG framework and sets a precedent for future international cooperation. The declaration’s focus on multilateral financing, digital public infrastructure, artificial intelligence, and international taxation further broadens the scope of ESG goals, integrating them into the fabric of global economic and technological advancement. The declaration’s success will ultimately be measured by the tangible actions taken by the G20 nations to fulfil these commitments, which will require concerted efforts across all sectors of society. As the world watches, the G20’s strategic direction in ESG policymaking has the potential to catalyze a paradigm shift towards a more sustainable and equitable global future.
The authors Saurav Kumar (Partner) and Roopam Dadhich (Associate), INDUSLAW.
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