By Srinath Sridharan

The Indian capital market regulator’s ask on ESG from the top 1,000 listed entities (by market cap) is in the form of Business Responsibility and Sustainability Reporting (BRSR). This will be an integrated format of sustainability information gathering, relevant to all business stakeholders—investors, shareholders, regulators, and other stakeholders. Based on India’s goal of Net Zero by 2070, BRSR makes it evident that sustainability reporting is as serious and as important as financial reporting. Environment Social Governance (ESG) standards are used to examine, as the name suggests, all environmental, social, and governance matters related to corporates. Many investors use these criteria in investment decision-making. The regulatory ask needs them to disclose not only the ESG risks, but also the mitigation strategy and financial implications for each of the risks.

With the corporate and investing world adopting ESG practices and increasing queries around ESG from analysts and rating agencies, Indian companies will need to set up separate ESG teams to work internally with all stakeholders. This function will also need talent who understand business mechanisms, regulatory practices and hurdles, competitive landscape, and, importantly, trends shaping their sector and allied areas. Effective ESG teams will have motivated individuals-business practitioners who can work with purpose-led plans with measurable outcomes—in short, those who are not just PowerPoint champs. The demand for analysts, strategists, and other skilled personnel around environmental, social, and governance issues has never been higher than the current talent availability.

ESG jobs should ideally emphasise ESG as the core principle. But with an onset of clamour for ESG talent, the roles would be as wide as data collection to analysis to developing ESG frameworks to measuring them in the entire organisation-wide networks. “If you can talk of ESG for five minutes and sound intelligent, and if you have additional skills of developing business models in excel sheet or create PERT chart or write social grants pitch document, just apply to email@esg.india. We will make your appointment letter available within end of today. No questions asked”. Assuming that ESG is about compliance is completely misplaced.

Many companies have succumbed to the fallacy that bringing on strategy experts will ‘create ESG solutions’. Few are simply adding the ‘E & G’ tag to their CSR teams with expectations of them running the business function of ESG. Without building a culture around ESG-thinking in an organisation, its journey will not even take off. Hence, assessing the desired competency, mapping with the existing talent pool, and market-driven talent acquisition have to reflect a degree of open-mindedness by the companies. It is easy math to estimate the potential shortage of ESG professionals at senior management & leadership levels for corporate India. Even if the top 1,000 listed entities need a team of five mid-to-senior ESG professionals in their teams, that is a need for 5,000 professionals who understand ESG. And, these 1,000 entities will also need junior management teams, external knowledge partners and ESG auditors and other service providers—that could mean another 100,000 ESG professionals straight away. But where is the talent supply with such experience, expertise and delivery mindset? Arguably, we need to start developing academic content, attitudinal training, and practical frameworks for ESG professionals. Over the next decade, one could argue, the Indian regulatory framework would make it mandatory for all listed entities to follow these BRSR standards. This could mean that the current nearly 7,000 listed entities (and, hopefully, 10,000 by 2032) might need at least over a million candidates in the ESG talent pool to be on-boarded.

In a scenario where a new global investing order of ESG is charging ahead with full force, the right leadership is needed across organisations. Leaders who have business experience, are adept in dealing with a VUCA world outlook, and work with multiple stakeholders can play ESG roles effectively. These roles would need a blend of understanding strategy, compassion, finance, and regulations, as a business intersection. The same set of leaders would also need to know what investors want, how to improve reporting and proactive market communication, and has to be senior enough to get the attention of the board of directors and relevant stakeholders. This necessitates someone with business experience, communication skills, crisis management skillset, passion for ESG, and deep interest to create positive societal impact.

Will CXOs who want another role in the same enterprise or a strategic role without the pressures of daily business targets assume the mantle of ‘ESG champion’ for the entity? They know their people, processes, and culture better than others. And now, they can implement the mandate for achieving business transformation with ESG as the guiding light. Is corporate India ready for training fresh and eager talent for ESG responsibilities? Does it have passionate talent identified for these? If not, do we intend to train future leaders while current business leaders can take up ESG mantle and learn ‘on the job’, so to speak?

The writer is corporate advisor and independent markets commentator. Views are personal. Twitter: @ssmumbai