Only 15% Indian Fims' Suppliers Are ESG Ready: Report

In a major development, Deloitte India in its report has said that only 15 per cent of organisations' suppliers are environmental, social and governance (ESG) ready and about 27 per cent of businesses are well-prepared to meet ESG requirements.

The ESG preparedness survey report revealed that less than half (49 per cent) of the organisations are well-aware of ESG reporting mechanisms and regulations in India.

While 83 per cent of organisations have a designated sustainability leader, only one-third (33 per cent) have both internal ESG champions/ambassadors and sustainability leaders.

Interestingly, nearly 68 per cent of organisations surveyed have been able to formally integrate ESG strategies and mechanisms into their organisations.

Most organisations (80 per cent) report on their ESG efforts. The prevalent method used is sustainability reports (81 per cent), followed by ESG reports (50 per cent) and business responsibility and sustainability reporting (‘BRSR’),  and integrated reports (44 per cent), it mentioned.

"Nearly 75 per cent of organisations cited that their organisation communicates their ESG efforts, with awareness programmes (85 per cent) being the most-used method, followed by annual meetings (76 per cent) and investor decks (50 per cent)," as per the report.

Talking about challenges and growth opportunities, the Deloitte India report stated that organisations (65 per cent) suggested evolving ESG regulations to be a major challenge in building ESG preparedness capacity, followed by multiple ESG frameworks (as indicated by 62 per cent of firms).

Also, a third-fourth of the surveyed organisations (75 per cent) concurred that there is a need to simplify ESG compliance or improve ESG reporting procedures.

Meanwhile, an estimated USD 2.97 trillion in global economic losses has been attributed to climate change events from 2023 until now. Further, it is estimated that the cost of not tackling climate change can amount to global economic losses of up to USD 44 trillion over the next 25 years.