Although the environment, social and governance (ESG) criteria remain a priority for businesses, CEOs in India are focussing less on the social component of ESG programmes post the second wave of the pandemic. However, they are keen to create a net-zero future, for which they are sure they need governmental support. About 79 per cent Indian CEOs (compared to 77 per cent CEOs globally) feel that without governmental stimulus, the business community’s investments in climate will not give the expected outcome.
Today, about 42 per cent of CEOs in India, as per the KPMG CEO Outlook report, are dealing with demand from stakeholders — investors, regulators and customers — for increased reporting and transparency on ESG issues. Half of the CEOs in India admit to finding it very challenging when it comes to presenting convincing ESG stories. Only about 46 per cent CEOs in India admit that to fulfil the expectations of their investors and stakeholders, with regard to consistent and robust sustainability reporting, they would turn to assurance of ESG data from outside.
About 78 per cent of CEOs in India stated that it is their response to the second wave of the pandemic that caused their focus to shift towards the social component of their ESG programme. This has come down significantly from 96 per cent in March 2021 and is a lot lower than the figure for global CEOs (81 per cent) in August 2021.
In India, it is the institutional investors (55 per cent) who show maximum interest in ESG transparency and reporting. Regulators come second (26 per cent), followed by customers, 17 per cent of whom demand ESG transparency and reporting. When it comes to employees, only two per cent of them and new hires demand the same.
Considering the fact that not many employees are interested in their employers fulfilling climate change expectations, about 36 per cent CEOs in India are of the view that disengaged employees and recruitment challenges are the biggest downside.
A significant 66 per cent CEOs in India compared to 71 per cent globally, feel they will be considered accountable for driving progress in terms of addressing social issues.