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Energy transition, ESG to be in focus in Chandrasekaran’s second term as Tata Sons chairman

Global investors focusing on environmental, social and governance (ESG) performance of companies coupled with the Indian government's push on renewable energy and cutting emissions will make it imperative for Tata Sons to align its plans and move swiftly.

February 11, 2022 / 06:42 PM IST

Energy transition and reduction in carbon emissions will be among the top priorities for N Chandrasekaran as he heads for a second stint as chairman of Tata Sons, as execution of plans in the next five years will be key to achieving the commitments made by the group’s companies thus far.

Global investors focusing on environmental, social and governance (ESG) performance of companies, even attaching a premium to it, will make it increasingly important for the group to expedite its plans as it needs access to global funds across businesses to reduce debt and finance growth.

Closer home, Prime Minister Narendra Modi has committed to a five-point climate action plan, the so-called “Panchamrit”, at the core of which is the ambition to be a net zero emissions country by 2070. Tata Sons, which is already working towards sustainability and clean energy, will have to work more aggressively to align itself to the plan.

For a group that traditionally used conventional energy to fuel its energy-guzzling businesses, Tata Sons has a stated sustainability policy that looks at creating long-term stakeholder value by integrating economic, environmental and social considerations for all Tata companies. The group set up the Tata Sustainability Group in 2014 which partners with all the Tata companies to embed sustainability in their business strategies. Group executives said that Chandrasekaran is likely to use this platform to push the group to improve its ESG ratings.