As ESG becomes an imperative for organisations towards achieving sustainable growth, it is critical for them to focus on every aspect, namely Environmental, Social and Governance, and develop strategies accordingly. In the second episode of PwC’s ‘ESG: A bridge to action’, in association with Moneycontrol, leaders discuss the governance aspect of ESG and how it could be utilised to drive sustainable value creation.
Vivek Prasad, Markets Leader, PwC India, and Nilanjan Roy, CFO, Infosys, were invited for the second episode. CP Gurnani, CEO, Tech Mahindra, shared a special message on sustainability before the discussion started. He said that global risks for organisations have shifted from economic to environmental and social. Tech Mahindra started its sustainable practices a decade ago and aims to achieve carbon neutrality by 2030 and 50% renewable energy mix by 2025.
Talking about corporate governance and its role in organisational ESG agenda, Vivek Prasad said that its necessary to equally balance all the aspects of ESG, though the environmental part tends to get more focus due to its tangibility. Governance is more about transparency, ethical business conduct, board compositions and policies and processes. Organisations that have invested and focused on the ‘G’ aspect of ESG have been rewarded with stakeholder trust, including stock market performance.
Nilanjan Roy said that while profitability has been one of Infosys’s goals since its inception, the organisation had identified sustainability as key to be cognisant of the larger ecosystem of clients, the environment and society. The organisation ventured towards its carbon neutrality goal in 2010 and achieved it in 2020. It has developed an ‘ESG 2030’ vision and is currently working towards it, other than including a larger percentage of women in its workforce and planning to use digital technologies to impart education to ten million children.
Discussing the role of technology in organisations’ ESG transition, Nilanjan Roy said that Infosys now incorporates sustainability during the design phase of clients’ digital transformation, thereby ensuring that sustainability is a core business strategy and not an afterthought.
Touching upon organisations’ understanding of governance, Vivek Prasad said it’s important for companies to identify their targets and objectives, and align their operational decisions to achieve them. Developing relevant policies and procedures, communicating them to the larger stakeholders, taking ESG factors into consideration during strategic decision making, and capital and portfolio allocations should be integral for organisations in their ESG journey.
Value creation for the stakeholders, the community and the environment should be priorities for organisations going forward into their ESG journey, said Nilanjan Roy. Regulations like Business Responsibility and. Sustainability Report (BRSR) are slated to be implemented in India from 2022 and become mandatory from 2023. Integration of sustainability in an organisation’s business model is key to realising its ESG objectives. Globally, developments such as oil companies moving towards using renewable energy and the automobile sector encouraging the adoption of EVs indicate that companies are strategically focusing on sustainability and hence, need to imbibe their ESG agenda as part of their everyday strategy and risk model.
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