ESG And Operational Risks Shape Indian Companies’ Strategic Priorities

Environmental, Social, and Governance (ESG) considerations are becoming integral to the strategies of Indian companies aiming for sustainable and long-term growth while maintaining a competitive edge.

According to KPMG’s 2024 India CEO Outlook, 66% of Indian CEOs, compared to 76% globally, are willing to divest profitable business segments that harm their reputation. Building customer relationships and positive brand associations continues to be a priority, with 30% of Indian CEOs identifying it as ESG’s key impact area, compared to 34% globally.

Operational risks are increasingly seen as a challenge, with 16% of Indian CEOs considering them the greatest threat to growth, up from 10% in 2023. Globally, 14% of CEOs share this concern, highlighting a growing need for businesses to address vulnerabilities.

Sectors like metals, mining, automotive, and food are embedding ESG principles to reduce emissions and create sustainable products. Government initiatives, including sustainable finance guidelines and green skills programs, are driving this shift, supported by regulatory measures like climate finance taxonomies.

Technology is enabling companies to build ESG dashboards for data-driven decisions, aiding green transitions. Indian businesses are enhancing brand reputation, customer relationships, and market differentiation by prioritising ESG, to secure a sustainable future amidst evolving global challenges.