India’s ESG Approach Should Differ From The West, Says CEA Nageswaran At IICA Conference

On Wednesday, Chief Economic Advisor (CEA) V. Anantha Nageswaran underscored the importance of advancing Environment, Social, and Governance (ESG) practices in India.

Speaking at an Indian Institute of Corporate Affairs (IICA) conference, Nageswaran pointed out the inherent resistance to ESG norms imposed by international bodies, highlighting the irony of global leaders discussing climate change while flying in private jets. He urged companies to embed ESG within their core operations rather than treating it as an isolated activity.

Nageswaran emphasized that responsible business practices in India should differ from Western models, focusing more on climate adaptation than emission mitigation, given India’s relatively lower emissions. He also warned against imposing stringent ESG standards on MSMEs, cautioning that it could stifle their growth and competitiveness.

Regarding corporate social responsibility, he argued it should be integrated into business practices rather than functioning as a separate initiative. He noted that neglecting to invest in the productivity of younger generations could hamper long-term economic growth and demand.

Inderdeep Singh Dhariwal, Joint Secretary of the Corporate Affairs Ministry, clarified that the government aims to provide a framework for ESG practices without imposing regulations. The intent is to offer guiding principles, allowing companies to adapt as needed. He added that sector-specific guidelines might be necessary in the future, though no such requests have been made by companies yet.