Kerala approves state-wide ESG policy

The Indian state of Kerala recently announced a statewide environmental, social, and governance (ESG) policy, making it the first Indian state to formally embed ESG principles into its investment framework.

- Meena Janardhan

Its cabinet approved the formation of this policy that has been formulated on the assessment that industries that are environmentally friendly and relatively low in pollution are suitable for the state’s ecosystem, according to a statement from the Chief Minister’s Office (CMO) and highlighted by a Press Trust of India (PTI) report.

The CMO statement said the policy was crafted after assessing the types of industries compatible with the state's ecological and social landscape. Sectors that are low in emissions and pollution are identified as most suitable, aligning with both Kerala’s climate priorities and its economic ambitions. The policy creates a governance framework to evaluate and attract investments that meet ESG standards, at a time when global capital markets are increasingly screening projects for sustainability risks. “The objective is to make Kerala the leading state in the country for ESG-compliant investments,” the government statement said.