Competition Laws Must Adapt To Support the ESG Mandate

In this article, lra Gayatri Jha reasons that in order to attain the overarching ESG Environmental, Social, and Governance) targets, the government must consider making exceptions in competition laws to facilitate effective ESG-related collaborations. This, the author contends, is essential to realize the SEE Social, Economic, and Environmental) security of both the present and future.

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Increasing natural disasters, rising global temperatures, rocketing economic inequalities, surging financial losses, spiralling company collapses, swelling unethical treatment of employees, and growing stakeholder insensitivities are undoubtedly the fallouts of ignoring the Environmental, Social, Governance (ESG) mandate. It is now universally accepted that businesses must implement the ESG framework in letter and spirit to finally inch-in towards the establishment of overall sustainability. There is such a buzz of ESG world-over, that countries are frantically finalizing these guidelines in order to ensure responsible investing. European Union, United Kingdom, Australia, China and many others are pushing their corporates to implement the ESG diktat through a number of regulatory changes and required compliances.

National bodies/councils are taking action in addition to ensuring the adoption of new rules/reporting requirements as there is mounting pressure on companies even from investors to make more detailed ESGrelated disclosures. To be honest, it is surely an uphill task to ensure complete implementation of the overarching ESG mandate. The key question being, how will the companies survive the ESG burden? Will it impact their share value, profitability? Will it impact business and some markets adversely? Or will it be a great opportunity for companies to recast businesses/processes for longterm sustained profits? Will markets innovate effectively under this ESG push? Will Governments make better laws to support business as they prepare and collaborate for this mandate? This can be an inflexion point where all stakeholders must align together to re-orient laws, business strategies, technological innovation and customer engagement to pave way for responsible business and sustainable development.