Climate crisis: India Inc's response calls for a hard reset

In May 2018, Thoothukudi, a port city in Tamil Nadu, erupted in protests over pollution caused by the Sterlite Copper factory, a unit of mining giant Vedanta. The protests turned violent and 13 lives were lost to police bullets. The plant was shuttered by the courts, but the incident raised questions about how a London- and Mumbai-listed conglomerate, which had good environmental, social, and governance (ESG) ratings and glossy sustainability reports, failed so miserably on the ground.

- SOUMYA SARKAR

It was not an isolated event, nor was it about just one irresponsible company. In June 2023, a toxic gas leak at a chemical plant in Gujarat hospitalized 24 people and triggered panic in Dahej, an industrial town. Deepak Nitrite, a Mumbai-listed firm, was flagged by residents and activists for air and water pollution. Despite a robust ESG policy on paper, a board-level sustainability committee, and positive analyst coverage, its actual practices failed the reality check.

Such incidents point to a widening gap between ESG proclamations and actual practices. India Inc.'s ESG adoption has grown rapidly in visibility but seems to be out of sync with climate and social realities. India is the world's fastest-growing major economy, with GDP likely to reach $5 trillion by 2027. But this expansion has climate consequences. India is the world's third-largest carbon emitter, accounting for nearly 7% of global emissions in 2022.

Carbon emissions are likely to rise further, energy demand is expected to surge, and environmental degradation will accelerate. Yet, many corporations continue to present green credentials on paper that do not hold up under scrutiny. Sustainability reports often highlight LED lighting, rooftop solar panels, or plantations, but fail to disclose carbon-heavy supply chains, hazardous waste generation, or groundwater extraction. ESG reports seem to have become a tool for optics rather than credible documents.