ESG in a post-COVID India – Bringing the “S” back to the centre by Shankar Venkateswaran
The section features the opinion of Mr. Shankar Venkateswaran who is an Operating partner & Head ESG at Ecube Investments & Advisors Pvt ltd and Ex Chief Tata Sustainability Group. The spotlight is on Environmental, Social, and Governance (“ESG”) which has attracted significant attention of the finance world and specifically the institutional investors globally.
He metaphorically expresses how the “ESG” term is interpreted in a manner which is often like a “blind man is touching what part of the proverbial elephant “.
The author is of the opinion that the financial world has endorsed the idea of ESG in the COVID crisis, but all attention on ESG seems to concentrate on one topic, notably the “E” in ESG – environmental issues, including climate change, which has gathered comparatively more interest in recent years, while discussion on the “S” typically stops at diversity in India, except for gender.
He rightly puts it forward how our dependence on other economies based on supply chain enhances our vulnerability and how covid-pandemic has added to the plight of human resources thus affecting the “S” component.
The author also points towards communities around manufacturing sites which are yet another important aspect of “S.” These people who gave up their lands for infrastructural development have not been adequately compensated and demands attention of these companies to operate smoothly.
He also believes that a third component of ‘S’is security. During a crisis, it is important to keep an eye on measures taken "proactively" to ensure employee safety and thus businesses must invest in safety training, procedures, and facilities, most of which is limited to their employees.
Another focus is on the effect of "E" problems on the "S." This is an area which is often overlooked. As it is seen coal-fired power stations must indeed be replaced by biomass, halting coal mining immediately throws millions of workers out of jobs and harms public finances, which are used to support public goods. The companies must come forward and bring smooth transition.
He finally concludes by saying that it is pertinent that the financial world understands that the three components “E” “S” & “G” are like the three legs of tripod stand where each needs to be taken care off holistically as they are interdependent on each other.
