When we destroy the environment, we destroy society,” warned anthropologist Margaret Mead long before sustainability became a boardroom buzzword. Nearly two decades after ESG – Environmental, Social and Governance – entered the corporate lexicon as aprescribed framework for ethical, responsible, and accountable business, its promise remains both compelling and contested. What began in the early 2000s, partly in response to corporate governance scandals like Enron, was meant to re-anchor capitalism to trust, transparency, and long-term social value.
Today, ESG is both an investment filter and a moral compass. Yet its journey has also been complicated by marketing hype, uneven implementation, and rising accusations of greenwashing. Though the term ESG is of recent coinage, its philosophical roots run deep. As early as the eighteenth century, religiously influenced communities like the Quakers and Methodists excluded industries like alcohol and tobacco from their investment decisions based on moral considerations. Over time, it translated ethical indices into measurable corporate metrics, which disproportionately focused on gaining investor confidence. ESG’s immediate intent is aptly summed up by Professor Robert Eccles of Said Business School ‘ESG was never meant to be a moral badge; it was intended as a risk-management lens for long-term value creation’.
While the statement has some validity, the need to restate ESG’s long term objectives, in conjunction with the larger narrative of climate sustainability, needs a stronger reinforcement. India embraced ESG with enthusiasm, recognizing its potential to attract global capital while aligning business growth with national development priorities. The country’s corporate landscape now features ambitious sustainability statements, dedicated ESG cells, and detailed reporting in annual disclosures. Large corporations in particular have shown what ESG can accomplish when pursued with intent rather than optics. HDFC Bank’s “Project Foot-Print” has invested in clean energy access – initiatives that tangibly improve health, empower women, and reduce emissions.
ITC’s “Triple Positive” approach-water positive, carbon positive, and solid-waste recycling positive – and Tata Power’s accelerated push into large- scale solar installations has moved beyond token sustainability efforts to genuinely reshape India’s energy landscape. Such examples prove that ESG, when integrated into core business strategy rather than treated as a branding exercise, can catalyse meaningful transformation. Investors have responded positively; ESGcompliant companies often enjoy reputational advantage, better access to capital, and resilience against regulatory shocks. Where the narrative has faltered is in the social dimension-arguably its most human aspect.
This remains ESG’s weakest pillar. For many companies, ESG decisions are still guided primarily by investment attractiveness rather than actual social or ecological urgency. Reporting quality varies widely, and sustainability disclosures often read like glossy brochures rather than honest performance audits. Corporate communication has been one of ESG’s biggest liabilities. Words like “eco-friendly”, “green”, and “sustainable” flood product packaging, investor presentations, and annual reports. But too often they are unsupported by verifiable outcomes. The result has been scepticism – and in some cases outright cynicism. Greenwashing allegations are not merely rhetorical; they have chipped away at trust, especially when companies overstate environmental achievements or selectively highlight partial successes while ignoring larger environmental costs.
Two decades in, the ESG journey can best be described as a ‘good intentions’ initiative giving in to ‘good outcomes imperative. It has helped reshape investor thinking, shifted boardroom conversations toward ethical consciousness, and encouraged corporations to reconsider their broader impact on society and the planet. It has also revealed how easily ideals can be bent into narratives without adequate substance. Still, dismissing ESG as cosmetic would be premature and unfair. It remains one of the most structured attempts to steer capitalism toward sustainability. The failures are not failures of philosophy but of discipline, transparency, and accountability.
For ESG to reclaim credibility and become a genuine driver of climate action – especially in a climate-vulnerable nation like India – it must evolve along three clear directions: Firstly, it needs to shift from rhetoric to measurable reality by having standardized, audited metrics that demonstrate tangible environmental outcomes, social impact, and ethical governance compliance. Independent verification—rather than self-certification— s critical. Clear benchmarks on emissions reduction, water stewardship, waste management, workforce inclusion, and community impact should anchor ESG reporting.
As climate scientist Johan Rockstrom opines “Sustainability cannot be relative-it must be anchored in planetary boundaries”Regulators, policymakers, and independent watchdogs must work collaboratively to ensure that relevant ESG disclosureseliminate the perceptions of greenwashing. Secondly, organisations need to recognise India’s climate vulnerabilities – heat stress, water scarcity, pollution, and extreme weather – demanding ESG strategies grounded in local realities. Corporate sustainability cannot merely echo global templates; it must respond to national and regional ecological priorities. Renewable energy transition, climate-resilient infrastructure, and sustainable urbanization should dominate ESG agendas.
When ESG aligns with climate justice and national development, it becomes both economically rational and socially meaningful. Thirdly the “S” in ESG requires urgent strengthening. True sustainability is not only about saving resources – it is about uplifting communities, ensuring fair labour practices, empowering rural economies, and bridging social inequities. India’s development story is intertwined with millions at the margins; ESG must not bypass them. Finally investors should re-appraise their roles, having the power to reward authenticity and penalize superficiality. If capital flows increasingly favour genuinely sustainable enterprises rather than skilful storytellers, ESG integrity will naturally strengthen.
Trust will return when ESG narratives go beyond buzzwords, stop trying to “sound green” and start being accountable, when businesses acknowledge that environmental stewardship is not charity but survival strategy. India stands at a unique juncture. It can either replicate the global pattern of inflated ESG claims and eroding credibility, or it can build a model where sustainability, profit, governance, and social responsibility genuinely reinforce one another. If the future of ESG in India is guided by integrity, measurable progress, and alignment with climate reality, it can evolve from a corporate checklist into a powerful instrument of national and planetary well-being.
(The writer is a former CEO who writes and comments on socio-economic issues.)