A New Era begins – Code name ESG!

by | Sep 15, 2022

Every decade has its own flavour. When I was growing up in the 1960s and 1970s, poverty and mismanagement were accepted as the norm. I spent many hours standing in queue at ration shops, which would not open regularly, and their operators blatantly sold sugar and wheat in the black market. Ballot boxes were “looted” in the elections, news about dacoit gangs striking towns and villages were common, and movies were made about the lives of smugglers. India was seen as a backward and laggard nation.  

Things struck rock bottom in July 1991, when India was forced to mortgage 46.91 tonnes of gold with the Bank of England and the Bank of Japan to raise just $ 400 million. The false pride of a Sone ki Chidiya burst in its face! Although different leaders got the credit for what was called economic liberalization, the truth was that the Indian economy was forced open by the World Bank and the IMF, for foreign entities to operate in Indian markets. The rupee was devalued. Markets were flooded with imported TVs, refrigerators and cars, and the middle class rejoiced.  

The share market boomed. But it also unleashed large-scale corruption. New words like “scam” entered the lexicon. Over the years, while the rich became richer, the spirit of philanthropy evaporated. Privatization of health and education eclipsed charitable hospitals and colleges, earlier a hallmark of Indian society. The policy of Corporate Social Responsibility (CSR) was created as a fig leaf to hide the nakedness of profiteering. But even this was misused for tax evasion more than it was used for doing good on the ground. The “India Shining” campaign was rejected by people. The neo-rich and corporate honchos were not trusted by the people. There was uneasiness amongst the poor. 

Things were not good at the global level too. American companies were rushing to China to manufacture their goods at lower costs and abandoning their factories and firing their own workers. The term, ESG (Environmental, Social, and Governance), was popularly used first in a 2004 report titled, Who Cares Wins: Connecting Financial Markets to a Changing World, which was a joint initiative of financial institutions at the invitation of the then United Nations Secretary-General, Ghanaian diplomat Kofi Annan. Eighteen financial institutions from nine countries, with total assets under management of over 6 trillion USD participated in developing this report.

Since then, the idea gained traction that the way that environmental, social, and corporate governance issues are managed, is part of companies’ overall management quality, and needed to compete successfully in a more globalized, interconnected, and competitive world. More importantly, a consensus was created for financial institutions to commit to integrating environmental, social and governance factors in investment processes. Someone must pay for the collective good of humanity and the wealth generators themselves would be the best people to make it a part of wealth creation. 

As the idea built up, a variety of organizations and financial institutions devised ways to measure the extent to which a specific corporation was aligned to ESG goals. In what was nothing short of a miracle, ESG turned out to be a great success. So much so, that in 2015, the United Nations (UN) adopted 17 Sustainable Development Goals (SDGs) as a worldwide call to action to eradicate poverty, protect the planet and improve the lives and prospects of everyone, everywhere. A 15-year plan was made to achieve the goals.

The SDGs are universal and thus, apply to the entire world developed and developing countries alike. They are integrated and indivisible, calling for coherent and integrated solutions and multi-stakeholder partnerships to address the complex development challenges we face. And they call for systematically and explicitly reducing inequality and focusing on those left behind on the path to sustainable development. Everyone in the world is now aware of the top three SDG priorities of no poverty, zero hunger, and good health and wellbeing.

Gradually, an awareness swept across the corporate world. Why not align the new investments to the SDGs? Why not refine HR policies so as to achieve human resource development, rather than mere management? A small army of business executives worked on Agenda 2030, deciphering the fundamental importance of reliable, timely and disaggregated data and statistics. India joined the mainstream and much of the country’s National Development Agenda is mirrored in the Sustainable Development Goals (SDGs).

Dr. Nirav Mandir, the young chief of HR at Shree Ramkrishna Exports (SRK), Surat, a diamond business house with an annual turnover of more than a billion dollars and employing more than 6000 people, was amongst the first in India to embrace the SDGs into their management.  As if prodded by the hand of Providence, when the SRK leader, Govind Bhai Dholakia, decided to create the new building of his company, Nirav was tasked to pursue the LEED (Leadership in Energy and Environmental Design) certification for green buildings. 

Nirav blended into this assignment that spread over six years, awareness creation about sustainability, not merely as a building standard, but as a way of life. Very active in HR parlance, he mobilized his peers in measuring progress achieved and making decisions supporting the SDGs that were based on evidence, without which change remains superficial and temporary. Fully supported by Govind Bhai, and mentored by Mahesh Ramanujam, the Indian-origin CEO of the U.S. Green Building Council, Nirav developed a unique model of HR policies in the company transcending the workplace, where “free from addiction” is a norm and families are invited in business success celebrations. 

Govind Bhai writes in his autobiography, Diamonds are Forever And So Are Morals, “Nirav Mandir, looking after HR in our company led hundreds of employees to work tirelessly as the backbone of the green building movement where they found common ground was the belief that success in life and business is all about our willingness to reimagine the way we treat each other. We decided to go for Gold Rating certification, which implied 60-79 points earned on the ‘Green building’ criteria and became the pioneers in the Indian diamond industry in this regard. With further improvements, we would later achieve the highest Platinum Rating.”

I have always been an ESG enthusiast, even when this term was not articulated. In 1993, Dr. APJ Abdul Kalam tasked me with developing civilian spinoffs of Defence technology, in what was, perhaps, the first example of channelling organizational resources for the larger good of people. The impact of this ideology was so transformative that I resigned from my secure job at DRDO to pursue interdisciplinary and multi-agency projects of societal importance. I might have missed out on some honours and rewards by stepping out of the might and glory of the missile world, but developing a low-cost coronary stent, or setting up telemedicine connectivity in the 1990s when even 2G telecom did not exist, was no less satisfying. 

I was recently going through the findings of a Gallup 2021 report The Will of the Workplace for Environmental, Social and Governance. It mentions, “In September 2020, the World Economic Forum published a report with inputs from CEOs of 120 companies, in collaboration with the big-four accounting firms (Deloitte, EY, KPMG and PwC). The report outlines a path for creating consistent metrics and reporting for sustainable value creation. Based on four pillars — principles of governance, planet, people, and prosperity — the report presents 21 core metrics and 34 expanded metrics.”

So, no business can be just making profits anymore. It must also do social good. That is the trend and flavor of the present times. High-sounding words like charity and philanthropy have been replaced with heavy-duty terms like responsibility and commitment. Companies must invest in the larger good of making the lives of people a little better, preserving the environment, adopting cleaner energy, and supporting local over global commodities and products. I see in my lifetime, the beginning of a new era of Environmental, Social, and Governance (ESG). As such, ESG can’t be a popular name for the era, but as things change for the better, a catchy name like “humanization” will also appear. 

The world over, sighting dolphins is considered as a good omen and a great symbol of good luck. That capitalists will take care of the progress of humanity is more of a wish, rather than a reality on ground. I see ESG as a dolphin and dream of it with a rainbow for the progress of humanity. The proverbial dolphins have not yet jumped out of the waters to give a sighting; they are still in the seas.   


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  1. Interesting article on payment for the collective good of humanity, Prof Tiwariji !

    Your articulation on Sustainable Development Goals for making the lives of people a little better is excellent !!

  2. About a century ago, the American poet Ella Wheeler Wilcox wrote in her poem “The Winds of Fate”:

    One ship drives east and other drives west
    With the self-same winds that blow.
    ‘Tis the set of the sails
    And not the gales
    That tells them the way to go.
    Like the winds of the sea are the winds of fate
    As we voyage along through life.
    ‘Tis the set of the soul
    That decides its goal
    And not the calm or the strife.

    ESG evaluation started from international organizations, investment institutions and financial institutions. Currently, a larger number of companies appear moved by “gales of ESG.” Some companies draw a sail and move toward achieving social value through the assessment of their environmental, social and governance factors, while others drift on the sea with a sail of ESG in name only. ESG has become widely accepted in the industry. It is time to choose whether we truly act up to our words or simply pretend to conform to the ESG guidelines.

  3. Very contemporary topic indeed!

    As you very aptly pointed out, while the principles of ESG have existed in one way or another for decades, the pieces for a defined approach to ESG have only recently fallen into place during the Covid-19 pandemic, which have placed increasing pressure on organisations to integrate ESG principles into their long-term strategies to meet both financial and community-based goals.

    With a post-pandemic recovery on roll now, organisations must focus on their ESG goals to meet the expectations of the new global reality. This can only be achieved by connecting with your people on these issues but embedding culture change is never a quick win. It’s about winning hearts and minds and really connecting with people emotionally to create change. It’s more likely to lead to culture change. Thank you for creating this awareness.

  4. Another exceptionally important piece. Your analogy stating that “CSR was created as a fig leaf to hide the nakedness of profiteering” is spot on. We’ve long said that it’s a short trip from greenwashing to social washing and what we mean by that is that if greenwashing is saving face when it comes to perception versus reality of climate action on the part of a corporation, then social washing is no longer just the overlooking of the S in ESG. It’s much deeper. It’s when a company fails to address social inequities at a systemic level, when a company lacks a deeper understanding of the root causes of these inequities and inaction, and perhaps more simply, when a company does not put people first.

    You, Ghovid Bhai, and Dr. Nirav have shown us that putting people first, and doing so without the compromising of other company goals, is not only possible, but prudent. Dr. Nirav has especially shown us that outlining ESG commitments is not equivalent to keeping them. His actions teach us that condemning the dismissiveness of substandard working conditions is not the same as introducing the tangible changes that lead to a workforce’s collective health and well-being.

    A trailblazer in the space, his embracing of UN SDGs not only signifies the acceleration of SRK’s four tiered business strategy for people, profit, planet, and purpose, but it serves as an accessible benchmark for global enterprises hoping to adopt the company’s roadmap for its “growing empire for good.” By prioritizing ESG compliance and integration of UN SDGs, Dr. Nirav is putting the needs of more than 6,000 SRK employees first, and he is also showing a nuanced understanding that decarbonization is our best answer to dehumanization.

    In the midst of an ongoing global pandemic, economic uncertainty, and uncharted climate risks, HR professionals have the difficult task of navigating crises with intersecting and often compounding effects on our quality of life. We need people like Dr. Nirav in these positions of importance, because at this juncture, these roles are not about treating humans as resources. They are about looking at the human experience of the workplace through the lens of human rights. And ESG is our first truly actionable glimpse at securing a transformational future for the people of India and for billions of people around the world.

    Thank you, as always, for the words of wisdom and the timely reminder of what’s at stake.

  5. Thank you sir for sharing an insightful article.

    We are a carbon-based economy and it is going to be a rough transition to low-carbon/zero carbon economy but nevertheless, an inevitable one.

    It is now needed more than ever to practice sustainability, introduce processes and measures to encourage it. Also it isn’t just about taking an initiative but to providing the means to maintain/manage it.

    Every company, every individual should make conscious choices towards sustainability for the survival of human kind.

  6. Sir, I attended last week, meeting of Empowering Farmers Foundation (EFF) meeting in Johannesburg and the word ESG was mentioned by several speakers. Your blog helped me to capture the idea better.

    As I understood, concepts like ESG have existed for some time. However, today increased scrutiny of corporate financial structures, consumers and investors are demanding that companies are more transparent and accountable for their global contributions. ESG spans everything from employee benefits to recycling policies and can show commitment to your customers, investors, and business partners (as well as the planet).

    Essentially, ESG considerations are a way to focus business leaders on the most important things for their people and communities. It’s an approach that allows organisations to measure their contributions to sustainable and ethical practises in a way that provides transparency to the market, financial benefits to the business and benchmarking for the industry.

  7. Respected Sir, in this most timely blog, you have brought out the emerging Environmental, Social and Governance (ESG) mandate in corporate governance. This idea indeed presents a new challenge for companies in India. The stakeholder-driven approach, which sits at the core of the ESG requirement for each company is different and must be fine-tuned to suit stakeholders with whom a company interfaces.

    During my years at the National Research Development Corporation (NRDC) we encouraged hundreds of companies to build in CSR in their work. Now that the entire idea is captured in ESG and is becoming a trend, I can see a lot of work ahead for the companies to be ESG-compliant, ultimately leading towards sustainable growth for future generations and contributing towards value creation for the companies as well as their stakeholders.

    And it is indeed possible. COVID-19 pandemic has forced business enterprises to re-examine their role in society and consider mitigating the impacts their operations might have caused on the environment and society at large. While the after-effects of the pandemic continue to affect many sectors, sustainability remains no different. You are on dot to declare the beginning of a new era as the ESG agenda is steadily gaining momentum.

  8. Sir, it is a pleasant surprise to get a mention in your blog. I have been in HR field over a decade and half now and can’t agree more on your assertion that capitalists must take care of the mandate of ESG (Environmental, Social, and Governance) in the modern world. The so-called Communists countries – Russia and China – are practicing capitalism and when 1% of the global wealth is in the hands of 1% people, this is the only way forward.

    Our Chairman Shri Govind Bhai Dholakia ji was amongst the first to embrace Green Building ideology in the Diamond Industry. We aspired Platinum LEED rating and become a role model. Govind Bhai is now leading ESG revolution by aspiring Net-Zero ratio in his diamond business which would be a pioneering achievement even at the global level and create a tole model. The upcoming Diamond Research and Mercantile (DREAM) City at Surat is set to make India as the epicentre of world diamond trade which has been Antwerp, Tel Aviv, New York, and Hong Kong earlier.

    As I briefed you when I met you recently, I am collating data from my vast HR network on how Indian companies are into ESG and trying to pen the template that is being evolved across multiple organisation. You have already blessed this effort and I can see by the end of 2023 a world class book emerging out of India as the ESG leader. There’s a lot to consider at the intersection of business and social work. It is not about earning a lot of money but adding a lot of value to people’s lives and making the world a better place. This is what Govind Bhai has done, this is what we at SRK are committed to do in rest of our lives.

  9. With rapid strides the world as a whole and India in particular is taking, primarily on account of gargantuan changes by the advent of technology clubbed with good governance by the educated mass is literally mind-boggling.

    Rightly as pointed out by you, we have seen it commence not far ago – merely a quarter century back by the arrival of World Bank and the IMF. Primarily, in my opinion it’s a white collar revolution, digitization winning all hands down and uplifting the economy, the life standards and the quality of life zipping ahead. Money power shows the way. The corporate and its honchos having tamed the jittery horse are now riding pretty smoothly. Though the sinusoidal wave of life will always have its crest and troughs but the next decade is poised to let the horse gallop.

    With major hiccups being over, I very much endorse your statement “ Companies must invest in the larger good of making the lives of people a little better, preserving the environment, adopting cleaner energy.” ESG definitely will pave the way and roll out for humanization. The buzz on the horizon is that the day is not far when the rainbow reflecting the progress of humanity will tantalize the dolphin to jump out of the water and give a sighting. Amen!

  10. Thank you Arun ji. I am of the opinion that GOI and state governments should have a SDG ministry to look for their achievements through ESG frame work

  11. Dear Shri Arun bhai, Your latest write up, based on realistic situation , brings some historical facts which younger generation may not have witnessed themselves.

    Terms like “ESG “and Future term prescribed “Humanization “ are new concepts to be understood .

    Ultimately, it conveys that it is not merely the profit alone of the corporate but how it is atleast to a reasonable extent utilised to improve external environment including the common people living there ,where they operate

    Nice one indeed as usual.

  12. Thanks very much Prof Tiwari sir for this thoughts-provoking article. Your articles are always very informative and educating.

    As an agricultural scientist, I am well aware with SDGs that were preceded by the MDGs (Millennium Development Goals), adopted in 2001 to eradicate extreme poverty and hunger and primarily targeted at developing nations. Based on my limited understanding, I believe that SDGs are targets and goals, and ESGs refer to methods and process. SDGs apply to everyone (individuals, countries and companies) while ESGs apply to the business community and companies.

    I like your proposal to have a catchy name like “humanization” should appear for this era. Thanks for educating us. Greatly appreciated.

  13. Dear Sir, The ESG concept is very much working here in Australia. The employees are being treated equally, not much hierarchy in system. Most of the employees across Australia are getting almost equally salary not much differences. People generally avoid working with Govt. sector opposite to Indian culture where everyone wants to become a govt. employee. India needs to be more adaptive for ESG to bring the system more productive.

  14. Wonderful. This blog reminds me of IKEA. They launched an effort to completely rethink product design. The aim is to create products that can be reused, refurbished, remanufactured, or recycled, thereby extending their lifespan. There products will be easily dismantled and reused as raw materials when they are no longer used.Although this process will take years, the firm will most likely emerge as a circular-economy leader with better environmental credentials.

  15. In Indian prespective any positive change can be achieved with active collaboration of govt and private corporates and for that the concept that all private corporates are ‘ chor’ has to go. Our bureaucracy is totally incapable of even thinking of any positive change. People who deal with them day in and day out know it better. The govt should only incentivise the change and leave it to the private sector.

  16. Sir, Thanks for phrasing a solution to the defining theme of our times. Published on Engineer’s day seems like a tribute to your training as a problem solver.

    We have lived through each part of your narrative. Anyone from our generation can relate to and testify to the historical developments. The dolphin that emerges is not just beautiful but, like all profound ideas, simple, most comprehendible. Thanks for beautifully joining the dots that make it as simple as it should perhaps be.

    SDGs 17 goals are universal. One might wish them if these were not so many. These essentially evolved out of a complex political process. Professor Jeffery Sachs articulated and suggested six major transformations across global societies. Your representations with just three aspects make them intelligible and actionable. ESG can make it all happen.

    Compliments for simplifying it all. There is nothing as powerful as an idea whose time has come. Now that we know we can act. Climate change is a wicked problem. Human sustainability is at stake; ESG provides us with essential tools.

  17. Dear Sir, An excellent blog with code name ESG. Every employee and every citizen should commit himself to the concept of ESG and CSR. A well defined and directed CSR can definitely make a difference in the life of a common man. Especially last five six years have seen a lot of change and purpose in the CSR activities. Construction of SOUCHALAYS was made compulsory under CSR and I have personally seen the perceptible change in the schools and in the attendance of girl students. It was quite a satisfying effort for majority of industries which undertook this activities. We made effort to see that these improvements made were sustainable by providing borewlls and motors and maintenance support for a longer period. Any CSR done as one time activity doenot yield the result and will not be effective. Sustained support is a must.

    Concept of ESG has to percolate to all levels and each one of us should commit to this concept, which is in the larger interest of mankind and in our own interest. Nice blog with message of social cause for everyone sir.

  18. Great article as always. My thoughts: Not only business, at every level, every employee, must give back every month / every day, in whatever way possible. Monetary, time, service etc. Collectively only its possible by having goals at every individual level.

  19. Dear Prof Tiwari, The Corporate world is rightly driven by the profit motive. Thus is essential for sustainability of businesses.

    In the same vein, CSR and/or ESG have direct correlations to profitability. A business that is sensitive to its community’s needs (CSR), the environmental protection and good governance (ESG) will inevitably reap higher profits from its operations.

    Both CSR and ESG are good concepts that align with SDGs. They are as much good for business profitability!

  20. Very well articulated piece with a great perspective. SDGs were the way of indian life before we blindly followed an unsustainable lifestyle. ESG is a way to bring back our traditional and sustainable way of living in harmony with nature.

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