I am running into my seventieth year. Born on February 10, 1955, I have lived a somewhat uncertain life with some cardiac electrophysiological issues since childhood and, later, coronary artery disease that necessitated multiple angioplasties, a bypass surgery, and two stents…
A New Era begins – Code name ESG!
A New Era begins – Code name ESG!
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.
MORE FROM THE BLOG
The Utility and Futility of a Human Life
The Secret of Life
Who I am? Why was I born? Why are people born in different conditions – some in poor families, some in rich, some in developed countries, some in conflict-prone areas and amidst astute poverty and depravity?…
The Promise of a Blue Economy
Every age brings its own flavour. As a university student, I have seen computers arriving and much later, the smartphone revolution. Talk of AI and Robotics marks the present times, but what is most promising and potentially transformative is the access to millions of small islands in the oceans that cover over three-quarters of the earth’s surface…


