Companies are increasingly judged not just on profit but on how they treat the planet, people and their own governance: ESG. This guide explains the three pillars, the business case and the debate around it, the push to standardise reporting, greenwashing, the backlash, and India’s fast-maturing ESG regime. It presents multiple perspectives and is not investment advice.
Impact on the planet: emissions, energy, water, waste and biodiversity.
Impact on people: labour, safety, diversity, communities and customers.
How the company is run: board oversight, ethics, pay and shareholder rights.
ESG’s core claim is that these factors affect long-term value and risk. What matters varies by industry: emissions for heavy industry, data privacy for tech, labour practices for retail and manufacturing. Good analysis focuses on the issues that are financially material for that business.
Research suggests ESG is neither a guaranteed profit-booster nor a pure cost. Its effect depends on the company, the sector and how it’s implemented. Material, well-managed issues tend to matter most.
| Framework | What it does | Status |
|---|---|---|
| ISSB (IFRS S1, S2) | Global baseline sustainability and climate disclosure standards | Being adopted by jurisdictions worldwide |
| EU CSRD | Detailed sustainability reporting for large EU companies | Narrowed to firms with 1,000+ staff and €450m+ turnover (Omnibus, Feb 2026) |
| EU CSDDD | Supply-chain due diligence on human rights and environment | Narrowed to 5,000+ staff and €1.5bn turnover |
| India BRSR | Mandatory ESG reporting for top listed companies | Top 1,000; assured BRSR Core phased in |
The EU’s Omnibus package, given final approval in February 2026, removed most smaller companies from mandatory reporting to cut administrative burden. The direction of travel is still toward fewer but more comparable and assured disclosures.
Exaggerated or false environmental or social credentials.
Regulators worldwide are targeting misleading sustainability claims.
Companies face investigations and lawsuits over ESG statements.
Vague, unverified or exaggerated claims that mislead customers and investors.
A 2025 trend: some firms stopped publicising genuine achievements to avoid scrutiny. Evidence-backed disclosure is the better answer.
ESG became politically contested in some markets, especially the US, while Europe simplified its rules. Yet demand for sustainability data and products persisted. Most analysts describe the period as ESG maturing: shedding hype and vague claims, becoming more selective and evidence-based.
SEBI data, 2025. About 92% of major Indian institutional investors say they consider ESG risk.
| Element | Detail |
|---|---|
| BRSR scope | Top 1,000 listed companies (SEBI) |
| BRSR Core | Independently assured KPIs, phased in from the top 150 to the top 1,000 |
| Key assured metrics | Greenhouse gases, water, diversity, wages, safety |
| Next frontier | Value-chain disclosures for major suppliers and customers |
India is building a credible ESG regime tailored to its economy, balancing ambition with ease of doing business. For large Indian companies, reliable ESG data systems are becoming a compliance and competitive necessity.
Fewer, more financially relevant metrics.
Sustainability numbers audited like financial ones.
Credible paths to net zero, not just pledges.
Stricter in Europe, contested in the US, phased in India.
AI and data platforms to measure emissions and supply chains.
Evidence-backed claims replace vague slogans.
EU Council final approval of Omnibus I (24 Feb 2026), via XBRL International · ISSB / IFRS Foundation · Morningstar, Global Sustainable Fund Flows Q2 2026; ESG Today · SEBI, BRSR and BRSR Core circulars · EY; KPMG; Morningstar sustainability research · ICAI · Industry ESG asset projections · GyaanBato, Sustainability & ESG in Business report V1.0 (Jun 2026). This infographic is educational and not investment advice.