India has had a CSR mandate in place since financial year 2014-15. Ever since that time, the companies in India have been diligently dedicating 2 per cent of their profits to CSR. This has led to increased CSR spending by companies – even from those that do not fall under the mandate. According to Rajesh Verma, secretary in the ministry of corporate affairs, Indian companies have spent more than Rs. 1 trillion in CSR ever since the FY 2014-15.
ESG Investment in Meeting SDGs
Verma said at the industry group Ficci’s environment, sustainability, and governance (ESG) summit that investments in sustainable development and the environment will be critical to fulfilling India’s socioeconomic goals.
ESG investments, according to Verma, will be critical in attaining not only the $5 trillion economic goal, but also the Sustainable Development Goals (SDG) by 2030 and net zero emissions by 2070. The secretary added that the ministry will continue to provide a conducive environment for businesses to become internationally competitive and aligned with the SDGs.
“The current and emerging challenges facing humanity—Covid-19, climate change, resource scarcity and growing inequality—have taught us that an interdependent world can only survive and thrive if everyone behaves responsibly and is accountable to each other. With several companies being larger than even some nation-states in terms of turnover, the responsibility of businesses to stakeholders will only increase in coming years,” Verma said. “Covid 19 has reaffirmed that businesses have to be inclusive and sustainable. It has provided us with an opportunity to revisit our relationships to nature,” he added.
PM Modi’s Support of the Stance
Earlier in another forum, Prime Minister Narendra Modi asked investors to support projects that are in line with national aspirations, such as net zero emissions. These problems, according to Modi, have highlighted the necessity of not being in silos, of becoming resilient, of acting ethically, and of promoting inclusivity and sustainability.
The PM identified sectors that may grow the economy and enable Indian firms to become world leaders in a virtual session on ‘Financing for Growth and Aspirational Economy,’ which centred on the implementation of union budget measures for FY23.
Natural and organic farming, beekeeping, warehousing, food processing, and agriculture logistics, according to the PM, are areas in the rural economy that require financial assistance. He also stated that with the proper backing, these and other areas may develop champions capable of ranking among the world’s top three players.
The Prime Minister’s appeal to financial institutions to support developing industries such as startups, exporters, and long-term infrastructure projects demonstrates the government’s eagerness to get the economy back on track and provide much-needed jobs and livelihoods.