ESG stands for Environment, Social, and Governance. In India, we have various laws governing Environmental issues. But it is only during recent times it has gained a lot of prominences because there is a need to assess these parameters. The S in ESG stands for Social, wherein all labour law-related matters are covered. G stands for Governance, which emphasis on Transparency and Disclosures.

ESG- Environment:

The environment aspect describes how a company manages its resources (specifically non-renewable). It further pays attention to the waste management policy of the Company. How it handles the potential problems arising from environmental matters? In India, we have umpteen laws governing environmental issues. To name a few-

  1. The Environment (Protection) Act, 1986
  2. The Forest (Conservation) Act, 1980
  3. The Wildlife Protection Act, 1972
  4. Water (Prevention and Control of Pollution) Act, 1974
  5. Air (Prevention and Control of Pollution) Act, 1981, etc.


The social aspect covers a broad spectrum of potential issues. Again we have numerous laws governing labour issues. 

“Human Resources are the most valuable assets the world has. They are all needed desperately."

A few questions the Board should consider while evaluating this aspect/Criteria of ESG are-

  1. What is the relationship between work and remuneration? Are the employees paid enough as compared to similar jobs in the same/similar industry?
  2. Does the Company offer any retirement benefits to the Employees? If yes, what is the retirement plan?
  3. What are the other benefits an employee procures from the organization?
  4. Training and other programmes, as required from time to time, to enhance and upgrade the employees as per the latest changes.

ESG- Governance:

The Governance aspect includes how well a company is managed by the top-level executives. Whether the executives and the Board attend to the various stakeholder's interests? Whether they give back to society? 

Complete and True disclosure about the operations of the Company; specifically Financial and Audit disclosures are often considered to be good corporate governance practices.


1.      Is the company’s mission/vision/purpose in alignment with the ESG objectives?

  1. How is the company communicating its ESG objectives with its stakeholders?
  2. What are the data required for the company to assess the impact of ESG performance and its impact on the company's performance (Financial/Non-financial)?
  3. How does the data aid in or influence the company’s Internal Management decision-making?
  4. How does the company strike a balance between its purpose and ESG now during the pandemic? (i.e.Covid-19)
  5. Does the company re-invent/refresh its ESG objectives as per the changing times?


  1. Environmental, social, and governance (ESG) criteria are an increasingly popular way for investors to evaluate companies in which they might want to invest. Environmental, Social, and Governance (ESG) analysis and reporting can provide valuable insights and help create long-term value for stakeholders.
  2. It can significantly impact the financial metrics of a company and better inform investment decisions.
  3. ESG criteria can also help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.


The board’s role includes looking into matters on ESG and how it can be integrated as a core value of the organisation. Those who have already embarked on this journey and stay the course will likely be well-positioned to thrive in the future.

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