Future-Proofing Indian Businesses: The ESG & Sustainability Imperative | ft. Prarthana Borah

[Podcast intro]

Welcome to the season five of the India Energy Hour podcast. This podcast explores the most pressing hurdles and promising opportunities of India energy transition through an in depth discussion on policies, financial markets, social movements and science. Your hosts for this episode are Shreya Jai, Delhi based energy and climate journalist and Dr. Sandeep Pai, Washington based energy transition researcher and author. The show is produced by 101 reporters, a pan India network of grassroots reporters that produces original stories from rural India. If you like our podcast, please rate us on Spotify, Apple Podcasts or the platform where you listen to our podcast. Your support will help us reach a larger audience.

As India transitions toward a low-carbon future, the private sector’s role in embracing sustainability and ESG is paramount. While top corporations lead with ambitious net-zero goals, many small and mid-sized firms are yet to begin their sustainability and ESG journey — held back by data challenges, lack of awareness, and complex disclosure frameworks.

To understand how Indian companies can embrace sustainability and ESG, we spoke with Ms. Prarthana Borah, Vice President, Momentum. With decades of experience across environmental education and corporate sustainability, she offers valuable insights on simplifying ESG frameworks, building internal capacity, and unlocking the potential of India’s private sector in the net-zero transition.

[end]

[Podcast interview]

Sandeep Pai: Prarthana, welcome to the India Energy Hour. I’ve been meaning to have you, both because I’ve admired your work, over the years, but also sort of, like, in my own understanding, I really wanna understand how companies, private sector, and otherwise are thinking about sustainability and how hard or easy it is for them to actually, you know, embrace sustainability in a true sense. So we’ll have a lot to talk about on on those topics. But before we dive into the topic of today, You know, we I wanna start with your own personal journey. You know, where are you from? What did you study? How did you get into this space? I mean, these days, it’s easy to get in this space. There’s so many courses, so many pathways, but, you know, I assume a few decades ago, it was, like, climate, energy, sustainability, or even environment was not not a space that, you know, kids would just get into. So how did you get here, and from where wherever you started?

Prarthana Borah: Thank you, Sandeep. I’ve also been an admirer of your work and the India Energy Hour, so I’m really very happy to be invited. I was waiting when will I be invited. So that’s, that’s, that’s a start. So interestingly, you know, my environmental journey was a very conscious choice, and environment was a conscious career choice. I grew up in Shillong in Meghalaya. And, you know, obviously, you know, those days, we didn’t have Netflix and technology. So our fun time was a walk in the forest or, you know, a picnic in the forest. So, I grew up surrounded by butterflies and caterpillars and forests. And, so, typically, you know, that was the world I knew. And, at the time, there was a lot of felling of trees because of the, you know, the need for agricultural land. And the slash and burn technique is a very accepted kind of a technique in, in, in the Northeast. So I used to be very conscious, you know, as a 19 year old thinking about, you know, what’s going to happen to my forests and stuff like that. But of course, I didn’t know how to transition that into a career. We didn’t really have a lot of, you know, eco camps and volunteer networks. But interestingly at that time, I got a project to, you know, somebody gave me a project to work on where they wanted to explore the need for environmental education in schools. So, I did some interviews in some of the local schools and then, you know, just and discovered that, you know, the consciousness as far as the environment is there. Like, everyone wants to be in the forest. But, when it comes to, you know, whether we need to protect the forest or do you think about the future of the forest? Nobody was thinking about it. So, I became very determined that I wanted a career in in environment. I studied economics. So obviously, the natural transition was environmental economics. But, obviously at that time, you know, where I studied, there were no courses. So I was, like, looking around for something. And as luck would have it, I was selected for this fellowship program at the Center for Environment Education. So, see, Ahmedabad ran a fellowship program. Oh, it was it’s like a 9 month program, which on and it was called training on environmental education.

So it looked like the ideal program, you know, because it was about understanding environment, but very practical version and and leading to a career, like a job. So I got selected, and I moved to Gujarat in 1995, to start my environmental journey and, of course, never looked back. My first job was, as a conservation educator in a nature park. So, I kind of designed nature camps and, you know, and nature trails and things like that. And the years after that, mostly, it was in environmental education in the sense that I thought sustainability. I worked in design, I worked at the National Institute of Design to understand design and sustainability. But, my transition to climate was in 2000 in year 2000 when, I went back to the center for environment education work. And, I joined, to lead a project, which was actually the first climate change education program in schools. And, it was called the Prarthana Borah program, and it ran in 1000 schools and was a collaboration with the UNAP. So that’s how, that was the beginning of my work in climate change. I worked in see  in climate and of course, related areas like biodiversity, for over 12 years  in different regions. I worked in Gujarat. I worked in the Northeast, and then I moved to Delhi. My my final project, I call it my career high, was actually to develop the background papers for the for COP 21 in Paris for the for the government of India, which led to the, to the development of a publication called Parampara, which looked at, you know, climate, friendly sustainable practices of India and was launched by the prime minister at COP. So, after that, I was wondering, you know, you get edgy. You wanna move on because you’ve done a lot of projects and it so happened that I was in Delhi at that time. And I got the opportunity to work on air pollution. And I joined Clean Air Asia as the country head. Very interesting journey where I looked at, you know, the entire policy support for the national clean air program, development of air quality indicators for the climate smart cities framework, and also a couple of cleaner action plans. So that was, that was a very, very policy oriented kind of a role where you supported policy, in terms of city cleaner plans and other cleaner initiatives. Of course, I continued to work on the education communication part, set up a youth cleaner network, worked with children in schools in terms of looking at equality monitoring around play areas and interesting projects like that. Right around that time, actually, I got very interested in the private sector, primarily because I realized that while the private sector’s focus was, you know, was very much there on the CSR side as far as environment was concerned. But, you know, the ESG was just being discussed at that time. It wasn’t what it is today. And I wanted to work in terms of engaging the private sector more in terms of how, you know, they could contribute to some of these programs rather than on ESG. And it so happened that, I got an opportunity with CDP because CDP was, looking at an Asia focus and, looking at increasing disclosure. So I joined CDP as the country director of CDP India. And, this was a time when they were looking at increasing disclosures in the country. So, my primary role was actually to push the CDP, climate, disclosures. But I also set up the science based targets incubator, which is and and basically have had almost about 70  Indian companies signed up to it to, you know, set science based targets. The other area that I pushed for was also the sustainable finance area. So CDP India developed the input paper for the g twenty sustainable finance working group. So, my work with the private sector is about, you know, 7-8  years old. I have been focusing on reporting, looking at internal strategies, looking at how you could support supply chain. Lot of my work is focused on training and making complex subjects simpler. And, it actually comes from my background because, you know, I’ve always been an educator. So if you look at the diverse areas, I’m not a theoretical expert in anything. But if you look at if you ask me to talk in terms of training, capacity building, and communications, I think I would look at that as the thread that builds all the different parts of my, you know, my stints in different jobs. So, in the recent past, I have been doing very interesting work mostly in terms of facilitating, you know, the emission reduction journeys of companies which do not fall in the top 100 or 200. Because, you know, if you look at the private sector, when we talk about the private sector, we always talk about the big names. And, you know, we kind of put that because it’s always defined by a market cap. Right? And but then, you know, there is the other private sector, which is also which may not, you know, be relevant from a market cap perspective, but they also contribute to emissions. Right? Maybe more, and we don’t have enough data. So what I’ve been doing is that looking at this kind of a segment and, how do we help these industries to transition, in terms of decarbonization, in terms of their ESG strategies, water risks, how do they address water risks and multiple areas. Even even training of supply chains, which includes, you know, maybe the supply chain of a sector like sugar where you have, you know, farmers. So that’s the kind of work I’ve been doing, and that’s in short the story of my environmental career.

Sandeep Pai: That’s not a short story. That’s a long story, which is great. I mean, I just want I just have one follow-up question. It’s very interesting because it’s, like, so many decades of you know, you can’t really summarize in eight, ten minutes your decade long journey. But as you were saying that you’re you define yourself as environmental or educator, like, what does that mean? Like, I because, you know, I’m just trying to understand what would it mean because it’ll be interesting to understand how you define it and what your day to day would look like as an educator, environmental educator. So if you wanna explain that a bit.

Prarthana Borah: So, Sandeep, it’s, as I said, it’s about making things easier. And I’d like to use a simple example of, you know, what I mean when I say environmental education. So, we were at a training program, where we were training a couple of MSMEs on, you know, on reducing industry emissions. So we were, we were supposed to, you know, kind of assess, do their carbon footprint report. And, my colleague was giving a presentation on how to do the assessment. And, one of the participants stood up and said, but you’ve been talking about this CO2. What is CO2? So sometimes I think we do not, you know, anticipate these kinds of questions because we’ve been in the sector for a long time. So when I say I’m an environmental educator, I think I like to communicate complex language in a terminology that is understood, which also means adapting it in a local context. It’s not about the language, but it’s also about adapting it in the local context. So when we talk about, say I mean, let’s take the case of a private sector. You have a complex disclosure framework like a CDP supply chain disclosure framework, which basically encourages private sector companies to disclose on their supply chain. Now the ideal, you know, the ideal grade would for the best disclosure would be a plus, and that would come if your supply chain disclosures. But what happens is that, many of the Indian companies don’t even know their supply chain. So, instead of, you know, discouraging them or, you know, kind of, figuring out a way to reduce the grade, How do we make it you know, how do we encourage them to continue the process? So even if they disclose partially on on, you know, even if they don’t disclose on the entire supply chain, but partially partially on the supply chain, how do we encourage them in that kind of a methodology? So for someone like me, the objective would be to present the framework in a manner that this is the beginning of your journey. And how do you explain it so that you can encourage the companies to start taking action instead of being worried that we will not be able to do it. And, because of that, our grade is gonna come down. So that would be, probably, you know, the kind of approach I would take as an educator.

Sandeep Pai: Great. So simplifying complex concepts for, you know, people who want to learn more or who want to understand the field. I mean, I think it’s at the crux of this. A lot of times in my own work, I realized that many people don’t know basics, and it’s not to their fault. It’s just that’s not what they do. Great. Wonderful. I have so many questions. This is you’ve already given me so many food for thoughts. So let’s just get into the topic of today, which is, you know, the role of the private sector and, how they can be more sustainable, and is it like, what challenges they face, etc. So before we get into it, let’s I wanna understand how you define sustainability, and how does it intersect with ESG issues. I mean, this is something, you know, people throw these terms all the time, but how do you define them? What does it mean for you as a practitioner in the field?
Prarthana Borah: So I think in if you look at the kind of community that I work with or even the, you know, the, the space where today, you know, ESG is being used, which is mostly, you know, in the consulting world, the both the terms are being used interchangeably, which is not correct, basically, because, you know, you use sustainability and you use ESG, you know, together or you you just use one or the other. So if I have to respond to that question, I think I’ll break it up into sustainable development, sustainability, and ESG. So, because if you look at sustainable development, it has an accepted definition. Right? And so whenever you listen or you, you know, you talk about it, immediately someone comes to that, the definition of sustainable development, which is meeting the needs of, the future by taking care of I mean, meeting the needs of the present meeting the needs of the future by taking care of the present. So, but that’s actually the journey. You know, if you look at it, it’s we’re talking about intergenerational equity, which is which is the journey. Sustainability is the balance you reach from that journey. So sustainability actually, if you look at the is a very broad framework, which looks at the economics, the the social, the cultural, and the environmental. And there are there are ways in which these 4 elements intersect. ESG becomes more of a framework because ESG is about how you look at your internal operations, how you look at your internal, journeys, how do you look at your internal use of energy? How do you look at your internal emissions? And ESG primarily evolved from, you know, from an investor’s concept. And, if you look at it and even the timelines are different if you look at it. I think ESG kind of the whole socially responsible investing started around the 1960s. And then it went on to, you know, to when the UN talked about the six ESG principles in 2004. And then, of course, GRI came in, and then you had all the, you know, the reporting frameworks that came in. Now primary difference is that if you look at ESG is that you have certain indicators in terms of how you want to measure, how you want to approach, how you want to define your internal strategies. There are environmental parameters, there are social parameters, and of course, there are very interestingly governance parameters because it looks inside. And, when you talk about governance parameters, you go into details like, you know, what is your board composition, what is the business ethics, and, even what is your supply chain policy. So these are certain areas that when you talk about sustainability in general, you might not go you might not do a deep dive into the details because you’re not really measuring a company’s strategy or inputs or, you know, it’s, what do you call it? It’s, position in terms of sustainability. So I think, you know, that’s primary difference. But, ultimately, if you look at it, both are you know, have a similar kind of a goal that you obviously want to, you know, do good for the planet.

Sandeep Pai: Right. So, I mean, just to kind of understand a bit more of this, is it in a simple in your own language as an educator, if I have to simplify this, sustainable development would be more of a vision, a mission? The sustainability is a more principles, and then ESG would become a framework to to measure and to to monitor. Is that a good way to understand this or I’m off?

Prarthana Borah: No. Absolutely. I think what ESG does is that it can because, you know, we are dealing with, with a sector that likes numbers and likes, you know, actual, figures, we are trying to translate the broader concept of sustainability to something which can be measured and gauged. And we try to kind of, you know, figure out a methodology for that. And, the other is that ESG is I mean, it’s slightly less inclined to just the e. I mean, you do have concepts like diversity, for instance, which comes into it. You have a concept like you have safety, for instance, you know, which you wouldn’t ideally bring up when you’re talking about sustainability. Like, if you look at the SDGs, I mean, we do have a gender SDG. Right? But, I mean, it’s not about how many, how many women versus how many men you have in a company. So I think it’s more about numbers and how you translate it into operations within an organization.

Sandeep Pai: Yeah. Wonderful. So, I’m now keen to dive into the role of the private sector. So before we started recording, we were just having an informal chat, and you really nicely explained that there are top hundred companies and then there are others who are not top hundred, but also have both a footprint, but also a major role in the Indian economy. So I’m just wondering if you want to sort of explain how Indian companies, particularly private companies, are approaching sustainability and ESG issues. What are some key trends, and are they any different from global players? I don’t know if you’re able to make a distinction at this point between the top hundred and the and the others. But if not, let’s just start with a general understanding of how they’re approaching, how this field has even evolved in India. Like, I don’t I believe that this might have taken some time to catch up these sustainability and ESG trends within the Indian private sector.  So, yeah, it’ll be great to hear from you.

Prarthana Borah: So I think, if you’re talking about Indian industry, there are different levels in which industry are in. I if you look at some of the top industries, and I am happy to quote names like Mahindra and Tata, who probably have larger sustainability teams than any sustainability, you know, organization and are much ahead of the curve in terms of, what they are working on primarily because there’s a large investor investor push and internal strategy, internal sustainability strategy has become very, very important. So for such companies, it’s more a business agenda because they know that they have to start thinking about climate risks, for instance, and water scarcity because an investor is going to ask for that data. So, I think these top level companies are actually ahead of the curve. They have commitments which are, you know, to go net zero by 2050, 2040 maybe, even earlier. But, that’s not the entire private sector. So, you know, so it’s interesting because, the rest of the private sector is driven either by global regulation or by Indian regulation. Now, as far as Indian regulation goes, I think, you know, it’s only the top 1,000 which have, you know, which have the, I mean, which have the BRSR applicable. But, there is now a lot of global push, especially because of European regulation, which is, asking for a lot of science based data when when you are in, you know, involved in a business. So basically, if you are if you’re exporting your good to to any European country, you would have to disclose or you would have to, you know, kind of show your pathway in terms of a net zero journey. So I think there are different levels. There would be a top first level, which would be, you know, doing even who would be adhering to even the latest, disclosure framework, which is now the nature of nature disclosures. They would have science based targets. They would be disclosing on their supply chain while as you go, to the you know, as you go down to, say, level four, they would probably be at the beginning of their ESG journey where you would need to explain to them what ESG is. So, for such companies, the journey starts with estimating scope one and scope two emissions and preparation of a carbon footprint rep report because that’s something that they probably will understand. But even within that, the data collection process is a challenge because, you know, it means you have to gather the energy data from various departments and go into, you know, go beyond just the, you know, the top management. So I think even developing a small carbon footprint report is a journey that is something that we should look at positively because it’s the starting of the journey. What, I usually suggest, is that you begin the journey with your, you know, emissions accounting, and then you develop a basic ESG strategy, which would help you identify your materials, your topics, and, yeah, and then help you kind of, you know, prepare a pathway. If you look at technical data, CDP reports that it’s only in the third year of disclosure that companies actually have emission reduction targets or emission reduction projects. So it actually takes you three years before you start thinking of what your energy transition policy would be, how would you look at your emission reduction strategy. So I think it’s a journey. And what is important that companies begin that journey and not just look at it from the perspective of pushing it back because it’s not a regulatory  requirement. And this is probably where, you know, the understanding of climate, water, natural resources from the perspective of risk will play a very, very big role. And that’s probably the narrative that needs to, you know, be pushed rather than, you know, reporting on ESG or, you know, talking about regulatory frameworks. I’m not saying those two are not important, but I just feel that if we push the risk narrative, then companies are bound to look internally. And I just have a quick example on this, and I can usually use it in very you know, in basic ESG coachings is that if you have a manufacturing plant near a sea, you know, near the sea and, you know, it is liable to flood, so you need to prepare yourself for, you know, that kind of a situation. So I think, you know, that kind of example, sets them thinking, and I always see, you know, a lot of nodding in in a group of, you know, a group of industry industry personnel who don’t usually like to be told that they need to get into us. Right.

Sandeep Pai: This is really interesting. So I just have one question. So imagine, this is a hypothetical, but I can assume that you might have come across this kind of situation. Imagine that there is a company where the board, the CEO, the management haven’t thought about any of this. Right? Now how do you motivate them? And even if you can motivate them, like, is it usually that one person drives it or the board suddenly changes its heart and starts looking at ESG issues? Like, how does it work in practice usually? Like, how do you get companies to take that action? Because this is not something that, you know, can happen on the side. This is a major, sort of undertaking to look at your entire footprint and then come up with policies over a period of time. But, yeah, like, how do you even start this process?

Prarthana Borah: So I think 70% of the time I fail. Must tell you that. But, because, you know, I think we as a country are still, you know, are driven by regulatory push. So, I think, it’s very difficult to actually kind of convince based on your knowledge or, you know, what your expectations are. But I think, the good part is today that, you know, there is a set of companies who are doing it. And because there is a global push that, you know, their supply chains need to transition, not only global, actually, even a national push. You know, if you look at the BRSR, they did say that, you know, the top top 200 would look at supply chain disclosures. So I think, you know, that would probably be the entry point because, you know, even within the national reporting framework, there is, there is a component which says that your supply chain needs to be trained. So within that training component, if we add sustainability, norms and we add sustainability, you know, issues like what I just mentioned to you, the example of, having a manufacturing plant near a a liable to flood area, I think that kind of an example sometimes have so you can translate, at least, like, in a room of in a room of 30, at least three people would come back to you and say that we’d like to start this journey. So, it would be probably we would have to look at the low hanging fruits, like how where we can address certain companies who are already advanced. Like, in the auto sector, we see that a lot because, you know, the top companies globally have their supply chain in the country. So you can actually look into that supply chain and start with that kind of sector. So, in terms of convincing, I think there are multiple ways of doing it. One is that, as you said, there are the first movers who would probably be interested in going very deep in their supply chain. So they will go into tier three, for instance. And then that becomes like a clientele for you because you can start the basics with them. The other would be leadership in the sense that, there are, you know, leaders who want to be prepared. The third is anticipating global regulation because I think, the global regulation today, even in a vendor requirement form, they are asking for, you know, say emissions data or, you know, if you have thought about target settings. So if we can identify these kinds of companies, I think, you know, that would be another way of doing it. But I think the policy push around sustainability is still missing, especially for the private sector because I don’t really see, say, for instance, the Ministry of Industries talking about, you know, how to, you know, decarbonize. Maybe one sector which has now a decarbonization pathway for the country is the steel sector. So if more and more, you know, more and more, ministries, take up this, this, like, I seriously feel that maybe the ministry of, you know, MSMEs can would be would be one sector which definitely needs to start thinking a bit of it. So those were those are some of the pushes that you miss because if you have that kind of a regulatory push, it becomes easier to have get an audience. But right now, I think it’s more driven by global regulations and identifying where the entry points are as well as looking at, you know, first movers and and, as you said, leadership who are, you know, would be interested in this kind of an approach.

Sandeep Pai: Yeah. And the risk of not doing this is, for example, you know, again, we were discussing about CBAM. If you can sort of double click on that point about, like, what the risk is. If Indian companies were not to do any of this, what is their overarching risk that you see?

Prarthana Borah: So, the CBAM is applicable to some products, which is specified. And it basically is a process where you need to, you know, kind of calculate the embedded emissions of your product and, you know, kind of declare it. So, what happens is, ultimately, you would be competing in a global market because if you’re exporting a product to a global market, then you’d be also you would be competing with other suppliers. So, you know, what happens is that if there is a supplier who has a better sustainability index or has a better, you know, kind of has a lower emissions, his product has a lower emissions, then obviously you would lose out in the business. So I think the larger implication would be would be that. But I think, you know, what is more important, Sandeep, is that the whole issue of the risk attached to your business, I think that is what needs to be really taken into consideration. Because, even if you look at the top, say, top 200 companies in India, the 2022 CDP report, you know, estimated that almost 2800 billion Indian INR was the estimated climate risk from these 220 companies. These are the top companies. Right? So, this is only disclosed data. Right? And if you look at what goes beyond, then it’s definitely there would be much more. And the risk that was, you know, was, voted as highest is the acute physical risk, which means, you know, the immediate impact or extreme weather impact. Now that is something that I think everyone should be prepared for. Why only the 220 companies? Right? So the narrative around that becomes very, very important. And, which is why risk assessment becomes very important. And unless I think, the risk assessment, the climate risk assessment, and not just climate, even water, all this transition to, you know, to the supply chain and to other companies, it will be very difficult to estimate what is the total risk. So that’s one area that probably needs a lot of work. But the other interesting aspect is that there is also the opportunity element. And now a lot of larger companies are looking at, you know, climate as an opportunity, which, which the traditional environmentalist in me should would say no. But I think, you know, if you look at the good side of it, again, I’ll quote CDP because, you know, I know that report very well. So 2022 report, of the 220 companies estimated, almost 30,000 billion INR as the climate opportunities. And these opportunities were in product development, in energy transition, in financial products. So you see, there is a natural transition there. Like, you look at energy transition as an opportunity because you look at, you know, energy efficiency, you look at reduction of cost. So I think, you know, that is another narrative that is something that, you know, companies, if they understand, they go into it. So I think the risk and the opportunity narrative needs to be pushed further. We need to do a little bit more of, you know, there isn’t enough, say, local research in the area. So you are often talking about, you know, data of the top 200 companies or you’re talking about, you know, what is what is the, you know, the research output of global companies. So I think that those are some gaps that we still have as a country because we do not have enough information out there in terms of primary level data that is collected from industries, which are susceptible to climate risks or, you know, water risks.

Sandeep Pai: So, that leads me to my another interesting question that I have in my mind, which is, like, how easy or difficult it is to collect this data, both for companies. I mean, I can imagine a company which has so many layers of suppliers, which has so many layers of operations. Like, how easy it is for them to even, like, collect this data, and how easy it is for, you know, people like us and you to then get them to disclose that data. Right? So, how how difficult is it to go and actually see what’s there, like, to bring this transparency?

Prarthana Borah: So, fortunately, today, there is a I mean, there is technology and AI which kind of supports this, you know, data collection process. And I think, you know, there are a lot of good platforms can that enable this process. But I think disclosure frameworks are very complex. And, you know, if you look at a framework like, like a CDP or a EcoVadis, which is the disclosure framework on supply chain, they have, you know, you have, like CDP has, like, over 60 questions. And each question would have, you know, multiple, questions. So I think the issue is that the frameworks when you’re reporting on a framework, it’s very complex. And it does need to be translated, you know, to sim to simplified versions, which is where we need the expertise in terms of technical expertise. Because what is happening is today these technology platforms are being created by technologists.

And they do not necessarily, you know, understand how to break up the data and simplify it. For instance, emissions data is about, you know, understanding the energy use even, you know, going down to a very minute level. So you would have to have, you know, an explanatory note that could explain to someone from the HR department or the procurement department why you need the data. Right? Because, you know, for the person, even to look up bills and, you know, kind of give you that information is a very tedious process. So when you to your question on how difficult is it to get the data, as I said, the mature industries have now developed a process where they can, you know, they have a feedback mechanism. Their, you know, their departments are educated enough so they can automatically feed these data this data into a system. But there, the problem is more in terms of validation. So someone would need to check and validate the data because sometimes you might just go wrong with, say, a unit. We’ve had that problem, you know, whenever we’ve looked at data. I mean, just a change of unit or an extra zero can, you know, kind of change the entire report. So, so I think, you know, there are two ways of looking at this as a challenge. One is that there are companies were mature in terms of data collection. They have great platforms. They have gone through a process, and they’ve been doing it for many years. But then they still need validation. But then there is the other, set of companies where, you know, the understanding of this data, you know, if, like, you know, just just the question of, you know, how many women are there in your, like, in in ESG, there’s a there’s a very simple, question which talks about, you know, the gender balance in your different departments or your in your in your in your plants. And then you need to get the data from the HR department. Now that’s probably easy one. But then when you have to go and track something like, okay, what is the energy use or, you know, in your various manufacturing plants or your units. That is where the complication comes because if you have larger, you know, large industry, it becomes hundreds of plants. So then it becomes a little bit complicated. And it’s not very, very easy to do it manually because, you know, you have to get into so much detail. It’s very resource intensive, physically very draining. So data collection is difficult. But there are ways in which companies have managed to, to kind of, you know, look at, ways to, you know, kind of, make it simpler. And today, I think the use of AI has facilitated the process because you can also do some modeling and you can do some derivations. So those are areas that are being explored.

Sandeep Pai: Right. So so, I mean, it it’s such a complex process just to even hear. I can only imagine people who work on it. I mean, first, the company has to sort of come up with all the data. Somebody has to validate. Then if they wanna be part of any framework, then they have to input that data in that framework, reconcile. And if the data collection has any issues, then it percolates all the way, you know, to reporting and so on. So, I mean, like, do we have enough people who can do that within companies and outside? Like, do we need to train more professionals to work on ESG issues? So, you know, we have a battery of army. Because I was just thinking that as more companies in India are moved towards sustainability and ESG issues, and become serious? Like, do we have enough staff? Do we have enough colleges and people to be trained in these areas?

Prarthana Borah: I think we have a lot of courses and programs that are, I mean, are there in the country and, you know, globally. I mean, there are a lot of online certifications which teach you, you know, about frameworks and about data generation. But the actual process of data generation, I don’t think we get enough, you know, we don’t have enough trained people. So even companies need to give that kind of time to train people to bring them up to a particular level. So it so in my experience, it takes about a year for, you know, for someone to actually understand one framework. And, I don’t think anyone can become an expert in all frameworks. And my suggestion to, you know, the teams that I’ve built is that  you need to really go deep into one and become an expert in that, instead of moving on. Because the other reason is that because the these kind of frameworks are always evolving. So you need to also be up to date in terms of what is happening in the space, because, you know, we are talking about the natural world and the natural world is constantly changing. So every time a new kind of calculation or a new kind of methodology appears. So you have to be constantly conscious and read. I have to emphasize the word read because, you know, because I think, you know, even now I, I have to read and I, I get very nervous when I have to think of when I, when I have to, you know, kind of, talk to a client on a particular issue because sexually, the application might be different because, you know, the tools and frameworks and methodologies have sectoral, you know, differences. So, to your question on whether we have enough people, I don’t think we have enough people. But I don’t think just training external people to support the process is the way forward. I think it has to be imbibed within the organization. And the ideal way would be to build internal teams. The successful sustainability experiences or sustainability models are within companies who have actually invested in building internal sustainability teams. You will always need an expert to guide you, but I think, everyone should really companies, even if it’s one person, I think the ideal way would be to have someone doing it. One of the biggest challenges we face in terms of Indian companies is that because the BRSR is an Indian regulation and goes into the annual report, it’s the finance department that deals with it. And it’s often very, very difficult to convince, you know, in terms of what is the next steps. So I just feel that it would be so much easier if you have sustainability as, you know, as a department or, you know, someone who understands sustainability, which is why probably some of the, some of the global frameworks actually also ask for data on governance so that they can understand how many people in the senior leadership are actually trained, to understand sustainability. So I think the ideal way would be to imbibe sustainability. And, when I say that you need a sustainability department, I don’t mean that the department has to be separate department. It just needs to be something that is integrated within the various other departments. It can also be that model. Every company has a different, you know, kind of, need, so it would obviously vary. But, definitely, I think the capacity building space is the weakest in the country, and we do need, you know, technical knowledge.

Sandeep Pai: Great. That I’m just because we are talking about so many frameworks and, you know, not everybody who’s listened to this podcast may be aware about these issues. So I’m just curious how many frameworks are out there, like, within India, and, like, what’s a ballpark number? And how do they vary? Like, are they very different from each other or, you know, like, there is some slight variation?

Prarthana Borah: So, someone asked me that question when I was recently on another panel, so I know that answer. I think there are over 600 frameworks globally. So it’s about choosing what is right for you. The some of them it depends on, you know, why you are disclosing. So there are regulatory frameworks. Obviously, when I say 600, there would be country specific frameworks. So, obviously, you know, you have something like the BRSR, which is only relevant for India. Similarly, there would be, you know, local frameworks, in Singapore, in Hong Kong, or in, you know, in other countries globally. But, that is because there’s a regulatory push and you need to do the disclosures. But I think the history of disclosures was because of the investor push. And I think that’s where, you know, a framework like CDP becomes very important because the CDP disclosure framework is used by the data is used by over 700 investors globally, including all the big names. And, investors actually, look at that data to you know, before they put their money into companies. So there is the investor push, you know, kind of, frameworks. And then there is, of course, the ratings framework, which again add to your value in terms of investors or your supply chain. You know? So there are frameworks like the EcoVadis, which is basically a disclosure on the supply chain, and it gives you a rating so that, you know, it positions you separately. The GRI is the most accepted framework because it is the oldest, and it is also, it’s an ESG framework. Like, something like a CDP is a climate disclosure framework, and, you know, they have separate, environmental parameters. So the GRI is the oldest, and the GRI is the most accepted globally. Most of the companies who are starting their ESG journey actually start on with the GRI framework, because it is slightly simpler and relevant, and applicable, like, you know, locally to, multi-country. And then, of course, there are, you know, very specific rating agencies, which also have their own frameworks, which kind of gives you, positioning. So, it depends on, actually, it depends on what your objective is before you start disclosing. And this is what usually is our recommendation because, ultimately, it’s about looking at internal strategy when you and and your journey in terms of reducing emissions and your net zero transition should be an internal process more than the related frameworks. But having a framework basically helps because data gives you a different perspective. It gives you numbers. Right? So if you have the numbers, you’re able to gauge. You’re able to also model for the future. So I think the reason that frameworks are popular is because of the number that comes in, and it becomes easier for private sector organizations, which are actually focused on financial numbers, to also have a number associated with sustainability.

Sandeep Pai:  I think we’ve talked a lot. We’re almost at, you know, fifty minutes. You won’t realize. Yeah. But, but I would love to hear some examples, you know, of what, like, what how I mean, it’s I know it’s hard to describe, like, a good example or something. But if there are some interesting examples of, you know, companies that have really, you know, pushed the boundaries of sustainability within India, especially, because I know you’re a storyteller. So if there are some you know, you may or may not name the company, but if there are examples of how a company, you know, changed course and got into, you know, sustainability issues and then got into reporting and how, you know, they have won accolades. I mean, I would be just curious to understand through an example if it’s available readily with you.

Prarthana Borah: So I think, you know, there are definitely good companies because, obviously, you know, they look at their internal journey, and they’re also well known, you know, because they have taken initiatives. But, I think you also have to understand that these are companies that have started their sustainability journey, like, a long time back. I think, you know, it’s not, it didn’t happen overnight. So, there are definitely, you know, there are companies which have begun their journey. But I think, what really excites me is when a company is able to address issues, beyond the operations. I think that is where things become difficult. And that is probably where, you know, you one needs hand holding because it’s not about just reducing the impact in your, in your own boundary. So, so I, you know, I’ve had some very interesting experiences working with companies, especially when it comes to working on the supply chain. And, it’s very interesting because, you know, you would assume that they would know their supply chain. But most companies, even if they’re very large companies and doing very well in their sustainability journey, often do not have, you know, a ready list of their suppliers. And even if they do, then, you know, they have no way to contact them because, you know, there are so many loops around that. So, there are a couple of companies who are actually working on the supply chain to a much lower level. And, and I’m actually, we are just doing it. We are actually doing a very interesting assessment of a supply chain in this context. And, the company’s actually gone into the detail of looking at whether their, you know, their financial, financial, output has increased or decreased because they have changed their, you know, suppliers. And interestingly, it also emerges that the more you work on your supply chain, the your because, you know, you also transition the your energy efficient measures from your internal operations to to the supply chain by hand holding, by technology transfer, by, you know, by trainings. You also manage to improve your, you know, financial output. So I think there are examples like that which, which really become like a benchmark because, you know, ultimately, that’s where you want to reach. Right? You want to go beyond the boundaries. But, I also think that there are a lot of companies which, you know, which are beginning their sustainability journey. And it’s a really difficult step to take for, say, a small industry, which is more focused on profits and on actually sustaining the business and to actually start the journey and start estimating emissions. So, I would like to say that, you know, there are different levels, but it would be very important for companies to start estimating emissions because, we we don’t I mean, you know, we have we have a glow we have global data that says that India is one of the highest emitting, economies. But if you look at it, I don’t know how much of the emissions we’ve really captured. So because, you know, if you look at the data that is available because I’m working in the sector, you all also have the numbers, right, in terms of how many companies are actually disclosing or how much public data is there. So I think for a country like ours, it’s very important to actually start estimating emissions because if we don’t, we wouldn’t know the extent of work that is required. And I believe that that’s where data plays a role because, you know, once you start estimating, then you also realize, you know, what you have to do because I think that is more important because that’s what is going to lead to, you know, this climate action journey.

Sandeep Pai: Great. This is fantastic. I was actually thinking about, like, the way you were describing and throughout this one hour of discussion. Like, how much of the data is actually out there? So do we what we report, what we hear, how much of it is true? Is it in, like, 20% range, 50 percentile, 60 percentile? So, curious. But before we end, I have to ask you one question, which is, like, you really nicely explained how, you know, things have evolved in the ESG space. There were some companies that started really early, others are coming in, etc. What is your wish list for the next, let’s say, five years? If you were to record a conversation again in five years, like, what would you like to see in this field, how would you like to see this field grow? What changes would you like? I’m asking a big picture question. Like, how do you want sort of, like, the whole ESG space and its adoption see in India with respect to private companies?

Prarthana Borah: I think the weakest spot we have as far as India’s concerned is the research and the science based tools to to actually facilitate the transition journeys. We have a lot of global tools, global frameworks. The BRSR is an attempt to kind of collect data, but no one’s really using that data or creating a narrative around this. And having worked both nationally and globally, I just feel, at a loss sometimes when a company comes to me and asks, because, you know, it’s very difficult to translate what is in the theoretical framework to a practical framework. So my wish list, honestly, and I’ve told this in many forums, is that how do we look at Indian adaptations of some of the great news like the SBTI or, you know, some of the, you know, some of the work that CDP does. I’m not saying that we want to, you know, have a different one, but how do we adapt it to in the Indian context and make it available and simplified so that, you know, the 25 lakh MSMEs start, you know, kind of accounting their emissions. Because if you look at that, that’s a huge number. But do we have data on the emissions? You know? So, I think my wish list would be really to have more research. I think we have a lot of courses, and we have a lot of people who are going out in the market. But, we do not have enough research or science based tools as far as climate science and translating it to the India transition journey is concerned. Because, ultimately, politically, we might announce, you know, a long term target, but we all know that we can’t wait. So we do need to present alternative trajectories. And there are a lot of people who want to do it. You know, there are companies who are committing to 2040, who are committing to 2050. So why not give them the right kind of tools that they can, you know, that are science based? And there are a lot of other there are a lot of tools, but, you know, there’s nothing like, say and this the SBTI. How does the SBTI become more applicable in the Indian context is something that probably I would really be interested in seeing in the next few years.Sandeep Pai: Well, Prarthana, thank you so much for your time. You took one hour and, you know, really explained this whole field to me. I mean, I’m very new to this whole ESG space, and I really appreciate all the insights, all the examples, and thank you for all the work you do in this space. It’s                                         so important yet, so difficult to sometimes understand, what’s going on given that there are 6,000 frameworks and so much more, else. So thank you. I really appreciate your time.

Prarthana Borah: Thank you, Sandeep. It was a pleasure. 

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