Insights into India: ESG as National and Economic Strategy

Welcome to Insight Connect, an initiative where we welcome a range of local and global experts to share their view, experience, and insights on cultural intelligence and why it matters. Today, I'm delighted to welcome Sudha Singh, who is a senior ESG expert and the founder of The Purpose Room, a platform where she tackles equity and inclusion, climate change, Global South, women in leadership, ESG, and sustainability topics.

Together, we'll be discussing and exploring the state of ESG in India and how this fast-rising economy, which is due to overtake Germany by 2028-2030 to the third ranking, has made giant leaps when it comes to sustainable growth.

https://youtu.be/dkQxfdeJhJs

Transcript

Mélanie Chevalier: Welcome, Sudha. It's an absolute pleasure to have you with us today.

Sudha Singh: Thank you for having me, Melanie. So, I'm the founder of The Purpose Room, as you said, where we help organisations make sense of the S in ESG. So this includes everything from labour practices, human rights, community impact, DE&I.

And my background is in strategic comms, crisis management, which I have over three decades of experience, and I've worked with global and Indian brands, governments, multilateral organizations across UK and India, and some bits of Africa actually, helping them to navigate complex social, regulatory, and political issues.

So working across these different markets has taught me something very important: that the biggest risk to global sustainability initiatives and strategies isn't usually a lack of capital or data, it's a lack of cultural intelligence and translation. So that was really what drew me into this space when I was making a career pivot.

I also wanted to use my experience to do more purpose-led work, and so I chose to work with leaders to make sustainability, equity, inclusion more practical, more culturally relevant if you understand, and more grounded in real life. Because too often these conversations miss the social and cultural context and nuances.

So I'll give you a simple example. So for example, a simple example is in the UK, ESG often starts in boardroom. These conversations start in boardrooms, and it is about governance, it's about reporting, it is about oversight. In India, it would be about seeing impact on the ground. It would be about jobs. It would be about community benefit. Another example I can give you is about DE&I. So in the UK you would focus on targets, representation, and policy. In India, a similar conversation is more practical. Can women get to work safely? Can we build their skills so that they stay in the workforce for longer and thrive? And this is often where you see the contrast. Global companies may arrive with stronger frameworks and disclosure discipline, while Indian companies are often quicker to adapt programmes to local requirements and local realities. And we understand that the best outcome is usually when you have a convergence of global standards and local fluency.

So in many ways, that is why I landed in this space, to help organisations bridge the gap between global ambition and local reality.

Mélanie Chevalier: Amazing, Sudha. That is really interesting. And actually, on that topic, I know you mentioned that funding is not necessarily always how these initiatives come to life and what makes them powerful. But it's interesting to see that unlike recent global trends, India has been really ramping up corporate sustainability in the last few years, and the funds are really reaching record levels.

What social ambitions are major businesses pursuing currently in India? What are the key themes?

Sudha Singh: What is striking about India is that mandatory CSR has been a part of the corporate landscape for more than a decade. Back in 2014, India became the only country in the world to legally mandate CSR spending and reporting. So CSR is not new here. What is new is the scale and ambition. That has definitely grown. So a lot of the spending still goes into ad hoc community programmes around factories, around operating sites, on education, health, water, livelihoods. But now, it is connecting more clearly to India's wider sustainability goals as a country. Building skills and local capacity so that we are ready for the next phase of growth. So, the big social ambitions that corporates have is about better education, health, more inclusive livelihoods, stronger opportunities for women and marginalised groups, including young people.

And this is so that they can participate in India's growth story. And that is why skill building and gender equity are two of the favorites amongst corporates. We see a lot of it. And because you may know that, India has some of the most educated young people in the world. But these educated young people are not necessarily ready for future facing jobs or are employable. So companies are investing in skilling and employability. And on gender, the shift is from S- to increasing real participation of women in the workforce. Helping women to enter, stay in the organisation, and to thrive within organisations. That is what gender equity would look like. So corporate India is realising, Melanie, that social investment is also an economic strategy. It's a business strategy. It is helping to build the workforce resilience and local capability that India as a country will require, and that these organisations will require in the future.

Mélanie Chevalier: It looks like in general, India is doing the right job to tackle sustainable growth in the future. You're demonstrating that it's about laying the right foundations to get the right growth moving forward. And with such a vast and very populated country, it's really great to hear. So looking actually at the Indian economy specifically, it is very largely dominated by SMEs. I saw some data that put forward that 99% of businesses are M-SMEs. So how do larger corporations mitigate those supply chain vulnerabilities? Because obviously one would look at scope two and three emissions, or even when you look at social criteria, it becomes a lot more difficult to control and ensure that these are implemented.

So how can regulators have a real impact on the country's sustainability ambitions with that in mind?

Sudha Singh: I think the elephant in the room. I think this is one of the hardest sustainability challenges in India because, as you said, supply chains are overwhelmingly made up of MSMEs operating on very thin margins. So if a large company or a multinational were to expect emissions, data or decarbonization plan from its India supply chain without support, it would usually go nowhere. So, let's look at the numbers. As you said, there are 63 million MSMEs, and they contribute to 30% of the GDP and about 46% of India's exports. So the supply chain is really the driver of growth in the economy. So progress on Scope 3 and India's wider climate goals will depend on making decarbonisation viable, doable, and easy for these smaller businesses. What does this mean for larger corporates? It means they need to step up. They need to move to partnership. They need to help suppliers with training, simpler reporting, practical support, use of technology, rather than acting as the sort of compliance auditors because they've been asked to audit Scope 3, so they are putting pressure, but they're not really helping them to grow. So that is the direction some companies are already taking, and some of the Indian ones are like the Tata Group companies or Mahindra Group companies, where they have framed supplier collaboration, circularity as a part of their broader sustainability strategy. You can see similar patterns in global companies, that they often lead on standards, like we spoke earlier, and reporting systems. What the Indian companies bring is they tend to move faster on hand-holding, commercial pragmatism, and local partnerships. And like I said earlier, in practice both matter, and regulators of course are very important. We cannot have rigid regulation. We cannot have an approach where it punishes these smaller suppliers for not being up to mark or up to speed right from the get-go.

So it has to be a phased approach, and that is what our regulator SEBI is doing. It has a phased approach to value chain ESG disclosures. So it means that smaller suppliers have more time to adapt rather than getting overwhelmed or going under. The bigger point is this, Melanie, that in an MSME-led economy like India is, decarbonisation can never be top-down. It works only when large companies create financial safety nets and regulators create right incentives for these MSMEs to participate. It has to be financially viable for them to do this. And that will help them to strengthen the local supply chain, which is aligned to India's path to cleaner, more self-reliant growth.

If you help these MSMEs grow and become stronger in terms of regulation, that is where the road leads, so that's where the journey is going to be.

Mélanie Chevalier: I believe the strategy applies to other countries. There are many nations whose backbones, maybe not to the same extent obviously, but the backbone of the economies is SMEs. The UK is one, for example. And I think your point is very relevant in demonstrating that larger businesses have a role to accompany their smaller suppliers in that journey to make sure everyone's is going in the right direction.

How does this fragmented market and being (broken down) into lots of smaller businesses impact the social side of things? Because obviously there are social inequalities that are happening throughout the country, and how does that live together with what bigger companies and brands are putting forward in terms of inclusion strategies?

Sudha Singh: If you understand India, and you understand the social and economic inequities, you will understand better how to address this question. Once we start talking about supply chains, the social question actually comes right at the forefront.

And it tests the ESG narratives of corporates, whether it's Indian or multinationals, because it's easy for brands to talk about inclusion at the corporate level. The real question, Melanie, is: what is happening deeper down in the supply chain where so much of the work is still invisible, underpaid, unprotected? The informal economy in India is the ultimate blind spot for corporate ESG and sustainability initiatives. Most people tend to forget about it or to ignore it. And we are still at that stage where we are defining how we are reporting. So it's a journey. A brand sustainability report can show very strong compliance at the top, but deeper down the value chain and the supply chain, where your sourcing and subcontracting is happening, the labour reality is that it's informal work. There are pay gaps, there are gender pay gaps, and there is little or no social security. So this is actually a huge operational risk for businesses, and I think this is where a lot of them tend to get into greenwashing. Brands can no longer talk about social equity at the top if the business model still depends on cheap, unprotected labor further down the chain. And I think a lot of organisations in India and across the world are guilty of this. And in India specifically, the gap is very significant because such a large portion of the workforce is informal, right? So you have strong policies on paper, but people handling sourcing, waste, agricultural work, are outside the formal protection. Then this S in ESG becomes so much harder for organisations to defend because you're not taking into consideration the informal workers or the invisible people in your value system and the supply chain. There are organisations that are attempting to actually be more pragmatic and create solutions and create reporting mechanisms that support these informal workers to get more protection and to be more inclusive. So, women's self-help groups, producer collectives, improving traceability in your product, investing in basics like childcare or transportation or giving people digital access, creating modalities for financial inclusion. Often these things are likely to turn participation into real progress. To conclude, I'd say that the real test of social ESG is not the language that they use in their reports. It is whether the most vulnerable people in the ecosystem are seeing more dignity, more protection, and more opportunity. Because that is what makes growth more inclusive and more resilient and ultimately more sustainable. And I think one thing that companies need to understand is that you need to start on that journey. You're not going to finish that journey in a day, but somewhere you need to start on that journey to be truly sustainable.

Mélanie Chevalier: It is about concrete action. It's interesting that you make this comparison with the language and the comms because that has been part of the biggest focus for large international companies. Whereas when you're thinking about a nation like India, there is a real need to go into concrete action and generate impact outside of the organisation, not just inside it. Looking at the diverse nature of the country, as we know, India is a country made of many nations almost, religions and cultures and languages. It's very vast geographically, and I can imagine this presents many different challenges, but also opportunities when it comes to environmental or social progress.

Do you have a few examples to share in terms of how businesses may want to activate differently in one region versus another in India?

Sudha Singh: India is a very vast and diverse country. And it is almost like if you think of Europe. There are so many different countries, and India has got 30 states, and they're all very, very different. So when you have, whether it is Indian companies or whether it is multinationals, they come in and they decide that they need to have a strategy over here, then they need to, of course, look at what central government mandates.

What is a tick box from compliance point of view. But they also need to be very conscious of what is happening at the state level because the states have their own priorities. What is true for a state in eastern India may not be true for a state in western India. Some of the western Indian states are some of the most advanced in terms of industrialisation, in terms of business growth, et cetera, while the eastern states may not be as advanced in those terms. So for example, if you look at a state like Tamil Nadu, both are big industrial states. But if you're looking at a ESG conversation in Tamil Nadu, it is likely to focus on manufacturing, probably clean energy, urban mobility, inclusive workforce. And if you look at Gujarat, which is in western India, it may be more about industrial scale, ports, water usage, managing environmental risk alongside growth. And of course, the smaller things, the tactical and ad hoc things that I'd mentioned in CSR like whether it's your nutrition or education or getting the communities together, all of those continue with all of this stuff. So even with the same national framework, the realities are very different, and that is why when you look at ESG reporting in India and sustainability strategies, you need to align with central regulation and national climate goals, but also make sense at the state level.

Mélanie Chevalier: It makes sense. And from what I hear from all you've said so far, currently we're at a state where fragmentation is probably the main characteristic of the market. And with that in mind, there's a need for concrete actions, as you said, and also a need for it to be locally targeted because of the sort of diversity that the country presents. Now, looking a bit further away and looking at the future, which demographically and economically seems to be very positive in India specifically, how do you see these ESG priorities evolving? And have you seen some bold and unique initiatives already that are giving us a taste of what's to come in India?

Sudha Singh: I think the next phase of ESG in India will be much more about delivery than language, and I think we just touched on that language bit. And in India, that delivery is increasingly being shaped by three things coming together. One is the ESG frameworks that the country has put in place, India's climate goals, and the push by the country for greater self-reliance. So if you look at India's NDCs, the nationally determined targets that they have set for themselves, it is lower emissions, more non-fossil power, more climate resilient growth. And these don't sit separately in a climate bucket anymore. They're starting to influence how companies operating in India think about, whether it's their energy usage, supply chains, manufacturing jobs, and risk in general. So that's where there is this opportunity for the India story to become quite distinctive. So sustainability is not going to just be about disclosure because you have to practice it since it is tied to national priorities, energy security, domestic manufacturing, reducing import dependence, building industries of the future. India has a national green hydrogen mission, which explicitly links decarbonisation with reduced fossil fuel imports and making India more self-reliant. So that, for me, is where ESG is going to go in India. Less theory, less box ticking, and much more focus on what the country can build for itself. How organisations can help to scale the India story and eventually lead on it. And if all of these things come together, I think there is an opportunity for India to redefine how we look at the sustainability ESG agenda, especially linking it to the national growth targets or future plans. This is about India becoming a 6 trillion economy. It's becoming the third-biggest economy in the world, or the second-biggest economy in the world. All of it is tied together. So I think all of this is interlinked with how businesses respond to the challenges that are being set within the country.

Mélanie Chevalier: Well, this is to an action-driven future then, and hoping that India becomes the best practice case for other nations and international businesses to follow. It's been really interesting, Sudha. Thank you so much for your time today. And to those watching, this was Insight Connect where cultural intelligence lands. Thank you very much.

Sudha Singh: Thank you, Melanie. This has been a fantastic conversation.