Chandigarh, Apr 16: In the last year, large organisations have been backtracking on their ESG commitments. This includes companies who have retracted their climate, plastic packaging and DEI commitments. The global economic slowdown has been a significant factor, causing corporations to look at return on sustainability investments with greater scrutiny, said Ramnath Vaidyanathan, AVP and Head of Environmental Sustainability at Godrej Industries Group.
Backtracking on sustainability targets can also be attributed to increasingly complex reporting regulations, which are creating a benchmark where more ambitious goals are not incentivised. For example, for Scope 3 emissions, obtaining reliable ESG data across vast supply chains to meet complex reporting standards on tight timelines is almost impossible. Is that level of granularity really necessary for practical decision-making?
Recognising this, regulators have stepped back to make ESG reporting more practical. India’s market regulator, SEBI, deferred the new BRSR Core value-chain ESG disclosures by a year, making them voluntary until 2026 and limiting the scope to key suppliers covering 75 per cent of spending. Likewise, the EU postponed the rollout of its reporting rules for smaller companies and reduced the number of data points required.
We have seen floods rip through Central Europe, wildfires tear across Bolivia. They shake up economies and change lives. It is clear that businesses cannot just focus on cutting emissions anymore. They need to prepare for what is already here. More companies are spreading out their risks and putting money into strategies that help them weather these challenges. Adaptation is not optional it is the new reality.
As per World Economic Forum estimates, almost half of the global economic output is dependent on nature. Biodiversity and nature loss continue to feature in global climate discussions. More companies are assessing how their work affects biodiversity. The Taskforce on Nature-related Financial Disclosures (TNFD) created metrics to track biodiversity loss and spot ways to minimize damage.
With stricter rules on green claims, some companies will try to look more sustainable than they really are. That kind of greenwashing makes people more skeptical and drags down real progress. To stop this, sustainability, legal, compliance, and audit teams will work more closely together to ensure data checks out.
Sustainability roles are likely to increase in legal and finance functions as regulations grow. Company general counsels and CFOs are showing greater involvement in sustainability initiatives and reporting. Roles such as ESG controllers may become more common, overseeing systems and processes for sustainability disclosures.
Some companies have pulled back on sustainability because of economic or practical hurdles, but they are doubling down on what moves the needle for their bottom line. Commitments are sharper biodiversity and climate risks are showing up in business plans. Corporate sustainability sits at a turning point. Actions may be fewer, but carry more weight. Companies that handle this shift well come out stronger and ready for what is next.
