Why ESG Is the Game-Changer Every Business Needs to Pay Attention To

A few weeks ago, while scrolling through a company’s annual report, something struck me. Page after page boasted about their “commitment to sustainability” and “ethical governance.” But as I dug deeper, I found a different story—rising carbon emissions, opaque labor practices, and little transparency.

It made me wonder: Are companies truly walking the ESG talk, or is it just clever marketing?

In a world where consumers are more conscious, investors more demanding, and regulations more stringent, Environmental, Social, and Governance (ESG) isn’t a corporate buzzword—it’s a necessity. And if businesses don’t catch up, they risk being left behind.

What Exactly Is ESG—and Why Should You Care?

Environmental: How a company impacts the planet—think carbon footprint, waste management, and renewable energy.

Social: How a company treats people—employees, communities, and customers. This includes fair wages, diversity, and social welfare.

Governance: How a company is run—transparency, ethical practices, and leadership accountability.

In short, ESG measures whether a company is doing the right thing—not just for profits, but for the world around them.

The ESG Reality Check: Are Companies Falling Short?

Despite the glossy reports and sustainability pledges, the truth is: Most companies aren’t doing enough.

Why? Here’s the inside scoop:

1. Greenwashing Is Real: Many companies exaggerate their sustainability efforts while making minimal actual changes (Harvard Business Review, 2023).
   
   
   
2. Chasing Profits Over Planet: Short-term financial goals often overshadow long-term ESG commitments (McKinsey & Company, 2023).
   
   
   
3. Weak Regulations: Inconsistent global standards make it easy for companies to pick and choose what they report.

And India? The story isn’t much better.

According to a 2023 CRISIL Report, only 22% of India’s top 1,000 listed companies offer detailed ESG disclosures. While the Securities and Exchange Board of India (SEBI) has introduced stricter Business Responsibility and Sustainability Reporting (BRSR) guidelines, compliance is still catching up (SEBI, 2023).

Why Ignoring ESG Is Bad for Business

ESG isn’t just about doing good. It’s also about doing well. Companies that prioritize ESG are outperforming their peers. And the numbers don’t lie:

A recent study found that 73% of global consumers would definitely or probably change their consumption habits to reduce their environmental impact. This shift in consumer behavior has led to a surge in sales of eco-friendly, organic, and ethically-sourced goods. (General Marine Conservation and Sustainability, 2024).

And By 2025, $53 trillion in global investments will be ESG-aligned (Bloomberg, 2023). According to the 2021 Consumer Intelligence Series survey on ESG conducted by Pwc, 86% of employees prefer working for companies with strong ESG values, highlighting the critical role that responsible business practices play in attracting and retaining top talent.

From Talk to Action: How Companies Can Get ESG Right

In today’s competitive landscape, companies must move beyond token gestures when it comes to Environmental, Social, and Governance (ESG) practices. To truly make a difference, ESG must be more than just a checkbox.

Here’s how companies can integrate ESG into their DNA and drive genuine impact:

1. Embed ESG Into the Core Business Strategy

ESG should no longer be a side project or an afterthought. Leading companies like Tata Group and Reliance Industries are demonstrating how to prioritize ESG by investing billions in renewable energy and building ethical supply chains. These investments don’t just help the planet—they strengthen brand loyalty, create long-term value, and foster resilience. Make ESG a foundational element of your business model, not a separate initiative.

2. Commit to Transparency—No Sugarcoating

Authenticity is key. Companies must stop hiding behind vague promises and start making measurable, verifiable progress. Leverage globally recognized frameworks like the Global Reporting Initiative (GRI) and align with SEBI’s Business Responsibility and Sustainability Report (BRSR) guidelines in India.

3. Engage Stakeholders—Everyone Counts

ESG isn’t just the responsibility of top management. It’s crucial to involve a wide range of stakeholders, including employees, local communities, and investors, in shaping sustainability initiatives. Their feedback is invaluable in driving innovation and ensuring that your ESG efforts are relevant and impactful.

4. Make Leaders Accountable—Link Executive Performance to ESG Goals

True change happens when leadership is held accountable. Tie executive compensation and bonuses to ESG performance. When top executives have skin in the game, they are more likely to prioritize sustainability, social justice, and good governance.

5. Innovate for Lasting Impact

Invest in technologies and initiatives that not only drive sustainable growth but also reduce your carbon footprint and improve labor conditions. Whether it's adopting green technologies or exploring new, ethical business models. It’s about finding scalable, impactful solutions that benefit both the planet and your bottom line.

6. Engage Gen Z in ESG—Empower the Future

One of the most powerful forces shaping ESG today is the rising generation of consumers and workers—Gen Z. More than half of Gen Z feels uncertain about the future, with many citing climate change as a reason for delaying or avoiding family planning. Companies must engage them directly in sustainability efforts, rather than leaving them to fend for themselves.

A great example is Puma’s “Voices of a Re:Generation” initiative, which brought young influencers into their sustainability conversations. By empowering this generation to help shape your ESG initiatives, you can build stronger, more meaningful connections with future consumers and leaders.

In conclusion, transforming ESG from a buzzword into a real, measurable impact requires dedication, transparency, and leadership. By embedding ESG into the fabric of your organization and engaging all stakeholders, you can build a sustainable future while staying ahead of the competition.

ESG isn’t just a corporate responsibility. It’s a collective one.

As consumers, we can choose to support brands that prioritize people and the planet. As investors, we can push for better transparency. And as citizens, we can advocate for stronger policies.

The future of business—and the planet—depends on it.

So, the next time a company boasts about its ESG commitment, ask yourself: Is it just talk, or are they truly walking the walk?

Because the world is watching—and it’s time for real change.

Let’s demand better. Let’s build better.

‍