ESG across borders: India

The culture of ESG in India

20 July 2023

Ipsos | ESG | Sustainability Sustainability and ESG in India is linked to values around moderation. India has a culture that has always frowned upon excessive indulgence and there is a strong belief in self-regulation, moderation and balance. As a result of its collectivist culture, ESG in India is about creating access for all. We see an emphasis on themes like co-living, repurposing and reusing items, being kind to things around you – not just people but also plants and animals – non-violence, traditional medicine like ayuverda, and ‘jugaad’: Indian ingenuity, improvising and inventing with limited resources. All of this indicates a strong focus around the human aspects of ESG.

India’s cultural profile is therefore almost the polar opposite of that of the US. When it comes to the country’s relationship with nature, the culture is one of co-existence, appeasement, being at peace in and in harmony with your nature, balancing the good vs the bad.

As India is a collectivist country, when it comes to ownership and responsibility, we see cultural expectations placed on the community, the authority or on institutions to take the lead on ESG initiatives. Indians look to the government – and increasingly also to the business sector to take action. India is in a period of great economic development, growth and progress, and so there is an unwillingness to compromise or sacrifice that immediate gain for some unseen future benefit. On the “the world – my world” scale, India’s priorities fall distinctly towards short-term and immediate rewards, affecting people’s individual worlds.

Government-led progress

Ipsos | ESG | Sustainability Indians show a high level of confidence in the belief that their government has a plan to address ESG issues and is going about it in the right way. In some sense, this faith in institutions allows Indians not to be overly concerned about ESG issues. Across 29 countries, India has one of the lowest levels of concern when it comes to social inequality and poverty4 implying that the public endorse the economic progress made by the government, alongside its social development efforts.

The government has put in place strong policies to introduce ESG compliance in many sectors e.g. fiscal reporting, financial reporting and also corporate reporting. This echoes the Indian sentiment that there is a clear need for the business sector to be doing more on ESG.

Successful initiatives include the Clean India Mission, investment in renewable sources of energy – which led to an LED bulb transition in the country as a result of a campaign around energy savings – a growing investment in electric vehicles, providing and investing in infrastructure so that everybody has access to water, housing, and health insurance for the poorest. Today, same-sex relationships have been decriminalised and the court is now also evaluating legalising them.

While these initiatives straddle both environmental and social aspects of ESG, they demonstrate the strength of the focus on the S of ESG. There is an acceptance and understanding that there is a human aspect to a lot of the themes around ESG. Awareness around ESG has also grown, particularly on the environmental side. In many cities, people are actually able to see the alarming increase in pollution levels, through the Pollutant Standards Index (PSI), haze and health issues. This has all now become a part of political rhetoric and urban Indians now expect the government to be able to provide clean, safe air.

Indians show a high level of confidence in the belief that their government has a plan to address ESG issues and is going about it in the right way. In some sense, this faith in institutions allows Indians not to be overly concerned about ESG issues.

ESG habits

Ipsos | ESG | Sustainability Over the past 300 years, India has not been a land of abundance. Instead, it has been characterised by scarcity and controlled access; even in terms of cultural values, frugality is a virtue. This extends to Indians’ ESG habits, where the focus is on being resourceful, inventive, not looking at the most expensive solutions for everything, and extending the life of resources by repurposing and reusing them.

These inherent practises are now gathering steam in India. Brands have also ramped up the amount they advertise around ESG, mostly with themes of reuse, repurpose, and not flouting any environmental rules. Neeman’s, for instance, have launched a wash and wear shoe as well as the ReLive Knits, shoes made from recycled PET bottles, designed to last longer and be more environmentally friendly. Brands are increasingly launching campaigns which rouse consumers to the potential threats of climate change. Even in categories like beauty, there are increasing claims of ethical sourcing, no nasties, etc.

However, brands risk potential backlash where these ESG measures start challenging cultural beliefs or rituals. For example, many cultural festivals use a lot of water and including water-saving messaging around these festivals may have negative repercussions. Similar risks hold for taking traditional marital rituals and applying these to same-sex couples. Very traditional aspects of Indian culture are a boundary to watch out for when introducing ESG initiatives.

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ESG ACROSS BORDERS: THE CULTURAL CONTEXT

Society

Government-led progress

ESG habits

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