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As climate risk, regulation, and investor priorities evolve, are you prepared to lead in a low-carbon economy?

On World Environment Day 2025, here’s a closer look at the ESG landscape in India and the opportunities it brings for businesses ready to act.

In the face of accelerating climate risk, resource scarcity, and shifting consumer expectations, the pressure to act is growing across the board. Investors want transparency. Regulators want accountability. Customers want values that match their own. From ESG (Environmental, Social, Governance) frameworks to climate-related financial disclosures, sustainability has moved from aspiration to infrastructure — defining how companies are financed, evaluated, and trusted. For Indian businesses, especially MSMEs navigating a changing global landscape, this moment is not just about reducing harm — it’s about building future-ready operations that can thrive in a low-carbon economy.

As we mark World Environment Day 2025, with its global call to #BeatPlasticPollution, the message for businesses is loud and clear: sustainability is no longer just about ethics or choice — it’s economics. It’s a strategic imperative with long-term ROI. With over 3.2 billion people already affected by ecosystem degradation and nearly half of the world’s GDP dependent on nature’s services, environmental action is now directly tied to business viability. India’s ESG investment market reflects this urgency, having grown 4.7x since 2023 to reach $10 billion by May 2025. For perspective, ESG thematic equity schemes alone held ₹12,085 crore ($1.61 billion approx) in AUM by September 2021, with 76% growth in inflows during 2020–21 compared to FY 2019-20. Global confidence is rising too with 41 Global E&S seeking funds have invested on an average 25 percent of their funds in India equities. This momentum is accelerated by regulatory frameworks like SEBI's BRSR, which mandates ESG disclosures for the top 1,000 listed companies, and the RBI’s Draft Disclosure Framework on Climate-Related Financial Risks 2024, which requires financial institutions to assess and disclose climate risks before and after lending. SEBI’s new “green credit” system and global shifts like the EU’s carbon tariffs will only raise the bar. For MSMEs, this isn’t just about compliance — it’s a $2.5 trillion opportunity aligned with India’s 2030 SDG goals. From global funding flows to Gen Z’s values-driven choices, sustainability is redefining the rules of business. The transition presents unprecedented opportunities for MSMEs to differentiate themselves, attract conscious consumers, and thrive in a rapidly greening economy — because those who lead, win.

That’s because the rewards are real. Companies that integrate ESG not only reduce exposure to climate-related risks — but also gain operational efficiency, premium pricing power, and access to green financing. Even small shifts matter: rethinking packaging, upcycling materials, tracking carbon, or adopting circular supply chains signal readiness and build resilience. As SEBI’s BRSR pushes transparency, businesses that can quantify their sustainability efforts — from reduced emissions to energy savings — are earning credibility in an increasingly conscious marketplace.

What comes next is action. Sustainability today means more than ambition — it means tracking progress, designing for circularity, rethinking value chains, and embedding resilience into daily operations. For businesses — large or small — that step begins with asking the right questions: Are we measuring our impact? Are we aligning with evolving ESG expectations? Are we building systems that balance profit with the planet? As we observe World Environment Day, let this not just be a moment of awareness — but a catalyst for how we plan, report, and grow moving forward.