In today’s rapidly changing world, environmental, social, and governance (ESG) principles are gaining significant traction, as societies across the globe recognise the need for sustainable development. However, Indian civilisation has long been rooted in ESG principles, and its ancient scriptures offer valuable insights, as Srinath Sridharan explores here.
In the pursuit of a sustainable and inclusive future, environmental, social, and governance (ESG) considerations have emerged as a critical lens through which investors and businesses evaluate their impact on society and the environment. While these frameworks have undoubtedly made valuable contributions, it is essential to recognise that they are relatively recent developments that often overlook the profound lessons embedded in ancient Indian scriptures. The Western world’s ESG frameworks, although well intentioned, often lack the societal depth and cultural diversity found in ancient Indian scriptures. Indian civilisation, with its millennia-old heritage, has long grappled with these very challenges and offers a wealth of knowledge and guidance in navigating them. The wisdom embedded in Indian scriptures offers profound lessons that can inform the development of robust ESG practices, aligning economic growth with social and environmental responsibility.
Indian civilisation boasts a diverse tapestry of religious and philosophical traditions, including Hinduism, Buddhism, Jainism, and Sikhism, which form the bedrock of its spiritual heritage. These traditions have nurtured a profound understanding of the interconnectedness of all living beings and their environment, which aligns harmoniously with ESG principles. These practices are more about human values and a societal way of life, rather than being religious motives. These texts have fostered a deep understanding of the interconnectedness of all living beings and their environment, emphasising the principles of ethical conduct, sustainability, and social welfare.
First and foremost, Indian scriptures emphasise the importance of responsible stewardship of the environment. The reverence for nature and the interconnectedness of all life forms, as highlighted in texts like the Atharva Veda, offers a profound lesson in environmental consciousness. By incorporating these teachings into ESG frameworks, businesses can embrace sustainable practices, minimise ecological footprints, and prioritise long-term environmental preservation.
Secondly, Indian scriptures advocate for social justice and inclusive growth. Concepts like dharma in Hinduism and compassion in Buddhism and Jainism underscore the importance of treating all beings with fairness, equality, and empathy. By integrating these principles into ESG frameworks, we can address issues of social inequality, labour rights, and community well-being, fostering a more inclusive and equitable society.
Furthermore, Indian scriptures promote transparency, integrity, and ethical conduct. The Bhagavad Gita, for instance, emphasises the importance of right action and ethical decision-making. By imbibing these teachings, businesses can develop robust governance structures, promote transparency in reporting, and ensure accountability to all stakeholders. The lessons of self-reflection and self-regulation from Indian philosophies can guide companies towards responsible governance practices that uphold the highest ethical standards.
Moreover, the deep-rooted tradition of community-centric initiatives in Indian civilisation provides valuable insights for ESG frameworks. The concept of seva (selfless service) in Sikhism, for example, highlights the importance of engaging with and uplifting communities. By actively involving local communities and marginalised groups, businesses can cultivate a sense of shared prosperity and contribute to sustainable development at the grassroots level.
India’s rich historical legacy provides numerous examples of ESG practices ingrained in the daily lives of its people. Examples include sustainable agriculture and community welfare, practices that have evolved over centuries, shaping Indian society.
Agriculture
The traditional Indian farming system, known as “agroecology”, embodies ESG principles. Techniques such as mixed cropping, crop rotation, and organic farming were practised to maintain soil fertility and minimise environmental harm. The concept of ahimsa (non-violence) in Jainism further influenced agricultural practices, promoting compassion towards animals and discouraging harmful methods of farming.
Community welfare
Indian history showcases remarkable examples of community-centric initiatives promoting social welfare. The concept of sarvodaya (the welfare of all) espoused by Mahatma Gandhi emphasised social equity, self-sufficiency, and uplifting of marginalised communities. Through acts of charity, community service, and rural development, these practices contributed to a more inclusive society.
Indian ESG Ideology Today
India’s ESG ideology continues to resonate in the country’s contemporary landscape, where innovative efforts are being made to tackle pressing environmental and social challenges.
Renewable energy transition
India has emerged as a global leader in renewable energy adoption, prioritising sustainability and reducing reliance on fossil fuels. Ambitious targets for solar and wind energy generation demonstrate the nation’s commitment to combatting climate change.
Social entrepreneurship
India’s entrepreneurial spirit is driving the growth of social enterprises focused on sustainable development. These ventures address societal concerns such as the alleviation of poverty, the accessibility of healthcare, education, and the empowerment of women, aligning with ESG principles.
Corporate governance reforms
Recognising the significance of strong governance, India has implemented reforms to enhance corporate accountability and transparency. Measures such as mandatory CSR (corporate social responsibility) contributions have encouraged businesses to actively engage in social and environmental initiatives.
Criticism and challenges
While the ESG framework has gained widespread recognition and adoption, it is not without criticism. Critics argue that the lack of standardised metrics and reporting frameworks for ESG factors makes it difficult to compare and evaluate companies’ ESG performance. The absence of uniformity in measuring and reporting ESG data raises concerns about the reliability and accuracy of the information provided. A larger concern is about “greenwashing”, the practice of making misleading or exaggerated claims about a company’s environmental or social impact to portray a positive image without substantial actions.
Detractors also suggest that prioritising ESG factors may come at the expense of financial performance. They argue that strict adherence to ESG standards could restrict profitability and hinder economic growth, particularly in industries with higher environmental or social costs. Assessing ESG factors involves subjective judgement and interpretation, leading to potential bias in evaluating companies’ ESG performance. Critics contend that this subjectivity may result in inconsistencies and undermine the credibility of ESG assessments.
When considering potential learnings from Indian scriptures to address these criticisms and strengthen the ESG framework, several insights can be drawn:
Emphasis on integrity and truth
Indian scriptures emphasise the importance of truthfulness and integrity in one’s actions. Applying these values to ESG reporting and assessments can help address concerns about greenwashing and ensure that companies genuinely implement sustainable practices. Transparency and authenticity should be prioritised to build trust and credibility.
Holistic view of ESG
Indian philosophies promote a holistic view of the world, recognising the interconnectedness of all living beings and their environment. By incorporating this perspective into ESG evaluations, the focus can extend beyond specific metrics and indicators to consider the broader impact of a company’s actions on the environment, society, and governance.
Focus on long-term sustainability
Indian scriptures emphasise the concept of dharma, which includes responsible and ethical conduct for the greater good. Incorporating this principle into the ESG framework encourages companies to adopt a long-term perspective, prioritising sustainability and the well-being of all stakeholders over short-term financial gains.
Accountability and self-reflection
Indian scriptures encourage individuals to reflect on their actions and be accountable for their impact on society and the environment. Incorporating self-assessment and reflection into ESG practices can help address biases and subjectivity, fostering a culture of continuous improvement and responsible decision-making.
Community-centric approaches
Indian scriptures promote community welfare and inclusivity. ESG practices can draw inspiration from these principles by considering the interests and well-being of local communities and marginalised groups when evaluating a company’s social impact. Engaging with stakeholders and incorporating their perspectives can provide a more comprehensive understanding of a company’s ESG performance.
Indian historical lessons
From agriculture to community welfare, India’s history is replete with examples of ESG principles ingrained in daily living. This enduring legacy serves as an inspiration for the country’s present and future endeavours, as it strives to address contemporary challenges and create a more sustainable and equitable society.
To harness the Indian ESG ideology effectively, it is crucial for the Western world to understand and appreciate the wisdom embedded in the scriptures. The concept of interconnectedness, prevalent in Indian philosophies, urges everyone to recognise that our actions have far-reaching consequences for both the environment and society. By embracing this holistic worldview, we can foster a greater sense of responsibility and collective action to achieve sustainability goals. Moreover, India’s emphasis on dharma, the righteous path, reminds us of our ethical obligations towards the natural world and fellow human beings. It prompts us to question our patterns of consumption, prioritise social justice, and implement governance mechanisms that are transparent and accountable.
By delving into India’s historical practices, we find a treasure trove of sustainable living techniques that can be adapted and adopted in the modern world. Traditional agricultural methods, rooted in harmony with nature, can inform sustainable farming practices globally. The principles of ahimsa and sarvodaya can inspire acts of compassion, empathy, and community engagement, fostering a more inclusive and egalitarian society.
India’s own contemporary efforts in renewable energy transition, social entrepreneurship, and corporate governance reforms demonstrate the practical application of the teachings from its ancient scriptures. By harnessing renewable energy sources, fostering social enterprises, and embracing transparent governance mechanisms, India is paving the way for a sustainable and responsible future. These efforts demonstrate that the Indian ESG ideology is not confined to the past but remains a living, evolving philosophy that responds to the needs of the present.
Developed and Western nations can learn valuable lessons on ESG from the rich heritage of Indian civilisation. Here are some key insights:
1. Holistic approach
Indian civilisation emphasises a holistic approach that recognises the interconnectedness of all living beings and the environment. This perspective encourages developed nations to move beyond a narrow focus on economic growth and consider the long-term implications of their actions on the environment and society.
2. Sustainable living practices
India’s history showcases sustainable living practices that can inspire Western nations. Traditional agricultural techniques, such as organic farming, crop rotation, and water conservation methods, promote ecological balance and minimise harm to the environment. Adopting such practices can contribute to sustainable food production and environmental preservation.
3. Non-violence and compassion
Indian philosophies, particularly Jainism and Buddhism, emphasise the principles of non-violence (ahimsa) and compassion towards all living beings. Western nations can learn to integrate these principles into their ESG frameworks by prioritising animal welfare, reducing cruelty in industries like factory farming, and promoting ethical treatment of animals.
4. Community welfare and inclusivity
Indian civilisation has a long-standing tradition of community-centric initiatives and social welfare practices. Western nations can learn from India’s emphasis on inclusivity, the equitable distribution of resources, and uplifting marginalised communities. Implementing social programmes that address poverty, education, healthcare, and gender equality can contribute to a more socially sustainable society.
5. Spiritual ethos and mindfulness
Indian civilisation’s spiritual ethos promotes mindfulness and introspection. Western nations can integrate mindfulness practices into their corporate culture and decision-making processes. By fostering a greater sense of responsibility and awareness, businesses and individuals can make more informed choices that align with ESG principles.
6. Corporate social responsibility
India has made significant strides in mandating corporate social responsibility (CSR) contributions for businesses. Western nations can learn from India’s approach and strengthen their own CSR regulations to encourage companies to actively engage in social and environmental initiatives. This can help bridge the gap between profit-driven goals and societal well-being.
7. Renewable energy transition
India has emerged as a global leader in renewable energy adoption. Western nations can learn from India’s commitment to transitioning to cleaner energy sources and scaling up renewable infrastructure. Investing in renewable energy and reducing reliance on fossil fuels can mitigate climate change, promote sustainable development, and create new job opportunities.
8. Governance reforms
India’s ongoing governance reforms emphasise transparency, accountability, and stakeholder engagement. Western nations can draw lessons from India’s efforts to enhance corporate governance and regulatory frameworks. Strengthening governance mechanisms can improve trust, foster responsible business practices, and align with ESG principles.
9. Traditional knowledge and indigenous practices
India’s diverse cultural heritage and indigenous knowledge systems hold valuable insights for sustainable living. Western nations can learn from India’s indigenous practices, such as herbal medicine, traditional crafts, and eco-friendly construction techniques, to promote environmental conservation, preserve cultural diversity, and support local communities.
10. Embracing circular economy
India’s informal sector, characterised by activities like recycling, waste management, and upcycling showcases the potential of a circular economy. Western nations can learn from India’s resourceful practices, such as repurposing materials and reducing waste, to minimise environmental impact and create a more sustainable and resilient economy.
11. Grassroots movements and social activism
India has a history of vibrant grassroots movements and social activism that advocate for environmental and social justice. Western nations can draw inspiration from India’s civil society organisations, community-led initiatives, and citizen activism to address pressing ESG issues and foster greater public participation.
12. Wisdom of Gandhian philosophy
Mahatma Gandhi’s philosophy of simplicity, self-sufficiency, and sustainable living remains relevant today. Western nations can learn from Gandhi’s teachings on minimalism, conscious consumption, and decentralised economies to promote ESG principles, reduce materialistic pursuits, and enhance overall well-being.
13. Cultural heritage conservation
India’s efforts in preserving its cultural heritage, such as ancient temples, historical sites, and traditional art forms, demonstrate a commitment to social and environmental sustainability. Western nations can learn from India’s emphasis on heritage conservation as a means to promote cultural identity, tourism, and sustainable development.
14. Traditional water conservation
India’s traditional water harvesting and management systems, like stepwells and tanks, highlight innovative solutions for water scarcity. Western nations grappling with water stress can learn from these age-old techniques to conserve water resources, promote rainwater harvesting, and develop sustainable water management practices.
15. Mindful consumption and waste reduction
India’s cultural practices, such as frugality and conscious consumer choices, promote mindful consumption and waste reduction. Western nations can embrace these practices to reduce their ecological footprint, combat climate change, and encourage sustainable production and consumption patterns.
Furthermore, the diversity and pluralism of Indian scriptures present a wealth of perspectives and approaches to address the challenges of sustainability and responsible investing. With multiple philosophical traditions and spiritual paths, India offers a mosaic of insights that can enrich the global discourse on ESG and inspire innovative solutions. By incorporating the wisdom of Indian scriptures into ESG frameworks, businesses can move beyond compliance and embrace a more holistic approach to sustainable development. They can develop a deeper understanding of their role as custodians of the environment, promoters of social well-being, and stewards of ethical governance. This integration can foster a shift from short-term, profit-driven decision-making to long-term value creation and positive societal impact.
The globalisation of ESG frameworks calls for an inclusive approach that embraces the diversity of perspectives and experiences worldwide. However, it is important to acknowledge that the application of Indian scriptures in the context of ESG frameworks requires thoughtful interpretation and adaptation. While the underlying principles are timeless, their implementation must consider the nuances of the modern world and evolving societal challenges. It is crucial to strike a balance between preserving the essence of the teachings and adapting them to the ever-changing needs and complexities of the global business landscape.
About the Author
Dr. Srinath Sridharan – author, policy researcher, and corporate advisor. Strategic counsel for over 27 years, with leading corporates across diverse sectors. Mentors and coaches founders and CXOs. Works with boards and leaders in transformation efforts. Published author and media columnist. Works on the intersection of finance, digital, consumerism, urban studies, GEMZ (gig economy, Millennials, gen Z), ESG, green and blue economy. Blogs in https://srinath.blog Twitter: @ssmumbai
