IIMA to develop research based Data Product for ESG Impact Measurement in India

Indian government has set ambitious goals in terms of ESG and is rolling out several initiatives that are focused on climate change, promoting clean energy to achieve sustainable development.

The Arun Duggal Centre for ESG Research (CESGR) at the Indian Institute of Management Ahmedabad (IIMA) has initiated a research project aimed at developing a first-of-its-kind data product that can help in ESG impact assessment in the country, with Dun & Bradstreet.

The Indian government has set ambitious goals in terms of ESG and is rolling out several initiatives that are focused on climate change, promoting clean energy to achieve sustainable development. The Indian capital market regulator, SEBI, has directed the top 1,000 listed companies (by market capitalization) to make ESG disclosures as per the Business Responsibility and Sustainability Reporting (BRSR) from FY 2022 - 23 onwards. In light of these mandates, the collaboration will contribute towards meeting the enhanced ESG data requirements of the Indian companies.

This collaboration will leverage the research capabilities of CESGR, and the extensive database provided by D&B to create a data product that will address data gaps to enable accurate assessment of ESG efficiency. The product aims to facilitate practitioners, investors, and policymakers in creating custom ESG metrics to further evaluate their performance and strategise their future actions.

Congratulating CESGR and D&B on the association, Professor Bharat Bhasker, Director, IIMA said, "With ESG regulations becoming more stringent, the need for an efficient data infrastructure in the country has become critical. Reliable and accurate data is absolutely essential for the industry in nascent stages trying to adhere to the multiple ESG reporting frameworks in existence today. I congratulate the Centre and D&B for their foresightedness and taking the lead on this front. I believe this initiative is a step in the right direction, and I am confident that this collaboration will come up with outcomes that will offer effective solutions to ESG related challenges and allow all stakeholders to make informed decisions."

One of the core principles of this project is to achieve two-way materiality – an aspect that has been stressed in the European Union’s new Corporate Sustainability Reporting Directive (CSRD) for reporting ESG standards.

Elaborating on this, Professor Anish Sugathan, Co-Chairperson, Arun Duggal CESGR said, “Two-way materiality requires assessment of the impact of ESG factors on a business as well as externalities caused by the company’s ESG activities. We intend to leverage our research capabilities to develop a framework that aligns with the principle of two-way materiality and help businesses stay ahead of the curve and further fuel the growth of the economy, at large. It can also be used by investors to rebalance their portfolio of investments and in general to understand the evaluation of the ESG ecosystem in the country.”

Avinash Gupta, Managing Director & CEO – India, Dun & Bradstreet said, “Across the globe, ESG has become a mainstay of conversation in corporate boardrooms and, more importantly, in the allocation of capital. According to a recent Dun & Bradstreet survey highlighting top compliance and procurement challenges, 51% respondents said that they need more data to verify entities and 43% said that it is difficult to identify application of ESG guidelines within the due diligence process of the customer. Inefficient data usage and management are at the core of such challenges. As environmental, social and governance metrics are becoming mainstream with the emergence of more and better data, D&B is also contributing by providing meaningful ESG data with comprehensive coverage of sustainability performance data on over 73 million public and private businesses across more than 174 countries and territories.”

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