Carbon Rules, Sustainability Norms Make ESG a Compliance Priority for Industry: Experts

• EU CBAM and India's CCTS transform ESG from voluntary disclosure to compliance priority, but 72% of Indian companies remain at early carbon readiness stage

• Without credible carbon data and traceable reporting, companies face compliance risks and competitive disadvantages, especially with poor supply chain emissions tracking

• Next 2-3 years critical for carbon measurement and supply chain transparency; early movers gain green finance access and export competitive advantage

Frameworks such as the EU's carbon tax and the proposed Carbon Credit Trading Scheme by India are rapidly transforming environmental, social and governance (ESG) practices from a voluntary disclosure exercise into a key business and compliance priority for industries, say experts.

Without credible carbon data systems and traceable reporting mechanisms, companies could face increasing compliance risks and competitive disadvantages in global markets, they said.

"The next phase of ESG will be driven by implementation readiness and data credibility," World of Circular Economy (WOCE) Founder and Director Anup Garg said.

He added that frameworks such as the European Union's Carbon Border Adjustment Mechanism (CBAM), India's Business Responsibility and Sustainability Reporting (BRSR) norms and the evolving Carbon Credit Trading Scheme (CCTS) are rapidly shifting ESG from a voluntary disclosure exercise to a business and compliance priority.

While sustainability intent is clearly rising, execution remains uneven, many organisations continue to struggle with structured emissions tracking, especially across supply chains and vendor ecosystems, he added.

Citing an anlysis, he said that 72 per cent of Indian companies remain at an early stage of carbon readiness despite increasing climate regulations and ESG compliance requirements.

WOCE is a Delhi-based sustainability and climate solutions platform, operating globally, offering services across ESG advisory, carbon accounting, emissions management and circular economy strategies.

Nidhi Mehra, Co-Founder, MyPlan8, said that for the next 2-3 years, carbon measurement, multi-framework reporting and supply chain transparency need to be prioritised by organisations, integrated into the core of the business and along the value chain.

"The early movers in sustainability will benefit from greater access to green finance and a sustainable competitive advantage in exporting," she said.