The Young Entrepreneur Awards (YEA) has always been an important initiative for BW Businessworld. The reasons for this were aplenty, fostering the young leaders who will create the big businesses of tomorrow, be a positive force for society at large and that these companies will play an important role as direct contributors to India’s economy and its holistic growth.
Startups and young entrepreneurs are building businesses that solve for present-day concerns, and this includes all things sustainability in a big way. Over the last few years, more and more companies that have taken the sustainable route, have begun with a purpose or have identified and solved gaps in health, food, jobs and the like have been identified among YEA winners. These are the companies that everyone believes will also succeed because their impact is beyond their businesses.
Many young (and established) companies have understood the importance of environment, social and governance (ESG) in their business decisions and structures. People are taking steps to embrace this also because governments are making some of the connected mandates compulsory. India’s regulatory schemes such as the introduction of business responsibility and sustainability reporting (BRSR) by Sebi in 2021 can be counted among these. This sustainability reporting format is based on the nine principles of the National Guidelines for Responsible Business Conduct (NGRBC) introduced by Sebi.
In spirit, BRSR aims to align various regulatory frameworks and compliance requirements in terms of ESG parameters to be followed by companies operating within India. This is to ensure responsible conduct of business and transparent disclosure of the non-financial parameters and sustainability goals of the company.
Startups have the advantage that they are born into some of these realities that older companies are looking to adapt to now. They can look for transparency and get it right at the beginning. The catch is ESG requires commitment and can be perceived to take away from business growth focus. As the eco-system becomes more challenging, some startups may prioritise survival, and therefore profitability, over the likes of ESG. This would be short-termed and unwise.
ESG can serve as a blueprint of sorts for a business to create a good framework. A net zero target at the beginning can guide decisions in building a natural resource footprint. Because ‘social’ asks for an inclusive culture, gender equity and even prioritising areas such as mental health, it will ensure the right culture-building in an organisation from the word go. The focus on the ‘governance’ aspect will require startups to have diverse boards and create strong data security rules. The former will assist in ensuring the right decision-making and guidance and the latter will be valued more by consumers in the time to come.
Startups that will have a strong and continued focus on their ESG strategies are more likely to survive the uncertainties of the time to come. It will help them grow in a future-fit way and remain scalable.
