Emerging regulatory frameworks such as the European Union’s carbon tax regime and India’s proposed Carbon Credit Trading Scheme (CCTS) are shifting environmental, social and governance (ESG) practices from a voluntary reporting exercise to a major compliance and business priority for companies, industry experts said.They warn that companies that lack reliable carbon data systems and traceable reporting mechanisms could face increased compliance risks and lose competitiveness in global markets.“The next phase of ESG will be driven by readiness to implement and credibility of data,” said Anup Garg, founder and director of World of Circular Economy (WOCE), as quoted by PTI.Frameworks such as the EU’s Carbon Border Adjustment Mechanism (CBAM), India’s Business Responsibility and Sustainability Reporting (BRSR) standards and the evolving Carbon Credit Trading Scheme (CCTS) are rapidly transforming ESG from a voluntary disclosure exercise to a business and compliance priority, he said.According to Garg, while sustainability commitments are increasing across industries, implementation remains uneven, with many organizations continuing to face challenges in systematically tracking emissions, particularly across supply chains and vendor ecosystems.Citing an analysis, he said 72 per cent of Indian companies are still 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 in environmental, social and governance (ESG) consulting, carbon accounting, emissions management and circular economy strategies.Nidhi Mehra, co-founder of MyPlan8, said organizations need to prioritize carbon measurement, multi-framework reporting and supply chain transparency over the next two-three years and integrate them into core business processes and value chains.“First movers in sustainability will benefit from increased access to green finance and a sustainable competitive advantage in exports,” she said, according to PTI.The comments come as companies face increasing pressure to align operations with emerging climate regulations and sustainability disclosure standards across domestic and international markets.