Page 35 - Banking Finance July 2023
P. 35

ARTICLE







         ESG AND ITS





         IMPACT ON





         BANKING





         SECTOR













          Introduction                                        emissions or air/water pollution). Social measures examine
          The  term 'ESG', which  stands  for all  environmental,  how it manages relationships with employees, suppliers,
          socioeconomic, and governance concerns, is consequently  customers, and  the communities  where it  operates.
          gaining traction in the business and corporate sector. ESG  Governance deals  with  a  company's leadership, audits,
          is about pursuing responsible and ethical business practices  internal controls, and shareholder rights.
          with attention to social and environmental parity along with
          economic development. ESG is fast becoming synonymous  In India's corporate ecosystem, there have been two major
          with sustainability. Investors and regulators have also  developments  in  the  context  of  Sustainability/ESG
          amplified their analysis in evaluating businesses that employ  Framework. The first was Corporate Social Responsibility
          sustainable business practises and the ESG framework.  (CSR) reporting and spending being made mandatory under
                                                              the Companies Act, 2013. The second is the Securities and
          ESG is a set of standards for a company's operations that  Exchange Board  of  India  (SEBI) making  the Business
          socially conscious  investors  use  to  choose  potential  Responsibility and Sustainability Report (BRSR) mandatory
          investments. Environmental criteria consider how the  for  the  top  1,000  listed  companies  by  market
          operations of a company impact  the environment (e.g.,  capitalisation.?This is a step forward in widespread adoption
                                                              of  ESG framework in corporate  decision-making  and
                                                              business practices.
                               About the author
                                                              Environmental, Social, and Governance (ESG) considerations
                         Anish Shrimali
                                                              have become increasingly important for the banking sector
                         Senior Manager- Research Officer
                         Union Bank of India                  in recent years. The banking industry has a significant
                         Union  Learning  Academy-Digital     impact on the economy and society, and as a result, banks
                         Transformation,  Mumbai
                                                              have a responsibility to manage their operations in a socially
            32 | 2023 | JULY                                                               | BANKING FINANCE
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