Emerging regulatory frameworks such as the European Union's carbon tax regime and India's proposed Carbon Credit Trading Scheme (CCTS) are transforming environmental, social and governance (ESG) practices from a voluntary reporting exercise into a key compliance and business priority for companies, according to industry experts.
Rising Compliance Risks
Experts cautioned that companies lacking credible carbon data systems and traceable reporting mechanisms could face rising compliance risks and lose competitiveness in global markets. Anup Garg, Founder and Director of the World of Circular Economy (WOCE), stated that the next phase of ESG will be driven by implementation readiness and data credibility.
Garg noted 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 CCTS are rapidly shifting ESG from a voluntary disclosure exercise to a business and compliance priority. While sustainability commitments are increasing across industries, implementation remains uneven, with many organizations continuing to face challenges in structured emissions tracking, particularly across supply chains and vendor ecosystems.
Carbon Readiness Gap
Citing an analysis, Garg said 72 per cent of Indian companies remain at an early stage of carbon readiness despite growing climate regulations and ESG compliance requirements. WOCE, a Delhi-based sustainability and climate solutions platform, operates globally and provides services in ESG advisory, carbon accounting, emissions management, and circular economy strategies.
Nidhi Mehra, Co-Founder of MyPlan8, emphasized that organizations need to prioritize carbon measurement, multi-framework reporting, and supply chain transparency over the next two to three years, integrating them into core business operations and value chains. She noted that early movers in sustainability will benefit from greater access to green finance and a sustainable competitive advantage in exporting.
Market Pressure Intensifies
These comments come as businesses face increasing pressure to align operations with emerging climate regulations and sustainability disclosure standards across domestic and international markets. The shift underscores the growing importance of ESG compliance for maintaining global competitiveness.
