Corporate Sustainability in 2026: What Indian Businesses Must Do to Stay ESG-Compliant
- sanjan ganguly
- Jan 16
- 8 min read
Updated: 4 hours ago
Table Of contents
Corporate sustainability in India is entering a decisive phase. What was once viewed as a voluntary branding effort has now become a mandatory, data-driven business reality. By 2026, Indian companies will be evaluated not just on profits, but on how responsibly they operate, how transparently they report, and how seriously they address environmental, social, and governance risks.
SEBI has made its intent clear. ESG disclosures are set to expand to nearly 1,000 listed companies, while global investors managing trillions of dollars are already favouring ESG-aligned businesses. Add rising climate risks, tighter supply-chain scrutiny, and stronger assurance expectations to the mix, and the direction is unmistakable. ESG compliance in India is no longer optional or future-facing.
This guide explains what corporate sustainability in 2026 actually looks like, outlines the latest ESG regulations India has rolled out, and, most importantly, clarifies what Indian businesses must do to stay compliant, trusted, and competitive in a fast-changing business landscape.
What Corporate Sustainability in India Means in 2026
Corporate sustainability in India is no longer limited to publishing a glossy sustainability report once a year and calling it quits. By 2026, it’s all about the degree to which ESG has been embedded in day-to-day business decisions from boardroom discussions to on-the-ground execution.
At its core, corporate sustainability still has three pillars.
Environmental responsibility has also come to mean, among other things, looking for proof of compliance with environmental regulations, low emissions and high energy efficiency, low water usage and how prepared the company is for climate-related risks.
Social responsibility is no longer confined to what you do in your own operations; rather, it’s now about real employee well-being, substantive community impact and ethical conduct up and down the supply chain.
Governance has become more sophisticated, and the standards around transparency, active board oversight, ethical behavior and accountability have escalated.
What’s truly changed is the regulatory muscle behind these pillars. Under India’s evolving ESG framework, sustainability performance is no longer measured by intent or narrative. It’s tracked through hard data, subjected to third-party verification, and increasingly tied to corporate governance and risk management systems.
Put simply, sustainability is no longer a side initiative or a marketing story. In 2026, it’s part of how Indian companies are expected to run their businesses, consistently, transparently, and responsibly.
Why ESG Compliance in India Is Now a Business Necessity
Many Indian companies still ask a familiar question: why should ESG matter when the core business is performing well?
In 2026, the answer is straightforward. Because regulators, investors, lenders, and even customers now expect it as a basic standard of doing business.
ESG compliance in India matters more than ever for a few very practical reasons. Regulatory pressure has increased sharply, with SEBI’s BRSR Core framework making structured ESG reporting mandatory for large listed companies, backed by clearer metrics and accountability. Access to capital is also changing fast. Banks, private equity funds, and institutional investors are increasingly linking lending terms and investment decisions to ESG performance, not just financial returns.
Risk management is another major driver. Climate change, water stress, energy volatility, and supply-chain disruptions are no longer abstract risks. They translate directly into operational losses, insurance costs, and business continuity issues. On top of this, global competitiveness is at stake. Indian exporters are being pushed to align with international sustainability norms, including mechanisms like CBAM, to remain viable in global markets.
The reality is simple. Companies that treat ESG as optional today risk regulatory penalties, loss of investor trust, and shrinking access to global capital and markets tomorrow.
ESG Regulations India: What Changed and What’s Coming
India’s ESG regulations have evolved quickly, and the shift is very clear. What started as voluntary guidance has now turned into a firm compliance framework, with SEBI steadily pushing sustainability reporting into the mainstream of corporate governance.
SEBI’s BRSR Core Framework Explained
The Business Responsibility and Sustainability Reporting framework now sits at the centre of ESG reporting in India. It moves companies away from broad statements and toward measurable, decision-useful data that regulators and investors can actually rely on.
Key milestones to know:
FY 2025–26
BRSR Core reporting becomes mandatory for the top 250 listed companies by market capitalisation. Companies are also required to disclose ESG data across their value chain, covering key suppliers and customers that account for 2% or more of purchases or sales.
FY 2026–27
Third-party assurance becomes compulsory for BRSR Core disclosures, bringing the same level of scrutiny that financial statements already face. The reporting requirement expands to include the top 500 listed companies.
Beyond FY 2026–27
ESG reporting will extend to 1,000 listed companies, firmly establishing sustainability disclosure as a standard part of corporate governance in India rather than a niche exercise.
This regulatory progression has reshaped ESG compliance in India into a system that is structured, auditable, and enforceable. Sustainability is no longer judged by intent or narrative. It is measured, verified, and expected to stand up to the same level of accountability as any other core business disclosure.
CSR vs ESG: Understanding the Difference in India
A lot of Indian businesses still get confused between CSR compliance and ESG compliance. They might seem similar at first glance, but they are quite different, and mixing them up can create gaps in a company’s sustainability approach.
Under the Companies Act, 2013, businesses that cross certain financial thresholds must spend 2 percent of their average net profits on CSR activities. This is mostly project-based; funds are allocated to things like education, healthcare, rural development, or environmental initiatives. The focus here is on how the money is spent.
ESG, by contrast, takes a broader perspective on how a company actually conducts its business. It looks at day-to-day operations, decisions made by managers, risk management, staff wellbeing, supply-chain working practices, response to climate change and way the company is governed. ESG isn’t just signing up to write checks; it’s also about creating accountability, embedding responsible practices and fundamentally changing how business is done at its roots.
After 2026, Indian companies will have to balance both equally. CSR remains a compliance obligation and will need to be complied with, whereas ESG evolves into a strategic approach that builds investor confidence, regulatory acceptance and long-term business sustainability. The companies that prevail will be those that treat both as indispensable elements of operating a responsible, future-ready business.
Indian Companies Leading Corporate Sustainability in 2026
By 2026, corporate sustainability in India is not about just producing glossy reports; it’s about taking real action on the ground, measuring impact and leading in a way that’s good for business as well as society. Some Indian companies are already leading the way.
Tata Group has been an early mover on all things ESG. There’s sustainability at the board level, embedded; the group publishes comprehensive climate and social impact data. Their holistic approach towards the management of environmental, social and governance areas has led to a ranking first regarding perception on sustainable companies in our country and the Asia-Pacific.
Mahindra & Mahindra has taken ESG beyond reporting. Climate risks are incorporated into this financial planning and those of supply-chain decisions, and the company is protected against climate-related damages, it is resilient in the face of such threats, while also reducing its impact on the environment. That they appear on global benchmarks like the Dow Jones Sustainability Index demonstrates how seriously they take their corporate responsibility.
ITC is another standout. Already an ESG stand-out, ITC emphasises water stewardship, waste management and sustainable sourcing. Their model isn’t merely one of compliance, but one that builds measurable and positive impacts across communities and the environment.
These organisations consider sustainability as integral to business, and not just a compliance issue. The payoff is obvious: more entrenched investor confidence, stronger brand trust and enduring resilience that differentiates them in India’s rapidly changing corporate landscape.
Building a Strong Corporate ESG Strategy India Can Sustain
A truly future-fit ESG strategy in India is about much more than writing policies or making statements. It’s about installing systems, assigning responsibility, and producing results that can be measured, verified and acted upon.
1. Embed ESG in Governance
Sustainability is not just one department. Boards should formally approve ESG goals, track performance on a regular basis and hold management accountable. Cross-functional boards touching on finance, operations, legal and sustainability also make certain that high-ranking ESG priorities aren’t compartmentalised by the corporation.
2. Invest in Robust ESG Data Systems
Manual spreadsheets no longer cut it. Businesses are now using automated systems to track energy usage and emissions for Scope 1, 2, and 3, alongside the automated systems which track water usage, waste, and social metrics, as well as record digital progress. With solid data, it is not about the reporting, but it is about the credibility and trust the data can provide to the investors, regulators, and other stakeholders.
3. Prepare for Third-Party Assurance
With the ESG assurance becoming standard, the more prepared the data is, the more the compliance gaps can be smoothed over. Getting assessors integrated into the processes early means losing less time improving alignment of the report to the standards and more time ensuring access for the users.
4. Manage Climate Risks Proactively
Climate risk should no longer be managed as a project external to the environment. Evaluations can be rolled into enterprise risk management, capital planning and long-term strategy to make sure the business is prepared for severe weather events, supply chain disruptions and regulatory changes.
5. Strengthen Supply-Chain Transparency
Suppliers and vendors are increasingly a factor in the ESG equation. By helping them in aggregating ESG data and, wherever necessary, guiding them in reporting, we facilitate the process of their value chain reporting and save companies from surprises when it comes to regulatory requirements.
This approach transforms ESG from a compliance requirement to a business advantage, one that creates resiliency, earns the trust of stakeholders and positions organisations for long-term growth amidst an ever-changing regulatory and investment environment.
Common ESG Compliance Challenges for Indian Companies
Even with growing awareness, many Indian companies face practical hurdles:
Inconsistent data across departments – ESG metrics often live in silos, making reliable reporting difficult.
Limited supplier ESG readiness – Vendors may struggle to provide the necessary data for value-chain disclosures.
Unclear ownership of responsibilities – Without clear accountability, ESG initiatives lose momentum.
Underestimating assurance requirements – Third-party verification is now mandatory, and delays can be costly.
The solution is simple: plan early, use integrated digital systems, and secure leadership support. ESG is a journey, and the sooner companies start, the smoother and more cost-effective it becomes.
Conclusion: ESG Is No Longer Optional, It’s Strategic
Corporate sustainability in India has entered a decisive phase. By 2026, ESG compliance will be a key factor in determining which companies attract investors, manage risks effectively, and stay competitive in global markets.
Companies that treat ESG as a strategic priority, rather than just a regulatory box to tick, will gain a real advantage. They’ll be better positioned to grow sustainably, access green finance, and earn long-term trust from stakeholders.
The message is clear: the time to act is now. With a well-planned ESG strategy, Indian businesses can move beyond compliance and emerge as leaders in responsible, future-ready corporate practices.
Turn ESG compliance into a strategic advantage- connect with Greenmyna today!
Frequently Asked Questions (FAQs)
What is corporate sustainability in India?
Corporate sustainability in India refers to integrating environmental, social, and governance practices into core business operations to meet regulatory, investor, and societal expectations.
Which ESG regulations apply in India in 2026?
SEBI’s BRSR Core framework and the Companies Act CSR mandate form the primary ESG regulations India follows.
Who needs ESG compliance in India?
Top listed companies, expanding to 1,000 firms by 2027, must comply. However, unlisted companies are increasingly affected by supply-chain requirements.
How can Indian companies improve ESG reporting?
By adopting digital ESG tools, ensuring data accuracy, engaging suppliers, and preparing for third-party assurance.
Is CSR enough for ESG compliance in India?
No. CSR is only one part. ESG compliance requires operational, environmental, social, and governance integration across the business.
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