Budget 2022 must be focused on Environmental, Social and Governance issues, say experts

New Delhi:  As the India made its commitments at COP26 conference to achieve net-zero emissions by 2070, it is important that the upcoming budget will be focus on Environmental, social and governance (ESG) issue by  providing fiscal or tax incentives for corporate demonstrating greater compliance to corporate social responsibility (CSR) rules to boost the ESG agenda in corporate, says PwC.

Indian businesses are undergoing significant changes amidst externalities such as climate change, finite resource availability, technology disruptions, emerging linked ecosystems and evolving stakeholder expectations.

According to PwC, the budget should incorporate ESG parameters when structuring incentives, allocating resources and in procurement processes across various sectors and institutions. 

 “Stimulate an ecosystem promoting research and innovation, through additional budgetary allocation, viability-based funding and institutional capacity building for cleantech.

 This includes carbon capture, utilisation and storage (CCUs), hydrogen, transportation, grid flexibility, afforestation and nature-based solutions” it said.

As per PwC India the budget should help in creating an enabling sustainable financial ecosystem by initiating relevant policies and institutional and regulatory frameworks for attracting and allocating capital for meeting the SDGs. 

It also advocating the establishing a voluntary carbon market in India will also enable efficient fund flows towards achieving India’s climate ambitions.

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On expectations from the Budget, Vikramjiet Roy, Managing Director of Maccaferri Environmental Solutions Pvt. Ltd (MESPL) in India said it should lead India towards becoming a green economy in line with the government’s commitment towards net-zero.

“For this, the Government will have to pave the way for creating an enabling atmosphere for corporates to start budgeting towards ESG. Like in the case of CSR, ESG investments should also be rewarded,” Roy said.

Jaya Vaidhyanathan, CEO, BCT Digital said that it is crucial that Union Budget 2022-23 pays due consideration to ESG and the implementation of requisite practices, to enable sustainable growth of the country

India has made the following commitments at the Conference of the Parties (COP26):

To raise the country’s non-fossil fuel-based energy capacity to 500 GW by 2030.  To  meet 50% of the country’s energy requirements using renewable energy sources by 2030

To reduce the total projected carbon emission by 1 billion tonnes between now and 2030.  To reduce 45% of the carbon intensity by 2030. To become carbon neutral and achieve net-zero emissions by 2070.

“Achieving the aforesaid objectives is conditional on availability and access to enabling technology and financing (estimated at US$ 1 trillion) at the necessary speed and scale” said PwC India.