Many companies listed under the Companies Act should set aside part of their profits to further CSR activities that respond to some SDG targets, like quality education (SDG 4) and clean water (SDG 6)

Byline: Vandana Khanna, Professor & Program Coordinator PGDM- Retail Management, K J Somaiya Institute of Management

The United Nations’ Sustainable Development Goals are an overarching plan to achieve sustainable and inclusive growth worldwide by 2030. It becomes an opportunity for businesses to support societal goals through innovation, growth, or resilience. Firms in India are gradually integrating SDGs into core strategies due to the demand of stakeholders for sustainable practice and the cooperation of the Indian government. When global challenges become more challenging to be addressed, the United Nations’ Sustainable Development Goals (SDGs) give directions and push businesses to take up sustainable and inclusive growth.

The United Nations started the 2030 Agenda for Sustainable Development in 2015, with 17 SDGs addressing core issues that range from poverty and climate action to placing culture at the centre of economic development. These goals are a roadmap to achieving a sustainable world, including clean energy, quality education, and responsible consumption and production. SDGs orient businesses for long-term resilience and growth. Companies align to SDGs by spurring innovation, new markets, brand equity, and consumer and investor demand for sustainability. Investors and consumers increasingly favour businesses that are committed to sustainable practices, a trend observed in India, too, where environmental and social impact have become crucial for branding reputation.

Issues on economic, environmental, and social fronts make the relevance of SDGs high in India. Indian companies get a unique opportunity to drive impact in solutions such as eradication of poverty, health improvement, and resilience on climate change. Policies and initiatives made by the government through the National Action Plan on Climate Change (NAPCC) and the CSR mandate make them a stepping stone for Indian companies to work on SDGs by making sustainability a core business imperative.

Indian regulatory frameworks have evolved to support sustainable practices. Many companies listed under the Companies Act should set aside part of their profits to further CSR activities that respond to some SDG targets, like quality education (SDG 4) and clean water (SDG 6). Similarly, corporate governance demands responsibility through ethical and sustainable practices under the National Guidelines for Responsible Business Conduct by the Ministry of Corporate Affairs.

SDGs empower Indian companies to gain market entry into new markets while formulating new solutions to existing real-life problems. In the context of SDG 7, Affordable and Clean Energy, companies like Tata Power and Adani Green Energy are emerging leaders in the solution for renewable energy, leading to business opportunities and energy security for India. Integrating SDGs opens up access towards sustainable financing options such as green bonds and impact investments. India is gradually developing a green bond market facilitated by the Indian Renewable Energy Development Agency and Yes Bank. These organizations support environment-oriented projects, allowing companies to fund clean energy initiatives under SDG 13—Climate Action.

Increasing awareness among Indian consumers and businesses that commit to fulfilling SDGs can enhance their brand reputation. Companies like Hindustan Unilever and ITC have made sustainability their core value by adopting responsible production and consumption practices (SDG 12), helping them earn more consumer trust.

Organizations need to prioritize sustainability goals to integrate SDGs as core business strategies. Companies need to identify which of the SDGs is most aligned with their business values, model, and industry focus. For instance, a healthcare company will likely focus more on SDG 3, good health and well-being, while a technology company might focus on SDG 9, industry, innovation, and infrastructure. Dr. Reddy’s Laboratories, one of the topmost pharmaceutical companies, supports SDG 3 by developing affordable healthcare products for deprived communities. It improves health conditions by making medicines available while developing brand value as a responsible social player.

Embedding SDGs at the governance level is very important. It includes dedicated teams and committees tracking progress, formulating measurable targets, and integrating sustainability into corporate governance frameworks. The Mahindra Group includes sustainability as a strategic focus area by integrating SDG goals within the corporate governance structure as an ESG committee. This integrates sustainability goals with financial goals and grants equal importance to the same.

Companies can also adapt their operations and supply chains to meet SDG targets. Sustainable sourcing and waste reduction contribute to SDG 12, and ethical labour practices support decent work and economic growth (SDG 8). For example, Fabindia sources the products from rural artisans, providing them with fair wages and achieving SDG 8. This contributes to the economic development of rural economies and also promotes sustainable handcrafted products by attracting conscious consumers.

Some key challenges for integrating SDGs in the Indian business world are resource constraints, lack of expertise and technology, and difficulty in measuring the sustainability impact. Many companies, primarily SMEs in India, face financial constraints, which makes it difficult to adopt sustainable practices for viable transformation. Investment in SDG practices often calls for technical know-how and advanced technology facilities, which small business enterprises lack. Tracking SDG progress is complex, and its impacts on the environment as well as society are very tough to measure.

Collaborations between businesses, NGOs, and government institutions can solve some of the challenges of public-private partnerships. They can pool resources and share expertise. Organizations may also partner with the United Nations Development Programme (UNDP) in executing projects aligned with the SDGs. Policies of the Indian government, such as subsidies for renewable energy projects, would help those companies that face financial constraints. Innovative financing models like green bonds and impact investments provide alternative financing sources for SDG initiatives.

Measuring and reporting SDG progress is essential to bring transparency, attract investors, and influence consumers. Transparent reporting highlights accountability and a sense of responsibility toward sustainable growth. Global Reporting Initiative (GRI) standards should be used to report sustainable performances. It makes the stakeholders understand the impact of SDGs. Tolls like SDG Compass and Integrated Reporting (IR) guide businesses in setting, measuring, and reporting SDG-aligned targets.

Many Indian firms, like Wipro, Tata Group, Infosys, Hindustan Unilever, ITC, Mahindra, etc., have integrated SDGs across multiple sectors by contributing and focusing on affordable energy, water conservation, education, recycling initiatives, waste management, carbon neutrality, green building projects, renewable energy solutions, sustainable sourcing, water stewardship, and community development.

Integrating SDGs into business strategy is not only a moral imperative in bringing about innovation, resilience, and competitive advantage, but it is more than that. For Indian businesses, SDG alignment can be instrumental in bringing sustainable growth and makes them leaders in social as well as environmental responsibility. Solutions such as partnerships, policy support, and financing can overcome many challenges. As Indian companies embed SDGs into their strategies, they will play a more meaningful and crucial role in supporting India’s march toward a sustainable future and contributing to the global agenda for a great new world for all.

(Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.)