Empowering Women through ESG: A Catalyst for Sustainable Progress in India (2024)

ESG, which stands for Environmental, Social, and Governance, has increasingly become a crucial framework for evaluating the sustainability and societal impact of businesses. Within the "S" or social aspect of ESG, women empowerment is a significant area of focus. On this International Women’s Day let see how ESG and women empowerment intersect:

Gender Diversity on Boards and Leadership: Companies with strong ESG profiles often prioritize gender diversity in their leadership and boardrooms. Research shows that diverse leadership teams, including more women, tend to lead to better decision-making and performance. This effort is supported by regulatory guidelines such as the Securities and Exchange Board of India (SEBI) mandate requiring listed companies to have at least one woman director on their boards [SEBI(LODR)Regulations, 2015-Regulation 17(1)].

Equal Pay and Fair Labour Practices: According to the World Inequality Report, 2022, “gender inequalities in India are very high.” The female:male labour income share ratio is 18%:82%. The principle of gender equality is part of the Constitution of India (Article 15), which guarantees gender equality and empowers the State to formulate affirmative action in favour of women. Companies' policies and practices related to equal pay and fair treatment of female employees form a very important part of ESG. Companies that ensure pay equity and provide opportunities for women's advancement are viewed more favourably from an ESG perspective. However, a lot more needs to be done to reduce these inequalities.

Support for Women-Owned Businesses: Supporting businesses that prioritize working with women-owned enterprises, either as suppliers, partners, or through investment in such businesses directly. NITI Aayog’s Women Entrepreneurship Platform (WEP), Government schemes for women entrepreneurs are facilitating the journey of women entrepreneurs in India. Some Indian companies are actively supporting women entrepreneurship by providing access to capital, mentorship, and market opportunities. Additionally, corporate procurement policies increasingly focus on engaging women-owned businesses as suppliers, promoting economic empowerment at grassroots levels. Incubation support for women-led start-ups and micro enterprises is also on the rise.

Gender-Inclusive Policies and Practices: ESG considerations extend to evaluating companies' policies and practices related to work-life balance, parental leave, childcare support, and other factors that impact women's ability to participate fully in the workforce. The government has implemented progressive maternity leave policies, including extending the duration of paid maternity leave to 26 weeks under the Maternity Benefit (Amendment) Act, 2017. Some companies have also introduced paternity leave policies to support working fathers in sharing caregiving responsibilities

Corporate Social Responsibility (CSR) Initiatives: Under The Companies Act, 2013, certain companies are mandated to spend a portion of their profits on CSR activities. Many organizations include women empowerment as a key focus area within their CSR initiatives, investing in projects related to education, healthcare, livelihood opportunities, and women's rights.

Community Engagement and Social Impact: ESG assesses how companies engage with and impact the communities in which they operate. This includes initiatives that support women's empowerment, such as education and skill-building programs, access to healthcare, and entrepreneurship opportunities. Many organizations in India are implementing skill development and training programs specifically targeted at women to enhance their employability and career advancement opportunities. Women empowerment also gets a focus under the Skill India Mission. These initiatives aim to bridge the gender gap in skills and empower women to succeed in diverse fields.

Advocacy and Policy Engagement: Companies with strong ESG profiles may engage in advocacy and policy initiatives aimed at promoting gender equality and women's rights at local, national, and global levels. This includes supporting legislative reforms, collaborating with civil society organizations, and participating in industry-wide initiatives to address gender-based challenges and advance women's empowerment agendas.

These examples highlight the diverse range of ESG policies and initiatives aimed at promoting women empowerment across various sectors and industries. By integrating these practices into their operations, companies contribute to building more inclusive and sustainable business ecosystems.