The Sustainability Index, which will act as a reliable indicator towards ESG adoption in Indian enterprises, was launched as first step towards accelerating greening of MSME eco system in India.
Hyderabad (India CSR): Small Industries Development Bank of India (SIDBI) and Dun & Bradstreet, the global leading provider of business decisioning data and analytics, signed an MoU to create the SIDBI -D&B Sustainability Perception Index (SIDBI – D&B SPeX). The index will be presented as a quantitative measurement for policy makers and enablers to nudge businesses towards adopting an ESG framework in their business strategy over the coming years.
To be released every quarter, the survey will capture the sentiment of businesses on various business parameters that, when analysed at an aggregate level, will provide valuable insights on adoption of an ESG framework. SIDBI – D&B SPeX will also capture feedback on specific events and policies. Later it is planned to cover the sectoral and sub sectoral perceptions/aspirations & preparedness where the sectoral enterprises can track themselves in regard to improvement on ESG.
The survey will cover the views of the respondents about the preceding quarter and the outlook for the upcoming quarter. This will help analyse the changing sentiment over a six-month period. It will also capture information on critical events that have an impact on MSMEs.
The SIDBI-D&B Sustainability Perception Index was launched on 30th September 2022 in an event held in Coimbatore in the presence of Industries Commissioner and Director Industries and Commence, Government of Tamil Nadu, CMD of SIDBI, and MD of D&B. During the event attended by around 200 representatives of MSMEs, financial institutions, government departments, and other stakeholders, SIDBI and D&B also signed an MoU for developing and implementing the Index.
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ESG is gaining momentum in MSMEs
Sivasubramanian Ramann, Chairman and Managing Director of SIDBI in his remarks at the opening event noted that Sustainability disclosure and reporting play an important role to help MSMEs and investors to reduce risks across their supply chain and enable an efficient decision-making process, toward greening MSMEs as well as lending institutions.
He further added that understanding and awareness about ESG is gaining momentum in MSMEs and it is relevant in view of changing scenario related to climate aspects, ESG related compliances will emerge essential in coming days and a must compliance to remain competitive in global world.
Ramann said that the SIDBI- D&B SPeX will help to gauge the understanding of sustainability within the sector. He hoped that the newly launched Index will help the stakeholders and enable MSMEs to integrate the responsible good practices within their operation in the longer run and be part of national commitment on energy independence and carbon neutrality.
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Barometer of enterprise responsiveness
Sigy Thomas Vaidhyan, Industries Commissioner & Director of Industries & Commerce, GoTN welcomed SIDBI’s attention on Greening the finance for MSMEs. In her remark, in view of several programs being run by central & state government for MSMEs, she hoped that a new category of ‘Platinum’ should be created under ZED program beside already having bronze, gold, silver category. She hoped that sustainability index shall act as barometer of enterprise responsiveness. She mentioned that state values partnership with sidbi and offered all help from state govt in this regard.
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ESG has become a mainstay conversation in boardrooms
Speaking at the signing event held in Coimbatore, Tamil Nadu, Avinash Gupta, Managing Director & CEO – India, Dun & Bradstreet said “Across the globe, ESG has become a mainstay conversation in corporate boardrooms and, more importantly, in the allocation of capital. According to a Dun & Bradstreet survey highlighting top compliance and procurement challenges, 51% respondents said they needed more data to verify entities and 43% said it is difficult to identify application of ESG guidelines within the due diligence processes of the customer. Inefficient data usage and management are at the core of such challenges.”
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Processes to collect ESG data
“Many Indian companies are still dependent on manual processes to collect internal ESG data such as water consumption, carbon emission, workforce demographics, etc., and therefore these data resources are often housed across databases in different formats. Digitizing these processes and products will save time and money, expediting the speed of decision making. The Survey will track the awareness/sentiment of MSMEs in manufacturing and services (including trading) across India. It will cover nearly 250 MSMEs every quarter from the D&B/SIDBI database of MSMEs,” added Gupta.
An interesting approach during launch was to make MSME walk live through the questions through QR Code which will lead to index deriving its inferences. MSMEs took part in this with great interest. The D&B SIDBI Sustainability Perception Index will help:
- Assess the role and impact of internal drivers in organisations
- Assess the impact of regulations and government policy on environmental practices in the SME sector
- Assess how these factors impede the implementation of environmentally sustainable practices in the SME Sector
- Assess the role and impact of social factors – community, equal opportunity, diversity, and competition
- Analyse the implementation of sustainability practices across the value chain
- Measure the progress in awareness, willingness, and adoption of sustainability measures by SMEs
- Establish the Indian economy and markets (especially mid-market segment) towards a sustainable future, attracting sustainable capital and investments
- Provide valuable information to policy makers and other stakeholders to study the changes in economic environment that may occur due to policy changes or dynamic market conditions
- Enrich investor experience, create benchmark for other economies/markets towards sustainable businesses and business practices creating value for all stakeholders, including environment, society and government
(India CSR)
