The future of ESG in 2025: a world divided

The future of ESG in 2025 feels split. While the West wrestles with political backlash and “anti-woke” culture wars, a quieter, more strategic story is unfolding across Asia. And at the center of it is India — where ESG isn't fading into controversy, but rising as a credible, competitive, and locally-rooted business lever.

If you're a corporate leader, startup founder, policymaker, or just someone navigating this changing terrain, the big question isn't whether ESG matters. It’s how to localise it, operationalise it, and future-proof it in a fragmented global landscape.

So, let’s zoom in — not on Wall Street or Davos — but on Mumbai, Bengaluru, and Jakarta, where the ESG momentum is being quietly but powerfully redefined.

ESG adoption in India by 2025, highlighting SEBI regulations, startup innovations, and tech-driven sustainability.

Two Worlds of ESG: Politicised vs Operationalised

In the West, particularly the U.S., ESG is now a political football. With the rise of anti-ESG funds, regulatory pushbacks, and debates over “woke capitalism,” the conversation has taken a sharp turn. ESG investing fell off a cliff in some quarters in 2024, and even BlackRock, once an ESG poster child — started hedging its rhetoric.

But in Asia? A different game entirely.

Here, ESG isn’t caught in a cultural tug-of-war. It’s increasingly viewed as good governance, risk management, and long-term value creation — not just moral posturing.

Asia’s private capital, especially sovereign wealth funds and family offices, are weaving sustainability into their investment thesis. No headlines. No outrage. Just intent.

India, in particular, isn’t waiting for the West to course-correct. It’s moving forward — fast.

🇮🇳 India’s ESG Backbone: BRSR, SEBI & G20 Momentum

India’s ESG journey isn’t a borrowed playbook — it’s becoming a regulatory framework with teeth.

🔹 BRSR: India's Answer to ESG Disclosure

The Business Responsibility and Sustainability Reporting (BRSR) framework, mandated by SEBI, is now required for the top 1,000 listed companies. But here’s the kicker — many smaller firms are voluntarily following it too. Why? Because it’s not just a compliance headache — it’s turning into a trust-building tool with investors.

BRSR Core, rolled out in 2023, now adds even more rigour, focusing on assured, verifiable metrics like energy use, greenhouse gas emissions, gender diversity, and supply chain responsibility.

This isn’t fluff. This is India normalising ESG as baseline hygiene.

🔹 SEBI’s Role: From Watchdog to ESG Architect

India’s Securities and Exchange Board (SEBI) is becoming a quiet force in shaping the ESG future — mandating disclosures, nudging toward assurance, and setting up a pathway for sustainability-linked instruments.

SEBI’s push for rating transparency, green bonds, and taxonomy clarity is a clear signal: ESG is no longer voluntary marketing material. It’s core business reporting.

🔹 India's G20 Presidency & Global Influence

During its 2023 G20 presidency, India spotlighted sustainability like never before. The agenda wasn’t limited to clean energy — it brought in climate financing, digital public infrastructure, and inclusive ESG frameworks relevant for the Global South.

It positioned India not just as a participant in global ESG — but as a potential rule-maker.

ESG Innovation from the Ground Up: The Indian Startup Scene

If Indian regulators are laying the foundation, Indian startups are building the towers.

Let’s take a look:

Ecofy

A green fintech startup offering loans for solar rooftops, electric vehicles, and other climate-positive assets. ESG isn’t a reporting function here — it’s the core business.

Climes

Using micro carbon offsetting, Climes enables consumers to attach small carbon offsets to daily purchases — making sustainability not just corporate-led but crowd-sourced.

Ambee

Backed by Google and Techstars, this Bengaluru-based startup offers real-time environmental intelligence — air quality, pollen, carbon emissions — through APIs that brands can plug into for smarter ESG tracking.

Infosys

One of the first Indian firms to use blockchain for ESG traceability, Infosys now helps global clients with transparent supply chain emissions mapping — a move that’s becoming essential as scope 3 emissions reporting rises globally.

Tata Group

Through its conglomerate arms — Tata Steel, Tata Motors, Tata Power — the group is aligning ESG with circular economy goals. Think steel that’s reused, power that’s decentralised, and cars that are EV-led.

These aren’t side projects. These are strategy-aligned, business-integrated ESG missions.

The Quiet Capital Shift: Asia’s ESG Investment Flow

While Western ESG funds face withdrawals, Asia is quietly doubling down.

🔹 Sovereign Funds Stepping In

Temasek (Singapore), GIC, Abu Dhabi Investment Authority, and others are actively investing in ESG-aligned companies — particularly in climate tech, clean infrastructure, and sustainable agriculture.

Their approach is notably pragmatic — less ideological, more returns-driven — but ESG-aligned all the same.

🔹 Family Offices with Purpose

From Mumbai to Jakarta, next-gen family office leaders are weaving ESG principles into legacy investments. Not to please regulators, but to de-risk portfolios and future-proof brands.

The result? Asia is now seeing the rise of green venture funds, impact-focused accelerators, and sustainability-focused PE firms.

ESG the Indian Way: Embedded, Not Exported

One of the most unique (and underreported) truths about ESG in India? It’s embedded, not exported.

Unlike Western ESG models — built around guilt, carbon credits, and offsetting — India’s approach taps into age-old philosophies:

• Dharma: Duty to self, society, and nature

• Ahimsa: Non-violence toward all living beings

• Sewa: Service as a responsibility, not charity

Whether it’s zero-waste temple kitchens in Kerala, community-led water conservation in Rajasthan, or renewable microgrids in Ladakh — India’s sustainability isn’t a boardroom buzzword. It’s a lived ethic.

It’s time the world acknowledged that India isn't “learning” ESG from the West. It's reinterpreting it through its own civilisational lens.

Tech Takes Over: Digital ESG in Asia

Forget the clunky spreadsheets and 60-page ESG reports that no one really reads — in India and Southeast Asia, ESG is getting a serious tech makeover. It’s no longer just about ticking boxes for compliance; it's about real-time data, smart tools, and automation that make sustainability measurable, verifiable, and actually useful for decision-making.

Take factory emissions, for example. Instead of relying on quarterly audits or self-reported estimates, startups are installing IoT (Internet of Things) sensors directly in manufacturing units. These sensors track things like carbon emissions, water usage, or energy consumption — every minute, every hour — and send the data to a central dashboard. This kind of live monitoring allows companies to spot issues early, reduce waste, and even prevent regulatory violations before they happen.

Then there are API-powered ESG platforms, which integrate ESG data directly into a company’s financial and operational systems. So rather than maintaining separate reports for sustainability and business performance, everything is linked — from carbon footprint to profit margins. It makes sustainability part of everyday operations, not just a once-a-year headache.

We’re also seeing blockchain technology stepping into the ESG world — especially when it comes to carbon credits and supply chain traceability. For example, when a company claims it’s using recycled materials or offsetting emissions, blockchain creates a tamper-proof digital record to prove it. No greenwashing, no vague promises — just transparent, traceable action.

And of course, AI is playing a starring role. From analysing ESG risks in a company’s supply chain to predicting future regulatory exposure, artificial intelligence is helping businesses make smarter, faster decisions around sustainability. In many cases, AI tools can even generate custom ESG reports tailored to meet the disclosure needs of different global frameworks — saving both time and compliance costs.

What’s interesting is that these innovations aren’t just staying local. Many of these India- and Asia-built ESG tools are now being used by Western companies, especially those scrambling to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) — one of the strictest ESG regulations in the world.

Why? Because these tools are often cheaper, more adaptable, and designed with digital-first logic — not legacy systems. In other words, they’re built for the future, not the past.

So, in 2025, when you hear about ESG tech disruption, don’t look westward. Look to the startups in Bengaluru, Jakarta, and Ho Chi Minh City. They’re not just keeping up with global standards — they’re setting them.

Soft Power Move: ESG as India’s Global Diplomacy Card

ESG isn’t just business. It’s geopolitics.

India’s push for green hydrogen, clean energy diplomacy, and south-south climate partnerships are part of a bigger strategy: to position itself as a sustainable manufacturing and investment hub.

• India-EU trade talks now include supply chain ESG terms

• Quad and Indo-Pacific initiatives are embedding green standards

• Indian states like Tamil Nadu and Gujarat are offering ESG incentives to global manufacturers

It’s a soft power play — and India is playing it well.

What’s Next? The Road Ahead for ESG in India and Asia

So where does this all lead?

Here’s what the ESG map looks like in 2025 — if you’re standing in Asia:

• Regulation will continue tightening — but smarter, not heavier.

• Investors will demand real-time, audit-ready ESG metrics.

• Startups will productize ESG as a business advantage — not just reporting duty.

• Corporates will embed ESG in supply chain, not just CSR.

• India will emerge as a model for the Global South: cost-effective, scalable, embedded ESG.

In a world where ESG is getting fragmented — Asia is operationalising while the West is polarising.

Final Thought: ESG is Splintering — and That’s Not a Bad Thing

By 2025, we are no longer in one global ESG market.

We are in two parallel worlds:

• One where ESG is under siege — a proxy for culture wars.

• Another where it’s a silent enabler of resilience, value, and global leadership.

India and Asia are clearly choosing the latter. And in doing so, they are not just catching up — they’re charting their own path. One built on local context, smart tech, cultural roots, and global ambition.

As the West argues over ESG’s identity, India is quietly proving its utility.

And maybe that’s the most sustainable move of all.

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