From Compliance to Value: Rethinking ESG in FMCG Operations

Dr. Ankur Chaturvedi is an accomplished leader, with his career spanning across operations, supply chain, and now ESG, reflecting the evolution of business performance, from traditional KPI-driven models to a more holistic focus on how outcomes are achieved. Having led early ERP implementations and witnessed the shift from manual systems to Gen AI, he brings a deep understanding of data, transformation, and responsible performance metrics.

Rooted in the values shaped during his time at the National Defense Academy, his leadership blends discipline with empathy. A strong believer in continuous learning beyond hierarchy, he has built cross-functional expertise across tea, packaging, and supply chain, while his long-standing passion for environmental issues has naturally led him into ESG.

In an interaction with Thiruamuthan, Assistant Editor at Industry Outlook Magazine, Dr. Ankur Chaturvedi, ESG Lead, Associate Vice President HSE, Excellence & Quality - Operations, Emami Ltd, shares how embedding sustainability into everyday decisions, not just metrics, can drive measurable business outcomes. Drawing from his experience across HSE, supply chain, and ESG, he highlights the importance of aligning profitability with sustainability, bridging organizational gaps, and adopting context-driven approaches to make ESG truly effective at scale.

Read the full conversation below to explore how ESG is moving beyond reporting to drive real operational impact, shaping sustainable decision-making and long-term business value.

When ESG moves beyond reporting and starts influencing operations, what are the first visible changes you notice on the ground?

When ESG begins to move beyond reporting and starts influencing operations, the first visible shift is in how organizations perceive its purpose. Traditionally, ESG has been closely associated with reporting, almost as if reporting itself is the core. However, I would disagree with that view. ESG, in essence, is about documenting what has already been done, and reporting can only follow action.

A simple example is the way organizations approach net-zero targets, particularly Scope 3 emissions. Even today, there is no universally precise method to measure Scope 3 emissions. Two individuals within the same organization could measure it differently, with significant variance, and both could still be technically correct. In such a scenario, setting absolute targets without clearly defined measurement frameworks can be misleading—it is like claiming a perfect score without a defined benchmark.

While estimation models and methodologies do exist, the underlying challenge remains the accuracy of measurement. Therefore, focusing purely on reporting or commitments without strengthening on-ground execution does not create real impact. The real shift happens when ESG priorities are embedded into daily operations. When people on the ground understand and internalize these principles, they begin to incorporate them into routine decision-making. At that point, reporting becomes a natural outcome rather than a forced exercise.

In fact, based on research I conducted as part of my doctoral work, organizations that integrated sustainability metrics into their operational KPIs witnessed tangible improvements. This study, which covered companies across India, the Middle East, Europe, the US, and Latin America, with a significant share from India and the GCC, showed that nearly half of the companies observed measurable gains in cost efficiency, waste reduction, and overall operational performance.

This reinforces a key point: when sustainability metrics are embedded into operations rather than treated as a parallel reporting requirement, ESG begins to deliver real, measurable value.

In a fast-moving FMCG environment, how do you ensure sustainability becomes part of everyday decision-making rather than remaining a separate initiative?

In a fast-moving FMCG environment, sustainability can only become part of everyday decision-making when it is aligned with the core objective of the business. I firmly believe that any business exists for profit, and profit to a business is like breathing to a human being. Just as survival is impossible without breathing, a business cannot sustain itself without profitability. If it appears to do so, it is only drawing from accumulated reserves, which will eventually run out. Therefore, positioning anything as more important than profitability would be unrealistic.

Having said that, sustainability should not be viewed as separate from business performance. The shift happens when sustainability KPIs are embedded into the operational matrix. When this integration takes place, it begins to positively influence key operational outcomes such as cost efficiency, waste reduction, and resource optimization. Most operational metrics already have a direct linkage to sustainability, and making this connection visible helps drive behavioral change.

Equally important is awareness at all levels of the organization. When individuals understand sustainability metrics and their relevance, they begin to incorporate them into everyday decisions organically. This does not always require top-down directives; in many cases, the most meaningful changes originate on the ground.

For instance, in one of our factories, teams implemented motion sensors in corridors to control lighting. While this may not be a large-scale innovation, it contributes to reducing energy consumption. More importantly, it reflects a mindset shift, where employees recognize that even small actions, despite limited immediate financial returns, are worthwhile. This is how sustainability gradually transitions from being a separate initiative to becoming an integral part of day-to-day operations.

From your experience, where do organizations typically face the most friction when trying to connect ESG goals with operational performance?

The biggest challenge today is the lack of understanding of ESG. For many within the organization, ESG is perceived as an additional layer of reporting, another set of KPIs, another demand for data, which naturally creates resistance. The moment something is seen as “extra work,” the first reaction tends to be, “Why is this needed?”

This gap becomes more evident between ESG teams and line managers. ESG managers require structured data from the ground, while line managers often view this as an added responsibility beyond their core roles. That is where the friction begins. Bridging this gap is critical. The first step is helping line managers recognize that they are already contributing to ESG through their existing operational activities. Once individuals see their role in it, a sense of ownership and even pride begins to develop. When that happens, documentation becomes a natural extension rather than a forced task, significantly easing the process for ESG teams.

Another major challenge arises in situations involving trade-offs. Many ESG benefits are long-term in nature, whereas operational decisions are often driven by short-term performance metrics. For example, adopting green packaging may increase upfront costs compared to conventional alternatives, leading to hesitation in cost-sensitive environments. However, when viewed holistically, factoring in regulatory requirements such as EPR mandates, reputational advantages, and future cost implications, the long-term value can outweigh the initial investment.

Similarly, on the social front, initiatives such as improving gender diversity may not immediately reflect in financial statements. Yet, it is well established that a more diverse workforce contributes to a healthier work environment and stronger organizational performance over time.

These are the kinds of practical challenges organizations face—balancing short-term pressures with long-term value, and aligning mindset and understanding across teams to make ESG truly operational.

Given your exposure to HSE, quality, and supply chain, how do these functions come together in practice to drive meaningful ESG outcomes?

HSE is directly connected to ESG. Health and safety form an integral part of the social pillar, while environmental management naturally falls under the environmental pillar. So, from an HSE perspective, the alignment with ESG is very direct.

Quality also plays a significant role. The focus on getting things right the first time helps reduce resource consumption, while defect prevention minimizes waste. As a result, many core quality practices directly contribute to ESG outcomes by improving efficiency and reducing environmental impact.

Another important aspect is ensuring that products consistently meet quality standards and are safe for consumers. Delivering safe, reliable products is a fundamental responsibility of the quality function and contributes to the broader social objectives of ESG.

When HSE, quality, and operational excellence work together, they create meaningful ESG outcomes by improving safety, reducing waste, optimizing resource use, and ensuring product quality for the end consumer.

With evolving frameworks like BRSR and stricter expectations around sourcing, emissions, and waste, what is the biggest challenge FMCG companies face in executing ESG consistently at scale?

For the FMCG industry in India today, the biggest challenge is the lack of consumer awareness around ESG. Businesses ultimately respond to what consumers value. While most people support climate action, sustainability, and environmentally responsible products in principle, purchasing decisions are still largely driven by price. As a result, companies often find limited consumer support or recognition for their ESG initiatives.

From a reporting perspective, frameworks such as BRSR and the evolving disclosure requirements are a positive development. Even if consumers are not actively demanding ESG performance, mandatory reporting ensures that companies document and disclose their progress.

One aspect I particularly appreciate about BRSR is the way it has been designed. Unlike many regulations that rely heavily on enforcement, BRSR focuses on transparency. Companies are required to disclose what they have measured and, equally importantly, what they have not measured.

For example, if a company has not measured its Scope 1 or Scope 2 emissions, which are part of the essential indicators under Principle 6, it can simply declare them as "not measured" in its BRSR report. Even the assurance provider can certify that the company has accurately disclosed this. The key requirement is transparency, not perfection.

If companies have the option to declare "not measured," why don't they all do so? The answer lies in peer pressure. No company wants to be perceived by investors, consumers, or the public as lagging behind its peers. Once industry leaders begin disclosing comprehensive ESG information, it naturally encourages others to improve their own reporting and performance without the need for strict enforcement.

Another strength of BRSR is the integrity it brings to disclosures. For instance, if a company claims to have a zero liquid discharge plant, that information is available in the public domain. It does not necessarily require an inspector to verify every claim because local communities and other stakeholders can review and challenge inaccurate disclosures. In that sense, transparency itself becomes the enforcement mechanism.

In my view, that is the real strength of BRSR. By encouraging public accountability and industry-wide transparency, it creates an ecosystem where companies are motivated to implement ESG sincerely, making the overall framework more credible and resistant to misuse.

With EPR mandates, Plastic Waste Rules, and rising renewable adoption, where is the FMCG sector seeing real traction today, and which ESG trends are delivering measurable impact?

EPR mandates and Plastic Waste Rules are, in principle, designed to make companies take responsibility for the lifecycle of their packaging. However, if you look at the on-ground reality across many Indian cities, the visible impact is still limited. The presence of plastic waste in municipal landfills has not reduced meaningfully, which suggests that while the framework exists, its execution is still evolving. When compared to regions like Europe, where EPR systems have matured and are visibly effective, India is still in a transition phase.

One of the challenges with regulatory mandates is that when responsibility is enforced purely through compliance, organizations may initially focus on navigating the system rather than fully embracing its intent. Responsibility, in that sense, cannot be driven by regulation alone; it needs to be internalized. That said, there is a natural maturity cycle. Over time, as systems strengthen and accountability improves, the effectiveness of EPR in India is likely to become more visible.

Another important trend to examine is the push toward RPET mandates. While the intent is to increase circularity by mandating a certain percentage of recycled PET in packaging, its impact in India needs to be viewed in context. India already has a highly efficient PET recycling ecosystem, with a significant portion, over 80%, being recycled into fiber for the textile industry.

Mandating RPET for bottle-to-bottle recycling could disrupt this existing ecosystem. It may divert PET waste away from textile applications, increasing reliance on virgin PET in that sector, while also raising costs for FMCG companies due to the higher processing requirements of food-grade recycled PET. As a result, the overall material demand remains unchanged, but the cost structure increases across industries.

In contrast, recycling PET into fiber is relatively less resource-intensive compared to converting it back into food-grade packaging. Therefore, while such mandates may be effective in markets where recycling ecosystems are underdeveloped, their applicability in India requires careful consideration.

Overall, while regulatory frameworks are pushing the right agenda, the real traction in ESG for the FMCG sector will come from context-specific approaches that align policy intent with existing ecosystem strengths, ensuring both environmental impact and economic efficiency.

Looking ahead: How do you see that the government should focus on these ESG goals, and what should be the role of organizations in this FMCG sector?

In the future ahead, ESG progress will be shaped by the interaction of three primary drivers: the public, the government, and corporates. It is the balance between these three that ultimately determines how effectively ESG goals are achieved.

At its core, the objective of any business is profitability. Therefore, for ESG to scale meaningfully, it cannot be positioned in conflict with profit. Instead, both the public and the government have a critical role in ensuring that ESG-positive actions are economically viable. Consumers, for instance, need to be willing to support sustainable products, even if it involves a marginal premium. At the same time, governments can accelerate adoption by incentivizing green alternatives and disincentivizing unsustainable practices through appropriate policy measures.

India, in particular, has a unique opportunity to build ESG solutions rooted in its traditional knowledge systems. Many sustainable practices already existed historically but have been replaced over time. For example, the use of kulhads for beverages predates modern disposable materials like paper or Styrofoam cups. Similarly, practices such as using leaf-based plates or banana leaves for serving food are inherently sustainable, as they do not generate additional waste and utilize natural by-products efficiently.

Traditional Indian architecture also offers valuable lessons. Buildings were historically designed to be climate-responsive, naturally regulating temperature. In contrast, the widespread adoption of glass façades in modern commercial buildings, often inspired by Western designs, significantly increases heat load in Indian conditions, leading to higher energy consumption and environmental impact. This is an area where policy intervention and design awareness can play a meaningful role.

Another critical aspect is awareness and education. Even today, frameworks like BRSR are not widely understood, including among business graduates. Integrating ESG concepts and regulatory frameworks into academic curricula can help build a stronger foundation for future professionals.

Overall, the way forward lies in aligning economic incentives, policy direction, and consumer behavior, while also rediscovering and adapting contextually relevant, sustainable practices. Only then can ESG become an integral and scalable part of the FMCG sector and the broader economy.