Social considerations form a core aspect of ESG compliance, the minister said. Coal companies are increasingly accountable for ensuring fair labour practices, promoting community health, and prioritising worker safety.
The Union Minister of Coal and Mines, G. Kishan Reddy, detailed the transformative impact of Global Environment, Social, and Governance (ESG) standards on the coal industry during a session in the Rajya Sabha today. The minister underscored that ESG standards are reshaping operational priorities in the coal sector, emphasizing sustainability, ethical governance, and community welfare.
Environmental Sustainability in Focus
Global ESG standards aim to curb carbon emissions, manage waste, and mitigate environmental degradation. For the coal industry, this entails adopting mechanised coal extraction, transport, and evacuation techniques aligned with modern, low-emission technologies. Coal companies are mandated to minimise carbon footprints and reduce environmental pollution in line with good industry practices.
Public Sector Undertakings (PSUs) under the Ministry of Coal are actively implementing sustainable practices, Reddy said. He cited the instance of Coal India Limited (CIL) which has taken significant steps toward environmental preservation, including afforestation, water management, and renewable energy promotion. The company has also introduced energy-efficient measures, cleaner coal technologies, and eco-friendly transportation, such as electric vehicles, as part of its broader sustainability goals.
Social Accountability Enhanced
Social considerations form a core aspect of ESG compliance, the minister said. Coal companies are increasingly accountable for ensuring fair labour practices, promoting community health, and prioritizing worker safety. Corporate Social Responsibility (CSR) initiatives by CIL and other entities focus on improving community welfare, providing access to mine water, and developing eco-parks to foster local engagement.
Governance and Transparency Prioritized
Under ESG standards, transparency and ethical practices have become crucial. Companies are required to disclose their ESG performance, enhancing accountability and building trust with stakeholders. Clause 11.5 of the Coal Block Development and Production Agreement (CBDPA) obligates commercial mining operators to adopt sustainable technologies and disclose performance metrics.
Reddy also said that the Securities and Exchange Board of India (SEBI) has mandated the top 1,000 listed companies to publish Business Responsibility and Sustainability Reports (BRSR), aligning with global frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). CIL has adhered to this mandate, with its BRSR for FY 2023-24 included in its annual report, filed with both the NSE and BSE.
A Holistic Transition
CIL’s initiatives illustrate a comprehensive approach to ESG standards, integrating environmental, social, and governance objectives, the coal and mines minister said. Efforts include deploying blast-free mining technology, utilizing overburden for alternative purposes, and promoting clean coal initiatives.
The minister concluded by emphasising that the government remains committed to aligning the coal industry with global ESG norms, ensuring a sustainable and socially responsible future for the sector.
