As per the 2022 EY global integrity report, 60 per cent of respondents from India said that regulators have taken action against their organisation for breaching integrity standards or regulations
A total of 78 per cent of respondents from India admitted that it is challenging for organisations to maintain their standards of integrity in periods of rapid change or difficult market conditions, an EY revealed on Monday.
As per the 2022 EY global integrity report, 60 per cent of respondents from India said that regulators have taken action against their organisation for breaching integrity standards or regulations.
The report titled — ‘Emerging Markets Perspective, Is your organisation upholding its integrity standards?’ revealed that 47 per cent of respondents from India have a policy on either corporate social responsibility (CSR) or environmental, social and governance (ESG) as compared to 33 per cent from emerging markets.
One in ten respondents in emerging markets see ESG as a top risk to the long-term survival of their company. However, the EY survey showed a gap between what companies said they have in the way of an ESG policy and how they demonstrate accountability.
Arpinder Singh, India and Global Markets Leader, Forensic and Integrity Services, EY said, “Growing geopolitical tensions, market disruptions and inflationary pressures have hit businesses in emerging markets, including India just as they seek to recover from the global pandemic.”
Singh added that while the standards of corporate integrity show discernible signs of improvement, many organisations are still facing heightened risks around unethical behaviour and diminishing standards of compliance.
“Encouraging a whistle-blowing culture, identifying, and addressing misconduct, improving cybersecurity programs, and greater governance in measuring and reporting on ESG performance can not only minimise threats actors, but also enhance regulatory compliance, and sustain long-term shareholder value,” Singh added.
Also, the report stated that new or improved regulations and increased enforcement action serve as a starting point to enhance integrity standards. But strong corporate governance practices can further boost regulatory compliance, mitigate the possibility of fines or penalties, and protect its assets and reputation.
Mini vandePol, Head, Compliance and Investigations Group, Asia-Pacific, Baker McKenzie said, “Companies need to ensure that their compliance programs and risk management systems address all aspects of ESG because maintaining stand-alone risk silos for corruption, money laundering, trade sanctions, fraud, HR misconduct etc. is inadequate.”
She added that it is crucial for organisations to walk the talk to ensure its ESG policies and goals are in place and facilitate regular risk assessments to address gaps.