India, even with it’s moderate growth over the last 2 years is one of the fastest growing economies in the world. It stands 10th in the world by GDP third in terms of PPP among the world. Even when the US, EU, Japan and other large G8+5 countries have seen stagnant or low growth rates, only China and India have managed a steady growth of 7.8% & 5.4% respectively.
With growth comes pressure on resources, social inclusion and environmental stability. Both India and China are continually facing issues such as inequality, poverty, environmental pollution, corruption, public health and the like. With the line between public responsibility and private initiative blurring, the popular opinion is putting pressure on private players to be responsible in their activities, go beyond financial performance and contribute positively to the social, economic and environmental well-being of the nation and society at large.
In short, companies are under pressure to become more Sustainable. While most of the companies have been able to heed this call, a lot of activity around sustainable development and sustainability reporting is just talk followed by very less action.
Sustainability Reporting is not a mandatory requirement in India. Except for some high performing, visible companies, a lot of organisations in India haven’t started using the GRI sustainability reporting framework effectively.
In the GRI reporting database, only 74 companies from India are listed, compared to 242 companies from China, 334 companies from South Africa, 213 companies in Brazil and even 83 companies from Thailand. So for India’s economic might, it still has a long way to go to catch up with other emerging economies in the area of Sustainability Reporting.
According to our research, only 35% of the top 100 BSE/NSE listed companies actually release sustainability reports.
Cement is the most compliant among this specific sample with 100% compliance with Banking & Financial services and Healthcare & Pharmaceuticals sector being the least compliant.
Cement has a heavy environmental footprint as the very process of production of cement releases CO2 and it consumes a lot of energy, both thermal & electrical, mostly through coal based captive power plants. At the same time, Cement sector has been very proactive in reducing its environmental impacts through fly-ash blending, waste heat recovery, using waste from other processes as energy input, growing green cover, etc., The four cement companies in BSE/NSE 100, ACC, Grasim, Ambuja Cements and Ultratech Cements are all regular reporters.
The IT sector, with huge intellectual capital and most of its business coming from US, Europe and APAC markets, has been a very diligent reporter and companies like Infosys, Wipro and Cognizant have been praised for the quality & neutrality of their reporting.
On the other end of the spectrum, Banking and Financial Services companies, in spite of their vast presence the BSE/NSE 100, their compliance is close to nil. Except of Shriram Transport Finance Ltd, which released an undeclared report in 2008 (& none thereafter), no other bank or large finance corporation makes a statement of their impacts and responses on Sustainability.
Same is the case with Healthcare & Pharma sector. With such an important role to play in the society and a large impact on the environment, the expectation is on this sector to be more proactive in reporting their Sustainability impacts. More compliance and action is also needed in the Construction, Telecom, Mining, Energy & Power and Infrastructure sectors.
So given that a lot of top companies in these sectors are yet to release their first Sustainability reports, the only way to go from here is upwards. Already, companies are drawing up their Sustainability strategies from their boardrooms, collating their compliance levels and increasingly getting open about their impacts on Social, Economic and Environmental fronts.
This is due to market demands and also through 3 critical policy interventions:
With these interventions getting into place, we can see an explosion of Sustainability reporting in India. It will then be left to the various stakeholders to maintain the quality of reporting, keep material issues relevant and give a transparent view of their economic, social and environmental impacts.
All the research on the reporting in India is taken from the GRI database [http://database.globalreporting.org]
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