The “Sustainability Initiatives Practice” at Frost & Sullivan welcomes the Securities Exchange Board of India (SEBI) initiative of mandating the top 500 listed Indian companies (based on market capitalization of the BSE and NSE) to include their sustainability agenda in the form of Business Responsibility Reporting (BRR). The reports need to detail the initiatives taken by the companies from an environmental, social, and governance (ESG) perspective, based on the National Voluntary Guidelines (NVG) launched by the Ministry of Corporate Affairs (MCA), Government of India (GoI). These guidelines lay down the comprehensive principles that need to be adopted by the companies as part of their business practices and a structured BRR format that requires certain specified disclosures.
Mr. Nitin Kalothia, Director, Sustainability Initiatives Practice, Frost & Sullivan, says, “This is indeed a great approach to instill sustainability culture in India’s top companies and urge them to embrace it as a means of achieving success in business. The ultimate goal of BRR is to lead to sustainable development of the country.”
The BRR adds value in a number of ways to organizations, including improving reputation and brand royalty, understanding and mitigation of risks and opportunities, streamlining processes, reducing costs and improving efficiency. It enables an organization to understand its stakeholders’ views, assess the materiality of sustainability-related issues, and sets the stage for robust performance management and communication.
It is only a matter of time that organizations will not just be evaluated only on their financial performances, but also on the sustainability measures taken by them. In fact, many financial institutes demand explanation on ESG factors before investing or lending to the companies. Globally, stock markets have been focusing on listed companies to report or explain basis and provide disclosures on ESG aspects. While stock exchanges in Johannesburg and Shanghai have made this mandatory, New York, Singapore, Hong Kong, Australia, Vietnam, and other stock exchanges have provided voluntary reporting guidelines. While most of these guidelines are based on the Global Reporting Initiative (GRI) guidelines, they are tailored to suit country-level conditions and scenarios.
Companies in India use different frameworks to report on their business responsibility (or sustainability aspects). The most commonly used reporting frameworks are GRI, Carbon Disclosure Project (CDP), and NVG. While GRI is the most widely used framework, NVG could outpace it in India mainly due to the BRR mandate for the top 500 companies. In either case, the reporting or disclosure is poised for a quantum leap driven by the regulatory and market developments.
“While compliance can be the main driving force for companies to look at BRR in India, a growing number of companies see this as a means to drive greater innovation through their businesses and products to create a competitive advantage in the market,” added Mr. Kalothia.
Globally, sustainability-reporting numbers have increased from 26 in 1992 to 6,893 in 2014; in India, the increase is from 20 to 170 during the same period. Companies that have traveled the path of sustainability have delivered higher customer value than their competitors. Sustainability is driving process and product innovations, resulting in enhanced competitive advantage and improved bottom line benefits.
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About the Sustainability Initiative Practice Under the aegis of “Sustainability Initiatives Practice”, we assist companies in their sustainability journey through a structured diagnostic, prioritization, and deployment approach in the areas of strategy and roadmap creation, risk assessment, reporting, and maturity mapping. With a dedicated team of professionals having varied industry and consulting backgrounds, we assist companies in disclosing their business responsibility in line with the NVG, among other sustainability services. It is also an endeavor to promote BRR as an opportunity to incorporate sustainability into core business strategies.
For more information about the services under the Sustainability Initiatives Practice, please send us an email with your full name, company name, designation, telephone number, company email address, company website, city, state, and country.
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