Awareness and use of sustainability reporting guidelines in India are restricted to large organizations, reveals a new report launched on August 4 by Global Reporting Initiative (GRI), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and Thought Arbitrage Research Institute (TARI).
Companies say that they find it difficult to justify investments in sustainability initiatives, as the results and paybacks are not immediate.
The authors of the report say smaller companies in India should start reporting their sustainability performance. The report also states that it is important to increase awareness and encourage the wide-spread adoption of sustainability reporting guidelines to support the transition to a sustainable economy.
India is acknowledged as one of the fastest growing economies in the world; as a result, it faces the challenge of balancing fuel consumption, and its rapid growth with the equitable conservation of its key resources, and managing the impact on society.
The new report, “Sustainability Reporting – Practices and Trends in India 2012”, explores sustainability reporting in India, and aims to establish factors that impede reporting. The report was commissioned by the German Ministry of Economic Cooperation and Development (BMZ) through a bilateral cooperation initiative supporting innovations in sustainability practices of Indian businesses.
Ms. Stefanie Bauer, Advisor, Private Sector Development, GIZ, explains: “Keeping with the global trend, this study shows that non-financial risk management is being embedded into strategic management of many companies in India. The report also highlights a need for further engagement on the part not only of businesses, but also of the financial sector.”
Mr. Vijay Shunglu, former C&AG and Chairman of the Advisory Board of TARI, says: “Indian companies have been reporting on sustainability parameters as a distinct section for about ten years now. However, the overall reporting initiatives have been sporadic and incomprehensive. It has been only over the past five years that a growing number of companies have been preparing separate sustainability reports. In view of the issues covered, this study is expected to establish a reference against which reporting efforts can be compared.”
Around 80 Indian companies from various sectors produce sustainability reports, and about 60 of these publicly declare that they use GRI’s Sustainability Reporting Guidelines.
In November 2011, the Securities and Exchange Board of India (SEBI) mandated listed companies to report on their Environmental, Social and Governance Initiatives. As a result, uptake of sustainability reporting is expected to rise in the coming year. For this to happen, companies need support: they have expressed the need for access to more information and assistance in developing their strategies for sustainability.
Dr. Aditi Haldar, Director of GRI Focal Point India, says: “Sustainability reporting enables companies to identify areas for improvement, helping them operate more efficiently, save money, and be sustainable. Our new report reveals that, while many Indian companies are taking the lead in sustainability disclosure, there is still work to be done. GRI’s Focal Point India aims to support companies in India – including small organizations – to start their sustainability reporting journey.”
“India has come a long way over the last few years,” Haldar adds. “The government used to think that sustainability reporting was an alien practice, but many important steps have been taken that illustrate a shift away from this kind of thinking.”
The most recent example of positive change was demonstrated last month, when SEBI distributed a circular reinforcing its commitment to business responsibility reporting. In the circular, SEBI stated that it should be mandatory for top 100 listed entities to produce business responsibility reports.
“In another bold move,” says Haldar, “the Bombay Stock Exchange, India’s largest stock exchange, recently invited GRI Focal Point India to be part of their Advisory Group and they are now very keen to collaborate with us on building the reporting capacity of their listed companies.”
While the awareness and use of sustainability reporting guidelines in India may currently be restricted to large organizations, the country has come a long way in recent years and corporate responsibility measures are gradually taking root in a more wide-spread way. Many more sustainability reports are sure to come from India in the near future.
Source: GRI.
