India’s Top Companies for Sustainability and CSR 2019

Top trends 2019

RANKS

  • Tata Chemicals is the top ranked company.
  • Tata group companies occupy the prime position. Of the top ten companies, two are from the Tata stable (as compared to three in the previous year).
  • Several companies have moved up the list – Infosys, Bharat Petroleum, Hindalco and Toyota Kirloskar Motors being the chief amongst them
  • One public sector company is in the top 10 list – Bharat Petroleum Corporation Ltd

PERFORMANCE

  • Integrated reporting is ramping up.
  • Manufacturing companies perform better than service companies.
  • Private companies perform better than public companies.
  • Information Technology and Energy are the top performing industries, while Other Financials are laggards.

SDGs

  • Companies are gradually incorporating SDGs into their responsible business actions. Of the top 100 companies studied, 60% companies have mapped their responsible business actions to SDGs.
  • All the top 10 companies mapped their business goals with SDGs.
  • Key action themes for companies include renewable energy, water, waste and data privacy.

ENERGY - Renewable energy capacity and its utilization have geared up. While solar is the most preferred, biofuel is picking up speed.

WATER – Access to water and management of water resources continues to be a focus area for internal operations and societal initiatives.

WASTE – Initiatives to manage e-waste, municipal waste and plastic reuse & recycling show an increasing trend.

DATA - Customer data and its privacy has become a material aspect in the operations of services companies.

Top Companies

The list of top companies includes 81 private sector and 25 public sector companies.

  • Tata Chemicals Ltd. 1
  • Infosys Ltd. 2
  • Bharat Petroleum Corporation Ltd. 3
  • Mahindra & Mahindra Ltd. 4
  • ITC Ltd. 5
Top 100 companies

India’s Top Companies and the SDGs

During 2017 UN Sustainable Development Summit, members from 193 countries of the United Nations collaboratively committed to adopting Sustainable Development Goals (SDGs, also known as Global Goals). The countries committed themselves to meet the 2030 agenda for sustainable development. The 17 SDGs and 169 interlinked targets within these range from ending poverty to stemming climate change. They provide a pathway for a sustainable and more prosperous world.

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The Rise of ESG

Several large banks and fund houses are realising that their definition of what is financially relevant needs to involve environmental, social and governance (ESG) factors. These issues are now becoming critical in investment decision-making. Investors are incorporating these to reduce risk and seize opportunities by fine-tuning equity exposures, searching for excess returns, remaking bond portfolios and tapping the green bond market. ESG represents about one-quarter of all professionally managed assets around the world. According to the 2018 Edelman Trust Barometer Special Report: Institutional Investors, 66 per cent of U.S. investors said that their firm altered its voting or engagement policy to be more attentive to ESG risks in the last year alone.

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ESG Performance

Companies undertake many types of responsible business activities. It is difficult to comprehend easily the breadth and scope of their work. Our study uses a measure called the Spread, which is indicative of how broad-based the responsible business activities of a company are and is a combined score of the environmental, societal and governance parameters.

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Environment

The environmental parameter looks at several issues. How pervasive are the sustainability practices of companies? Programmes related to waste, water and energy, and targets to reduce their impact; Promoting sustainable products and services; Programmes and targets to build sustainable supply chains; Programmes and targets to build sustainable logistics.

Renewable energy

India could be one of the most exciting power markets, especially with respect to renewable energy. For starters, renewable energy is an absolute essential for a country like India, which has a massive shortage of power and a looming energy deficit. Solar, Wind, Hydropower, Geothermal and Biomass are the different sources of renewable energy. Renewable energy sources are also non-carbon emitting sources, thus helping in climate change mitigation.

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Water

Most cities in India are water stressed with no city having 24/7 water supply and most of it being contaminated. Hence, the need to manage water and waste water cannot be overemphasized. Companies play a crucial role in this environment as they are large-scale consumers and can contribute significantly to this. At government policy level, the focus is primarily on water treatment – whether it is the mandate for zero liquid discharge (ZLD) systems across industries , or the Supreme Court’s ‘green order’ for all industrial units to set up effluent treatment plants (ETP), or the reuse of treated water in nearby thermal power plants.

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Waste

Waste management: Waste is a big environmental challenge, for companies across the board. Leading Indian companies recognize waste management as a key issue. Led by regulatory changes, many companies have discussed plastic waste and e-waste management measures in their sustainability reports. Separately, some companies have extended their waste management practices to help communities manage municipal waste – both solid and liquid.

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Social

The social parameter looks at several issues. How well are key stakeholders (employees, community, customers and suppliers) integrated within a company’s responsible business framework? Employee-centric initiatives; Customer-centric initiatives; Community-centric initiatives; Supplier-centric Initiatives.

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Governance

Governance as a parameter looks at several issues. How well is the governance for responsible business structured? Board oversight of CSR and sustainability issues; Managerial accountability of responsible business issues; Corporate policies and management systems, such as a signatory to the United Nations Global Compact (UNGC), a formal policy on sustainable practices, a formal CSR policy, etc.; How forthcoming are companies with respect to responsible business activities and performance? Sustainability reports as per standards, such as the GRI reports; Disclosure in financial filings; Participation in global projects such as the Carbon Disclosure Project; Mapping business goals with Sustainable Development Goals; External assurance and impact assessment of responsible reporting.

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Responsibility Matrix

We could combine spread and spend and arrive at what we call the responsibility matrix. The matrix charts companies based on the combination of their spend (as a percentage of average profits of the past three years) and the spread (responsible business) score.

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Methodology

This study aims to examine Sustainability Reports (SR), Business Responsibility Reports (BRR), among others. It also brings information disclosed publicly, whether online or in annual reports (including those with integrated reporting [IR] framework).

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Acknowledgements

The 6th edition of the Responsible Business Rankings brings to you how India’s top companies are gearing up to tackle the responsibility challenges that face us today. In the world of climate change the challenges are immense, but so are the opportunities for change.

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