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.
Governance has shown a steady improvement over the years. This has come about due to the nudge provided by Companies Act 2013 and the Paris Accord. It also reflects the greater emphasis that companies are starting to place on their responsible business actions.
60% of the companies are signatories to global principles/compacts indicating greater alignment with international environmental actions. Unlike in the past, all companies in our sample have CSR policies and policies on sustainable practices that act as a signal to their commitment to CSR and sustainability.
In several spheres, companies have policies governing their actions:
|Policies regarding||Per cent of companies|
|Formal policy on working conditions||97%|
|Formal policy on data privacy||87%|
|Formal policy on discrimination/ Human rights||100%|
|Discrimination against women/girls||44%|
|Eradicate forced/child labour||81%|
|No discrimination based on gender/race/disability/etc||88%|
Except equal pay, companies are communicating their focus on a diverse set of areas.
Reporting is an element of Governance. The Companies Act, 2013 ensured that CSR became subject to board level scrutiny. We noticed that companies are increasingly reporting by publishing Business Responsibility Reports and Sustainability reports. During 2018-19, in our sample 92% companies published a BRR and 71% companies published a sustainability report1. Integrated reporting is picking up with about 26% of the companies publishing an integrated report. External assurance of their activities is a weak area with only 49% of the companies adopting it.
Overall, companies have taken significant strides towards ESG actions. However, there is still a long way to go for the environment and society to see significant changes and thereby an improvement in people’s lives.
1As many companies report in multiple formats there is a possibility of double counting.