By Rusen Kumar
Welcome to India CSR’s exclusive interview with Gayatri Divecha, the dynamic Head of Good & Green at Godrej Industries Limited and its Associate Companies, where we delve into her leadership role in steering corporate sustainability, her strategies for driving social impact, and her vision for a greener future.
In this interview, we explore the real value of ESG reporting. We speak to experts from the world of finance, sustainability, and corporate governance to get their insights on the matter. We hope that this interview will help you to understand the real value of ESG reporting and how it can be used to improve corporate performance.
Q. How does Godrej Industries use ESG reporting to stimulate sustainable development action, not just accountability?
ESG reporting is a tool for strategic decision-making. It is not a substitute for action. At Godrej Industries, we are embedding ESG into business strategy, aligning them with long-term business goals, and using certain metrics to guide decision-making. Many of our senior business leaders have ESG goals and Key Performance Indicators (KPIs) as part of their goal sheet that enables action, and progress towards ESG goals. Our ESG reporting which is fairly robust including BRSR, Annual Integrated Reports, CDP, TCFD and is aligned with best in class standards. It also goes beyond commitments and includes authentic disclosure of demonstrable progress and impact of our work on ground.
Q. What obstacles do firms encounter in converting ESG reports into actions that mitigate environmental, social, and governance risks?
ESG standards and frameworks create a broad expectation of what responsible business is. There’s a built-in bias towards the existence of ESG commitments over actual progress and action. For example, long range net-zero commitments are rated higher over emissions intensity reduction progress of a company. There’s also the issue of universal versus region or sector-specific standards.
Not all ESG indicators are relevant across all industries and geographies. Consider how gender diversity on boards is considered an important metric for a company’s performance on diversity and inclusion. However, several countries, including India, have regulations for having a woman director for publicly listed companies. Hence adopting an impact or effectiveness lens to such a metric for companies across different regions is difficult.
Q. Can you share some specific examples of how Godrej Industries has utilised ESG reporting to identify areas for improvement and drive positive change within the organisation?
While there are over a dozen ESG reporting standards and overlapping frameworks leading to disclosure fatigue, there are a few areas where we’ve adopted recommendations. Recently, we took note of the Task Force on Climate-related Financial Disclosures (TCFD) framework. The TCFD disclosures helped us to effectively communicate our climate-related financial impacts and helped us in strengthening our business strategy for efficient risk mitigation and resource allocation. We have been able to identify physical and transition risks and their financial implications on our business. We have further prioritised these risks and integrated them in our enterprise risks management system that routinely assesses risks across our companies.
Q. With the proliferation of various ESG reporting standards and frameworks, how does Godrej Industries ensure consistency and comparability in its reporting practices while addressing the unique aspects of its business operations?
Besides regulatory reporting compliance, we align our reporting with widely-accepted frameworks like the Global Reporting Initiative (GRI) and TCFD. These frameworks provide a structured approach to ESG reporting and cover a broad range of ESG issues. We use our annual report to highlight the progress on our ESG goals, share the stories behind our data, and talk about the challenges in our progress.
Q. Apart from internal stakeholders, how does Godrej Industries engage and communicate with external stakeholders, such as investors and consumers, to ensure transparency and foster trust in its ESG reporting efforts?
We engage with our external stakeholders on our ESG efforts through regular communication through various channels such as our annual reports, investor presentations, corporate websites, media interactions and social media. We also nominate our ESG progress on various sustainability indexes such as DJSI and CDP. Our ESG performance is third-party verified and assured every year to build trust in our ESG reporting. We provide clear and accessible explanations of our ESG strategies, goals, and performance. We also engage with our investors by responding to their queries and surveys. We ensure our ESG efforts are aligned to our external stakeholder expectations and concerns.
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