State of the ESG Reporting in India analyses the Nifty 50 companies on the quality of their sustainability reporting; Most assessed companies are high on maturity levels, but there are clear patterns for rooms of improvement.
Centre for ESG Resources (CER), a joint initiative of ESG Robo, a corporate sustainability firm, and RSM GC, an energy and sustainability consulting firm, launched a report titled “The State of ESG Reporting in India” analysing the maturity of sustainability reports published by the constituent companies of Nifty 50 index. It has studied the sustainability reports of 2018 2019 of the Nifty 50 constituent companies in India.
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A total of 38 reports were analysed that had reports and/or public accounts of their sustainability that could be reviewed against criteria such as sustainability context, integrated thinking, governance, measurement and performance, and balance. The reports were assessed on 64 scoring points across 3 dimensions: reporting principles, content, and experience, as per best practice guidelines provided by the World Business Council for Sustainable Development (WBCSD).
As per the report, assessed companies show a high level of basic reporting maturity with 89% of them aligning their reports with Sustainable Development Goals (SDGs) and 87% of them were externally assured. Global Reporting Initiative (GRI) was the most widely adopted reporting framework with 89% of companies providing the GRI index in the report, followed by 39% reporting as per the Integrated Reporting framework. Compared to previous years, the reports are covering more topics including broadening discussions on materiality analysis and stakeholder engagement.
The report identified several patterns that emerged in the study including scope for improvement. All reports focus on environmental matters and disclosures on emissions, water, and waste measurement and reduction measures are most visible and extensive. However, despite the focus, there is little disclosure of risk assessment from climate change, or how these risks are being quantified or integrated into business strategy.
Reporting on social matters is generally limited to CSR activities and boilerplate health and safety metrics disclosures. The most visible gap is in addressing strategy and governance. Discussions on megatrends and their impact on strategy are either at a high level or are missing. Despite the centrality of governance, the reporting remains boilerplate and most companies are yet to integrate sustainability objectives into management remuneration.
“Global investors are under pressure from governments and capital providers to report their impact on people and the planet. Companies have been voluntarily increasing their sustainability disclosures and most companies publish elaborate reports. However, there remains a gap and investors complain about lack of actionable information and companies complaining about reporting fatigue. CER initiative aims to close this gap” Sandeep Raghuwanshi, CEO, Centre for ESG Reporting and ESG Robo commented on the launch of the report.
Sandeep added, “Today we have a strange situation. On one hand, companies are complaining about “reporting fatigue“ on ESG matters. On the other hand, investors are complaining about not having enough ESG data. The problem is not lack of information but lack of relevant information. It is critical that the disclosures are tuned to the needs of the investors, and focus on material, actionable information sharing. This report aims to assess the current state of reporting and contribute to bridging the gap.”
“Good information is the lifeblood of good investing and investors use quantitative and qualitative company reported information to make informed investment decisions. Context is key. Clear, consistent, decision-useful disclosure helps investors understand the risks that individual companies are facing and the opportunities that a company is looking to capitalize on. This report has a limited scope but it is an important first step in improving the information on sustainable enterprises.” added Dr. Ram Babu, Board Member of Centre for ESG Reporting and CEO, RSM GC.
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