Sustainability Reporting- Business Ethics

2. Conserving an ecological balance by avoiding
depletion of natural resources
Capability of being maintained at a steady level
without exhausting natural resources or
causing severe ecological damage

3. An ever-greater number of companies and other
organizations are recognizing the need to make
their operations more sustainable.
The governments, stock exchanges, markets,
investors, and society at large are calling on
companies to be transparent about their
sustainability goals, performance and impacts.

4. SUSTAINABILITY
REPORTING Sustainability reporting is the practice of measuring, disclosing, and
being accountable to internal and external stakeholders for
organizational performance towards the goal of sustainable
development.
 It is a broad term considered synonymous with others used to
describe reporting on economic, environmental, and social impacts
(e.g., triple bottom line, corporate responsibility reporting, etc.).
 A sustainability report should provide a balanced and reasonable
representation of the sustainability performance of a reporting
organization – including both positive and negative contributions.

5.  Sustainability reports based on the GRI Reporting Framework
disclose outcomes and results that occurred within the reporting
period in the context of the organization’s commitments, strategy,
and management approach.
 Reports can be used for the following purposes, among others:
Benchmarking
Demonstrating
Comparing

6. IMPORTANC
E
 Corporate companies that focus on SR outperform their peers over the
longer run, which in turn results into a stronger market position and
increased profitability.
 There is a reliable co-relation between business integrity and above
average financial performance.
 SR helps to acquire national and international listings and provide
access to otherwise restricted markets.
 SR will provide a sound understanding of the organization's
customer needs, especially foreign international customers.
 Other benefits include attracting finance through transparent
relationships with credit providers, improving management systems and
improving employee motivation and customer satisfaction.

7. SUSTAINABILITY REPORTING
FRAMEWORK
Principles for defining
contents:
•Materiality
•Stakeholder inclusiveness
•Sustainability context
•Completeness
Principles for defining quality:
•Balance
•Clarity
•Accuracy
•Timeliness
•Comparability
•Reliability
Standard Disclosures:
1- Strategy and profile
2– Management approach
3 – Performance
Indicators

8. SUSTAINABILITY REPORTING
FRAMEWORK
Economic
Environmental Social
Human rights Society
Product responsibility
Sector Supplements:
•Airports
•Apparel & Footwear
• Automotive
• Construction and Real State
• Electric Utilities
• Financial Services
• Food Processing
• Logistic &
Transportation• Mining & Metals
• NGOs
• Public Agencies
• Telecommunication
s
• Tour Operators

9. STANDARD
DISCLOSURES1. Profile Disclosures
 Strategy & Analysis of the organization
 Organizational Profile
 Report Parameters for the organization
 Governance, Commitments and Engagements of the organization
2. Disclosures on Management Approach
3. Disclosure on Performance Indicators
 Economic
 Environmental
 Social
 Labour Practices and Decent Work
 Society
 Human Rights
 Product Responsibility

11. GLOBAL REPORTING
INITIATIVEThe Global Reporting Initiative (GRI) is a multi-
stakeholder process and independent institution whose
mission is to develop and disseminate globally
applicable Sustainability Reporting Guidelines.
The Guidelines are for voluntary use by organisations
for reporting on the:
◦ Economic,
◦ Environmental, and
◦ Social dimensions of their activities, products, and services.

12. DIMENSIONS OF REPORTING

13. GRI REPORTING OVER THE YEARS
(
https://www.globalreporting.org/resourcelibrary/G

14. National Voluntary
Guidelines on Social, Environmental and Economic
Responsibilities of Business
• The National Guidelines on the Economic, Social and Environmental
Responsibilities of Business (Guidelines) initiated by the Ministry of
Corporate Affairs (MCA) in September 2015.
• After extensive discussions between the MCA and the Indian
Institute of Corporate Affairs (IICA), it was decided to update the
National Voluntary Guidelines on the Social, Environmental and
Economic Responsibilities of Business (NVGs), which were released
in 2011.

15. Principles
Principle 1: Businesses should conduct and govern themselves with integrity in a manner
that is Ethical, Transparent and Accountable.
Principle 2: Businesses should provide goods and services in a manner that is safe and
sustainable
Principle 3: Businesses should respect and promote the well-being of all employees,
including those in the value chain
Principle 4: Businesses should respect the interests of and be responsive to all its
stakeholders
Principle 5: Businesses should respect and promote human rights
Principle 6: Businesses should respect and make efforts to protect and restore the
environment
Principle 7: Businesses, when engaging in influencing public and regulatory policy, should
do so in a manner that is responsible and transparent
Principle 8: Businesses should promote inclusive growth and equitable development
Principle 9: Businesses should engage with and provide value to their consumers in a
responsible manner

16. Sustainability Reporting – Challenges
Reasons for Reporting Reasons against Reporting
Mandatory approaches to reporting •Changing the corporate culture –
leaders will continue to innovate
above minimum requirements
•Incompleteness of voluntary reports
•Comparability
•Non-disclosure of negative
performance
•Legal certainty
•Reduction of non-diversifiable market
risk free rider problem
•Cost savings
•Standardization
•Equal treatment of investors
•Knowledge gap between
regulators and industry
•One size does not fit all
•Inflexibility in the face of change
and complexity
•Lack of incentive for innovation
•Constraints on efficiency and
competitiveness
Voluntary
approaches to reporting •Flexibility
•Proximity
•Compliance
•Collective interest of industry
•Conflicts of interest
•Inadequate sanctions
•Under-enforcement
•Global competition
•Insufficient resources

17. Barriers to Sustainability Reporting
• Unclear / rapidly evolving reporting standards and frameworks
- Breadth of topics under sustainability can be overwhelming
• Resources: cost, time, expertise
• Lack of management support or understanding
-Fear of risking credibility and reputation, risking misinterpretation
-Senior-level ownership is important
-Training and education of management and employees responsible for
report
• Mandating sustainability reporting places companies and stock exchanges at
a competitive disadvantage
-Companies risk credibility or misinterpretation

18. Rio Declaration
• The Rio Declaration on Environment and
Development, often shortened to Rio Declaration,
was a short document produced at the 1992 United
Nations "Conference on Environment and
Development" (UNCED), informally known as the
Earth Summit.
• The Rio Declaration consisted of 27 principles
intended to guide countries in future sustainable
development. It was signed by over 170 countries.

19. • The Rio Declaration proclaims 27 principles. It
includes formulations of the
• Precautionary principle
and
• Polluter pays principle.

20. Principles of stockholm declaration
• The meeting agreed upon a Declaration
containing 26 principles concerning the
environment and development; an Action Plan
with 109 recommendations, and a Resolution.

21. Kyto Protocol
• The Kyoto Protocol is an
international agreement linked to the United
Nations Framework Convention on Climate
Change, which commits its Parties by
setting internationally binding emission
reduction targets.

22. challenges of implementation of
sustainable development goals
1. Lack of financial resources to carry out and plan sustainable
development
2. Sustainable development is often not possible in under developed or
developing countries as there are other priorities on hand.
3. The governmental conflict between immediate profit and investment
towards sustainable technologies.
4. Lack of efforts at a municipal level

23. Thank you…

24. Continued strong growth in sustainability reporting
Increased interest in what organizational leadership identifies as
critical sustainability topics
Increased interest from report users for clearly presented and
accessible information
Harmonisation between reporting tools and systems
Increased integration of financial and sustainability reporting

25. GRI SUSTAINABILITY REPORTING
PROCESS

26. GRI GUIDELINES DEVELOPMENT

27. G4: NEXT GENERATION OF
REPORTINGG4, the fourth generation of the Guidelines, was
launched in May 2013. It marked the culmination of
two years of extensive stakeholder consultation and
dialogue with hundreds of experts from across the
world from a wide variety of sectors.
Aim of G4: to help reporters prepare sustainability
reports that matter – and to make robust and
purposeful sustainability reporting standard
practice.

28. G4 Objectives
 Be user friendly for beginners and experienced reporters
 Improve technical quality with clearer definitions
 Align with other international reporting references
(frameworks)
 Lead to reports that cover material topics
 Offer guidance on how to link sustainability and integrated
reporting, aligned with the IIRC

29. STRUCTURE &
FORMATThe G4 is presented in two separate documents:
1.Reporting Principles and Standard Disclosures:
GRI’s Reporting Principles are the criteria that should be
used to guide your choices, in order to achieve effective GRI
reporting. Standard Disclosures are the GRI ‘questions’ you
answer in your report. (Strategy & Analysis, DMA, Indicators)
2.Implementation Manual: This is the ‘how to’ section, and
provides detailed advice and recommendations for reporting
with G4.

30. Examples of Performance Indicators
 Economic
◦ Financial implications and other risks and opportunities due to climate
change (G4-EC2)
◦ Local hiring (G4-EC6)
 Environmental
◦ Materials used (G4-EN1)
◦ Materials used that are recycled input materials (G4-EN2) – Coca Cola
◦ Energy consumed (G4-EN3) – Hazira, RIL
◦ Impact on biodiversity in protected areas (G4-EN12)
◦ Amount of waste (G4-EN23) – P&G
◦ Environmental impact associated with transportation (G4-EN29) – Coca
Cola, Bata

31. Examples of Performance Indicators
 Labor
◦ Health and safety measures (G4-LA6) – P&G
◦ Hours of training (G4-LA9)
◦ Governance body/employee diversity (G4-LA12) - Dell
 Human Rights
◦ Human rights screening on suppliers and contractors (G4-H10) -
Tata
◦ Violation of indigenous rights (G4-HR8)
 Society
◦ Impact on community (G4-SO1) - Vedanta
◦ Training against corruption (G4-SO5)
 Product Responsibility
◦ Life cycle assessment of products/services (G4-PR1)
◦ Customer satisfaction (G4-PR5) - Dell

34. List of India companies with GRI based sustainability reporting

36. Comparison of the standards
Features GRI AA 1000 SA 8000 ISO 26000
T le bott li So
acco ting,
reporting
accontabi So respsib
Corporate
ty
Reporting &
Man ement
Codes, issues &
asse ts ance
Su
pillar
ility
Triple bottom line
Primarily social, se
nd rily enviro
l
economical labour
- mainly Sustain le
development
Application
Normative asp
indicators Non normative Normative Normative
3rd party
audit Y Yes Yes Y
Indicators Se Up to t

37. National Scenario
 The reporting in India is still at a nascent stage with nearly 80 companies
out of 7000 listed companies, disclosing their sustainability performance.
 Out of these 80, there are about 60 companies which have publicly declared
that they use GRI Guidelines.
 And out of these 60, only 51 sustainability reports are registered on the GRI
database.
 Reporting companies are mainly from Oil and Gas, Mining, Cement, Steel,
Minerals, Automotive, etc. Reliance, ITC, Dr. Reddy's, Jubiliant Organosys,
Tata Steel, Tata, Lafarge are some of the most active companies reporting
themselves. Reliance and ITC are the highest rating (3 A+) companies.

38. 2011 onwards

39. Global Scenario
 Of the 250 largest global companies, over 65% are already publishing a
sustainability report.
 More than 3,000 companies across the world report on how they minimise
their environmental footprint, engage with stakeholders, adopt fair social
practices or embed sustainability into their day - to - day business, R & D or
marketing practices.
 Companies across Europe, Canada, Australia, Japan and USA and across
sectors have been coming up with the sustainability reports for 6 to 10 years
now.
 Companies like BP, ABN, AMRO, BT, Novo NORDISK etc. have been rated
amongst the top reporters for years now.

40. 2013 Global CSR Reputation Winner
Companies
RANK POINTS OUT OF
100
MICROSOFT 1 72.97
WALT DISNEY 2 72.83
GOOGLE 3 72.71
BMW 4 72.14
DAIMLER 5 70.65
SONY 6 69.49
INTEL 7 69.29
VOLKSWAGEN 8 69.21
APPLE 9 69.12
NESTLE 10 69.00
Source: Reputation Institute

41. Comparing 4 Years Ranking By Reputation
Institute

42. Companies lagging behind in reporting –
G3.1
 Most of the companies do not have regular checks and internal assurance
protocol in place.
 Most of the reports issued by companies fail to define clear focus areas and
identifying key stakeholders.
 Very few reporters have sustainability strategy with well - defined objectives and
SMART targets.
 The Sustainability Reports issued during the last few years are highly packaged
but lack emphasis on the main issue of sustainability.
 Climate change has emerged on the key sustainability risks across industries but
only small number of companies report on climate change risks.

43. What can be done? – G4
The expectations from Indian reporters going forward are to focus on
presenting information related to:
◦Sustainability issues, challenges, dilemmas and opportunities.
◦Regulatory environment and fact-based information.
◦Information of interest to investors such as materiality of issues in financial
terms, vision and strategy, statements, goals and targets, etc.
◦Explanation on identification and prioritization of material issues.
◦Reader friendly report design.

44. CASE STUDY 1
MICROSOFT

47. EMPOWERING NON PROFITS
Bill gates has donated $ 36,854,000,000 in
his lifetime.

48. EMPLOYEES RESPONSE

49. CASE
STUDY
- RIL

52. CASE STUDY -
TATA
 Approximately two third of the equity of the parent firm, Tata
Sons Ltd. is held by philanthropic trusts endowed by Sir
Dorabji Tata and Sir Ratan Tata, son of Jamshedji Tata, the
founder of today’s Tata empire in the 1860s.
 Through these trusts, Tata Sons Ltd. utilizes on average
between 8 to 14 percent of its net profit every year for
various social causes. Even when economic conditions were
adverse, as in the late 1990s, the financial commitment of
the group towards social activities kept on increasing, from
Rs 670 million in 1997-98 to Rs 1.36 billion in 1999-2000. In
the fiscal year 2004 Tata Steel alone spent Rs 45 crores on
social services.

53. In July 2004, B. Muthuraman, Managing Director, Tata Steel Limited (TISCO)
announced that in future TISCO would not deal with companies, which do not
conform to the company's Corporate Social Responsibility (CSR) standards.
Speaking at the annual general meeting of the Madras Chamber of Commerce
and Industry, He stated, "We will not either buy from or sell to companies that do
not measure up to Tata Steel's social responsibility standards."

54. •Over 500 self-help groups are currently operating under various poverty alleviation
programs; out of which over 200 are engaged in activities of income generation
thorough micro enterprises.
•Women empowerment programs through Self-Help Groups have been extended to
700 villages. From the year 2003 to 2006, the maternal and infant survival project had
a coverage area of 42 villages in Gamharia block in Seraikela Kharsawa and a
replication project was taken up in Rajnagar block.

55. Tata Steel supports various social welfare organizations. They include;
Tata Steel Rural Development Society
Tribal Cultural Society
Tata Steel Foundation for Family Initiatives
National Association for the Blind Shishu Niketan School of Hope
Centre for Hearing Impaired Children
Indian Red Cross Society, East Singhbhum
•In 2010-11, TCS supported its local communities in the United States: supported
the victims of the 2010 Chilean earthquake.
As far as the Tata group is concerned , it has gone a long way in fulfilling its duty and
responsibility towards the society and the nation.

56. Comparing with international
firm
As both a supplier and a customer in the technology industry, Dell has a robust process to
understand how the chemicals and materials used inside our products and during their
manufacturing processes affect humans, plants and animals. Materials usage laws and
regulations differ around the world, and suppliers’ levels of transparency and accountability
can also vary.
DELL FOCUSES ON :
ENVIRONMENT COMMUNITIES PEOPLE

57. In 2013 dell achieved their long term recycling goal to collect 1 billion pounds
of e-waste, a full year ahead of schedule. They recycled more than 170 million
pound of electronic globally.
Dell continued to close the recycling loop by
using 7.8 million pounds (3,542,556 kg) of recycled-content plastics in flat-
panel monitors and
Optic Plex desktops an increase of
6 percent over FY12.