Sustainability disclosure and reporting in India has received a fillip in the last couple of years. It has been driven to large extent by investors and policy makers. The Sustainability Leadership Forum has been working closely with businesses, investors, catalyst organizations and policy makers to identify the link between investment/capital flows and Environmental and Social (E&S) disclosure in India and have an integrated conversation about the expectations, concerns, challenges and realities surrounding ESG measurement/ management/ disclosure in the Indian market.
Working Group 2014
Enhanced ESG disclosure communicated appropriately provides an opportunity to listed companies to attract investors with long-term perspective by enhancing and communicating about their ESG performance.
Keeping in mind the existing need of businesses, investors and other stakeholders, the aim of the 2014 India Responsible Investment working group was to create ‘Information Instruments’ and ‘Information Enablers’ to help generate action related to ESG. The purpose was to leverage the power of information transparency and competitive dynamics to create greater ESG reporting actions. The objectives of the 2014 working group included:
Developing ESG Information Instruments that will inform the SBLF working group, investors as well as the market at large on the ESG performance of Indian businesses. This included:
Annual benchmarking report: which analysed trends on ESG disclosure and reporting of over 120 large businesses in India – to inform investors on the ESG performance and risks of their stocks
ESG Benchmarking tool: which has established sectoral ESG benchmarks for different parameters and metrics and allows investors to evaluate their investee’s performance vis-à-vis their peers
Quarterly information dashboard: which captured ESG actions of Indian businesses, investors, policy makers and other stakeholders
Developing an ESG Information Enabler by constructing an ESG guide for investors on how they can get and use ESG information.
2014 Working Group Products for Public Dissemination
Members of the India Responsible Investment Working Group 2014
GIZ-IICA is the bilateral cooperation project being implemented jointly by GIZ and IICA since 2008. Two major outcomes of this initiative have been the NVGs and the BRR developed by a committee of experts and backed by consensus through intensive consultations with stakeholders (www.iica.in, www.giz.de )
GIZ (Gesellschaft für Internationale Zusammenarbeit GmbH) is a German federally-owned international cooperation enterprise for sustainable development which operates worldwide. It has been operating in India for over 50 years and led several initiatives. More recently it has been actively engaged in the IICA-GIZ CSR Initiative to help develop a country specific common understanding of CSR, and to enable the adoption of Business Responsibility by businesses. Recently it has also been developing a program on Responsible Finance which is expected to be rolled out in late 2012. (www.giz.de)
Indian Institute of Corporate Affairs (IICA) is a think tank and capacity building institution that has been established by the Indian Ministry of Corporate Affairs for matters relevant to corporate regulation and governance. The Institute has been designed with an eye on the future to provide a platform for dialogue, interaction and partnership between governments, corporate, investors, civil society, professionals, academicians and other stake holders in the emerging 21st century environment. (www.iica.in)
cKinetics is a specialized sustainability advisory firm working with investors and businesses in emerging markets. The firm has a track record as being a specialist in leveraging cross-functional management resources across geographies to design and execute profitable business models that enhance and promote Sustainability. cKinetics helps architect and implement growth oriented sustainable solutions by bringing a deep understanding of sector dynamics across industries. (www.ckinetics.com )
Building on the work of the Working Group during 2013 and 2014, the outlook for 2015-16 is to leverage the research and information so far into greater action.
Facilitated by SBLF, cKinetics convened a sustainability disclosure and reporting working group in 2013 in partnership with the Indian Institute of Corporate Affairs, GIZ, and Impact Investing Policy Collaborative. The aim was to create a group which will identify institutional and policy linkages to drive Environmental and Social (E&S) disclosure.
The working group focussed on engagement with businesses, investors and institutions to gain a better understanding of E&S measurement, management and disclosure among Indian firms:
What are steps needed to coordinate actions between existing institutions to increase the prevalence of impact disclosure from businesses in India?
When, where, and how should these steps be undertaken to promote deployment of investment capital looking beyond a pure financial return?
The work aligns with the ongoing consultations of the IICA regarding the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (NVG-SEE).
The working group engaged with the extended supply chains in the following sectors: Agro/Food Processing and Consumer Products,Automotive/Automotive Ancillary, and Pharmaceuticals & Chemicals, in order to understand following:
Prevalence of ESG disclosure-measurement practices
Preparedness to implement enhanced ESG disclosure-measurement practices
How are the supply chains currently engaged on ESG issues?
How are firms managing supply chain risk on ESG issues?
How can businesses in these supply chains increase disclosure/ transparency on sustainability issues?
Investor interest in standardized ESG data - What E&S metrics are requested by investors and insurers?
2013 Working Group Members
Impact Investing Policy Collaborative (IIPC)
Convened by InSight at Pacific Community Ventures, in partnership with IRI at Harvard University, IIPC has a global membership which strives to grow impact investing markets by building a global network for policy research and innovation. The IIPC helps investors, public officials, advocates, researchers and related communities better identify and support policies that lead to more robust and effective capital markets with intentional social and environmental benefits. www.iipcolaborative.org
Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is a German federally-owned international cooperation enterprise for sustainable development which operates worldwide. It has been operating in India for over 50 years and led several initiatives. More recently it has been actively engaged in the IICA-GIZ CSR Initiative to help develop a country specific common understanding of CSR, and to enable the adoption of Business Responsibility by businesses. Recently it has also been developing a program on Responsible Finance which is expected to be rolled out in late 2012. www.giz.de
cKinetics is a specialized Sustainability advisory firm that works with investors and businesses. It has a practice focused on Investments and Sustainability Finance that amongst other topics works to deploy capital based on Environmental and Social (E&S) measures and create an impact going beyond a pure financial return. cKinetics has also been working for the past 18 months on working with investor groups to build an understanding of the E&S landscape in India. www.cKinetics.com/crackingtheconundrum
Indian Institute of Corporate Affairs (IICA)
Indian Institute of Corporate Affairs (IICA) is a think tank and capacity building institution that has been established by the Indian Ministry of Corporate Affairs for matters relevant to corporate regulation and governance. The Institute has been designed with an eye on the future to provide a platform for dialogue, interaction and partnership between governments, corporate, investors, civil society, professionals, academicians and other stake holders in the emerging 21st century environment. www.iica.in
2013 Working Group Reports for Public Dissemination
During the 12 month period of engagement, the 2013 industry working group on sustainability disclosure and reporting developed the following work products:
Emerging Landscape of ESG Action in Indian Businesses and Their Supply Chain
This first of its kind report presents the landscape of preparedness of Indian businesses and their supply chain to adopt ESG management systems and disclose the actions undertaken by them, their drivers and risk perception. It also presents the investor perspective on gaining ESG information from businesses and steps needed to increase the prevalence of impact disclosure in India.
National Voluntary Guidelines: Creating a conducive policy environment for Responsible Business and Responsible Investment in India
The report examines the development of the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (NVGs), lessons learnt for future policy makers and leveraging existing institutions. It also tries to establish the connect between NVG and the London Principles.
Survey Findings: Building a Business View on ESG Disclosure in India
The report presents the key findings of a survey amongst Indian businesses which examined how ESG measurement, management, and disclosure improves business operations, reduces risk and enhances access to capital.
Outcome Note of Discussion: Taking Action to Promote ESG Disclosure in India
This outcome note summarizes the key discussion amongst investors, policy makers and businesses during a workshop on ‘Building a Business View and Case for ESG Disclosure in India’
Driving E&S Performance and Disclosure in Businesses
This interim research report presents an overview of the existing research related to ESG management, performance and actions by businesses and delves on, the drivers and challenges faced by businesses. It also maps the existing institutions driving ESG management and disclosure globally and in India.
To learn more about the ongoing work, please contact Sustainability Outlook (Info@SustainabilityOutlook.in) with the subject ES Working Group