by Namrata Rana (@namratarana) and Utkarsh Majmudar (@utkarshm)
India's top companies for CSR study 2014 (www.responsiblefuture.in) has given a remarkably low score to top Indian companies on Sustainability. While sustainability parameters are often talked about in GRI reports, closer scrutiny reveals a narrow spectrum of operation for most companies.
Sustainability Performance in the study was evaluated around achieving on-the-ground results, such as reduction in carbon emissions & coal, water use, procurement of renewable energy, improved energy efficiency, a supply chain that meets high environmental and social standards and products designed not only to minimize environmental and social impacts throughout their life cycle, but also to serve as solutions to key sustainability challenges.
Our study finds that 41% of the companies studied give specific targets to their suppliers to reduce their carbon footprint. However, only 17% of the companies studied conduct environmental audits of new suppliers before they are brought on board or conduct ongoing periodic audits of existing suppliers on their environmental impact.
However some top scoring companies ensure that suppliers meet the same environmental and social standards — including disclosure of goals and performance metrics—as the company has set for its internal operations. Some have also taken the initiative of creating sustainability awareness and training for employees of suppliers/vendors. There are also initiatives to help suppliers start their sustainability journey.
Greening a companies transportation systems provides one of the best opportunities to reduce GHG emissions. A sustainable transportation and logistics strategy includes an analysis and monitoring of both owned and third-party operated fleet & logistics, as well as the type of fuel used. 32% of Indias top companies have these parameters as part of their sustainability reporting, though only 13% of the companies studied disclose information related to emissions from logistics
Manufacturing being a core process for any business has a significant impact on both - consumption of resources as well as the GHG emissions it generates. Only 37% of Indias top companies disclose data on GHG emissions while 53% of them have set targets. Many manufacturing companies do not have a GHG monitoring mechanism in place around their operations and only a handful from the services industry e.g. IT & banking seemed to report their indirect emissions like electricity consumption, business travel and employee commute. Many low ranked companies are yet to take up initiatives in this regard.
The commonly adopted measures were usage of renewable energy, green certification of production units/buildings, preventing wastage of electricity, improving efficiency of electricity by use of LEDs, etc. Some manufacturing companies also mentioned initiatives such tree plantation for carbon sequestration. Financial institutions (including banks) seem to associate their contribution in this regard by providing funds to firms investing in and/or using renewable energy in their operations at concessionary rates.
Products and Services
48% of top Indian companies are investing in transforming business models to create products and services that minimize adverse social and environmental impacts and, in many cases, have positive sustainability impacts. While IT companies are investing in hybrid technology to reduce emissions, infrastructure companies have invested in large-scale solar power plants and water reduction technologies. Banks are supporting initiatives in the area of clean technology and energy efficiency by utilizing credit lines from various bilateral and multilateral agencies.