Sustainability is a
business strategy that meets the needs of the enterprises and its stakeholders
today while sustaining the resources, both human and natural, which will be
needed in the future. In other words, it is a practice of measuring, disclosing
and being accountable to internal and external stakeholders for organizational
performance towards the goal of sustainable development.
In India,
there is an increased pressure on companies to be transparent and socially
responsible and present their non-financial performance (primarily
environmental and social) in the form of a Sustainability report. In such a
scenario, it is vital for companies to understand the evolving trend of reporting
and how it may impact their long-term viability. The value of a company is
impacted by the quality of its relationship with a range of internal and
external stakeholders.
The Ministry
of Corporate Affairs, Government of India, in July 2011, came out with the
'National Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business'. These guidelines contain comprehensive
principles to be adopted by companies as part of their business practices and a
structured business responsibility reporting format requiring certain specified
disclosures, demonstrating the steps taken by companies to implement the said
principles.
The Securities and
Exchange Board of India (SEBI) vide Circular dated 13/08/2012 has
mandated the Business Responsibility Report (BRR) for top listed companies
based on market capitalization at BSE and NSE as
on 31st March 2012. SEBI has further put tremendous
emphasis on disclosing BR Report for all the companies. It is due to the fact
that at a time and age when Enterprises are increasingly seen as critical
components of the social system, they are accountable not merely to their
shareholders from a revenue and profitability perspective but also to the
larger society, which is also its stakeholder. In line with the above
guidelines and considering the larger interest of public disclosure regarding
steps taken by listed entities from a Environmental, Social and Governance
(“ESG”) perspective, it has been decided to mandate inclusion of Business
Responsibility Reports (“BR reports”) as part of the Annual Reports for listed
entities.
The listed entities
which have been submitting Sustainability reports to overseas regulatory
agencies/stakeholders based on internationally accepted reporting frameworks
need not prepare a separate report for the purpose of these guidelines but only
furnish the same to their stakeholders along with the details of the framework
under which their BR Report has been prepared and a mapping of the principles
contained in these guidelines to the disclosures made in their sustainability
reports.
Sustainability
reporting is not a new practice. Stakeholders (investors, employees, customers,
suppliers, and the community) and the capital markets are increasingly
demanding better, more transparent communication of nonfinancial sustainability
data. Sustainability reports—also called Corporate Social Responsibility (CSR)
or Environmental Social Governance (ESG) reports— that convey information about
an organization’s economic, environmental, and social impact are increasingly
being issued in conjunction with financial reports—and stakeholders are using
them more often in evaluating the long-term viability of a company.
Public reporting
offers not only examples of sustainable business behavior, but also allows us
to improve our internal processes and achieve our business objectives. It has
multiple benefits like
·
One can achieve greater credibility
among employees, business partners, and government regulators.
·
One can attract consumers who value
businesses that are implementing sustainable practices.
·
It creates public trust in your
business because it is based upon what a company does and how honestly it talks
about what it does.
In nutshell, it
helps you enhance your environmental reputation, manage internal risk and
increase business efficiency. So don't miss a crucial and effective opportunity
to build and/or repair confidence in your businesses.
Some leading
companies have been producing sustainability reports for more than ten years. All organizations (private,
public, or non-profit) are encouraged to report against the Guidelines whether
they are beginners or experienced reporters, and regardless of their size,
sector, or location.
We at
PCC, understand the importance of Sustainability to Companies and have
invested significantly in developing services to meet their Sustainability
objectives — including business performance, process and control analyses and
attestation capabilities to help address the challenges of measuring and
reporting sustainability data.