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Trend Analysis of sustainable consumption in corporate reporting

Anand Acharya( anandacharya.mission@gmail.com )

Bansuri Das ( bansuridas@gmail.com)

MBA BS (3rd Sem) TERI University, New Delhi

Background:
Corporate Social Responsibility (CSR) and Sustainability reporting is used by companies to
inform consumers of their social and environmental values and practices beyond the
sustainability characteristics of individual product. Reporting topics include corporate
governance, environmental performance, health and safety of employees, community
contributions, and supply chain management. But the gap between corporate sustainable
reporting and most notions of sustainable consumption is still large, e.g. not many reports look at
how the company & its product range supports sustainable consumption. While many companies
have a good track record on corporate reporting, this may not necessarily match actual
sustainability practices.
This research aims at throwing light on companies supporting sustainable consumption in their
CSR activities. The focus areas in which corporate implement sustainable consumption
shall be identified and recommendations shall be given to other companies to adopt such CSR
activities.

Objective:
1. To identify corporate social responsibility initiatives of Indian companies which promote
sustainable consumption.
2. To determine the trend in which sustainable consumption activities are being executed.

Methodology:
The research will be based on secondary data. Corporate Social Responsibility and sustainability
reports of various sector specific companies in India would be analyzed. A model was developed
under which weights assigned to the companies on the basis of the area and number of
sustainable consumption practices. The model is attached under Annexure 1.

Limitations:

1. Not all sustainability reports disclose data pertaining to their CSR activities thus data is not
uniform.

2. Companies’ capacity & annual revenue are not the criteria for comparing their sustainability
report.
Scope:

This research shall give guidelines to specific sector companies who want to adopt and promote
activities related to sustainable consumption if its scope is expanded from page constraint

Literature Review:

Sustainable consumption and production first secured international prominence at the Rio Earth
Summit (UNCED) in 1992. At the 1992 United Nations Conference on the Environment and
Development (UNCED) in Rio de Janeiro, the Agenda 21 action plan was adopted which is a
collection of detailed goals and policies aimed at making sustainable development a reality by
eliminating poverty and by eradicating the serious threats to our global and local environment1
Sustainable Consumption is "the use of services and related products which respond to basic
needs and bring a better quality of life while minimising the use of natural resources and toxic
materials as well as the emissions of waste and pollutants over the life-cycle so as not to
jeopardise the needs of future generations."2

Sustainable consumption is a key step towards achieving sustainable development. The intrinsic
relationship between sustainable consumption and the sustainable development paradigm was
stressed in the Johannesburg Declaration on Sustainable Development which states, that:
“poverty eradication, changing consumption and production patterns, and protecting and
managing the natural resource base for economic and social development are overarching
objectives of, and essential requirements for sustainable development.”3
Sustainable Consumption is about:
• Meeting the increasing needs of people with improved environmental outcomes and more
sustainable consumption
• Using fewer resources and causing less pollution to enable human development in all parts of
the world
• Helping consumers to stimulate suppliers to be innovative, improve competition and promote
economic growth and development.4
Although companies tend to focus on sustainable consumption related activities internally but
when comes to their CSR activities or external participation they used to follow conventional
path, there are various definitions of CSR but this paper is adopting UNEP’s definition of CSR,
as mentioned in the Global Compact Environmental Principles Training package (2005):
“A values-based way of conducting business in a manner that advances sustainable development,
seeking positive impact between business operations and society, aware of the close interrelation
between business and society as well as of enterprises, like citizens, having basic rights and
duties wherever they operate.”
A company can have a good CSR record, but this does not mean that its operations and products
are sustainable, nor that sustainability is embedded into the company’s culture and decision-
making. Core to this is moving beyond an internal frame of reference, coupled with an
engagement with key stakeholders, to accept responsibility for the impact of the products and
services it sells to consumers5

To find out relations between sustainable consumption of business6 and its CSR activities
various indicators of sustainable consumption is studied7 starting with OECD indicators they
focused from angle of analyzing economies, then UNGC indicators for sustainable consumption8,
UNGC GRI indicators, Indicators of Consumption and Production Patterns (UN CSD)9, none of
them specifically looked into sustainable consumption in corporate social responsibility activities
so the following table for sustainable consumption and CSR activities is developed to analyze
trend of CSR activities in confirmation with sustainable consumption indicators, the table
consists various indicators with sub-indicators as explained below.

Indicator Used with Description of Indicator


subindicator in brackets
Green Procurement (Alternate focuses on sustainable procurement of electricity, water, raw
sources of Energy, Cleaner materials, chemicals, technology transfer etc. from
Inputs, Clean Technology) environment friendly sources.

Material with sub indicator focuses on consumption of various input materials from
(Reduce,Reuse,Recycle) different usage aspects,
Energy focuses on reduction of energy usage within a company
water also focuses same as Indicator of Material
(Reduce,Reuse,Recycle)
fuel focus on judicial use of it
(Reduce, Treatment),
Waste (Reduce, focus on company’s varied activities related to it,
Reuse/Recover,Recycle,
Environment Friendly
Disposal )
Pollution(Air, Noise etc, focuses on activities for reducing it
GHG Gases excluded in this
indicator )
Green building focuses on green building developed by companies for their on

Product innovation and design looks for activities inline with sustainable consumption,
(Biodegradable, R&D, Green
Products)
Transport Looks for various actions to reduce transporation
carbonfootprint
Conservation (Habitat, water, Activities focused on it
trees/soil)
GHG Reduction Actions taken to reduce GHG emission
CDM/Carbon Credit Enrolled/actively
SC Awareness (Ad&PR, Activities related to participation and awareness
labeling,activities)
CSR Activities Specifically promoting Resources use optimization in
community external to company

Sampling: The number of companies whose CSR reports were considered was divided
sectorally. A total of 91 companies were reviewed belonging to 11 different sectors. The number
of companies reviewed under each sector is illustrated in the chart below.
Sectoral approach was adopted since it is a significant element in a portfolio to address climate
change, it provided a means to compare best practices, performance standards, environmental
performance and use of clean technology by companies to reduce their carbon footprint. To avoid
inefficiency and unintended effects, sectoral approach was used to compare CSR reports of
companies belonging to a similar sector.[10]
The main benefit of using this approach was to understand the commitment level of companies in
a particular area for reducing GHG emissions and to understand the diverse approaches
undertaken by companies across different sectors for analyzing the trend in their respective field
to combat climate change.
Chart showing the number of companies reviewed in each sector

Observation and Analysis:

Observation on companies approach to sustainable consumptions are illustrated below sectorally:

1. Information Technology:
Analysis

Top 3 Key Areas for adopting Sustainable 1. Rain water Harvesting


Consumption in this sector 2. Waste Recycling
3. Adopting alternate source of energy

2. FMCG

Analysis

Top 3 Key Areas for adopting Sustainable 1. Sustainable consumption awareness


Consumption in this sector generation campaigns
2. Research & Development
3. Rain water conservation

3. Automotive:

Analysis

Top 2 Key Areas for adopting Sustainable 1.Sustainable consumption awareness


Consumption in this sector generation campaigns
2.Innovation of green products

4. Realty:

Analysis

Top 2 Key Areas for adopting Sustainable 1. Tree Plantation


Consumption in this sector 2. Energy Reduction
5. Pharmaceutical:

Analysis

Top 3 Key Areas for adopting Sustainable 1. Sustainable consumption awareness


Consumption in this sector generation campaigns
2. GHG Reduction
3. Waste Reduction

6. Bank

Analysis

Top 3 Key Areas for adopting Sustainable 1. Sustainable consumption awareness


Consumption in this sector generation campaigns
2. CSR activities promoting sustainable
consumption

7. Consumer Durables

Analysis

Top 3 Key Areas for adopting Sustainable 1. Sustainable consumption awareness


Consumption in this sector generation campaigns
2. Energy Reduction
3. Water Reduction

8. Metal:

Analysis

Top 3 Key Areas for adopting Sustainable 1. Tree Plantation


Consumption in this sector 2. Energy Reduction
3. Waste Reuse
9. Consumer Goods

Analysis

Top 3 Key Areas for adopting Sustainable 1. Innovation in green products


Consumption in this sector 2. Clean technology adoption
3. Energy reduction

10. Power:

Analysis

Top 3 Key Areas for adopting Sustainable 1. Tree Plantation


Consumption in this sector 2. Habitat conservation
3. Sustainable consumption awareness
generation campaigns

11. Oil and Gas:

Analysis

Top 3 Key Areas for adopting Sustainable 1. Sustainable consumption awareness


Consumption in this sector generation campaigns
2. Tree Plantation
3. Rain water conservation

Conclusion:

There lies a big gap between companies adopting sustainable consumption practices to reduce
their carbon foot print on the environment and mitigate climate change.

There exists a big bias across sectors since some companies focus on few indicators of
sustainable consumption rather than adopting a holistic approach for reducing carbon foot print
specially in respect of companies CSR activities.

There is a lack of uniformity in CSR reporting of companies and thus it is difficult to understand
the company’s focus area for sustainable consumption.
Annexure 1

Alt sources of energy


Green Procurement Cleaner Input
Clean technology
Material Reduce
Material Material Reuse
Material Recycle
Energy Energy Reduce
Water Reduce
Water Water Reuse
Water Recycle
Fuel Reduce
Fuel
Fuel Treatment
Waste Reduce
Waste Reuse
Waste
Waste Recycle
Environment Friendly disposal
Pollution Air, Noise Pollution Air, Noise Reduce
Green Building
Full/partial bio degradable
Product Innovation & Design R & D/ alliance/ participation
Green products
Transport Car pooling/ Public Transport/ Green
mode
Cleaner fuel
Video Conferencing
Habitat
Conservation water
trees/ soil
GHG reduction
CDM/ Carbon credit
Advertising & PR
SC Awareness Labeling
Awareness generation campaigns
CSR Activities promoting resource
optimation

References:

1 Swedish Consumer Coalition (2001) Sustainable consumption: A report from the Swedish
Consumer Coalition, Sweden

2 UN CSD International Work Programme (1995)


3
Http://www.johannesburgsummit.org/html/documents/summit_docs/1009wssd_pol_declaration.d
oc
4 http://www.uneptie.org/pc/sustain/about-us/about-us.htm
5. See, for example, Carbon Trust (2005), The carbon emissions generated in all that we
consume.
6 Why business could get serious about sustainable consumption
I will if you will: Towards sustainable consumption
http://www.sd-commission.org.uk/file_download.php?
target=/publications/downloads/I_Will_If_You_Will.pdf
7.OECD (1999). Towards Sustainable Household Consumption: Indicators to measure progress.
http://www.olis.oecd.org/olis/1998doc.nsf/LinkTo/E
NV-EPOC-SE(98)2-Final

8. Chapter 10 Indicators and Methodologies for Sustainable Consumption Hands-on


Sustainable Consumption: A training guide for implementing the United Nations
Guidelines for Consumer Protection
http://www.consumersinternational.org/media/316122/hands-on%20sustainable
%20consumption-%20implementing%20sustainable%20consumption%20policies.pdf

9.Figure 10: Indicators of Consumption and Production Patterns (UN CSD) PLANNING FOR
CHANGE Guidelines for National Programmes on Sustainable Consumption and
Production

10 The Sectoral Approach to Climate Change: Introduction and Overview Industry sectoral
approaches and climate action:From global to local level in a post-2012 climate framework A
Review of Research, Debates and Positions

Brief List of companies analyzed

Companies CSR pdf/Link

Cadbury http://www.cadburyindia.com/cadtoday/socialresp.asp

Colgate http://www.colgate.co.in/app/Colgate/IN/Corp/Environment.cv
sp

Marico http://www.marico.com/abt_marico/csr.html

ITC Sustainability Report 2010

Britannia Health & Nutrition Initiatives 2010

HUL Sustainable development report 2009

Parle http://www.parleproducts.com/citizen/citizen_parle_csr.asp

Dabur http://www.dabur.com/About%20Dabur-Vision

Amul http://www.amul.com/photogal/pg150808.html

Moser bear Sustainability report 2009

TCS Environmental Objectives 2009-2010

Infosys Sustainability Report 2008-2009

Wipro Sustainability report –executive summary 2008-2009

HCL http://www.hcl.in/community-initiatives.asp

Patni http://www.patni.com/

Finanical Technology http://www.ftindia.com/

Oracle http://www.oracle.com/index.html
NIIT http://www.niit.com/Pages/DefaultINDIA.aspx

Mphasis http://www.mphasis.com/

TATA Motors Social Responsibility Annual report 2009-2010

Mahindra Corporation Sustainability Review 2008-2009

Maruti Suzuki Maruti Sustainability report 2008-2009

Ashok Leyland http://www.ashokleyland.com/green_mission.jsp?


name=Green

Apollo http://www.apollotyres.com/india_community.htm

Bajaj http://www.bajajauto.com/csr.asp

Hero Honda http://www.herohonda.com/co_csr.htm

Exide http://www.exideindustries.com/corporate_social.html

Bharat Forge http://www.bharatforge.com/index.asp

MRF http://www.mrftyres.com/MrfSport.aspx

Oriental Bank of Directors Report 2008-2009


commerce

Canara Bank Directors Report 2009-2010

Indian Overseas bank http://www.iob.in/sakthi.aspx

Yes Bank http://www.yesbank.in/responsible_climate.htm

HDFC Bank http://www.hdfcbank.com/personal/default.htm

Axis Bank http://www.axisbank.com/

ICICI Bank http://www.icicifoundation.org/

Allahabad Bank http://www.allahabadbank.com/

Fedral Bank http://www.federalbank.co.in/

Thermax Sustainability Report 2009-2010

Sony India Ltd http://www.sony.net/SonyInfo/csr/environment/