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Sustainability reporting enables
organizations to consider their
impacts on a wide range of
sustainability issues. This enables
them to be more transparent about
the risks and opportunities they face.
Sustainability reporting is the key
platform for communicating
sustainability performance and impacts. A sustainability report in its basic form is a report
about an organization’s environmental and social performance.
To make this reporting be as useful as possible for managers, executives, analysts,
shareholders and stakeholders. A unified standard that allows reports to be quickly assessed,
fairly judged and simply compared is a critical asset. As firms worldwide have embraced
sustainability reporting, the most widely adopted framework has been the Global Reporting
Initiative (GRI) Sustainability Reporting Framework. It can be considered as synonymous
with other terms for non-financial reporting; triple bottom line reporting and corporate social
responsibility (CSR) reporting.
Building and maintaining trust in businesses and governments is fundamental to achieving a
sustainable economy and world. Every day, decisions are made by businesses and
governments which have direct impacts on their stakeholders, such as financial institutions,
labour organizations, civil society and citizens, and the level of trust they have with them.
These decisions are rarely based on financial information alone. They are based on an
assessment of risk and opportunity using information on a wide variety of immediate and
future issues.
The value of the sustainability reporting process is that it ensures organizations consider their
impacts on these sustainability issues, and enables them to be transparent about the risks and
opportunities they face.
Stakeholders also play a crucial role in identifying these risks and opportunities for
organizations, particularly those that are non-financial. This increased transparency leads to
better decision making, which helps build and maintain trust in businesses and governments.
THE GLOBAL STANDARD OF SUSTAINABILITY REPORTING BY GRI
The GRI Standards create a common language for organizations – large or small, private or
public – to report on their sustainability impacts in a consistent and credible way. This
enhances global comparability and enables organizations to be transparent and accountable.
The Standards help organizations understand and disclose their impacts in a way that meets
the needs of multiple stakeholders. In addition to reporting companies, the Standards are
highly relevant to many other groups, including investors, policymakers, capital markets, and
civil society.
The Standards are designed as an easy-to-use modular set, starting with the universal
Standards. Topic Standards are then selected, based on the organization's material topics –
economic, environmental or social. This process ensures that the sustainability report
provides an inclusive picture of material topics, their related impacts, and how they are
managed.
STANDARDS OF GRI
COMPANIES SELECTED
TATA MOTORS
MARUTI SUZUKI
The Automobiles industry is highly concentrated, with a few large manufacturers and a
diversified supply chain. Given the industry’s reliance on natural resources and sensitivity to
the business cycle, revenues are typically cyclical.
Company Links
Company Website
Official Website
Sustainability Reports
Sustainability Reports
EXPECTED SUSTAINABILTY DISCLOSURE TOPICS
Product Safety
Driving is a risky activity, as factors such as distracted driving, speeding, drunk driving, and
dangerous weather conditions can lead to accidents that expose drivers, passengers, and
bystanders to possible injuries and deaths. Accidents can also be caused by defective
vehicles, and failure to detect defects before vehicles are sold can have significant financial
repercussions for auto manufacturers. Defective vehicles sold in many countries that do not
meet safety requirements must be recalled and repaired or replaced at the manufacturer’s
cost. Recalls can result in reputational damage, which can reduce revenues and growth
potential while increasing a company’s risk profile and thus its cost of capital. Ensuring
vehicle safety and responding in a timely manner when defects are identified can protect
companies from regulatory action or customer lawsuits, which may result in significant costs
that can erode industry margins. Through effective management of the issue, companies can
enhance their brand value and drive higher sales over the long term.
Labour Practices
Many workers in the Automobiles industry are covered under collective bargaining
agreements that cover fair wages, safe working conditions, and freedom of association, which
are among basic worker rights. Meanwhile, due to the global nature of the industry, auto
companies may also operate in countries where worker rights are not adequately protected.
Effective management of, and communication regarding, issues such as worker pay and
working conditions can prevent conflicts with workers that could lead to extended periods of
strikes, which can slow or shut down manufacturing, reduce revenues, and raise operational
risk. Auto manufacturers that manage workers in a way that protects worker rights may face
higher labour costs in the short term, but may be better positioned to ensure the long-term
financial sustainability of their operations by enhancing worker productivity.
STANDARD 1: ECONMIC
STANDARD 2: ENVIRONMENTAL
STANDARD 3: SOCIAL
ANALYSIS OF THE PARAMERTERS MET UNDER EACH STANDARD
Completeness: The company has clearly outlined the reporting scope and organizational
boundaries in the report. The report mentions the material issues and how do they impact the
company. However, in terms of discussing material impacts beyond direct operations,
upstream and downstream, the report has excluded the subsidiaries from the reporting scope.
The company describes their value chain and uses clear graphical representation of the value
chain through a dashboard.
Materiality: The report does not categorize the company’s stakeholders into internal and
external. They have disclosed the methodology adapted by the company to prioritize material
issues by stakeholder engagement. The report focuses on the content which is on strategies,
KPI, targets and case studies on the identified material issues.
The company has hired TUV for the external validation but there is no mention of the internal
validation.
Stakeholder Engagement: The report discusses the key stakeholder engagement that go
beyond business as usual. The report talks about the significance of stakeholder engagement
mechanisms and the stakeholders’ perspective through quotes. In particular, the report
mentions the significance of stakeholders in the value chain of the company. The report
discusses the procedures to respond and monitor stakeholder’s feedback resulting from the
engagement during the year.
External Environment: Under ‘Sustainable Mobility Solutions’. of the report, it has
discussed about the role of TML in shaping the future of mobility in India. The company has
aligned the trends with their future prospects of the business
Reliability: Tata Motors Ltd has engaged TUV for external independent assurance provider.
The assurance certificate from the independent external party has been provided in the report.
Company has not Explained how assured data is used for better internal decision-making.
Balance: The report does not provide the reader information about the low performance (if
anywhere). Yes, few issues have been mentioned that are associated with the industry. The
third party has given its comment in the assurance certificate which enhances the credibility
of the report.
Conciseness: The report has covered essential aspects such as materiality, strategy,
governance, targets and indicators in the report. The report is focused on the identified
materiality issues. There is no separate summary document but in the initial pages of the
report the highlights of the reporting year had been mentioned.
Governance and Accountability: The report does not describe the highest sustainability
decision-making authority and how it fits within the corporate governance structure. An
overview has been provided on sustainability governance at group level. The report stays
boilerplate and does not provide insight into governance activities and key decisions made or
actions undertaken during the reporting period. The report discusses the significance of non-
financial criteria to be included in the business but does not provide adequate details on how
it is integrated in board and executive remuneration.
Performance: KPIs of the key material issues have been disclosed by the company in the
report. The report provides context to the data presented in the report and explains
performance trends to facilitate data interpretation. However, the report does not provide
granular details or insights into performance at regional level or specific sites where
operations could be threatened by local factors.
Management Approach: An overview of the management system of the company has been
given. However. the report does not adequately describe the management systems and
processes in place to address the most significant issues. The process for data collection has
been disclosed in the report. The report also discusses about the engagement procedure of the
company with the employees, customers and suppliers and talks about their significance
along the value chain.
Strategy: The report explains the strategic approach to sustainability and how it fits into the
corporate strategy by linking with each SDGs. However, the report does not discuss
connection between sustainability strategy and financial performance. The report describes
how the strategy will be delivered via action plans, targets and integration into business
functions under ‘Sustainable Mobility Solutions’.
Targets & Commitments: The report provides only a few targets and does not provide
adequate short term, medium term and long-term targets. However, the targets provided are
specific. Also, the company has included target that go beyond direct operations. The report
provides a flowchart of the targets and mentions the achievements till the reporting year.
CONCLUSION
The Sustainability report of TATA Motors meet majority of the parameters of the standard 1
and standard 2, however, they failed to meet several parameters of the standard 3. Overall,
the report is in accordance to the GRI standards, but there is a need to focus on social
standards.
Maruti Suzuki India Ltd (MRTI.BO)
Maruti Suzuki has been at forefront of Indian automobile manufacturers in publishing its
sustainability reports. Maruti Suzuki’s communication emphasizes that the company
understands the impact of Environmental and Social (ESG) impact of its activities and that
green technology is the need of the hour/way to achieve both.
Maruti Suzuki India Limited is a holding company. The Company is engaged in the
manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles).
The other activities of the Company comprise facilitation of pre-owned car sales, fleet
management and car financing. Its geographical segments include the domestic segment,
which includes sales to customers located in India, and the overseas segment, which includes
sales to customers located outside India.
The Company’s product portfolio includes Alto 800, Alto K10, Wagon R, Celerio, Ritz,
Swift, DZire, Ertiga, Omni, Eeco, Gypsy and Ciaz. Its service offerings include Maruti
Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki
Auto Card and Maruti Driving School. It has approximately five plants, located in Palam
Gurgaon Road, Gurgaon, Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with
an installed capacity of over 1.5 million vehicles per year.
The automobile manufacturer designs, build, and sell vehicles that run using a range of
traditional and alternative fuels and powertrains. The company sells these vehicles to dealers
for consumer retail sales as well as sell directly to fleet customers, including rental and
leasing companies, commercial fleets, and governments. Due to the global nature of this
industry, company has manufacturing facilities, assembly plants, and service locations in
several countries around the world.
The Automobiles industry is highly concentrated, with a few large manufacturers and a
diversified supply chain. Given the industry’s reliance on natural resources and sensitivity to
the business cycle, revenues are typically cyclical.
Company Links
Company Website
Official Website
Sustainability Reports
Sustainability Reports
PARAMETERES MET UNDER EACH STANDARD
STANDARD 1: ECONMIC
STANDARD 2: ENVIRONMENTAL
STANDARD 3: SOCIAL
ANALYSIS OF THE PARAMERTERS MET UNDER EACH
STANDARD
Completeness: The report mentions the scope and organizational boundaries of the company.
The report discusses the significance and the material impacts on their value chain. The
material impacts cover the boundaries of Maruti Suzuki, dealers and suppliers and partially
covers the upstream and downstream operation. The value chain of the company has been
discussed in the report but there is absence of graphical representation of it.
Balance: The report does not provide the reader information about challenges and the below
expected performance (if anywhere). The report doesn’t discuss about any public concerns
associated with the auto mobile industry. The company has worked for issues faced in the
local communities. A third party has given its comment in the assurance certificate which
enhances the credibility of the report.
Conciseness: The report is focused on the materiality, strategy and governance but ignores
the sustainability targets set by the company. Most of the report content is focused on the
identified materiality issues. There is no separate summary document but there are
performance highlights of the reporting year on various pages of the report.
Governance and Accountability: The report does not give an idea about the highest
sustainability decision-making authority. Sustainability performances and use of more eco-
friendly products have been mentioned where relevant in the report. The report sticks to
boilerplate reporting and does not provide insights into governance activities and key
decisions made or actions undertaken during the reporting period, this report explains how
sustainability in important in their business.
Strategy: The company has shown how sustainability approach fits to corporate strategy.
However, no linkage of sustainability approach with financial performance has been
provided. Future plans and targets describing how the strategy will be delivered via action
plans, targets and integration into business functions have not been provided.
Targets & Commitments: No future targets by the company have been mentioned in the
report. Hence, the report does not meet the criteria of the GRI.
Management Approach: An overview of the management system of the company has been
given. Detailed data collection methodology is missing. The report has disclosed data
collection process and internal controls. The report has discussed the engagement procedure
but has not mentioned the material impacts along the value chain.
Performance: KPIs have been mentioned for all the key materiality issues. Data along with
the performance trends have been explained in the report. Data for regional level or specific
sites are missing.
Evidence of Activities: The report mentions the data of previous years to compare and shows
how the company’s performance has improved. Case studies show how the company has
achieved/ achieving sustainability.
Strategic Partnership & Collaborations: The company has mentioned about the partners
(not NGO) and how they are collaborating with the stakeholders to understand the issues. The
report mentions the collaboration process with the communities to support company’s
sustainability agenda. The outcomes of the collaborations have been mentioned in the report.
Not much have been disclosed in the report about the significance of partnerships.
CONCLUSION
The sustainability report of Maruti Suzuki has met majority of the parameters of the GRI
standards, However, a few parameters, that are important for the sector, are yet to be
recognised by the firm. Overall, the report is in accordance to the GRI standards, but there is
a need to focus on a few parameters of the economic standard such as Anti- corruption and
Anti-competitive behaviour.
COMPARISON OF THE TWO COMPANIES
By analysing the sustainability reports of both the companies it can be concluded that Tata
motors and Maruti Suzuki, both follow the GRI standards in forming their Sustainability
reports, however, Maruti Suzuki has followed it to a greater length. Maruti Suzuki has
followed majority of the standards and has given equal importance to all the parameters.
They have made sure that the operations of the company are sustainable for the nature and
have worked towards a more environment friendly procedure of operating. Apart from
focusing on their economic and environmental standards, they have also worked on the social
aspect and have met majority of the social standards of the GRI.
On the other side, TATA motors have largely focused on their economic and environmental
standards. They have failed to meet several parameters of the social standards of the GRI.
REFERENCES
globalreporting.org
WWW.Tatamotors.com
WWW.marutisuzuki.com