Sustainability an important cog to drive the

business engine

Introductory session
13th May 2022

Session: Online Certificate Course on Business

Responsibility and Sustainability Reporting (BRSR) Speaker: Vishal Bhavsar
Agenda
• Sustainable Development
• Need for sustainability reporting
• Global trends in Corporate Sustainability Reporting
• United Nations Sustainable Development Goals 2030
• National Guidelines on Responsible Business Conduct, 2018
• Mapping of NGRBC to SDG
• Fiduciary duties of directors – section 166 of Companies Act, 2013
State of sustainability in current business planning
Poll 1

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Global risk report 2021
Summary of 2021 risk report
Introduction: Sustainability
What is sustainability?

Sustainability is meeting today’s Sustainability is a condition under

need without compromising with which humans and nature can exist in
ability of future generations to productive harmony to support
meet their needs present and future generations.

Sustainability is based on a simple

principle:
Everything that we need for
our survival and well-being Sustainability is Ability to Sustain
depends, either directly or
indirectly, on our
natural environment.
Video 1
Sustainable Development timeline

1962 1969
Book ‘Silent National
Spring’ Environmental
Policy act

1972
UN conference
on the Human
environment and
UNEP

2012
Millennium
Development
goals (MDG’s)

2015
Sustainable
Development
goals (SDG’s)
Why is sustainability important?

Because our future depends on it…

Businesses today operate in an environment plagued by enormous global
challenges.

Climate Resource
change Scarcity

Growing
population Inequality

These mega-trend form a growing network of interconnected challenges which are creating
an imbalance in our global systems
Sustainability is transition

From
Short-Term Conflicting A linear flow of
An Economy Fossil fuels
Thinking with Nature resources

To
Long-Term Integrated Compatible A circular flow Renewable
Thinking Economy with Nature of resources fuels
Sustainability ….is more than CSR
Why Businesses pursue Sustainability?

Improved brand Increased Attract employees Assured Business Stakeholder

image and productivity and and investors continuity and satisfaction
protection against reduced costs Competitive
reputational risk Advantage
The impact of climate change are already being felt
Source: The Guardian

Increase in the Earth’s Average

Surface Temperature

Source: http://mapsgoogllez.us/climate/climate-chart-for-greenland
Investors are focusing on Environment, Social and Governance (ESG) risk

Over of investors surveyed by EY agreed that businesses should “focus more on

long-term value creation rather than short-term dividend payouts; be open

80%
and transparent about growth plans; and focus on environmental, social
and governance factors because they have real and quantifiable financial
impacts.”

Source: EY
Consumers are placing greater emphasis on sustainability

There is a significant growth in the market for

sustainable products and services and
consumers are becoming more educated
about the environmental and social impacts
of the products and services they consume.

65% 1/3rd 450

of global respondents of 250 business ecolabels in 199
surveyed by Nielson are executives surveyed by countries covering 25
willing to pay more for Accenture said that they sectors to help inform
products from could not keep up with consumers about the
companies that are consumer demand for sustainability credentials
committed to sustainable products and of products and services
sustainable business services
practices
Poll 2

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Businesses are responding by setting audacious goals and
targets
• Increase share of “Green 3 Star’
products to 80% by 2025
• Reduce GHG emissions by 400
million tons between 2015 and
2025
• Reduce water use intensity by
25% by 2025 compared to 2007
• 2025 target of reducing GHG
emissions during product use
by 60 Mn tons-CO2/ year
• To be supplied 100% by
renewable energy
• To create zero waste
Reduce water use and waste by
50% by 2030 over 2020 levels
• Using 100% renewable or
recycled materials for all
products and packaging
• Having zero consumer and
manufacturing waste go to
landfills by 2025
• Place 50 Mn people on the
path to prosperity by 2025
• Reduce recordable
workplace injury rate to 0.6;
LTIFR to 0.15 by 2025
• Reduce water consumption
intensity & energy intensity by
50% by 2024 from 2016 levels
• Improving the lives of 3 billion
people per year by 2025
• Become carbon neutral by
2020
• Applying circular economy
principles throughout Philips
Global trends in Corporate Sustainability Reporting
Poll 3

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Key trends in reporting framework

Global ESG framework There are multiple reporting frameworks,

ratings and rankings globally.

The most widely adopted frameworks in

India include:

1. Integrated Reporting (IIRC)

2. Global Reporting Initiative (GRI)
3. Sustainable Development Goals (SDGs)
4. National Guidelines on Responsible Business Conduct,
2018
Key findings in 2020

1 2 3
Reporting is improving The state of SDG reporting The state of integrated reporting
78% of member companies in our benchmark 96% of reports reviewed acknowledge the
41% of reports reviewed combine financial and
have improved their Overall scores since the SDGs in some way; 93% prioritize specific
non-financial information, up from 35% in
baseline year 2017; 26% have improved their SDGs and present some evidence of
2017; 18% are self-declared integrated reports.
Materiality score. alignment and contribution.

4 5 6
The state of GRI reporting The emergence of SASB The future is digital
84% of reports reviewed reference the Global 28% of reports reviewed integrate SASB into 15% of reports reviewed provide a digital-first
Reporting Initiative (GRI), similar to 87% in the materiality assessment process or experience; 81% of members with an offline-
2017; 78% of those claim to be in accordance produce a separate SASB index, up from 7% first approach produce complementary online
with Core or Comprehensive level of our sample in 2017; 65% of our US- content, up from 44% in 2017
headquartered sample does so.

Source: WBCSD
Global Reporting Initiative (GRI)

A multi stakeholder organization that pioneered the development of the world’s most widely
used sustainability reporting framework

Materiality: Materiality of information is at the center of sustainability reporting. Materiality in the context of
reporting constitutes, reporting on relevant topics important in reflecting the organization’s economic,
environmental and social impacts or influencing decisions of stakeholders.

Stakeholder inclusiveness: Stakeholders are defined as entities or individuals that can reasonably be expected to
be significantly affected by the organization’s activities, products, and services. The organization should identify its
stakeholders, and explain how it has responded to their reasonable expectations and interests

Sustainability context: The underlying question of sustainability reporting is how an organization contributes, or
aims to contribute in the future, to the improvement or deterioration of economic, environmental and social
conditions, developments and trends at the local, regional or global level.

Completeness: The range of sustainability information covered in the report and the time period for
which the performance data was collected should be sufficient to reflect the organizations significant impacts.
Global Reporting initiative framework
The GRI Standards
represent global best
• GRI 101: Foundation 2016
practice for reporting
• GRI 102: General Disclosures 2016 • GRI 401: Employment 2016
publicly on a range of
• GRI 103: Management Approach 2016 • GRI 402: Labor/Management Relations 2016
economic,
• GRI 403: Occupational Health and Safety 2018
environmental and
• GRI 404: Training and Education 2016
social impacts.
• GRI 201: Economic Performance 2016 • GRI 405: Diversity and Equal Opportunity 2016
Sustainability reporting
• GRI 202: Market Presence 2016 • GRI 406: Non-discrimination 2016
based on the Standards
• GRI 203: Indirect Economic Impacts 2016 • GRI 407: Freedom of Association and Collective
provides information
• GRI 204: Procurement Practices 2016 Bargaining 2016
about an organization’s
• GRI 205: Anti-corruption 2016 • GRI 408: Child Labor 2016
positive or negative
• GRI 206: Anti-competitive Behavior 2016 • GRI 409: Forced or Compulsory Labor 2016
contributions to
• GRI 410: Security Practices 2016
sustainable
• GRI 411: Rights of Indigenous Peoples 2016
development. • GRI 301: Materials 2016 • GRI 412: Human Rights Assessment 2016
• GRI 302: Energy 2016 • GRI 413: Local Communities 2016
• GRI 303: Water and Effluents 2018 • GRI 414: Supplier Social Assessment 2016
• GRI 304: Biodiversity 2016 • GRI 415: Public Policy 2016
• GRI 305: Emissions 2016 • GRI 416: Customer Health and Safety 2016
• GRI 306: Effluents and Waste 2016 • GRI 417: Marketing and Labeling 2016
• GRI 307: Environmental Compliance 2016 • GRI 418: Customer Privacy 2016
• GRI 308: Supplier Environmental Assessment • GRI 419: Socioeconomic Compliance 2016
2016
International integrated reporting council (IIRC)

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors,
companies, standard setters, the accounting profession, academia and NGOs. The coalition promotes
communication about value creation as the next step in the evolution of corporate reporting.
Growth in integrated reporting continues
Integrated reporting: UltraTech Cement
 Convergence of reporting frameworks

Before 2010 2010 -2020 Beyond 2020

GRI BRR
FRAMEWORK LANDSCAPE

GRI CDP IIRC

TCFD
KEY OUTCOMES/EXPECATIONS

1. Integration phase of 1. Value creation across value

sustainability in business chain
1. Sustainability was standalone
strategy 2. Sustainable and resilient
issue
2. Climate and sustainability risks business
2. Introduction of international
and opportunities starts to 3. Business built around
standards of corporate
influence product & business ‘PURPOSE’
responsibility
strategy
Redefining Value’s context

Financial and non-financial systems serve different purposes, are influenced by different stakeholders
and are misaligned, creating a disconnect.

Efficiently allocates financial capital but does not Recognizes other capitals and goals of sustainability
focus on equity, fairness or other capitals but doesn’t integrate into financial system
United Nations Sustainable Development Goals 2030
UN Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are the product of extensive

multi stakeholder negotiations involving a wide range of sectors,
including business. They set out a framework of 17 Goals with 169 targets
to tackle the world’s most pressing social, economic, and environmental
challenges in the lead-up to 2030.

❑ One way to measure progress is to focus on the “5 Ps” that shape the SDGs: People,
Planet, Prosperity, Peace, and Partnerships.
❑ The SDGs provide us with a new lens through which to translate global needs and
ambitions into business solutions
Short video on SDGs

https://www.youtube.com/watch?v=ivm191V50KE
UN Sustainable Development Goals (SDGs)
SDGs – driver for future growth
Existing coverage of SDGs in the reporting

Similar to last year, nearly all (96%) of reports reviewed reference the SDGs. We have seen moderate
improvement in the level of detail around the SDGs

❑ About a quarter of reports (24%) discuss Target-level SDG information, with the remainder of disclosures
focusing on Goal-level information. This is up from 20% in 2019.

❑ Nearly a third reference a prioritization process (29%) and ties to strategy (33%). About one fifth explicitly
discuss ties between the materiality assessment process and the SDGs (24%).

❑ An increasing number of reports align key performance indicators (KPIs) (20% vs. 6% in 2019) and targets
(28% vs. 15% in 2019) to the SDGs.

❑ About a third (32%) tie SDGs to case studies or detailed evidence of sustainability programs and initiatives
undertaken during the reporting period (19% in 2019).

❑ As was the case last year, very few (1-3%) make reference to Enterprise Risk Management (ERM) and human
rights in relation to the SDGs.
Case study: Samsung
Case study: Corporate action on SDG 1
National guidelines on Responsible Business conduct, 2018 (NGRBC)

2011 – National Voluntary Guidelines on Social, Environmental and Economic Responsibilities

of Business (NVG – SEE Principles) released by MCA

2012 – SEBI mandated top 100 listed companies to prepare Business Responsibility Report
(BRR)

NGRBC Journey 2015 – SEBI mandate extended to top 500 companies

2018 – NVGs were revised in alignment with global reporting developments: SDGs, UNGPs

2020 – BRR rechristened to Business Responsibility and Sustainability Reporting (BRSR) with
enhanced disclosures

WHY BRSR matters

Business Responsibility
BRSRs will be integrated with
Sustainability Index will be
filings made on MCA21 portal
developed through info captured
Mapping of NGRBC to SDGs
Principle
Principle 1: Ethics, Transparency
Principle 2: Product life cycle
Principle 3: Employee well-being
Principle 4: Stakeholder engagement
Principle 5: Human Rights
Principle 6: Environment management
Principle 7: Policy advocacy
Principle 8: Community Development
Principle 9: Customer Relations
SDGs
SDG 16, SDG 17
SDG 3, SDG 6, SDG 9, SDG 12, SDG 13,
SDG 14, SDG 15
SDG 3, SDG 5, SDG 6, SDG 8
All SDGs
SDG 3, SDG 5, SDG 8, SDG 10, SDG 16,
SDG 17
SDG 6, SDG 7, SDG 11, SDG 12, SDG 13,
SDG 14, SDG 15, SDG 17
SDG 16, SDG 17
SDG 1, SDG 2, SDG 3, SDG 4, SDG 6, SDG
7, SDG 10, SDG 17
SDG 9, SDG 16, SDG 17
Fiduciary duties of Director – section 166 of Companies Act, 2013
Presenter: Vishal Bhavsar
Organization: UltraTech Cement Limited
Mobile: 98192 33540
Email: vishal.Bhavsar@adityabirla.com