TRIPLE BOTTOM LINE & ITS ASSESSMENT

The Indian IT Context

Major Research Project submitted in partial fulfilment of the requirements for the award of the degree of PGDCM in IIM Calcutta

Submitted to

Submitted by

Dr Indranil Bose

Kanishka Mohan (4014/18) Rohan Singh (4021/18)

Contents
Acknowledgement .......................................................................................................................................... ii Abstract...........................................................................................................................................................1 Motivation for the Study ................................................................................................................................1 Introduction ....................................................................................................................................................1 State of Sustainable Reporting .......................................................................................................................2 Existing reporting methods ........................................................................................................................3 AA1000 Guidance Report .......................................................................................................................3 Global Reporting Initiative (GRI).............................................................................................................4 Industry practices .........................................................................................................................................13 Motivation for Corporate Sustainability Reporting ..................................................................................13 Sustainability Reporting in India ...............................................................................................................14 Issues and Criticism.......................................................................................................................................15 Recommendations ........................................................................................................................................16 Future of Sustainability Reporting in Indian IT .............................................................................................17 References ....................................................................................................................................................19 Annexures .....................................................................................................................................................21 Case 1: Nokia, Finland...............................................................................................................................21 Case 2: HP, USA.........................................................................................................................................24 Case 3: Wipro, India ..................................................................................................................................27 Case 4: Infosys, India ................................................................................................................................29 Case 5: ITC, India.......................................................................................................................................32 Case 6: Tata Motors, India ........................................................................................................................35

Acknowledgement
We would like to take this opportunity to offer my grateful thanks to Professor Dr Indranil Bose, who guided this project to hopefully a successful conclusion. His timely suggestions to the direction of the research put the paper on the right track. He rightly berated us for losing communication with him, but guided us to the end so helpfully. We would also like to thank my friends and colleagues, especially Anand Das, who peer reviewed my paper and pointed out quite a few mistakes. Special gratitude to Aditya Rikhari for always maintaining the perfectly conducive environment to writing the report.

Kanishka Mohan (4014/18) Kolkata 18/Feb/13

Rohan Singh (4025/18) Kolkata 18/Feb/13

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Abstract
Even as sustainable reporting is picking up popularity among firms to increase transparency, under the absence of clear-cut guidelines in this regard, there is increasing confusion in what the firms choose to report. Unlike financial accounting guidelines, Sustainability Reports churned out by corporates tend to be more PR documents than an annual benchmark to measure actual impact. In this paper, we first summarise the most important reporting framework in use in the industry GRI. An attempt is made to identify the key trends in sustainable reporting among Indian and international firms. To exemplify some of the practises in use by companies, we briefly analyse some reports by key companies. HP & Nokia, the international examples, are the pioneers in the IT & electronics industry and are highly rated by a lot of green watching firms. Next we present the case of Indian IT giants, Infosys and Wipro, the latter of which tops the Greenpeaces list of most responsible IT companies. Also relevant is the case of ITC, which published its first GRI compliant sustainability report in 2001, only four years after the establishment of the GRI initiative. We note that despite latest revisions in the GRI guidelines, the IT industry has no mention in a list of industries who have to report a supplement. Then we recommend some parameters which IT companies might consider while preparing sustainability reports.

Motivation for the Study

Businesses have a tough time relating sustainable reporting and their bottom line performance. It is difficult to quantify a business return on investment in people and planet. Efforts like GRI and AA1000 Principles try to establish ground rules for firms to report qualitatively as well as quantitatively on the Triple Bottom Lines (TBL) parameters. Since the sub-prime crisis in 2008, transparency and stakeholder engagement have assumed primary importance in business agenda. Political, environmental and social factors are playing an increasingly critical role in a firms development. Holistic reporting is back in vogue as shareholders place increasing emphasis on knowing how sustainable businesses are by making a contribution to the society in which they exist (Mitra, 2012). In this context of transparency and process efficiency, the Triple Bottom Line (TBL) appeals to an increasingly larger number of firms because of its simplicity. As businesses become increasingly aware about the importance of sustainability reporting, using metrics to measure and manage social, environmental and economic impacts has become standard practice. Even so, there is still significant variation in how companies interpret and use the resulting data to guide their activities. In the Indian context, where IT is a huge contributor to the success story of India, Inc., sustainable reporting holds even more relevance. With a face towards the developed world, IT firms need to quickly get their act together to present a sustainable future for Indian IT. Despite the impending launch of National Voluntary Guidelines (NVG), firms still do not have a clear agenda on what, why and how to report their corporate citizenship measures.

Introduction

The phrase triple bottom line (TBL) was coined by John Elkington in the early 1980s: The TBL captures the three scopes of sustainability economic, social and environmental and proposes that an organisations impact should be recorded and communicated to stakeholders. The three facets are The triple bottom line focuses corporations not just on the economic value they add, but also on the environmental and social value they add and destroy. At its narrowest, the term triple bottom line is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters. (Elkington, 1980) also often summarised as the three Ps of sustainability Profit, People and Planet.

Figure 1: 3Ps of Triple Bottom Line

The economic performance comprises the traditionally reported financial facts by organisations. Today organisations not only report profits and losses in annual financial reports, but also related issues like detailed breakup and future budgets. The other two parameters environmental and social are more intangible and are yet to be accepted universally. Organisations tend to freely interpret the contents of the intangible parameters. Generally, firms include factors like energy and water consumption, waste management and other green initiatives for reporting environmental performance. Social performance aims to measure impact on community and its residents. Tangibly, it translates into factors like employee relations, workplace conditions, community involvement and customer satisfaction.

State of Sustainable Reporting

Most organisations have made it a custom to annually publish a sustainability report with the annual financial report. Despite its positives, the lack of a standard set of guidelines has plagued the efficacy of such reports. Hubbard, 2006 identifies five shortcomings in this trend i. ii. iii. Sustainability reports are published separately from the financial reports which characterises a break from the integration of the two concepts as advocated by the TBL. The sustainability reports in their current format tend to focus only on the positives, partly because they are written for clients or prospective clients. Reports suffer from a lack of standardisation and fail to provide numerical values to the intangible aspects of TBL. Current reports focus on descriptive outcomes with little benchmarking. Thus, the performance information is of little value to other stakeholders.

Stakeholders are rarely involved in any stage of the report preparation. Consequently, this information is audited less thoroughly than financial information. v. Between the intangible aspects of impact on people and planet, social issues remain largely ignored. (Sharma & Ruud, 2003) Despite these shortcomings, companies increasingly continue to publish sustainability reports annually.

iv.

Existing reporting methods

In her book, Corporate Responsibility Code Book, Leipziger, 2003 identifies thirty-two different codes of practice worldwide. Despite that there is still lack of literature on how companies should choose the best method of preparing sustainability reports to maximise impact. However, most organisations worldwide are beginning to adhere to the GRI G3 Indicator Matrix published by the Global Reporting Initiative. Worldwide, 80% of the G2501 and 69% of N1002 companies are now aligned to the GRI reporting standards (KPMG, 2011). The practise is even more prevalent in India with 71% of the reporters using GRI guidelines for corporate responsibility reporting (KPMG, 2011). One of the first reporting standards was developed by AccountAbility AA1000 in November 1999, which was concerned with specifying the processes both organisations and assurance providers should employ to secure the quality of what they then termed social and ethical accounting, auditing and reporting. However, in its current avatar, the AA1000AS (2008) recommends that reporting organisations may adhere to guidelines provided in GRI G3, or systems standards like ISO 14001, BS8900 or SA8000. However it emphasises that the report be as explicit as possible about the criteria (Owen & ODwyer, 2004). Following is a brief description of the G3.1 Guidelines and AA1000 Guidance report.

AA1000 Guidance Report

AccountAbility was established in London, United Kingdom in 1995. It has the objective to develop new tools, thinking and connections that enable individuals, institutions and alliances to respond better to global challenges. The AccountAbility Principles for Sustainable Development first appeared in the AA1000 AccountAbility Framework Standard published in 1999. In its latest avatar (2008), it comprises three standards, A. AA1000APS (Principles) a. The Foundation Principle of Inclusivity b. The Principle of Materiality c. The Principle of Responsiveness B. AA1000AS (Assurance) a. Type 1 AccountAbility Principles b. Type 2 AccountAbility Principles and Performance Information C. AA1000SES (Stakeholder Engagement)

1 2

250 largest companies in the world, (KPMG, 2011) 100 largest companies in each of the 34 countries in the study (KPMG, 2011)

Figure 2: AA1000SES - Purpose scope and stakeholders (AccountAbility, 2008)

Global Reporting Initiative (GRI)

The Global Reporting Initiative (GRI) was formed in 1997 with the support of the United Nations Environment Programme (UNEP) as a non-profit organization that promotes economic sustainability. It produces one of the world's most prevalent standards for triple bottom line (TBL) reporting. Almost 5000 organisations in more than 60 countries use the GRI guidelines to publish their sustainability reports annually. In 2000, GRI published their first set of guidelines G1. This evolved into G2 by 2002 and G3 in 2006. In March 2011, they updated the G3 with G3.1 which provide further guidance for reporting on human rights, local community impacts, and gender. Another special feature of G3 was the inclusion of special supplements for certain industries. G3.1 expanded upon the list to include more industries.

Performance Indicators
G3.1s Performance Indicators are organized into categories: Economic, Environment and Social. The Social category is broken down further by Labour, Human Rights, Society and Product Responsibility sub-categories. The following table enlists the standard disclosure parameters for all reporting companies.

GRI G3 Code
ECONOMIC PERFORMANCE INDICATORS
EC1 EC2 EC3 EC4 EC5 EC6 EC7 EC8 EC9 Economic Performance

Description
Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. Financial implications and other risks and opportunities for the organizations activities due to climate change. Coverage of the organizations defined benefit plan obligations. Significant financial assistance received from government. Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation. Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation. Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in kind, or pro bono engagement. Understanding and describing significant indirect economic impacts, including the extent of impacts.

Type
Core Core Core Core Addl Core Core Core

ENVIRONMENTAL PERFORMANCE INDICATORS

Materials EN1 EN2 EN3 EN4 EN5 EN6 EN7 EN8 EN9 EN10 Bi od ive rsi ty EN11 Materials used by weight or volume Percentage of materials used that are recycled input materials. Direct energy consumption by primary energy source. Indirect energy consumption by primary source. Energy saved due to conservation and efficiency improvements. Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. Initiatives to reduce indirect energy consumption and reductions achieved. Total water withdrawal by source. Water sources significantly affected by withdrawal of water. Percentage and total volume of water recycled and reused. Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Core Core Core Core Addl Addl Core Addl Addl Core

Water

Energy

Indirect Economic Impacts

Market Presence

EN12 EN13 EN14 EN15 EN16 EN17 EN18 EN19 EN20 EN21 EN22 EN23 EN24 EN25 EN26 EN27

Products and Services

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. Habitats protected or restored. Strategies, current actions, and future plans for managing impacts on biodiversity. Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. Total direct and indirect greenhouse gas emissions by weight. Other relevant indirect greenhouse gas emissions by weight. Initiatives to reduce greenhouse gas emissions and reductions achieved. Emissions of ozone-depleting substances by weight. NO, SO, and other significant air emissions by type and weight. Total water discharge by quality and destination. Total weight of waste by type and disposal method. Total number and volume of significant spills. Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organizations discharges of water and runoff. Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. Percentage of products sold and their packaging materials that are reclaimed by category.

Core Addl Addl Core Core Core Core Core Core Core Addl Addl Core Core

Compliance

Emissions, Effluents, and Waste

EN28

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations.

Core

Transport

EN29

Significant environmental impacts of transporting products and other goods and materials used for the organizations operatio ns, and transporting members of the workforce.

Addl

Overall

EN30

Total environmental protection expenditures and investments by type.

Addl

LABOUR PRACTICES AND DECENT WORK

Empl oym ent LA1 LA2 Total workforce by employment type, employment contract, and region, broken down by gender. Total number and rate of new employee hires and employee turnover by age group, gender, and region. Core Core

LA3 LA15 Labour/ Management Relations LA4 LA5 LA6 LA7 LA8 LA9 LA10 LA11 LA12 LA13

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation. Return to work and retention rates after parental leave, by gender. Percentage of employees covered by collective bargaining agreements. Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements. Percentage of total workforce represented in formal joint managementworker health and safety committees that help monitor and advice on occupational health and safety programs. Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender. Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. Health and safety topics covered in formal agreements with trade unions. Average hours of training per year per employee by gender, and by employee category. Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. Percentage of employees receiving regular performance and career development reviews, by gender. Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

Addl Core Core Core Addl Core Core Addl Core Addl Addl Core

Equal Remunerati on for Women & Men

Diversity

Training and Education

Occupational, Health and Safety

LA14

Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation.

Core

HUMAN RIGHTS PERFORMANCE INDICATORS

HR1 HR2 HR3 HR4 Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening. Percentage of significant suppliers, contractors, and other business partners that have undergone human rights screening, and actions taken. Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. Total number of incidents of discrimination and corrective actions taken. Investment and Procureme nt Practices Core Core Core Core

Nondiscrimi nation

Freedom of Association and Collective Bargaining

HR5

Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.

Core

Child Labour

HR6

Operations and significant suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour.

Core

Forced and Compulsory Labour

HR7

Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour.

Core

Security Practices

HR8

Percentage of security personnel trained in the organizations policies or procedures concerning aspects of human rights that are relevant to operations.

Addl

Indige nous Rights

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken.

Addl

Assess ment

HR10

Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments.

Core

Remed iation

HR11

Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.

Core

SOCIETY PERFORMANCE INDICATORS

Local Communities SO1 SO9 SO10 Percentage of operations with implemented local community engagement, impact assessments, and development programs. Operations with significant potential or actual negative impacts on local communities. Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities. Core Core Core

Corruption

SO2 SO3 SO4

Percentage and total number of business units analysed for risks related to corruption. Percentage of employees trained in organizations anti-corruption policies and procedures. Actions taken in response to incidents of corruption Public policy positions and participation in public policy development and lobbying.

Core Core Core Core

Public Policy

SO5

SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

Addl

Anticompetitive behaviour

SO7

Total number of legal actions for anticompetitive behaviour, anti-trust, and monopoly practices and their outcomes.

Addl

Compliance

SO8

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations.

Core

PRODUCT RESPONSIBILITY PERFORMANCE INDICATORS

Customer Health & Safety PR1 PR2 PR3 PR4 PR5 Marketing Communications PR6 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes. Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements. Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes. Core Addl Core Addl Addl Core

Product & Service Labelling

PR7

Addl

Custom er Privacy

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.

Addl

Compl iance

PR9

Monetary value of significant fines for noncompliance with laws and regulations concerning the provision and use of products and services.
Table 1: GRI G3 Key Performance Indicators, 2011

Core

Sector supplements
Other than the core performance indicators, G3 suggests additional parameters for certain industries.

Construction & Real Estate

Code
CRE1

Financial Services
Code
FS1

Food Processing
Code
FP1

Mining & Metals

Code
MM1

Oil & Gas

Code
OG1

Description
Building energy intensity.

Description
Policies with specific environmental and social components applied to business lines.

Description
Percentage of purchased volume from suppliers compliant with companys sourcing policy. Percentage of purchased volume which is verified as being in accordance with credible, internationally recognized responsible production standards, broken down by standard. Nature, scope and effectiveness of any programs and practices (in-kind contributions, volunteer initiatives, knowledge transfer, partnerships and product development) that promote healthy lifestyles; the prevention of chronic disease; access to healthy, nutritious and affordable food; and improved welfare for communities in need.

Description
Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated. The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place.

Description
Volume and type of estimated proved reserves and production.

CRE2

Building water intensity.

FS2

Procedures for assessing and screening environmental and social risks in business lines.

FP2

MM2

OG2

Total amount invested in renewable energy.

CRE3

Greenhouse gas intensity from buildings.

FS3

Processes for monitoring clients implementation of and compliance with environmental and social requirements included in agreements or transactions.

FP4

MM3

Total amounts of overburden, rock, tailings, and sludges and their associated risks.

OG3

Total amount of renewable energy generated by source.

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CRE4

Greenhouse gas emissions intensity from new construction and redevelopment activity.

FS4

Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines.

FP5

Percentage of production volume manufactured in sites certified by an independent third party according to internationally recognized food safety management system standards. Percentage of total sales volume of consumer products, by product category, that are lowered in saturated fat, trans fats, sodium and sugars. Percentage of total sales volume of consumer products, by product category sold, that contain increased fibre, vitamins, minerals, phytochemicals or functional food additives. Policies and practices on communication to consumers about ingredients and nutritional information beyond legal requirements.

MM4

Number of strikes and lockouts exceeding one weeks duration, by country.

OG4

Number and percentage of significant operating sites in which biodiversity risk has been assessed and monitored.

CRE5

Land and other assets remediated and in need of remediation for the existing or intended land use according to applicable legal designations.

FS5

Interactions with clients/investees/business partners regarding environmental and social risks and opportunities.

FP6

MM5

Total number of operations taking place in or adjacent to Indigenous Peoples territories, and number and percentage of operations or sites where there are formal agreements with Indigenous Peoples communities. Number and description of significant disputes relating to land use, customary rights of local communities and Indigenous Peoples. The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and the outcomes. Number (and percentage) or company operating sites where artisanal and smallscale mining (ASM) takes place on, or adjacent to, the site; the associated risks and the actions taken to manage and mitigate these risks. Sites where resettlements took place, the number of households resettled in each,

OG5

Volume of formation or produced water.

CRE6

Percentage of the organization operating in verified compliance with an internationally recognized health and safety management system. Number of persons voluntarily and involuntarily displaced and/or resettled by development, broken down by project.

FS6

Percentage of the portfolio for business lines by specific region, size (e.g. micro/SME/large) and by sector.

FP7

MM6

OG6

Volume of flared and vented hydrocarbon.

CRE7

FS7

Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose.

FP8

MM7

OG7

Amount of drilling waste (drill mud and cuttings) and strategies for treatment and disposal.

CRE8

Type and number of sustainability certification, rating and labelling schemes for new construction, management, occupation, and redevelopment

FS8

Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose. Coverage and frequency of audits to assess implementation of

FP9

Percentage and total of animals raised and/or processed, by species and breed type.

MM8

OG8

Benzene, lead and sulphur content in fuels.

FS9

FP10

Policies and practices, by species and breed type, related to physical alterations and the

MM9

HR9

Total number of incidents of violations involving rights of indigenous people and

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FS10

environmental and social policies and risk assessment procedures Percentage and number of companies held in the institutions portfolio with which the reporting organization has interacted on environmental or social issues. Percentage of assets subject to positive and negative environmental or social screening Voting polic(ies) applied to environmental or social issues for shares over which the reporting organization holds the right to vote shares or advises on voting.

use of anaesthetic.

and how their livelihoods were affected in the process.

actions taken

FP11

Percentage and total of animals raised and/or processed, by species and breed type, per housing type. Policies and practices on antibiotic, anti-inflammatory, hormone, and/or growth promotion treatments, by species and breed type. Total number of incidents of non-compliance with laws and regulations, and adherence with voluntary standards related to transportation, handling, and slaughter practices for live terrestrial and aquatic animals.

MM10

Number and percentage of operations with closure plans.

OG9

Operations where indigenous communities are present or affected by activities and where specific engagement strategies are in place. Number and description of significant disputes with local communities and indigenous peoples.

FS11

FP12

MM11

Programs and progress relating to materials stewardship.

OG10

FS12

FP13

OG11

Number of sites that have been decommissioned and sites that are in the process of being decommissioned.

FS13

Access points in lowpopulated or economically disadvantaged areas by type Initiatives to improve access to financial services for disadvantaged people. Policies for the fair design and sale of financial products and services. Initiatives to enhance financial literacy by type of beneficiary.
Table 2: Sector supplement recommendations by GRI

OG12

Operations where involuntary resettlement took place, the number of households resettled in each and how their livelihoods were affected in the process. Number of process safety events, by business activity. Volume of biofuels produced and purchased meeting sustainability criteria.

FS14

OG13

FS15

OG14

FS16

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Assurance
Upon finalisation, preparers should declare the level to which they have applied the GRI Reporting Framework via the GRI Application Levels system. Companies utilising external assurance can use grades (A+, A, B, etc.), to declare their level of compliance with the GRI. The only caveat on the profile of the assurer is that it should be demonstrably competent.

Industry practices
Motivation for Corporate Sustainability Reporting
The relationship between a company and its stakeholders is central to the success of any organisation. Organisations increasingly recognise the need to communicate their activities and performance to its stakeholders. Effective communication is one way of harbouring a healthy and long-term relationship between two parties. Another important constituent to building this relationship is the value the two parties create for each other. In its International Survey of Corporate Responsibility Reporting 2011, KPMG points out almost half of the largest companies have already demonstrated financial gains from their CR initiatives. In Peter Druckers words, what gets measured, gets managed. GRI points out that the outcomes of sustainable reporting are often different from the expected results. It goes on to say that organisations derive value from such reporting is twofold3, A. The Value Of Internal Changes a. Develop vision and strategy b. Improve management systems, improve internal processes and set goals c. Identify weaknesses and strengths d. Attract and retain employees e. Connect departments and encourage innovation f. Raise awareness with the Board g. Achieve competitive advantage and leadership h. Attract investors B. The Value Of Recognition a. Enhance reputation, achieve trust and respect b. Transparency and dialogue with stakeholders c. Demonstrate commitment to sustainability d. Enable comparability and benchmarking Group of 100 Inc., Australia, further points out that as governments across the globe grow more wary of unsustainable businesses, publishing a sustainable report maintains firms licence to operate (G100 & KPMG, 2008). However, actual business needs that motivate an organisation to engage in sustainability reporting might be unique from mandatory government regulations to public relations. The figure below enumerates some key drivers identified by KPMG in a survey in 2011.

GRI Sustainability Reporting: How valuable is the journey? (GRI, 2011)

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Figure 3: Key business drivers for corporate sustainable reporting (KPMG International Corporate Responsibility Reporting Survey, 2011)

Sustainability Reporting in India

India shed its elephant economy image post-1991 financial reforms and has remained one of the most exciting markets in the world. However, the Indian success story has taken a hit due to a number of political and industrial scandals, accompanied by a policy paralysis by the government. In this challenging environment Indias businesses are beginning to recognise the benefits of sustainability reporting and organisational transparency. Most of the organisations in India making sustainable disclosures adhere to the Global Reporting Initiative (GRI) guidelines while referring to other international standards including UNGC guidelines, IFC standards on sustainable development, WBCSD focus areas and sector specific frameworks such as API/IPIECA guidelines and ICMM sustainable development framework. (Sharma A. , 2011) The practice was initiated by a small number of firms publishing sustainability reports in 2001. By end of 2012 the number has swelled to about 80. (Times of India, 2012) The Government of India has not been late in realising the importance of transparency in reporting. The Ministry of Corporate Affairs introduced the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business on 8 July 2011. The Guidelines provide a robust framework for companies to address the needs of their stakeholders. Further, the Guidelines recommend reporting frameworks like GRI to present on sustainability measures. GRI reports IT as one of the leaders in sustainability reporting. The trend is not surprising as the international community is increasingly aware of the impact of IT firms to both the environment as well as the community. This is furthered by the fact the most Indian firms are geared towards outsourcing services to developed markets which have higher awareness toward sustainability parameters (GRI, 2012).

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Issues and Criticism

General Issues
Despite efforts by agencies like GRI and WBCSD to standardise reporting guidelines, some fundamental shortcomings still remain with existing frameworks.

Quantifying Qualitative Measures

Despite providing parameters for measuring the triple bottom line, the frameworks in popular use do not quantify qualitative measures. In particular, the return on social and environmental sustainability initiatives is particularly hard to gauge. Also there is lack of clear evidence to link sustainability reporting (or initiatives) to financial performance. Certain studies do establish a positive correlation between financial indicators and sustainability indicators, but there is significant counter evidence too (Lee, Pati, & Roh, 2011) (Adams, Thornton, & Sepehri, 2010). Industry wise studies are still lacking in this domain.

Need for Regulation & Capacity Building

Sustainability reporting is still in its nascent stage and lacks formal regulation unlike quantitative financial disclosures. At best, countries are establishing guidelines for companies with no clear benefits of compliance. Consequently, sustainability reporting is a low priority for most organisations and they have no internal capability for the same. This results in reporters outsourcing their reporting activity leading to high costs. Also, sustainability reporting does not receive the attention of the board and the executive management and is often delegated to the HR or PR department which lack adequate expertise and flexibility. Also the five smart steps of the reporting process as provided by GRI Guidelines Prepare, Connect, Define, Monitor, Report are almost never followed by businesses, making the sustainability reporting process often a cumbersome activity with heavy financial burden and dependency on external consultants. (GRI, 2012) There is a clear need for mandatory reporting regulations accompanied by an increase in reporting capacity.

Need for Customising Reporting Guidelines

Companies are still gaining clarity about measurement of triple bottom line indicators. In this regard, global guidelines provide broad parameters. But often these parameters are not adapted to the particular industry or region. Revisions to existing frameworks, like the G3.1 guidelines do suggest some industry level customisation, but the information is available only for selected industries. A continuous feedback mechanism is necessary to fill the gaps in existing guidelines. Collaboration with the currently reporting firms would help identify current problems in reporting.

Increasing Awareness
Despite an increasing trend in the number of reporters, by 2009, only 22% of the top 100 earning Indian companies published sustainability reports. Obviously, an increase in awareness has not translated into sustainability reporting shifting to a higher priority in management agenda. This is also exacerbated by the fact that local stakeholders are not very interested in such reports. This has led to the trend that only companies with a global facing front end up publishing sustainability reports. Awareness building exercises at all stakeholder levels would lead to useful two-way engagement. An increased interest from interested investors would result in ensuring reliable and transparent disclosure.

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Specific to analysed companies

Neutrality of reporting
Though companies state numerous reasons for preparing TBL reports, public relations plays a very important role in the process. Thus, companies invariably want to be seen putting their best foot forward in front of their stakeholders. Coupled with a lot of self-serving bias, organisations tend to write only the good things they have done and gloss over cursorily over the so-called mishaps. Most organisations are rated as being acceptably neutral by their external assurers. The level of reporting was acceptable or good for all the companies analysed.

Stakeholder inclusiveness and Materiality

Organisations explicitly state their stakeholder engagement measures. But how much these activities actually translate into ground level engagement and then further incorporated into the reporting process is extremely questionable. In fact most reporting companies determined their materiality (relevance to all stakeholders) only using perspectives from within the company (e.g., senior representatives or function heads). Limited stakeholder engagement in this aspect leads to an incomplete materiality matrix which may not truly reflect the stakeholder concerns. All organisations analysed by us had only acceptable stakeholder inclusiveness and materiality. Organisations actively need to strengthen such frameworks to bring out material issues that reflect short, medium and long term impacts. Inputs from external stakeholders should be included in in all processes.

Manual data collection & collation

In an Indian context, data is still collected and stored manually. This leads to human errors creeping in, especially during collation, where unstandardized measures may lead to wrongful interpretation. Nonstandardised parameters also remains an issue as companies are only yet establishing frameworks for such data collection. Companies actively need to integrate sustainability reporting processes with existing IT infrastructure to reduce the risk of errors.

Recommendations
The GRI 3.1 released in November 2011, has special guidelines for the following industries, Airport Operators Food Processing Construction and Real Estate Media Event Organisers Mining and Metals Electric utilities NGO Financial Services Oil and Gas

Table 3: List of industries to provide sector supplements while reporting

The list does not mention any such special guidelines for IT companies. Perhaps in the future G4, GRI will address this issue, but as of now, IT companies have no guidance in reporting according to their special needs. The issue is particularly relevant in India where the IT industry has already crossed the $100 billion mark and still growing at more than 7.5% CAGR. Moreover, Indian IT firms have First World clients who prefer transparency in all dealings. In this regard, sustainability reports go a long way in communicating a longterm commitment to sustainability and shareholder responsibility. 16

In the view of a lack of regulatory framework within the country, we propose below some useful indicators that can be utilised by IT firms to supplement their reporting process.

INDICATORS
Economic

GRI G3 INDICATOR CODE

DESCRIPTION

Market Presence IT 1 Countries of self and clients presence IT 2 Total number of clients broken down by industry and sector

Society

Energy IT 3 Energy saved due to conservation and efficiency improvements. Emissions, effluents and waste Total direct and indirect amount of heat generated in servers and IT 5 datacentres and energy expended in cooling. Description of other such related energy saving measures Amount of old and discarded hardware and toxic or non-toxic electronic IT 6 waste generated and disposal measures, including but not limited to recycling measures Local Communities IT 7 Employment IT 8 Man-hours input by contractor and subcontractor employees involved in development, deployment, QA and other ancillary IT support activities Number of product failures and steps undertaken to rectify the failures (whilst protecting customer privacy and vital product information), especially in critical situations
Table 4: Proposed indicators for IT firms

Environmental

Initiatives to improve access to IT & ITeS for disadvantaged people or areas

Product Responsibility

Labour Practices

IT 9

NASSCOM has long been the face of Indian IT and ITeS sector. However, as a recent article in Economic Times pointed out, it may be losing its relevance4. NASSCOM might have an important role to play in advocating the relevance of sustainable reporting to the government.

Future of Sustainability Reporting in Indian IT

A study by Ioannou & Serafeim, 2012, suggests that mandatory corporate sustainability reporting (MCSR) impacts corporate practices. Statements from upper management confirm that the reporting process helped them gain a new perspective on risks and opportunities, and to map out a strategic vision to gain stakeholder trust. (GRI, 2012)

http://economictimes.indiatimes.com/opinion/comments-analysis/does-indian-it-need-nasscom/articleshow/18511543.cms

17

Consequently, IT companies often end up with viewing existing problems in a new light and sustainability information allows them to manage these matters more effectively. The inclusion of sustainability parameters into the industrial benchmarks would force firms to actively improve sustainability indicators. The government has recognised the need for making sustainability reporting mandatory to improve Indias investment friendly image. The Ministry of Corporate Affairs has introduced the National Voluntary Guidelines, with the latest revision published in 2011. The introduction of the Carbon Indexing project by the BSE and the current S&P ESG index of NSE underline the recognition of sustainability reporting among industry experts. The Zero Draft, (popularly known as the Rio+20) calls for global policy to require all listed and large private companies to systematically report sustainability practices. Generally, firms worldwide, reporting or non-reporting have accepted the policy that sustainability reporting will become mandatory in the future. In fact, in 2012, the Brazilian stock exchange, BM&FBOVESPA, recommended that its listed companies follow a report-or-explain protocol. However, there are still no clear guidelines for the IT industry and companies continue to adhere to customise guidelines like GRI to their needs. The emergence of Indian companies as an attractive investment option has raised awareness about sustainability reporting. Indian firms have responded by producing quality sustainability reports. A 2012 report by GRI indicates that 80% of reporters from India contain complete information relevant to the reporting organisation and externally assured, compared to just 24% globally.

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References
Adams, M., Thornton, B., & Sepehri, M. (2010, October 1). The impact of the pursuit of sustainability on the financial performance of the firm. Journal of Sustainability and Green Business, 1-14. Retrieved Feb 9, 2013, from http://www.aabri.com/manuscripts/10706.pdf Allen Consulting Group. (2002). Triple Bottom Line Measurement And Reporting In Australia. Melbourne: Document Printing Australia. Elkington, J. (1980). The Ecology of Tomorrow's World. London: Associated Business Press. G100 & KPMG. (2008). Sustainability Reporting: A Guide. Australia: KPMG. Retrieved Feb 17, 2013, from http://www.group100.com.au/publications/kpmg_g100_SustainabilityRep200805.pdf GRI. (2011). GRI Sustainability Reporting: How valuable is the journey?,. Amsterdam: GRI. Retrieved Feb 17, 2013, from https://www.globalreporting.org/resourcelibrary/Starting-Points-2-G3.1.pdf GRI. (2012). Sustainability Reporting: Practices and Trends in India 2012. New Delhi: Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH. Retrieved Feb 03, 2013, from http://www.giz.de/Themen/de/dokumente/giz-2012-sustainable-reporting-india-en.pdf Hubbard, G. (2006). Measuring Organizational Performance: Beyond the Triple Bottom Line. Adelaide, Australia: John Wiley & Sons. doi:10.1002/bse.564 Ioannou, I., & Serafeim, G. (2012). The Consequences of Mandatory Corporate Sustainability Reporting. Harvard Business School, Harvard University, Boston. Retrieved Feb 9, 2013, from http://www.hbs.edu/faculty/Publication%20Files/11-100_35684ae7-fcdc-4aae-9626de4b2acb1748.pdf ITC Sustainability Report. (2004). ITC Sustainability Report 2004. ITC. Retrieved Feb 04, 2013, from http://www.itcportal.com/sustainability/sustainability-report-2004/content.aspx ITC Sustainability Report. (2012). ITC Sustainability Report 2012. ITC. Retrieved Feb 7, 2013, from http://www.itcportal.com/sustainability/sustainability-report-2012/sustainability-report2012.pdf Jackson, A., Boswell, K., & Davis, D. (2011, November). Sustainability and Triple Bottom Line Reporting What is it all about? International Journal of Business, Humanities and Technology, 1(3), 55-59. Retrieved Jan 28, 2013, from http://www.ijbhtnet.com/journals/Vol_1_No_3_November_2011/6.pdf KPMG. (2011). Corporate Responsibility Survey 2011. India: KPMG. Retrieved Feb 15, 2013, from http://www.nebrija.com/catedras/nebrija-santander-responsabilidadsocial/pdf/biblioteca/Corporate-Responsibilty-Survey-KPMG.pdf KPMG. (2011). KPMG International Survey of Corporate Responsibility Reporting 2011. KPMG. Retrieved Feb 07, 2013, from http://www.kpmg.com/PT/pt/IssuesAndInsights/Documents/corporateresponsibility2011.pdf Lee, J., Pati, N., & Roh, J. J. (2011, January). Relationship between Corporate Sustainability Performance and Tangible Business Performance: Evidence from Oil and Gas Industry. IJBIT, 3(3), 72-82.

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Retrieved Feb 08, 2013, from http://www.rowan.edu/colleges/business/prme/outcomes/files/pati_lee_roh_2011.pdf Leipziger, D. (2003). The Corporate Responsibility Code. Sheffield: Greenleaf Publishing. Mitra, P. K. (2012, May). Sustainability Reporting Practices in India: Its Problems and Prospects. International Journal of Marketing Financial Services & Management Research, 1(5), 109-115. Retrieved Feb 05, 2013, from http://www.indianresearchjournals.com/pdf/IJMFSMR/2012/May/16_IJM_MAY12.pdf Nokia Corporation. (2012). Nokia Sustainability Report 2011. Espoo: Nokia. Retrieved Feb 15, 2013, from http://static.globalreporting.org/report-pdfs/2012/873397ad1f9a199232be6d786215fed9.pdf Owen, D., & ODwyer, B. (2004). Assurance Statement Quality in Environmental, Social and Sustainability Reporting: A Critical Evaluation of Leading Edge Practice. Nottingham: International Centre for Corporate Social Responsibility. Retrieved Feb 15, 2013, from http://195.130.87.21:8080/dspace/bitstream/123456789/1082/1/23Assurance%20Statement%20Quality%20in%20Environmental,%20Social%20and%20Sustainabilit y%20Reporting%20A%20Cri.pdf Sharma, A. (2011, August). IOD: Institute of Directors. Retrieved Feb 2013, 05, from IOD: Institute of Directors Web site: http://www.iodonline.com/Articles/Arvind%20Sharma%20%20Sustainability%20Reporting%20Trends%20in%20India_KPMG.pdf Sharma, S., & Ruud, A. (2003, July 11). On the path to sustainability: integrating social dimensions into the research and practice of environmental management. Business Strategy and the Environment, 12(4), 205-214. doi:10.1002/bse.366 TERI. (2001). Altered Images the 2001 state of corporate responsibility in India poll. New Delhi: Tata Energy Research Institute. Retrieved Jan 31, 2013, from http://www.terieurope.org/docs/CSRIndia.pdf Times of India. (2012). 80 Indian companies are now doing sustainability reporting. TOI. Retrieved Feb 08, 2013, from http://timesofindia.indiatimes.com/business/india-business/80-Indian-companiesare-now-doing-sustainability-reporting/articleshow/17573219.cms

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Annexures
Case 1: Nokia, Finland
Introduction
Nokia is one of the worlds oldest and richest technology firms. The firm has remained committed to the theory of corporate citizenship and actively participated in CSR initiatives. The firm holds the third position on Greenpeace Internationals Guide to Greener List (November 2012)5 that ranks electronics manufacturers according to their policies on sustainability, energy and climate and green products. Nokia has been GRI compliant right since its first Global Citizenship Report in 2001. The last report published in 2012 has a disclosure level of A+. It is also compliant with the AA1000 AccountAbility Principles Standard 2008. The table below provides a summary of the details of the parameters reported by Infosys in its Sustainability reports.

GRI G3 INDICATOR CODE

Economic EC 1-4 EC 5-7 EC 8-9 Environmental EN 1-2 EN 3-7 EN 8-10 EN 11-15 EN 16-25 EN 26-27 EN 28 EN 29 Social LA 1-3 LA 4-5 LA 7-8 LA 10-12 LA 13 LA 14 Human Rights HR 1-3 HR 4 HR 5 HR 6 HR 7 Society SO 1 SO 2-4
5

DESCRIPTION

LEVEL OF REPORTING
2.25 2 3 2 2.4 3 3 3 3 3 3 2.5 2.5 2.5 2.33 2 2 2 2 2 2 2 3 2.33

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Equal remuneration for women and men Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Local communities Corruption

http://www.greenpeace.org/international/en/campaigns/climate-change/cool-it/Campaign-analysis/Guide-to-GreenerElectronics/?accept=cfe6745720a79024955ef6ac6bb4eeee

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SO 5-6 SO 7 SO 8 Product Responsibility PR 1 PR 3, 5 PR 6 PR 9

Public Policy Anti-competitive Behaviour Compliance Customer Health and Safety Products and Services labelling Marketing Communications Compliance
Table 5: Reporting performance for Nokia, 2011

3 3 3 3 3 3 3

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. For Nokia, sustainability means maximizing the positive, enabling effect of our mobile technology on people and planet, while minimizing the possible negative impact of our activities.

Materiality & Stakeholder Engagement

For material context of the report, key topics and their impact to sustainable development, stakeholder interest and Nokia business.

Figure 4: Materiality Matrix

Nokia clearly lays down a road map for improving business sustainability with a clear governance structure and targets and performance measures. Nokia tries to make a positive impact to communities through its mobile platform, trying to increase customer accessibility.

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Voluntary Disclosure
Nokia goes out of its way to be transparent and remain transparent even as it disclose details of their suppliers and Nokias efforts in engaging them to be sustainable. These details are not required by the GRI or AA1000 Principles.

Assurance
Nokias report is externally assured by PwC Oy to be compliant with Nokias documented standards, GHG Protocol, ISO 14001 and the AA1000 AccountAbility Principles Standard 2008 including the three principles of inclusivity, materiality and responsiveness is the responsibility of the Management certifications for suppliers ISO 14001 system. The report is A+ on the GRI assurance level.

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Case 2: HP, USA

Introduction
HP is one of the worlds oldest and richest technology firms. The firm has remained committed to the theory of corporate citizenship and actively participated in CSR initiatives. The firm holds the second position on Greenpeace Internationals Guide to Greener List (November 2012) that ranks electronics manufacturers according to their policies on sustainability, energy and climate and green products. In 2008, HP released its supply chain emissions data an industry first.6 HP has been GRI compliant right since its first Global Citizenship Report in 2001. It was one of the earliest reporters in the IT industry. However, the 2012 report, despite being the tenth such report, was only selfdeclared B level complaint not very encouraging.

GRI G3 INDICATOR CODE

Economic EC 1-4 EC 5-7 EC 8-9 Environmental EN 1-2 EN 3-7 EN 8-10 EN 11-15 EN 16-25 EN 26-27 EN 28 EN 29 EN 30 Social LA 1-3, LA 15 LA 4-5 LA 6-9 LA 10-12 LA 13-14 Human Rights HR 1-3 HR 4 HR 5 HR 6 HR 7 HR 8 HR 10 HR 11 Society SO 1, SO 9-10 SO 2-4 SO 5-6
6

DESCRIPTION

LEVEL OF REPORTING
3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport Overall Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Security Practices Assessments Remediation Community Corruption Public Policy

http://www.treehugger.com/clean-technology/hp-steps-up-it-industry-transparency-releases-supply-chain-emissions-data.html

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SO 7 SO 8 Product Responsibility PR 1-2 PR 3-5 PR 6-7 PR 8 PR 9

Anti-competitive Behaviour Compliance Customer Health and Safety Products and Services labelling Marketing Communications Customer Privacy Compliance
Table 6: Reporting performance for HP, 2011

3 3 3 3 3 3 3

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. HP has done considerably well on almost all the parameters of GRI Sustainability index.

Minimising Environmental Footprint

As mentioned in their report they are well ahead in fulfilling their commitments and are in fact planning to set new goals for the coming financial year. Their goal of reducing their carbon footprint to 40% of the levels in 2005, has already been achieved. They have also increased the energy efficiency of their laser printers to reduce energy consumption. Their aim is to reduce emission of GHG by 20% from their products, and are currently well on course to do so. HP does not allow e-waste to be exported from developed countries to developing countries. They have also taken many initiatives for recycling and reuse of computer hardware. HP achieved 67% of its goal to phase out BFR and PVC in newly introduced personal computing products in 2011; 100% of all new notebook products have achieved this BFR- and PVC-free goal. HP will complete its goal to phase out BFR and PVC where technically feasible in those few remaining new PC products as

Figure 5: HP sustainability initiatives

25

market demand and customer expectations permit.

Figure 6: HP product proactive materials restriction/substitution timeline

Assurance
HP provides external verification for information in three focus areas: Greenhouse gas (GHG) emissions Product reuse and recycling Supply chain responsibility

HP is A+ compliant with GRI G3.1.

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Case 3: Wipro, India

Introduction
Wipro is one of the earliest reporters in India, having published its first report in 2003. The first initiatives were started as a synergy with the rest of the Wipro Group businesses which later developed into a fullfledged community programme. Internationally, it holds the top position in Greenpeace Internationals Greenpeace Internationals Guide to Greener List (November 2012) that ranks electronics manufacturers according to their policies on sustainability, energy and climate and green products.

GRI - G3 INDICATOR CODE

Economic EC 1-4 EC 5-7 EC 8-9 Environmental EN 1-2 EN 3-7 EN 8-10 EN 11-15 EN 16-25 EN 26-27 EN 28 EN 29 EN 30 Social LA 1-3, LA 15 LA 4-5 LA 6-9 LA 10-12 LA 13-14 Human Rights HR 1-3 HR 4 HR 5 HR 6 HR 7 HR 8 HR 10 HR 11 Society SO 1, SO 9-10 SO 2-4 SO 5-6 SO 7 SO 8 Product Responsibility PR 1-2

DESCRIPTION

LEVEL OF REPORTING
3 3 3 1 3 3 2.2 2.7 2 3 2 3 3 3 3 3 3 2.7 3 3 2 2 2 2 3 3 3 3 3 3 2.5 27

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport Overall Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Security Practices Assessments Remediation Community Corruption Public Policy Anti-competitive Behaviour Compliance Customer Health and Safety

PR 3-5 PR 6-7 PR 8 PR 9

Products and Services labelling Marketing Communications Customer Privacy Compliance

Table 7: Reporting performance for Wipro, 2011

2.7 3 1 3

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. For Wipro, sustainability implies and is driven by risk management. Wipro identifies key risk areas and aims to maximise sustainable impact by mitigating these risks.

Materiality

Figure 7: Wipro's Materiality Matrix

Community Action
A quick look through the table gives a clear indication that WIPRO has done reasonably well in fulfilling its sustainability commitments. They have initiated primary health care projects under the aegis of Wipro Cares at their operations in Waluj (Maharashtra), Tumkur (Karnataka) and Hindupur (Andhra Pradesh). Working through partners, they currently cover 34 villages with a combined population of 48000 and the results after a year of operations have been extremely encouraging. Wipro Applying Thought in Schools (WATIS), our program in school education has been trying to address some of the systemic anomalies in our urban school system for a decade now. They have assessed their report at application A+ level as per GRI Application matrix. The report has been independently verified and assured by Det Norske Veritas AS and the assurance engagement is for Type 2 and Moderate level as set out in the AA1000 Assurance Standard 2008. Wipro is part of the NASDAQ Global Sustainability Index, a list of 100 global sustainability leaders. Wipro Ltd. is ranked 1st in India and 6th in Asia in the 2010 Asian Sustainability Rating (ASR) - an environment, social and governance ESG benchmarking tool developed by Responsible Research and CSR Asia. Wipro is in the Top 2 in India in the Carbon Disclosure Leadership Index (CDLI), India from Carbon Disclosure Project (CDP).

Assurance
DNV provides assurance to the report indicating it is compliant with AA1000 2008 Principles and meets Application Level A+ according to GRI G3.1.

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Case 4: Infosys, India

Introduction
Infosys is one of the first Indian IT firms to publish a sustainability report in 2007-08. The firm has had a strong focus on sustainability as most of its clients are based in the developed worlds, where awareness is higher than in India. The first report utilised a highly customised version of the GRI G3 Guidelines and UNGC principles. The report largely focussed on identified parameters of high stakeholder interest and dismissed other parameters even as the report was awarded the A+ rating by GRI.

However, the report in its current avatar of Infosys 3.0 closely adheres to the GRI 3.1 guidelines, omitting only parameters their business activities did not affect directly or indirectly. All excluded indicators carry explanations for the reason of omission. The table below provides a summary of the details of the parameters reported by Infosys in its Sustainability reports.

GRI - G3 INDICATOR CODE

Economic EC 1-4 EC 5-7 EC 8-9 Environmental EN 1-2 EN 3-7 EN 8-10 EN 11-15 EN 16-25 EN 26-27 EN 28 EN 29

DESCRIPTION

LEVEL OF REPORTING
3 3 3 3 3 3 3 3 3 3 3 29

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport

EN 30 Social LA 1-3, LA 15 LA 4-5 LA 6-9 LA 10-12 LA 13-14 Human Rights HR 1-3 HR 4 HR 5 HR 6 HR 7 HR 8 HR 10 HR 11 Society SO 1, SO 9-10 SO 2-4 SO 5-6 SO 7 SO 8 Product Responsibility PR 1-2 PR 3-5 PR 6-7 PR 8 PR 9

Overall Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Security Practices Assessments Remediation Community Corruption Public Policy Anti-competitive Behaviour Compliance Customer Health and Safety Products and Services labelling Marketing Communications Customer Privacy Compliance
Table 8: Reporting performance for Infosys, 2011

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. A quick look through the table clearly indicates Infosyss commitment to transparent reporting. The report consistently fully reports most of the Core parameters as defined by the GRI. The missing indicators are usually qualified by Infosys as to why the parameter is missing.

Infosys: Green Reporting

30

Materiality & stakeholder engagement

Figure 8: Stakeholder engagement methods for Infosys

Figure 9: Materiality Matrix for Infosys

Future green commitments

Infosys has clearly mentioned in their sustainability report for the financial year 2011-12 that they wish to become carbon neutral in the next few years. They have already reduced their carbon levels by 50% as compared to 2007-08. They aim at using 100% green energy for all their purposes. A system of waste segregation at source has been established and waste is disposed to recyclers/vendors in adherence to the legislation wherever applicable. They are also working towards preserving biodiversity. As claimed in their sustainability report, they have planted 45914 trees (endangered) in their campuses in the year 2012.Infosys has given a lot of attention to the welfare of their employees. They organized a safety week called HALE which was attended by almost 38000 employees.

Assurance
The report is vetted by DNV to be compliant with the GRI 3.1.

Figure 10: DNV External Assurance A+ for Infosys 2011

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Case 5: ITC, India

Introduction
ITC has been one of the pioneers of sustainable businesses in India. They realised the importance of sustainability and the utility of triple bottom line to measure it. ITC quotes itself as being a corporate trustee of the social and economic resources deployed in its business operation. Referring to itself as a Citizen First, ITC is Indias first company to voluntarily seek rating for Corporate Governance. The organisation has been producing Sustainability Reports in accordance with GRI since 2004. In earlier years, ITC used to prepare the Environment, Health and Safety (EHS) Report till 2003 (ITC Sustainability Report, 2004). The reports in their current format adhere very closely to the guidelines set down by the GRI. The table below provides a summary of the details of the parameters reported by ITC in its Sustainability reports. GRI - G3 Indicator Code Economic EC 1-4 EC 6-7 EC 8 Environmental EN 1-2 EN 3-5 EN 8-10 EN 11-12 EN 16-23 EN 26-27 EN 28 Social LA 1-2 LA 4-5 LA 7-8 LA 10 LA 13-14 Human Rights HR 1-2 HR 4 HR 5 HR 6 HR 7 Society SO 1 SO 2-4 SO 5 SO 8 Product Responsibility PR 1 PR 3 PR 6 Description Level of reporting

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Community Corruption Public Policy Compliance Customer Health and Safety Products and Services labelling Marketing Communications

3 3 3 3 3 3 3 3 2.5 3 2.5 3 2.5 2 2.5 3 3 3 3 3 3 3 3 3 2 3 3 32

PR 9 Compliance Food Processing Sector Supplement (FPSS) FP 1-2 Sourcing FP 3-4 Labour Practices and Decent Work FP 5-8 Product Responsibility Animal Welfare
Table 9: Reporting performance for ITC, 2011, (ITC Sustainability Report, 2012)

3 1.5 2 1.5 N/A

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. A quick look through the table clearly indicates ITCs commitment to responsible reporting. The report consistently fully reports most of the Core parameters as defined by the GRI. The missing indicators are usually designated as Additional parameters by GRI. From this years report, ITC has also included a new category, Food Processing Sector Supplement (FPSS), to include its growing portfolio of processed food protects under the ITC Packaged Foods Division.

ITC: Green Reporting

Corporate Governance
The GRI requires companies to declare their company profile including organisational structure (Section 2, Profile, GRI 3.1 Guidelines, 2011). ITC divides its corporate governance structure into three interlinked levels, Strategic supervision Strategic Management Executive Management Board of Directors Corporate Management Committee (CMC) Divisional/Strategic Business Unit (SBU) Chief Executive assisted by the respective Divisional/SBU Management Committee (DMC)

Table 10: Corporate Governance - Division of Responsibility

Figure 12: Governance structure in ITC

Material Sustainability
ITC, being a resource heavy firm, focusses on sustainable sourcing of raw materials to ensure long-term availability at optimum and competitive prices. In this regard, ITC has undertaken a number of rural empowerment development programmes (like e-Choupal). In 2011-12, 94% of raw materials used by ITC were renewable. This is aided by the fact that ITC actively tries to vertically integrate its sourcing capabilities to the furthest extent possible. 33

Community
The sustainability report includes information on labour practices, CSR activities and product responsibility as a measure of community engagement. Highlighting fair labour practices at its workplace is one of the prime intentions of the report. Also included are facts about environment, health and safety (EHS) management systems. CSR is a highlight of the report, as the repeatedly mentioned flagship programme, e-Choupals success is touted alongside other programmes related to infrastructure, skill and knowledge development. Product responsibility is very important for ITC as a food processing major in the industry, also backed by the introduction of the FPSS guidelines. Although, the report claims almost full compliance with the GRI guidelines, the actual section in the report hardly includes any information on customer health and safety.

Food Processing Sector Supplement (FPSS)

Only some of the parameters mentioned in the FPSS are already included the current version of the report published by ITC. Since the guidelines were provided only in 2011, the section was considered for reporting for the first time in 2012. The status update in the 2012 report includes reasonably detailed information on sourcing and labour practices. However, it is limited in its scope of declaration regarding product responsibility. For example, the company provides little or no information regarding its products ingredients and nutritional information beyond legal requirements.

Application Levels
Till 2007, PwC provided external assurance to ITC. Since then, Ernst & Young have provided external assurance to the firm.

Figure 13: Assurance certificate by E&Y 2012, (ITC Sustainability Report, 2012)

ITCs commitment to green business is demonstrated by the regular annual publication of its sustainability reports and its detailed compliance with GRI guidelines. The organisation is continually evolving its business and reporting practices and the immediate reaction to the G3.1 changes only reaffirms the firms commitment to the cause of green reporting.

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Case 6: Tata Motors, India

Introduction
Tata Group of Companies is one of the most respected brands in the country and the group have established time and again that they are sensitive to the communities needs and actively organise social improvement events to improve peoples lives. Sharing the same values, Tata Motors tries to create customer value by reducing their environmental footprint. The table below provides a summary of the details of the parameters reported by Tata Motors in its Sustainability reports.

GRI - G3 INDICATOR CODE

Economic EC 1-4 EC 5-7 EC 8-9 Environmental EN 1-2 EN 3-7 EN 8-10 EN 11-15 EN 16-25 EN 26-27 EN 28 EN 29 EN 30 Social LA 1-3, LA 15 LA 4-5 LA 6-9 LA 10-12 LA 13-14 Human Rights HR 1-3 HR 4 HR 5 HR 6 HR 7 HR 8 HR 10 HR 11 Society SO 1, SO 9-10 SO 2-4 SO 5-6 SO 7 SO 8 Product Responsibility PR 1-2

DESCRIPTION

LEVEL OF REPORTING
3 3 3 2 3 2 N/A 2.5 3 3 2 3 3 3 3 3 3 2.7 3 3 2 2 2 2 3 3 3 3 3 3 3 35

Economic Performance Market Presence Indirect Economic Impacts Materials Energy Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport Overall Employment Labour/Management Relations Occupational Health & Safety Training & Education Diversity and Equal Opportunity Investment and Procurement Practices Non-Discrimination Freedom of Association and Collective Bargaining Child Labour Forced and Compulsory Labour Security Practices Assessments Remediation Community Corruption Public Policy Anti-competitive Behaviour Compliance Customer Health and Safety

PR 3-5 PR 6-7 PR 8 PR 9

Products and Services labelling Marketing Communications Customer Privacy Compliance

Table 11: Reporting performance for Tata Motors, 2011

3 3 N/A 3

We assume the Level of Reporting to vary from 1 to 3, with 3 being the highest level of detail. The scores are consequently computed by taking the average level of disclosure by the organisation. Tata Motors has shown good compliance level in their sustainability reporting. Their efforts towards environment sustainability are also commendable and a lot of them are also mentioned in their sustainability report. They have not only met the environmental regulations norms in terms of emissions, but are also making an extra effort to go beyond the compliance levels to make their vehicles more fuel efficient and environment friendly

Application Levels
DNV provides assurance to the report indicating it is compliant with AA1000 2008 Principles and meets Application Level A+ according to GRI G3.1. Despite that, Tata Motors Limited (TML) needs to improve on improving levels of stakeholder inclusiveness and neutrality of the report. Furthermore, TML does not utilise the template set by GRI. Consequently their report is harder to interpret as compared to other companies which use standardised reports.

36