CII Lists Ten Most Sustainable companies
Confederation of Indian Industry (CII) announced Sustainable Plus labels for 100 largest companies by market capitalisation across 20 sectors. Sustainable Plus is India’s only corporate sustainability label and is based on a comprehensive analysis of companies across environment, social and governance dimensions of business. The analysis was conducted for information based on FY2015. Sustainable Plus label is given across three levels, viz., Platinum, Gold and Bronze.
Ten companies got Sustainable Plus Platinum, seven got Sustainable Plus Gold, and the remaining 83 companies got Sustainable Plus Bronze. Sustainable Plus Platinum companies, also “India’s Most Sustainable” are ACC Ltd, Wipro Ltd, Reliance Industries Ltd, Mahindra & Mahindra Ltd, Tata Power Ltd, Tata Motors Ltd, Tata Chemicals Ltd, Hindustan Zinc Ltd, Vedanta Ltd and ITC Ltd.
Not one sector dominated the list of Sustainable Plus Platinum. Companies range from automobile and IT to construction and oil and gas. Overall, metals & mining, automobile, software, construction material and oil & gas have the best scores. When companies in a sector do not share information in the process, they make a dent on overall sector performance. Transportation, other financial services and media had the lowest overall scores. That also reflects the lack of transparency in those sectors.
The twenty sectors that were covered are Metals and Mining, Software and Services, Telecom Services, Textiles, Apparel & Accessories, Transportation, Media, Diversified, Pharmaceuticals, Consumer Durables, Other Financial Services, Banks, Utilities, Oil and Gas, Capital Goods, Automobiles, Construction Materials, Household and Personal Products, Chemicals and Petrochemicals, Food- Beverages and Tobacco, and General Industrials.
Governance continues to be the strongest dimension of sustainability as compared to environment and social. The impact of requirements of corporate governance, and transparency and disclosures in the Companies Act 2013 have definitely helped companies do better on governance. Companies have adequate disclosures on board structure and committees, whistle blower mechanism for key stakeholders, and risk management framework for addressing business, financial as well as sustainability risks. They also have employee code of conduct to ensure ethical operations and policy for conflict of interest management. However there are gaps in reporting on aspects such as rotation of auditors, identification of sustainability risks and opportunities, and measuring the effectiveness of code of conduct and risk management framework.
Social dimension is the next highest scorer. Most companies have OHSAS certified occupation health & safety management system and CSR policy. Companies are engaged in community development initiatives around the areas of operations by partnering with relevant focused groups or NGOs. Health & sanitation, education and women empowerment top the cause list. While companies have subscribed to global human rights principles corresponding results need attention, which exposes companies to human rights related risks. There exists a supplier code of conduct with commitment to local sourcing and suppliers’ capacity building. There is scope of improvement on indicators such as impact measurement or outcome of community investments.
Environment dimension had the lowest overall performance scores. Across sectors the companies have environmental policy and have commitments to reducing their overall eco-footprint. Aimed at reducing emissions, energy usage and waste management, the companies also integrate climate change risks into multidisciplinary company-wide risk management processes. However there is a scope of improvement on aspects such as targets and performance related to environmental KPIs (GHG emissions, energy consumption, water consumption, and waste generation), long term biodiversity management plan and evaluation of effectiveness of the systems.
Each year, CII-ITC Centre of Excellence for Sustainable Development (CESD) undertakes ESG analysis of top 100 companies across 20 sectors and provides Sustainable Plus label. First the 20 largest (by market capitalization) sectors are identified and then top five companies in each sector make it to the list of 100 companies for Sustainable Plus. After the initial public scan, each company receives a customized information request to fill gaps. The overall performance of the company improves in relation to the quality of disclosures. Once the analysis is completed, companies are given Sustainable Plus labels as well as a summary report.
CESD conducts the process by informing each company that they are being analysed for Sustainable Plus. Inclusion of companies in the list is by their market capitalisation and not by their consent to be analysed.
