AWARENESS PROGRAM ON SUSTAINABILITY

- Cyril Danthi

AGENDA

• Business context for sustainability

• The changing policies and environment for disclosure

• Different types of disclosure – UNGC, GRI and NVG

• Global Reporting Initiative – The reporting framework

• The Reporting Process

INDUSTRIAL REVOLUTION

The industrial revolution - effects

• Machine-made industries

• Manufacturing

• Wealth increase

• Mechanized and increased yield in agriculture

Consumption increased

Increase in use of natural resources, minerals, metals, etc

Exponential rise in CO2 emissions, air pollution, etc

WHAT CAN ONE DEGREE TEMPERATURE CHANGE DO TO US…

Consumption increased

Increase in use of natural resources, minerals, metals, etc

Exponential rise in CO2 emissions, air pollution, etc

SUSTAINABILITY CONTEXT

• What is going on in the world ?

• How does society react to face these problems ?

• How does society see the role of organizations to

help solve these problems ?

• What does society expect of organisations and how

does this change the business scenario?

WHAT IS GOING ON IN THE WORLD ?

WHAT IS GOING ON IN THE WORLD ?

WHAT IS GOING ON IN THE WORLD ?

WHAT IS GOING ON IN THE WORLD ?

WHAT IS GOING ON IN THE WORLD ?

WHAT IS GOING ON IN THE WORLD ?

ROLE OF ORGANIZATIONS

ROLE OF ORGANIZATIONS

Organizations concentrate

large amount of financial,

technical ( research &

technology), natural &

human resources. They

also influence political

decisions.

They have to be part of the

solution.

ROLE OF ORGANIZATIONS

Different ways to respond:

Both Important, but different and lead to different results

Philanthropy Responsible Management

•Gives support where not available

from the state or local communities

•Not related to “day to day “ decision

making operations.

•Uses “day to day” management

decisions to address social,

economic and environmental issues

resulting from the organizations

operations. e.g design of

products/services, supplier etc

WHAT IS SUSTAINABILITY

What is

Sustainability

Development

Sustainable development is development which meets the needs of the

present without compromising the ability of future generations to meet

their own needs.”

Sustainability for

businesses

Business sustainability is defined as managing the triple bottom

line- a process by which companies manage their financial, social

and environmental risks, obligations and opportunities.

Transforming

Businesses

•Energy

•Water

•Waste

•Air emissions

•Products stewardship

•Labour practices

•Stakeholder engagement

•Human rights

•Health & Safety

•Diversity

•Employee benefits

•Contribution to local

community development

•Spending on local

suppliers

Successful businesses of tomorrow will need to manage the triple bottom lines

Economic

Performance Social Performance

Environmental

Performance

CHANGING REGULATORY LANDSCAPE COMPELLING

BUSINESSES TO ADOPT SUSTAINABLE PRACTICES

2003

2008

2011 2012

Near Future

• Water Act

• Air Act

•Enforcement of

Kyoto Protocol

•Renewable

Energy -GBI,

Accelerated

Depreciation and

Feed in Tariffs

•National Action

Plan on Climate

Change(NAPCC)

•Perform Achieve

and Trade (PAT)

•Renewable

Purchase

Obligation (RPO)

•SEBI - BRR

guidelines

•Companies Bill

2012

•National Water

Policy

•Extended

Producer

Responsibility

(EPR)

•Green Public

Procurement (GPP)*

•Land Acquisition Bill

•Water allocation

and trading#

•Integrated reporting

SUSTAINABILITY FOR BUSINESS

• Sustainability is a driver for business Innovation

• It’s a direction for businesses to survive for LONG term with

LESS harm to people and planet

• …And creates the ‘license to operate’

STAGE 1

Viewing

Compliance as

Opportunity

STAGE 2

Making

Value Chains

Sustainable

STAGE 3

Designing

Sustainable

Products and

Services

STAGE 4

Developing

New

Business

Models

STAGE 5

Creating

Next-Practice

Platforms

Hewlett-

Packard

realized that

because lead is

toxic way back

in 1990’s

Titan Karigari

Case

P & G Air cool

Clean – Cold

washing

Fedex and

Kinko’s chain of

print jobs

Car running on

water

Sustainability is now Key Driver of Innovation

BUSINESS SUSTAINABILITY & REPORTING

BUSINESS SUSTAINABILITY & REPORTING

Peer Pressure • Recommendation of the UN Secretary General's

High Level Panel on Global Sustainability

• Rio+20 negotiating text -Zero Draft: “A global

policy framework requiring all listed and large

private companies to consider sustainability

issues and to integrate sustainability information

within the reporting cycle.”

• Governmental pressure

• Supply-chain pressure (e.g. PUMA)

• Customer pressure (e.g. IT companies,

mergers/acquisitions)

Regulatory environment • MCA pushing Business Responsibility Reporting

o SEBI making it mandatory

• GoI approving the new Companies Act

o Making 2% CSR spending for bigger corporations

Stakeholder Pressure • The rise of ‘Communitivism’ (Community Activism)

• Investors & FIs. promoting ethical business

Overlooking environmental damage is more •costly than environmental mitigation

BUSINESS SUSTAINABILITY & REPORTING

BUSINESS SUSTAINABILITY & REPORTING

Ultimately, it’s now the age of transparency

• Scams, raising voice against corruption...

• Employees want to know more... Demand more

• Society and Community seek more open dialogues

• Investors vary of companies with ‘rigid’ and closed structure

• Accountability

• Transparency

DIFFERENT FORMS OF DISCLOSURE

UN GLOBAL COMPACT (UNGC)

Launched in July 2000, the UN Global

Compact is a both a policy platform and a

practical framework for companies that are

committed to sustainability and responsible

business practices. As a leadership

initiative endorsed by chief executives, it

seeks to align business operations and

strategies everywhere with ten universally

accepted principles in the areas of human

rights, labour, environment and anti-

corruption

UN GLOBAL COMPACT – 10 PRINCIPLES

NATIONAL VOLUNTARY GUIDELINES (NVG)

Indian Disclosure perspective

• Ministry of Corporate Affairs

Voluntary

• Guidelines

• Disclose: 2.5% of revenues for CSR

• SEBI ruling on top 100 companies

as per market capitalisation

NATIONAL VOLUNTARY GUIDELINES (NVG )

1. Businesses should conduct and govern themselves with Ethics,

Transparency, and Accountability

2. Businesses should provide goods and services that are safe and

contribute to sustainability throughout their life cycle

3. Businesses should promote the wellbeing of all employees

4. Businesses should respect the interests of, and be responsive towards

all stakeholders, especially those who are disadvantaged, vulnerable

and marginalised.

5. Businesses should respect and promote human rights

6. Business should respect, protect, and make efforts to restore the

environment

7. Businesses, when engaged in influencing public and regulatory

policy, should do so in a responsible manner

8. Businesses should support inclusive growth and equitable

development

9. Businesses should engage with and provide value to their customers

and consumers in a responsible manner.

NVG - 9 Principles

GLOBAL REPORTING INITIATIVE (GRI)

• The Global Reporting Framework is an

independent non-profit organisation based

out of Amsterdam

• It is composed of independent

‘stakeholders’ who develop the GRI

Guidelines based on systematic dialogue

with relevant stakeholder

• constituencies.

• GRI proposes a methodology for

sustainability reporting.

• The GRI guidelines and methodology are

recognized and used by all types or

organizations worldwide, from industries to

NGOs and the public sector.

GRI - FRAMEWORK

GRI-G3 ENVIRONMENT

• Materials

• Energy

• Water

• Biodiversity

• Emissions, Effluents, and Waste

• Products and Services

• Compliance

• Transport

LABOR PRACTICES AND DECENT WORK

• Employment

• Labor

Management Relations

• Occupational Health and Safety

• Training and Education

• Diversity and Equal Opportunity

HUMAN RIGHTS

• Investment and Procurement Practices

• Non-discrimination

• Freedom of Association and Collective Bargaining

• Abolition of Child Labor

• Prevention of Forced and Compulsory Labor

• Complaints and Grievance Practices

• Security Practices

• Indigenous Rights

SOCIETY

• Community

• Corruption

• Public Policy

• Anti-Competitive Behavior

• Compliance

PRODUCT RESPONSIBILITY

• Customer Health and Safety

• Product and Service Labelling

• Marketing Communications

• Customer Privacy

• Compliance

PURPOSES OF SUSTAINABILITY REPORTING

PURPOSES OF SUSTAINABILITY REPORTING

Sustainability Reports can be used for the following purposes, among others:

• Benchmarking and assessing sustainability performance with respect to laws, norms, codes, performance standards;

• Demonstrating how the organization influences and is influenced by expectations about sustainable development;

• Comparing performance within an organization and between different organizations overtime

PURPOSES OF SUSTAINABILITY REPORTING

• Improving business performance, operational efficiency and cost savings

• Improving reputation with stakeholders including investors, credit agencies, customers, employees and business partners

• Increasing brand value and recognition

• Enhancing risk assessment and management capabilities

MAPPING OF NVG WITH GRI, UNGC INDICATORS

MAPPING OF NVG WITH GRI, UNGC INDICATORS

The following is a mapping of the 9 core principles of NVG-SEE against the pertinent

indicators of the GRI G3.1 guidelines and the UNGC principles

NVG-SEE principles (Aspects) GRI G3.1 Indicators UNGC Principles

Principle 1 : Ethics, transparency and

accountability

4.1 – 4.13

Principle 10

Principle 2 : Product life cycle sustainability EN2, EN26, EN29, PR1,

PR2

Principle 8

Principle 3 : Employees’ well-being

LA1, LA10, HR4, EC5 Principle 3, Principle 4, Principle 5,

Principle 6

Principle 4 : Stakeholder engagement 4.14 – 4.17

Principle 5 : Human rights HR10, HR11 Principle 1, Principle 2

Principle 6 : Environment EN1 – EN30 Principle 7 , Principle 8, Principle 9

Principle 7 : Policy advocacy SO5

Principle 8 : Inclusive growth SO1, SO9, SO10, EC8

Principle 9 : Customer value PR3, PR4, PR5

SUSTAINABILITY CONTEXT & REPORTING

SUSTAINABILITY CONTEXT & REPORTING

Environmental Economic

Social

A report about economic, environmental and social impacts caused by an

organization though its every day activities.

GRI & THE GRI FRAMEWORK

Structured

feedback

process

on 2002

guidelines

TAC &

BoD

Approval

G3

Guidelines

released

Decision

to work on

G4

announce

d

DG 3.1

released.

G4

working

groups

establishe

d.

G4

international

sneaks

peeksTAC

& BoD

approval G4

G4

Guidelines

are

released

2003-2005 2006 2010 2011 2012-

20013

GRI & THE GRI FRAMEWORK

GRI Framework developed based on systematic dialogue with key stakeholders

Guidelines contain:

• Principles

• Profile Disclosure

• Disclosure on Management Approach

• Performance Indicators and Protocols

And:

• Sector Supplements

• National Annexes (current status)

MAPPING OF NVG-SEE WITH GRI, UNGC INDICATORS

Principles

Standard

Disclosures

Content

Quality

Boundary

Disclosure Items

Disclosure on

Management Approach

and Performance

Indicators

Strategy & Analysis

Organization Profile

Report parameters

Governance,

Commitments and

Engagement

Economic Environmental Social

GRI - REPORTING PROCESS

Prepare Connect Define Monitor Report

GRI - REPORTING PROCESS - PREPARE

Prepare Connect Define Monitor Report

• Imagine your report.

• Hold a kick off meeting.

• Create the “reporting team”.

• Develop an Action Plan.

GRI - REPORTING PROCESS - CONNECT

Prepare Connect Define Monitor Report

• Identify stakeholders.

• Prioritize them.

• Dialogue with them

GRI - REPORTING PROCESS -DEFINE

Prepare Connect Define Monitor Report

• Select issues for action & report.

• Decide on report content.

GRI - REPORTING PROCESS – MONITOR

Prepare Connect Define Monitor Report

• Check procedures & systems.

• Discuss & set goals.

• Monitor activities & record data.

• Ensure quality of information.

• Follow up.

GRI - REPORTING PROCESS – REPORT

Prepare Connect Define Monitor Report

• Choose best way to

communicate.

• Write the report.

• Finalize & launch the report.

• Prepare for the next cycle.

Any

? Please

THANK YOU