Sun, 04 Jun 2023

India's Changemakers: KPMG ESG Conclave and Awards 2023

26 Apr 2023, 15:45 GMT+10

New Delhi [India], April 26 (ANI/Mediawire): Indian organisations are rewiring themselves to do business with sustainable practices in mind. In this changing environment, where every voice in the community needs to be heard, several ESG practices for companies will need to be thought of afresh so that the communities that they serve can be adequately taken care of. Some organisations have taken the first step of a journey that could be a thousand miles. Others are learning from the best practices of their peers. With the BRSR reporting regulation having kicked in, and other global reporting standards evolving at a rapid pace, there needs to be an urgency in aligning the ESG strategy and reporting for all organisations.

Excellence in ESG, guiding light for the future of India Inc.

Well before regulations kicked in, India's leading companies had put in place a robust mechanism to monitor their ESG performance

The first step in recognizing a fundamental change may appear to be routine. The import of such a recognition often takes time to be accepted for a wider audience.

It was one such evening in Mumbai when the KPMG ESG Conclave and Awards 2023 sought to recognise companies and their practices for raising the bar for ESG. Every trophy in the hands of the winners could tell the story of commitment of practices that are critical for businesses to thrive for communities. The first edition of the recognition programme had gotten underway several months earlier when data around the efforts of companies was collated. The theme of the event was Thought|Action|Impact.

As the names of the A-listers of corporate India for the awards were announced as the winners in their categories, the appreciation for their efforts were ringing loud among the audience. The hall was packed to the brim, one of the indicators that suggested the importance that India Inc is giving to sustainability.

The universe of listed companies was the focus for the year. Beginning April 1, 2023, SEBI has made it mandatory for India's top 1000 companies to disclose non-financial data. The regulatory requirements are expected to expand during the coming years and companies will have to organise granular data so that they can stay ahead of the emerging regulation.

Panel -1:

India Inc needs sense of urgency on ESG

Addressing the ESG regulation is the first step that large companies must take to ensure they comply with the emerging laws. Large companies may not be content doing just that and would want their ESG strategy to stay ahead of regulation. The sense of urgency against the sustainability challenge should show in the action of companies, starting with an in-depth materiality assessment.

This is even more true for sectors that are hard to abate - cement, iron & steel, chemicals, and others - and industry and communities could well be running against time. The extreme weather conditions that have been seen is serving as a warning for perhaps the kind of decade this could be.

The carbon from the use of energy sources is one of the biggest cause for worry and the transition from the use of fossil fuel to moving towards electric mobility, for example, may need to be accelerated. While the thoughts and action are being seen, the impact needs to be seen in a timeline that is much shorter. If the leaders in the hard to abate sectors can show a turnaround, it could serve as a template for others in the sector and other industries to follow. Indian companies have raised sustainability linked bonds, while some sectors are raising finance for green transition. RBI's recent guidelines has opened the market for green deposits. Along with the private sector, the government and multi-lateral agencies also need to come together in enabling this transition. "To bring about climate action, imbibing conscious choices in everyday life will likely be more impactful than what can be achieved simply with ESG through the boardroom. Even a small change can become significant enough to cause a larger critical change. Corporate leadership need to realise that," OP Bhatt, Independent Director and former SBI Chairman said.

Panel 2:

Adding stakeholder voices as part of business operations

Every voice from the communities that are impacted by the operation of businesses needs to be heard. That is turning out to be the rule for businesses as they evolve in the new millennium. The expectations that stakeholders have from business is expanding and the emerging regulation is making it imperative for businesses to have one ear to the ground. This shift away from traditional shareholder-centric models of capitalism has created a whole new set of corporate obligations, with businesses now needing to actively demonstrate their commitment to sustainability and social justice. Companies are today being held to higher ethical standards, exemplified by CSR initiatives. As millennials continue to embrace stakeholder capitalism, businesses will be forced to rapidly adapt. The sweeping changes being seen in the way companies make their mandatory disclosures are being impacted in a big way due to the regulations. Some changes could also be happening due to the expected regulatory landscape. The suppliers of all these companies will also have to face a new environment due to the unfolding changes. "We have seen massive change including in India in the last five years. Some of these drivers might be regulations in the pipeline, especially in India, we saw a great push of the BRSR regulation that is coming for the top 1000 largest companies. They are preparing for the disclosure ahead of that. So, there is a massive move of the large companies to be comparable to their global peers," Robert Dornau, Global Head of Corporate Engagement, S & P Global said.

Rigorous jury process

The multi-stage evaluation process was anything but easy as it tried to identify the best among the best. The jury evaluation process considered policy frameworks, materiality considerations, best practices, nature of initiatives, public disclosures, performance across various indicators and others helped sift through the work being done by companies.

After the sourcing of preliminary data had been completed, recognising the best practices among companies required a team to look at 52 companies in greater detail. What followed was reviewing 114 reports - integrated reports, sustainability reports and more. After spending over 4000 hours and putting together some 15,000 data points collated in nearly 1500 pages, some 300 documents were compiled for the jury to consider.

The jury was now ready to go ahead with the herculean task. With online and offline meetings among the jury members, all relevant data points were pored through culminating into two days of jury deliberations. As they debated on the various considerations, it helped the jury members to narrow down on the winners across the seven sectors.

Challenge for next year

The challenge for the next year will be to expand the list of companies to identify more changemakers and companies that are doing the grunt work. Companies that are putting together the building blocks for holistic ESG transformation, banking and finance companies that are expanding their sustainability finance business, changes happening in the value chain, and more could be possible areas to look at. Regulation is expected to evolve further, as more and more companies could be expected to report their non-financial data. Investors could demand greater transparency and reporting because of the risks due to non-compliance to the capital, operations and overall conduct of the business. As companies enhance the quality and transparency of their ESG reporting, an integrated view towards reporting could emerge, where both financial and non-financial data is disclosed holistically.

The recognition is expected to goad more companies into action and, collectively, India Inc could make the change towards meeting India's sustainable development goals (SDG) by 2030. India Inc must also align its actions to the national commitment made for the country to achieve net zero by 2070. The target year may look too far off but every small step towards the goal will count.

The trophies and the citation that the winners carried for the evening will have pride of place in their offices. The importance of being the first winners of the prestigious awards, that could define a new way of doing business, could dawn on the companies in times to come.


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This story has been provided by Mediawire. ANI will not be responsible in any way for the content of this article. (ANI/Mediawire)

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