a comparative perspective of sustainability reporting ... · the corporate sustainability...

A Comparative Perspective of Sustainability Reporting Practices

in Indian and Global Firms

Submitted to

National Foundation for Corporate Governance

PD Jose

Haimashree

Centre for Corporate Governance & Citizenship

December 2014

Table of Contents

1.0 Introduction: ............................................................................................................................... 1

2.0 Data Collection and Analysis: ...................................................................................................... 1

3.0 Summary of Findings ................................................................................................................... 3

3.1 Sector-wise distribution of Most Reported CSIs ..................................................................... 1

3.2. Financial Performance and CSI reporting ............................................................................... 3

4.0 Comparison of Reporting Practices Region wise ........................................................................ 3

4.1 Region-wide distribution of Most Reported CSIs:......................................................................... 4

5.0 Organization and Management .................................................................................................. 5 5.1 Organizational Structure ......................................................................................................... 6 5.2 Policies .................................................................................................................................... 7 5.3 Internal Codes of Conduct ...................................................................................................... 7 5.4 Voluntary Sustainability Principles & Codes of Conduct......................................................... 8 5.5 Certifications and Audits ......................................................................................................... 9 5.6 Communication with Employees and Stakeholders: ............................................................ 10

6.0 Operations & Core Business Practices ...................................................................................... 11 6.1 Green Operations ........................................................................................................................ 12 6.2 Climate Change ........................................................................................................................... 13 6.3 Research & Development ........................................................................................................... 14 6.4 Greening Supply Chain ................................................................................................................ 15 6.5 Renewable Energy....................................................................................................................... 16 6.6 Health & Safety ........................................................................................................................... 17

7.0 Corporate Social Responsibility ................................................................................................ 18 7.1 CSR Finance: ................................................................................................................................ 19 7.2 Donations or Sponsorship ..................................................................................................... 19 7.3 Disaster Relief ....................................................................................................................... 20 7.4 Education .............................................................................................................................. 21 7.5 Healthcare ................................................................................................................................... 21 7.6 Community Livelihood .......................................................................................................... 22 7.7 Environment Conservation ................................................................................................... 22 7.8 Other CSR Activities .............................................................................................................. 23

8.0 Summary & Conclusions ........................................................................................................... 24 Appendix 1: Fortune 100 List ............................................................................................................ 26

1 Corporate Sustainability Initiatives (CSI) Reporting: A Comparative Study of Indian & Global Firms

1.0 Introduction: This study analyses the sustainability initiatives of most valuable firms in the Fortune 500 list. The methodology adopted involves analysing information disclosed on their Websites, including annual reports, sustainability reports, policies, and other documents. The study, sought to answer the question on what type of information related to sustainability and business operations were currently being disclosed and attempted to map the information based on industry type and sector, location and profit” For the purposes of this study Corporate Sustainability Initiatives (CSIs) were defined to include:

Any voluntary action taken by the company to ensure reduced impact of their operations on the environment or the society beyond legal compliance;

Those initiatives that are embedded in the core or mainstream business or are carried out by an extended arm of the corporate; and

All initiatives that depict that the company in general is concerned about the social and environmental aspects along with the economic aspects explicit in its strategic behaviour or planning.

The Corporate Sustainability Initiatives incorporated by the sample firms are reported below:

2.0 Data Collection and Analysis: For the present report data on the sustainability initiatives undertaken by these firms was collected either from their websites and/or from the information provided in their Annual reports or CSR/Sustainability reports. The period of data collection was September, 2013 to November, 2013


Data Collection:

Based on the information available, an initial list of different parameters covering almost all the aspects of economic, social and environmental responsibility initiatives an organization could undertake in order to operate in a sustainable manner was prepared. Data was then analysed both overall as well as sector-wise. In some cases the sub-variables have also been analysed for all 100 firms. The charts and trends arising from this data analysis led to interesting insights which have been showcased throughout the report. With an aim to review the kind and extent of initiatives undertaken by the prominent Global firms to address the above issues, the present study was carried out on a focus group of 100 most valuable private sector firms rated by Fortune 500 in the year 2013. For managing the data as well as facilitating analysis, these firms were classified into 12 different sectors.

Organization &

Management

Corporate Social

Responsibility

Operations& Core

Business Practices

This section describes organizational structures within the company to execute the Corporate

Sustainability Initiatives and various ways to manage it like policies, codes of conducts, audits

and certifications, communications and adherence to (inter)national voluntary sustainability

principles and codes of conduct.

The findings with regard to greening and ethically advancing their operations and reducing their

negative environmental impacts are included in this section

Initiatives to improve the lives of people in the surrounding communities and society at large

are highlighted in this section. These initiatives are not directly impacting core business

practices of a company as such; however, these can be a part of Public Relations, CSR

commitments, or investments in particular market segments which can be tapped in the section

Future.


This data was then compared against the findings of an earlier study on the reporting patterns of most valuable Indian firms. The data for Indian firms came from the Business Today 500 list Business Today 500 (BT 500) in 2010. For managing and analysing the data, these companies were classified into 15 different sectors.

0 5 10 15 20 25 30

Sector

Chemicals

Conglomerates

Construction and building materials

Cement & cement products

Metal, mining & other engineering

Metals

Other

Telecommunication

Telecom and media

Utilities and energy

Electric utilities

Automotive

Automobiles and parts

Electronics and computers

Trade and retail

Oil and gas

Finance, securities and insurance

Banking and finance

Pharmaceuticals

IT Consulting and software

FMCG

Infrastructure

Realty

Industrial equipment

Sample Firms (No of Firms)

India Global

Figure 1: Sector-wise Distribution of Top 100 Companies in the Study Sample

3.0 Summary of Findings An analysis of the reported CSIs for the top 100 firms in both the categories indicated significant

overlaps as well as differences. In the global Fortune 500 sample more than 90 % of these firms had

developed green operations, environment conservation as well as donations and sponsorships. This

indicates that a strong emphasis is given to Operations and CSR activities. After Operations and part of

CSR activities, the most reported initiatives were internal code of conduct, CSR-related(education,


community livelihood, volunteering, healthcare, disaster relief and so on), operational efficiency driven

(R&D, climate change, renewable energy, health & safety), or voluntary sustainability principles.

0 20 40 60 80 100 120

Awards

Climate change

Internal Codes of conduct

CSR finances

Communication to stakeholders

Environmental conservation

Other CSR activities

Disaster management

Donations/philanthropy

Educational Initiatives

Healthcare Initiatives

Cultural conservation

Infrastructure development

Community livelihood

Voluntary sustainability principle

HSE initiatives

HR initiatives

Green operations

Organisational Structure

Policies related to Sustainability

R&D

Renewable Energy

Supply Chain Intiatives

Comparisons of Global and Indian CSIs

India Global

Figure 2: Reported CSI (Corporate Sustainability Initiatives) for Top 100 Firms (Global vs India)

A study of the CSIs that are mostly reported by top 25 and bottom 25 firms indicates that the same or similar CSIs were the most reported for both groups. However those in the top quartile were more likely to report on a great number of metrics when compared to those in the last quartile. In the top quartile more than 80 % of the firms reported on all the top 12 CSIs while at the bottom more than 70 % of the firms from the bottom 25 firms reported all the top 12 CSIs.

Figure 3a: Most Reported CSIs for top 25 firms in the study sample (Global) Figure 3b: Most Reported CSIs for bottom 25 firms (Global)

Figure 3c: Most reported CSIs for Top 25 Indian Firms Figure 3d: Most reported CSIs for Bottom 25 Indian Firms


3.1 Sector-wise distribution of Most Reported CSIs Fortune 500 Sample BT 100 Sample

Banking, Insurance & Securities

Green Operations,

Voluntary Sustainability Principles

Donations, Education,

Codes of conduct

Community livelihood. Oil & Gas

R&D(Research & Development)

Green operation

Environmental Conservation

Health, safety and environment

Donations Trade & Retails

Green operations

Voluntary sustainability Principles

Donations


Environmental conservation Electronics & Computers

Green operations



Code of conduct

Climate change Automotive

Green operations


Environmental Conservation

Donations

Education Chemical

Voluntary sustainability principles

Green operations

Banking & Finance

Code of conduct

Awards

Policies

Research & development

Voluntary sustainability principles and codes of conduct

Electric Utilities

Code of conduct

Policies

Communication with employees and stakeholders

Education

Voluntary sustainability principles and codes of conduct

Pharmaceuticals

Policies


Code of conduct

Healthcare

Green operations initiatives Automobiles and Parts

Code of conduct

Other CSR initiatives

Policies


Healthcare IT Consulting & Software

Code of conduct

Policies


Workplace

Other CSR Initiatives


Code of conduct

R&D(Research & Development) Conglomerate


Volunteering

Donations


Disaster relief Metal, mining & Engineering



Volunteering

Donations

Education Construction & Building materials-


Health, safety & Environment

infrastructure development,

Environmental conservation,

Code of conduct Telecommunications-


Green operations,


Community livelihood,

Healthcare,

Education. Utilities-



Green operations,

Renewable energy utilization,

Climate change initiatives

Voluntary sustainability principles.

Table 3: Sector-wise Distribution of Most Reported CSIs of Firms in the BT Sample (India)


3.2. Financial Performance and CSI reporting

0 20 40 60 80 100 120

Audits

Awards

Certification

Climate change

Internal Codes of conduct

CSR finances




Disaster management


Educational Initiatives

Healthcare Initiatives





HSE initiatives

HR initiatives

Green operations


Policies related to Sustainability

Product Information

R&D

Renewable Energy


Voluntary Codes of Conduct

Volunteering

Reporting Differences in Global Firms based on Profitability

% of firms (Profitability Top Quartile) % of firms (Profitability Bottom Quartile))

Figure 4: CSIs reported by most and least profitable firms in the sample

4.0 Comparison of Reporting Practices Region wise The study indicates that U.S firms place much more emphasis on codes of conduct, Environmental conservation, CSR activities and green operations as opposed to voluntary codes of conduct, organizational structure, and audit.

Non U.S firms, on the other hand emphasise on environment conservation, donations, green operations, R&D, climate change, community livelihood, voluntary sustainability principles & education.


0 20 40 60 80 100 120

Audits

Awards

Certification

Climate change

Codes of conduct

CSR finances




Disaster management


Education

Healthcare





HSE initiatives

HR initiatives

Green operations


Policies relaetd to Sustainability

Product Information

R&D

Renewable Energy



Sustainabilty Reporting Practices of US vs Non-US Firms

% of Non US companies % of U.S companies

Figure 5: Percentage of US firms reporting on CSI variables

4.1 Region-wide distribution of Most Reported CSIs: The study also analysed the reporting patterns from a global perspective. On the basis of geographical distribution, the firms originated as given in the table below:

Region No of firms in the sample

European firms 34

U.S 32

China 12

Japan 10

Rest of the World

Latin America 3

Russia 3

South Korea 2

India, Malaysia, Thailand 1 each


0 20 40 60 80 100 120

Audits

Awards

Certification

Climate change

Codes of conduct

CSR finances




Disaster management


Education

Healthcare





HSE initiatives

HR initiatives

Green operations


Policies relaetd to Sustainability

Product Information

R&D

Renewable Energy



Volunteering

Reporting Comparisons across multiple regions

% age U.S (n=32) %age Rest of the world (n=12)

%age Chinese (n=12) % age Japanese (10)

%age European (34)

Figure 6: Region-wide distribution of Most Reported CSIs:

5.0 Organization and Management In order for firms to become more sustainable, they need to incorporate sustainability principles through goals and objectives, vision, mission, strategies, management practices and operations. Firms


can apply different methods to achieve this, such as by changing their organizational structure, update their policies and codes of conduct, have their practices verified and certified, and communicate any changes in management and operations and progress towards more sustainability business practices to their employees and customers.

The various CSIs that fall under this category are listed in following Table:

CSI Descriptions

Organizational Structure

Special structural arrangements to address Corporate Sustainability Initiatives:

Environment department, CSR department, R&D department for sustainable issues and Health & Safety department

Policies Policies related to sustainability used by the company:

CSR, environment, health & safety, HIV/AIDS, human resources, quality, and any other, and policies related to corporate governance, TPM policy

Internal code of conduct

Sustainability related concepts that are included in a company’s codes of

conduct:

Compliance with laws, diversity, environment, equal opportunities, differently abled people, gender, non-discrimination, harassment, health & safety, society, whistle blowing

Voluntary sustainability principles & code of conduct

Adherence to voluntary principles and codes of conduct related to

sustainability, developed by external organizations and adopted by the

company:

Global Reporting Initiative (GRI), United Nations Global Compact (GC), Carbon Disclosure Project and Millennium Development Goals (MDGs) and sector-specific initiatives, & Responsible care, Voluntary code of conduct-industrial, voluntary code of conduct

Certifications Verification and certification of current systems and practices to identify

progress towards sustainable business practices:

AA1000, ISO14000 and 9000 series, OHSAS18000, Quality certification, SA8000 & Six Sigma

Audits Various audits related to :Energy, environment & safety Communication with employees & stakeholders

Communication with employees about sustainability, with consumers about products and services (safe usage, life-cycle, etc.), and consumer feedback and communication with other stakeholders such as sharing information with competitors, communication to vendors and facilitators.

Table 5: Typology of CSI Initiatives

5.1 Organizational Structure The study also examined whether the firms in the sample have established organisational structures for dealing with sustainability related matters. While many either have separate departments or a consolidated Health, Safety, and Environment (HSE) department with a manager or an employee in charge to look after the functioning of environmental measures, safety, of implementation of CSI.

Figure 7 represents the percentage of firms in each sector that reports specific divisions in charge of CSR, Health & safety, environment, R&D. The creation of organisational structures to manage sustainability issues was most prominent among utilities, automotive, electronics and computers and oil and gas. Overall about 23 percent of the firms reported the existence of structures.


Figure 7: Percentage of firms disclosing organizational structure (Global)

5.2 Policies We also analysed whether policies on environment protection, CSR, HSE, HIV/AIDS prevention, TPM and any other sustainability related aspects existed within these companies. As indicated in figure 8, the disclosure was maximum in the case of utilities, automotive, electronics and computers and oil and gas, trade and construction sectors.

Figure 8 Sector-wise percentage of firms disclosing Internal Policies (Global)

5.3 Internal Codes of Conduct A vast majority of the Top 100 firms have either formulated their own Codes of Conduct or have disclosed elements which usually form codes of conduct. Figure 9 presents data related to the number of firms that disclosed various elements of a code of conduct. The broad trends in India reflect those of global companies, with some exceptions on aspects such as diversity policy, whistle blower policy etc.


0

10

20

30

40

50

60

70N

um

be

r o

f co

mp

anie

s

Elements of code of conduct

Number of firms disclosing various elements of code of conduct

Global

India

Figure 9: Percentage Firms disclosing their code of conduct compliance (Global vs India)

5.4 Voluntary Sustainability Principles & Codes of Conduct Firms in the study sample have adopted various voluntary principles and codes of conduct. In some instances, they have joined specific special interest groups as a member and have worked together with other firms and stakeholders to enhance their sustainability practices. Over 79%of the surveyed firms have adopted Voluntary sustainability principles.

The most popular global sustainability frameworks are: the Global Reporting Initiative (GRI) Sustainability Reporting Framework, Carbon Disclosure project and the United Nations Global Compact (GC). Companies have adopted these guidelines and attempted to standardise practices and sustainability evaluation processes in the Industry’s total environmental performance. About 31% of the firms studied had published GRI based Sustainability Reports.


Figure 10: Percentage of firms disclosing information about voluntary sustainability principles and code

of conduct (Global)

Figure 11: Percentage of firms adopting voluntary Sustainability principles and code of conduct (Global)

5.5 Certifications and Audits The review of the reported certifications reveals that Environment, Health & Safety, and Quality are the most popular focus areas for firms and most firms are not opt to take Human and Social rights certifications (SA 8000). Interestingly 22 firms in the sample reported on their Energy and Safety audits. Further utilities, automotive, chemical, metals and mining sectors placed considerable emphasis on audits and certifications. Nearly 60% of the firms had received ISO14000 certifications.


Figure 12: Percentage of firms disclosing details on certifications & audits (Global)

Figure 13 Percentage of firms in each sector reporting audits & certifications (Global)

5.6 Communication with Employees and Stakeholders: Companies communicate with employees and other stakeholders through various mediums such as

notices, emails, newsletters etc. Almost every company extends customer service, customer feedback

system, and a complaint registration system. In this study, communication with employees & shows a

significant difference among global Indian firms with Indian firms performing significantly better.

Whether this reflects reality needs to be verified as our assessments are based on publically available


data and companies may have chosen not to report on their stakeholder communication initiatives.

Figure 14: Percentage of firms disclosing information about mode of communications

Figure 15: Percentage of firms in each sectors disclosing mode of communication (Global)

6.0 Operations & Core Business Practices The initiatives studied under this section are

CSI Description

Green Operations Steps towards recycling and conservation of resources: product

materials, packaging, waste materials, water, energy, offering take-

back facility for recycling;

Controlling and prevention of air, noise, water and soil pollution;

Reducing emissions, eliminating toxic and hazardous elements;

Managing solid waste, waste water and by-products efficiently; and

Developing green belt


Climate Change Combating climate change through:

Carbon trading, Clean Development Mechanisms, reduction in CO2 emissions, reduction in other greenhouse gases (GHGs), and CO2 sequestration

Research & Development Innovating eco-friendly processes or products as well as regularly

investing in R&D for inventing them through:

Collaborating with R&D institutions, efficient finance allocation, staff

allocation and other sustainability initiatives

Greening Supply Chain

Initiatives carried out for greening the supply chain:

End of life initiatives (recycling and return facilities), efficient use of

raw materials, vendor management

Renewable Energy Usage of various forms of renewable energy:

Alternate Fuels, solar energy, wind energy

Health & Safety Taking care of health and safety (HS) of employees and society at large:

HS policies, HS training and other HS initiatives

Workplace Any procedure or practice being taken by the company to be:

non-discriminative, child labour free, promoting equality and

providing equal opportunities to differently-abled /underprivileged

people

6.1 Green Operations How open are global firms in reporting their green manufacturing practices? . This section focuses on the technologies and measures adopted by the firms to control emissions from their manufacturing or service units as well as additional steps undertaken by them to protect the environment As may be seen in the following graphs global companies appear to marginally better in reporting green manufacturing initiatives. These initiatives range from measures to conserve energy to recycling, water conservation, solid waste management etc.

Figure 17: Percentage of firms disclosing various initiatives of green operations

A sectoral analysis indicates that about 93% of all firms studied report on at least one Green Operations


Initiative. This high percentage may be linked to the economic benefits like lower operating costs that result from implementing these initiatives. Not surprisingly firms that belong to sectors having a bigger impact on the environment like Oil & Gas, Mining, and manufacturing disclose information on their Green Operations.

Figure 16: Percentage of firms in each sector disclosing their green operations (Global)

6.2 Climate Change Climate change initiatives can include Carbon trading, sequestration mechanisms; Clean Development

Mechanism (CDM); Initiatives taken to reduce carbon dioxide emissions during operations. This includes

new technologies and practices adopted by the company to curb carbon emissions from their units and

other information like - emissions reduced annually by the company, new targets set by the company

etc.

Figure 18: Firms disclosing information about climate change initiatives


Figure 19: Percentage of firms in each sector disclosing climate change initiatives

Compared to the nearly 90% of firms that focus on Greening Operations, the focus on climate change is

not as intense, above 80% of firms disclosing information on Climate Change initiatives. A focus on

energy conservation not only reduces emissions but also cuts down costs. Whereas a sole focus on

climate change does not seem as attractive. This is evident in the distribution of Climate Change

Initiatives undertaken by firms – Carbon and GHG reduction rule the roost. Investments in Initiatives like

Sequestration and Carbon Trading which may not have a direct bottom-line impact are lesser.

The electronics &computers, automotive, chemicals, Metals, and Utilities outperform all other sectors

when it comes to climate change initiatives. This may be considered as part of these sectors’ efforts to

maintain their license to operate.

6.3 Research & Development Major manufacturing, electronics, utilities, telecommunication, firms have their own research and development centre to carry on research in efficient manufacturing, manufacturing products with lesser environmental impacts, conserving energy and water, removing toxic elements, packaging, product development etc. This section looks into the R&D efforts of the firms and what measures they are adopting to make their processes and products environment friendly.


Figure 20: Percentage of firms with Research & Development initiatives

Developing Environmentally-friendly products and processes does not seem to figure high on the list of R&D priorities for firms

6.4 Greening Supply Chain Greening of supply chain refers to incorporating practices along the supply chain that cause minimum or

no environmental harm. They can include end of life measures (Take back or recycling of products at the

end of their life cycle by the company); Supply chain initiatives (sourcing raw materials in a sustainable

manner, emphasizing suppliers as well as dealers to be socially and environmentally responsible,

communicating supply chain policies to suppliers, etc.); and vendor management initiatives taken by the

company to manage vendors and dealers to follow green supply chain practices.

Figure 21: Percentage of firms disclosing information of greening supply chain


Figure 22: Percentage of firms disclosing green supply chain initiatives

Barely 30% of firms disclose any information on green supply chain initiatives. The focus here seems to

be on managing vendors and in sourcing raw material in a sustainable manner. Very few firms focus on

end-of-life supply initiatives. The leaders in this area are the electronics & computers, automotive, with

the rest of the sectors performing poorly. Greening Supply Chain if done right can be a differentiating

factor and a source of competitive advantage to firms.

6.5 Renewable Energy Renewable Energy in the form of solar energy, wind energy, biogas, bio-fuels and other alternate forms

of energy are being utilized by many firms. Nearly 72% of the firms studied disclosed information on

using renewable fuels. Solar Energy by far is the most popular, followed by wind energy. This focus on

renewable energy is not surprising considering that 92% of firms follow some sort of energy

conservation initiative. Interestingly, sectors like the Oil & Gas, electronics & computers Automobiles,

and metal mining, telecommunications, utilities which are intrinsically tied to fossil fuels, are focusing

on renewable energy. Also, sectors like Electric Utilities are increasingly seeking cleaner sources of

energy.

Figure 23: Percentage of firms disclosing information about renewable energy


Figure 24: Percentage of firms in each sector reporting on Renewable Energy

6.6 Health & Safety A total of 69 firms have implemented some form of HSE initiatives. The common initiatives include the

implementation of various safety procedures, equipment, safety committees, setting standards, review

of procedures etc. As is evident, a safety focus is more important for the manufacturing and heavy

industries sectors compared to services sectors

Figure 25: Percentage of firms disclosing about Health, safety & environment (HSE)


Figure 26: Percentage of firms in each sectors disclose Health, safety and environment (HSE)

7.0 Corporate Social Responsibility Corporate Social Responsibility (CSR) initiatives are programs implemented by a company for the

communities around its premises, the society at large, or contributing towards environmental

protection and conservation. These initiatives are of philanthropic nature. These acts could include

‘donations of money, goods, time and/or effort to support a beneficial cause, with a defined objective

and with no financial or material reward to the donor.

The various CSIs that fall under this category are enlisted in the table below.

CSI Description

CSR Finances Budget and resources allocated to operate CSIs

Donations &

Sponsorship

Initiatives which include charity or cash donations that have focus either on

the surrounding community of its operations or addresses issues for public:

Offering cash or material donations, building hospitals, schools, old age

homes, and sponsoring programs

Disaster Relief Supporting communities that are hit by disasters:

Donations to funds, infrastructure development, relief work, volunteering

Education Steps adopted to promote education amongst local communities or society at

large:

Building schools, scholarships, sponsoring schools, promotion of primary,

secondary and higher education

Healthcare Initiatives to offer health services:

Spread awareness about diseases, maternal health and child mortality, set

up clinics for treatments and training programs, blood donations, eye-

camps and building hospitals


Infrastructure

Development

Activities to improve local infrastructure:

Constructing roads, sanitation and sewerage, and other initiatives

Cultural Conservation Conservation of cultural traditions, heritage conservation and promotion of

arts

Community

Livelihood

Initiatives to improve quality of life in communities through:

Livelihood initiatives like professional trainings, training and activities for

children, elderly and differently-abled people, promoting sports, rural

development, empowerment of women

Environment

Conservation

Contributing to environmental conservation through:

Awareness programs, nature conservation, water conservation

Forestry, afforestation, landscaping

Other CSR Initiatives Activities part of CSR but not included in the above categories

7.1 CSR Finance:

Figure 29: Percentage of firms in each sector reporting on CSR Finance

Across all sectors there is little transparency when it comes to disclosing the amount of money spent on

CSR. Part of this may also do with the fact that very few firms keep a detailed and auditable record of

these finances and thus may be hesitant to disclose it in the public domain. Apart from this, a large part

of CSR has to do with non-financial support like volunteering which is hard to quantify.

7.2 Donations or Sponsorship These philanthropic initiatives taken by firms range from offering cash or material donations, donations for places of worship and sponsoring programs.


Figure 30: Percentage of firms reported about donations

It is recommended that firms track their CSR spends and donations as a way of measuring the efficiency of their CSR budgets and programs.

7.3 Disaster Relief This includes donations to organizations helping communities that are hit by disasters. Donations could be provided in the form of food, water, medicines, clothes and other efforts towards providing relief to the affected public. It also includes restoring infrastructure of places affected by disasters. This could include giving training in masonry, electrical work, agriculture, arts and crafts, tailoring, running schools, clinics, and hospitals, and thereby bringing benefits to the community.

Figure 31 showing percentage in each sector disclosing disaster relief activities

Overall the extent of reporting is low for this variable, but that may be because other CSR areas like healthcare or education are greater priorities for many firms.


7.4 Education A key focus area for CSR for more than two-thirds of the sample is education. The focus here is on both

improving access to education through scholarships as well as by improving the quality of education by

sponsoring or running schools.

Figure 33: Percentage of firms disclosing about each educational initiatives

While the IT sector may not have a direct impact on the community, their focus on education is driven

by two things – ensuring a steady stream of talent by investing in the education and providing their

employees an opportunity to volunteer through CSR initiatives.

7.5 Healthcare Healthcare is a focus area for almost all sectors. 68% of the firms disclose information on healthcare

initiatives including: local community health care services, awareness camps, maternal health, childcare,

HIV/AIDS, malaria, diarrhoea, cholera, setting up mobile clinics or camps, training programs etc.:

Figure 34: Percentage of firms disclosing about Healthcare initiatives


7.6 Community Livelihood Firms can invest in society and neighbouring communities through provision of trainings to increase

livelihood of local community. Building skills and improving the quality of life can be done through

training, empowerment of women, people with disability, children and elderly, and by organising

relaxing and fun events and encourage sports. Community Livelihood is the most popular CSR focus

area with nearly 80% of firms disclosing some information about these initiatives. Sectors having an

impact on the community focus more in this area of CSR. Sectors like metal, telecommunication,

utilities, oil &gas are leaders in this area as well given its focus on education as a CSR focus area.

Figure 35: Percentage of firms reported about community livelihood initiatives

Figure 36: Percentage of firms disclosing information about community livelihood initiatives

7.7 Environment Conservation

Firms also engage in activities such as nature conservation in and around the local communities, water

conservation, forestry initiatives and spreading environmental awareness. These initiatives are not part

of greening their core business operations but are of a philanthropic nature; these are deployed to


create awareness amongst employees and other stakeholders, and to improve quality of life of

neighbouring communities and society at large. To that end, firms can work with the local governments,

communities and other stakeholders on initiatives like planting trees, cleaning up the surroundings,

watershed management for the villages, and organizing awareness camps in partnership with NGOs.

In the study sample environmental awareness programmes and nature conservation initiatives were

seen to be the most popular options exercised by firms.

Figure 37: Percentage of firms disclosing about environmental conservation initiatives

7.8 Other CSR Activities Among other CSR activities, volunteering by employees was practised by over two-thirds of the

companies surveyed. The next popular approach was to work through foundation, either set up by the

companies themselves or by others.

Figure 38: Percentage of firms disclosing about other CSR activities


Figure 39: Percentage of firms in each sector disclosing about ‘Other CSR activities’

8.0 Summary & Conclusions

As noted earlier, this study analyses publically available, sustainability-related information disclosed by

the top 100 Global Fortune 500 companies with the top 100 Indian companies. The analysis is broadly

divided into three parts: Organisation & Management, Operations & Core Business Practices, and

Corporate Social Responsibility and also along industry sectors. As the companies were not all in the

same sectors the analysis did not take place between perfectly comparable sets. However the analysis

does throw up several interesting observations.

Overall, the study has shed light on some interesting trends. There is a strong focus on green

operations, environmental conservation and philanthropy among the firms surveyed. Nearly 90% of

firms state that they have either developed or follow green operation and environmental conservation.

Disclosures on CSR finances and infrastructural development is low in both the Indian and global cases.

It is in the interest of big corporations to become more transparent to drive greater stakeholder trust as

well as improve internal processes for managing sustainability issues.

The study indicates that U.S firms place much more emphasis on codes of conduct, Environmental

conservation, CSR activities and green operations as opposed to voluntary codes of conduct,

organizational structure, and audit. Non U.S firms, on the other hand emphasise on environment

conservation, donations, green operations, R&D, climate change, community livelihood, voluntary

sustainability principles & education.

While over nearly 58% of the firms disclosed their sustainability related policies there were still sectoral

difference as in the India case. The disclosure was maximum in the case of utilities, automotive,

electronics and computers and oil and gas, trade and construction sectors.

Over 79%of the surveyed firms have adopted Voluntary sustainability principles. The most popular


standards are United National Global Compact, Carbon Disclosure Project and Global reporting

Initiative. Environment, Health & Safety, and Quality are the most popular focus areas for firms and

most firms do not opt to take Human and Social rights certifications (SA 8000)

The study indicates that global companies appear to marginally better in reporting green manufacturing

initiatives. A sectoral analysis indicates that about 93% of all firms studied report on at least one Green

Operations Initiative. This high percentage may be linked to the economic benefits like lower operating

costs that result from implementing these initiatives.


Appendix 1: Fortune 100 List

Rank Companies Location(U.S/Non

U.S) Industry

1 Royal Dutch Shell Non U.S energy and petrochemical

2 Walmart U.S General Merchandiser

3 Exxon Mobil U.S Petroleum Refining

4 Sinopec Group Non U.S Oil and gas producer

5 China National Petroleum Non U.S Oil and gas producer

6 BP Non U.S Oil and gas producer

7 Stat Grid Non U.S Utilities- Gas & Electric

8 Toyota Motor Non U.S Automobile manufacturing

9 Volkswagen Non U.S Auto maker/Automobile manufacturer

10 Total Non U.S petroleum refining/mining or crude oil production

11 Chevron U.S Petroleum Refining

12 Glencore Xstrata Non U.S commodity trading & mining

13 Japan Post Holdings Non U.S diversified financial

14 Samsung Electronics Non U.S Electronic & Electrical equipment’s

15 E.ON Non U.S Utilities- Gas & Electric

16 Phillips 66 U.S Petroleum Refining

17 ENI Non U.S Mining, crude oil production/petroleum refining

18 Berkshire Hathaway U.S Insurance: property and casualty (stock)

19 Apple U.S computer, office equipment’s

20 AXA Non U.S diversified financial

21 Gazprom Non U.S energy

22 General Motors U.S motor vehicles and parts

23 Daimler Non U.S motor vehicles and parts

24 General Electric U.S diversified financial

25 Petrobras Non U.S energy

26 EXOR Group Non U.S diversified financial

27 Valero Energy U.S Petroleum Refining

28 Ford Motors U.S motor vehicles and parts

29 Industrial & Commercial Bank of China Non U.S commercial banks

30 Hon Hai Precision Industry Non U.S Electronics contract manufacturing

31 Allianz Non U.S diversified financial

32 Nippon Telegraph & Telephone Non U.S Telecommunication

33 ING Group Non U.S diversified financial

34 AT&T U.S telecommunication

35 Fannie Mae U.S diversified financial

36 Pemex Non U.S petroleum company

37 GDF Suez Non U.S Utilities- Gas & Electric

38 PDVSA Non U.S Oil and natural gas company

39 Statoil Non U.S petroleum company

40 CVS Caremark U.S food and drug stores

41 BNP Paribas Non U.S diversified financial

42 Mckesson U.S wholesaler: healthcare


43 Hewlett-Packard U.S computer, office equipment’s

44 JX Holdings Non U.S metal and petroleum conglomerate

45 Honda Motors Non U.S Auto maker/Automobile manufacturer

46 Lukoil Non U.S Oil company

47 Nissan Motor Non U.S Automotive manufacture

48 Verizon Communication U.S telecommunication

49 Assicurazioni Generali Non U.S diversified financial

50 China Construction Bank Non U.S diversified financial

51 United Health group U.S Healthcare: Insurance and Managed care

52 Enel Non U.S electric utility

53 Siemens Non U.S engineering and electronics

54 Hitachi Non U.S engineering and electronics

55 J.P Morgan Chase & Co. U.S commercial banks

56 Cardinal Health U.S wholesaler: healthcare

57 SK Holdings Non U.S conglomerate

58 Banco Santander Non U.S commercial banks

59 Carrefour Non U.S general merchandiser

60 HSBC Holdings Non U.S diversified financial

61 Societe Generale Non U.S diversified financial

62 IBM U.S Information Technology Services

63 Tesco Non U.S general merchandiser

64 Agricultural Bank of China Non U.S diversified financial

65 BASF Non U.S chemicals

66 Bank of America Corp U.S commercial banks

67 Costco Wholesale U.S Specialty Retailers: Others

68 BMW Non U.S Automobile manufacturing

69 Nestle Non U.S food consumer product industry

70 Bank of China Non U.S commercial banks

71 China Mobile Communications Non U.S Telecommunication

72 Kroger U.S food and drug stores

73 Credit Agricole Non U.S diversified financial

74 Express Scripts Holding U.S Healthcare: Pharmacy and other services

75 Petronas Non U.S oil and gas industry

76 Noble Group Non U.S agriculture, energy product, metal mining and ores_misclleneous

77 Electricite de France Non U.S Utilities- Gas & Electric

78 Wells Fargo U.S commercial banks

79 Citigroup U.S commercial banks

80 China State Construction Engineering Non U.S engineering, construction

81 PTT Non U.S oil and gas company

82 Archer Daniels Midland U.S Food production

83 Panasonic Non U.S electronics, electrical equipment

84 Prudential Non U.S diversified financial

85 Llyods Banking Non U.S diversified financial

86 Nippon Life Insurance Non U.S Insurance


87 Metro Non U.S Wholesaler: diversified

88 Indian Oil Non U.S petroleum refining

89 Procter & Gamble U.S household and personal products

90 Prudential Financial U.S Insurance

91 Arcelor Mittal Non U.S steel manufacturing

92 Munich Re Non U.S re-insurance company

93 China National Offshore Oil Non U.S crude oil production

94 Sony Non U.S electronics, electrical equipment

95 Boeing U.S Aerospace and defense

96 Freddie Mac U.S diversified financial

97 Telefonica Non U.S Telecommunication

98 Amerisource Bergen U.S wholesaler: healthcare

99 Rosneft Oil Non U.S petroleum refining

100 China Railway Construction Non U.S railway construction

a comparative perspective of sustainability reporting ... · the corporate sustainability...

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