Sustainability needs to come from inside the heart and soul of a company, and not just a forced reporting function
It is true that sustainability reporting has become increasingly prevalent amongst Indian companies. While the top 100 listed companies, as per market cap, are mandated to, under section 32(2)(f), to include a business responsibility report in their annual reports by SEBI, there are companies voluntarily reporting on sustainability due to pressure from their stakeholders and global customers. It is great to see the increase in awareness of sustainability reporting amongst Indian companies, but isn’t reporting only a functional task, and shouldn’t the more important and imperative need be the focus of companies on sustainability?
Even SMEs and mid-size companies are understanding the need for sustainable reporting owing to stakeholder and customer pressures, but for the true impact of a sustainable approach, it is not the reporting which is key, but the approach towards a sustainable future. A sustainable future for people, planet, and profit! Apart from playing a risk management function and serve as a demonstration of responsible practices, sustainability can unlock new opportunities and result in cost savings. Reports show that 41% of the companies truly embracing sustainability achieve key cost savings, and more importantly, embracing sustainability has fueled innovation in companies to unlock new business opportunities.
Sustainability reporting encapsulates any company’s economic, environmental and social impact through the running of its business. But before we report, we need to implement sustainability. Only if sustainability is an attitude and embraced at the highest levels of any company will it deliver social, environmental and business impact and results. If it is a mere functionary measure, it will only remain as an annexure to most annual reports, without getting the focus it deserves. When sustainability is only a response to regulatory pressures, customer needs and activist stakeholders, we will never be able to unlock the potential and impact sustainability can have. It is evident that while sustainability reporting is growing, the same cannot be said for a sustainable approach of companies. If we take a closer looks at the business responsibility reports submitted by companies in their annual reports, there are key indicators that many are doing it only because they have to, not necessarily because they believe in it. Many reports address materiality and its impact in their responsibility reports, but only a few define it for their company, sector and stakeholders. The reports are filled with strategic priorities and initiatives for sustainability, but are missing timelines for the roll out of these activities. Any business leader would never accept any plan without a timeline for its implementation, they why do business leaders often turn a blind eye to the lack of timelines in their business responsibility reports. These observations, amongst others, make a strong case that sustainability, majorly, is still just a tick on a company’s To Do List rather than a truly integral part of their business and vision.
This is not to say that there are not companies, which truly embrace, and give the importance sustainability deserves, but they are unfortunately a minority. Companies such as Godrej, Mahindras, TATAs, Wipro, Infosys etc. truly understand the meaning of sustainability, but there needs to many more for a paradigm change to be seen in the approach towards sustainability of Indian businesses. 90% of the businesses are SME/mid-size, but it is important for the larger MNCs and conglomerates to set the right example for the Indian business environment they lead. Sustainability needs to be at the heart and soul of the company, and then only, will it be able to deliver the true impact it is capable of. It is time that we as, Indian businesses, look beyond mere reporting, and focus on action. A focus to embrace and reimagine what sustainability really means and the long-term positive impact it can provide, if taken forward as an attitude not just a function.