1594458276 ESG-Analysis-On-50
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Table of Contents Acknowledgements ............................................................................................3 Executive summary ............................................................................................4 Introduction to ESG ............................................................................................7 Prominence of ESG and the Present Study ......................................................11 ESG highlights ...................................................................................................12 Scoring categories ............................................................................................15 Sample selection ..............................................................................................16 I – Policy Disclosures 1.1 Principle-wise (as per NVGS) BR policy / policies ....................................18 1.2 BRR implementation ..................................................................................20 1.3 General Disclosures ...................................................................................21 II – Environment 2.1 General disclosures ....................................................................................24 2.2 Product / Services ......................................................................................26 2.3 Energy consumption ...................................................................................28 2.4 Renewable Energy .....................................................................................30 2.5 Water consumption ....................................................................................32 2.6 Air emissions ..............................................................................................34 2.7 Waste management ...................................................................................36 2.8 Environmental incidents ............................................................................38 III – Social 3.1 Workforce ...................................................................................................41 3.2 Health & safety ...........................................................................................45 3.3 Relationships with local communities .......................................................47 3.4 Data security & customer orientation ........................................................48 ESG Analysis on 50 listed companies in India 1 Table of Contents Acknowledgements IV – Governance At the outset, Stakeholders a brief summary of ESG footprints legal standpoint. The report (including Empowerment Services (SES) of selected NSE listed companies, data capturing, analysis, findings, and 4.1 Board composition .....................................................................................52 would like to thank NSE for providing evaluated by SES through its report writing) was solely worked on this opportunity and a platform proprietary model (available at by SES team, without any involvement 4.2 Board committees ......................................................................................55 to present maiden report of SES (“Model”). of NSE and CAM. 4.3 Director’s remuneration .............................................................................56 on a contemporary and extremely 4.4 Statutory auditors ......................................................................................58 relevant topic “ESG – Reporting The report is the result of collective I express my sincere gratitude to Trends and Practices in India”. efforts of NSE and SES, with Cyril all team members from NSE and 4.5 Audit & financial reporting .........................................................................59 Undoubtedly, this endeavour would Amarchand Mangaldas (CAM) being a SES for this report, and in particular, 4.6 Stakeholder engagement ...........................................................................60 not have been possible without knowledge partner solely with respect the following team members for 4.7 Other governance factors ...........................................................................62 the initiative taken by NSE and its to the model. NSE provided financial their untiring efforts in compiling guidance and support to the SES support, guidance, and logistics; and analysing voluminous data team on a continual basis. The SES developed the model, and CAM and developing the report in its purpose of this report is to provide assisted with vetting the model from a present form. V – Evaluation Framework Model - Legal and Voluntary Framework .........................................................69 NSE SES ESG scoring .......................................................................................................70 Ms. Priya Subbaraman Mr. J.N. Gupta Limitations of the model ...................................................................................72 Annexure I – List of companies ........................................................................73 Mr. Avishkar Naik Ms. Aditi Chandani Annexure II – Disclosure pattern in BRR table ................................................74 Ms. Yukti Sharma Mr. Mukesh Solanki Mr. Lokesh Bhandari 2 ESG Analysis on 50 listed companies in India ESG Analysis on 50 listed companies in India 3 Executive Summary Executive Summary For a long time, investors and the study risks, on account of these of India Inc. The study is based on in high E score on voluntary basis. increasing renewable energy analysts have been using traditional non-financial parameters. Investors Key Highlights from the Study: usage. a proprietary model developed by • Wide divergence in scores financial metrics to value a company, are realising that businesses cannot SES which was vetted by CAM from Companies have largely scored was also observed with Water Consumption: 9 companies as if it is only financial results that survive for long without caring for a legal perspective, and by NSE. better on policy disclosures sample companies within within the sample had achieved a matter. The fact is that for investors, environment and society. followed by governance factor, Performance on environmental, the same industry, indicating ‘water positive’ status. in the end, it is only the financial compared to environment that although companies social, and governance factors was • 44 companies from the sample outcome that matters. However, ESG reporting and analysis in a and social factors. This can are operating within same evaluated using the model. had disclosed data on water financial analysis is like a post- structured manner is rather new be attributed to the fact that industry, there is asymmetry in consumption or usage. mortem; it is like a result card and in India, although it has existed governance reforms have appreciation and concern for can be used for modelling future. in fragmented manner for long. For this first ever study on ESG transformed into laws by various environmentally sustainable • 27 companies disclosed data However, beyond the numbers, there While companies have been disclosures and performance, due to regulatory agencies within practices and disclosure on the on water intensity or specific India, in the last two decades. are several factors which are non- evaluated by investors for buy or sell limited availability of sustainability same. water consumption (per monetary yet affect the performance recommendations, by credit rating Similarly, many policies have unit production or w.r.t. the reports, the sample was restricted • All the companies in the of investments and can be said to agencies for credit rating purposes, been mandated to be prepared revenue). to 50 companies. The companies by regulatory authorities. Hence, sample have disclosed be constituents which eventually ESG evaluation has been absent. • 48 companies discussed are those that have disclosed companies have scored higher that they have framed an determine financial outcome. No rainwater harvesting. However, either their sustainability report or on policy disclosure parameters. environment policy. longer can a business perform in Realising ESG to be extremely 37 of such companies provided integrated report voluntarily and • 42 companies from the isolation; it has to integrate itself important to evaluate business details on initiatives taken with the environment in which it risks and continuity, NSE felt that are within the top 10 companies sample stated that they have Policy disclosures: by them regarding rainwater Environment Management operates. Hence, Environment (E) it would be appropriate to carry within their sectors and within top harvesting. All sample companies had a Systems and 22 companies and Society (S) must be an important out a comprehensive study of the 100 companies as per their market policy regarding employees, Waste Generation: 49 provided part of business operations. disclosure and performance of India stated that they have Energy capitalisation. These 50 companies stakeholder, environment, and disclosures on waste. However, Integrating E and S factors with Inc. on these non-financial ESG Management Systems in place. belong to 12 industries which SES corporate social responsibility. only 33 companies have provided business Governance (G) plays an parameters. SES was entrusted with Air Emission: 45 companies felt had a direct impact on the Very few companies had framed information about categories or important role. As a result,