#IndiaAdoptsIR Edition 02 / December 2020 INTEGRATED REPORTING IN INDIA INSIGHTS TRENDS BEST PRACTICES Prologue Disclaimer The paradigm of ‘value’ has shifted over the In this context, AICL Communications Ltd. (AICL) This publication is aimed at demystifying some years to include both tangibles and intangibles. launched its #IndiaAdoptsIR publication series key issues surrounding Integrated Reporting <IR> and creating awareness about its components, for With Environmental, Social and Governance in early 2019. This, the second edition, builds on those that wish to adopt it. AICL Communications Limited (AICL) has collated information from (ESG) considerations in evaluating business the research to gauge the scale of Integrated publicly available material, and applied its own understanding to create this document. performance becoming mainstream, corporates Reporting adoption in India while highlighting the Every care has been taken to attribute sources, and use non-IP protected information. worldwide are increasingly focusing on long-term best practices and providing recommendations This publication is purely meant for information resilience and relevance. for Indian companies to take their reporting purposes, and does not claim to be an authoritative guide to Integrated Reporting. Readers should to the next level. exercise due care and caution while implementing Integrated Reporting is one of the leading recommendations contained herein, and seek relevant professional advice. AICL assumes no frameworks which has seen a growing adoption We hope that this document serves as a handy responsibility whatsoever for any issues arising out of actions implemented on basis of this publication. across the world, by facilitating a concise yet guide for organisations to adopt Integrated The copyright of this publication is held by AICL holistic approach to reporting. Much like their Reporting in letter and spirit, and contribute Communications Limited. Its content may be reproduced, distributed or quoted with due global counterparts, Indian corporates too are more effectively to the improvement of attribution, purely for non-commercial purposes. Prior written permission must be obtained for leaning towards the framework to demonstrate reporting practices. substantial reproduction, or usage. their ability to create, preserve and grow value for © AICL Communications Limited, 2020 a diverse stakeholder base. www.aicl.in/ir/indiaadoptsir/ 1 What’s inside? How to navigate Index the document This is the navigation panel. Foreword: Introduction: An introduction Integrated Reporting You can use this to switch Charles Tilley Arvind Agrawal to Integrated <IR> in India to different chapters of this CEO, IIRC Founder and CEO, Reporting <IR> document. The orange colour AICL Communications Koushik Chatterjee highlights the chapter you are ED and CFO, Tata Steel currently in. Pg 02 Pg 05 Pg 07 Pg 16 You can directly access a specific chapter from this navigation bar. More information in some Analysing Indian Evaluating an Industry-wise Glossary cases are provided by way integrated reports integrated report best reports of hyperlinks in the text. Alternatively, the navigation panel will guide you to the specific links. Pg 21 Pg 22 Pg 62 Pg 63 All reports referenced in this document has been linked to their original source. Please click on the icon in the respective pages to access them. www.aicl.in/ir/indiaadoptsir/ 2 Foreword Charles Tilley OBE CEO, International Integrated Index Reporting Council (IIRC) Now more than ever integrated reporting is social and corporate governance factors. important for organisations’ long-term success By being more transparent in their practices 02 Foreword and sustainable development. The Covid-19 and culture, organisations gain the trust of 02 Charles Tilley OBE pandemic has led to businesses across the their many different stakeholders, which in turn world prioritising the health and safety of their contributes to sustainable development and 03 Koushik Chatterjee employees, customers and local communities responsible capitalism. 05 Introduction over financial profit, radically changing I am very encouraged to see in their business models to evolve with these 07 An introduction to AICL Communications’ #IndiaAdoptsIR challenging times. Integrated Reporting <IR> publication that nearly 80 Indian companies are Businesses need to show their stakeholders now voluntarily incorporating the International 16 Integrated Reporting <IR> that they create value and report on not <IR> Framework into their business models in India just financial capital but also intellectual, and strategies. Not only does this reflect the 21 Analysing Indian environmental, manufactured and human accelerating adoption of integrated reporting Integrated Reports capitals to name a few. The International globally, but that India is making great strides in <IR> Framework helps organisations to gain leading the way to sustainable value creation in 62 Industry-wise best reports I am very encouraged to see in a holistic view of their business by providing South Asia. 63 Glossary AICL Communications’ a clear overview of all their capitals, which #IndiaAdoptsIR publication that are more wide-ranging than environmental, Best regards, nearly 80 Indian companies are Charles Tilley now voluntarily incorporating the International <IR> Framework into their business models and strategies. www.aicl.in/ir/indiaadoptsir/ 3 Foreword Koushik Chatterjee Executive Director and Index Chief Financial Officer, Tata Steel In recent years, the world has been experiencing As a developing country, India has the aspiration a seismic shift in the geopolitical and economic to become a 5 trillion dollar economy in the 02 Foreword balance, which is going to define the global foreseeable future. However, this growth is 02 Charles Tilley OBE agenda in the future. India will play an important also targeted to be inclusive and diverse to role in this transition, and if foreign direct raise the quality of lives of the population, 03 Koushik Chatterjee investments are an indicator, the record fund conserve and optimally use natural resources, 05 Introduction flows into India at the peak of the pandemic deploy capital prudently and drive the climate reinforce the country’s attractiveness as an agenda very strongly through technology, 07 An introduction to investment destination. digital strategy and policy response. Therefore, Integrated Reporting <IR> as Indian companies grow in size and scale, As investors worldwide decisively move towards 16 Integrated Reporting <IR> the need to capture and communicate this sustainable value creation in harmony between in India sense of purpose and responsibility will be even capital, community and natural resources, more pronounced, with clear alignment with 21 Analysing Indian ‘impact investing’ is gaining strong traction with national and global priorities. In this context, Integrated Reports capital finding its way into businesses having the Integrated Reporting <IR> framework comes measurable impact on environmental, social and 62 Industry-wise best reports The purpose of the corporation as a powerful vehicle for corporates to report governance (ESG) issues. their long-term resilience and relevance story to 63 Glossary is also getting redefined, from The purpose of the corporation is also getting prospective and existing stakeholders. merely creating shareholder redefined, from merely creating shareholder While financial performance remains the value to a much broader and value to a much broader and inclusive theme bedrock of sustainability, the correlation inclusive theme of sustainable of sustainable stakeholder value. The issue of between market performance, organisational stakeholder value is now moving to the front stakeholder value. priorities and ESG considerations is occupying and centre of the Board of the corporation centre-stage. In letter and spirit, the <IR> as strategies, risks and opportunities and framework is uniquely positioned to establish integration of capital to deployment becomes linkage among these aspects and apprise the the key agenda. stakeholders holistically about the 'real value' being created. www.aicl.in/ir/indiaadoptsir/ 4 Foreword (Contd.) Index The publication reflects the In India, Tata Steel was one of the very first more significance with India’s growing stature in the world order with demonstrated scale and breadth and depth of Integrated companies to adopt the framework in 2016 with a view of communicating its sustained capabilities, putting the spotlight on domestic Reporting in India ever since 02 Foreword value creation through cyclical ebbs and flows corporates to align themselves with best-in-class the market regulator SEBI to a diverse stakeholder base. Since then, our global standards. 02 Charles Tilley OBE reporting practices have continuously evolved called for voluntary adoption of I congratulate AICL for putting together this first and have been received well by our investors and 03 Koushik Chatterjee the framework. This assumes even of its kind publication in India. I believe this will independent directors, and appreciated by the serve as a reliable guide for organisations in their 05 Introduction more significance with India’s regulators and other bodies. integrated reporting journey. growing stature in the world order 07 An introduction to I am pleased to write this foreword for the Integrated Reporting <IR> with demonstrated scale and second edition of #IndiaAdoptsIR. The Best regards, 16 Integrated