Today, there is a greater understanding that corporate strategy can be crafted to encompass a larger picture that not only enhances competitiveness but also ensures responsible and sustainable growth. It is important that such initiatives are encouraged through stakeholder awareness and response. A key purpose of Sustainability Reporting is to assist organizations, both large and small, in identifying the cross-cutting dimensions of triple bottom line performance and in understanding the process elements of accountability and engagements. It is through this learning and change process that the organisations start to measure, report and improve on the way they make decisions and take actions. And by doing so, they create sustainable value for the organisation and its stakeholders.

Global Reporting Initiative defines Sustainability Report as the practice of measuring, disclosing, and being accountable for organizational performance while working towards the goal of sustainable development. A sustainability report provides a balanced and reasonable representation of the sustainability performance of the reporting organization, including both positive and negative contributions.

The Centre promotes Sustainability Reporting as a means to gain competitive advantage through informed decision-making and Sustainability Reports are seen by decision-makers as evidence of good corporate citizenship, and are increasingly used by financial institutions seeking more information to judge investment risk and opportunity.

The specific role of the Centre on Sustainability Reporting is to assist companies initiate or improve the process of reporting by measuring their economic achievements, contribution to social up-liftment and environmental enrichment.

Sustainability Reporting: The Benefits

Sustainability reporting is generating considerable interest around the world and is becoming one of the basic criteria for judging the social responsibility of organizations. Business leaders are starting to realize that comprehensive reporting helps support company strategy and shows commitment to sustainable development. The corporate benefits of sustainable performance are also markedly reduced when key stakeholders do not know what you are doing. Thus companies are issuing Sustainability Reports to enlarge the scope of conventional corporate financial reporting. The report helps them ensure transparent communication and engagement with their stakeholders in respect to the company's sustainability performance. It has become imperative for the companies to have stakeholder engagement due to the growing awareness of the stakeholder because of the easy and speedy access to information. The stakeholders like government agencies, employees, investors, financial institutions, community, NGOs, consumers, etc. have become more demanding and ask the company to disclose information on its social, environmental and economic impacts.

The companies are also under peer pressure from their competitors to perform well their social responsibilities and report them to gain a competitive advantage to be recognized as a socially responsible company.

Sustainability Reporting is also of benefit to the company internally by helping it identify and address business risks and opportunities.

The top management of Indian companies identify the following benefits of Sustainability Reporting:

• Focused attention - structured approach
• Motivating continual improvement & better data management
• Helps in becoming market leader
• Influencing policy makers
• Improves trust & enhances image / Investor confidence
• Marketing tool - demonstration effect
• Will assist in stakeholder dialogue
• Builds ownership and commitment
• Helps in thinking ahead - vision

Sustainability Reporting - Partnership with Global Reporting Initiative

CII has been continuously associated with GRI since its first South Asian Briefing Meet in Delhi and Mumbai in the year 1999. The organisation has been contributing to the promotion of Sustainability Reporting though various Indian forums, motivating Indian companies to participate in structured feedback processes and organize events like Sneak Peek Programmes. CII has been also providing advice and assistance on Sustainability Reporting for the past four years.

CII has been an organizational stakeholder and an active stakeholder council member to continuously dialogue with the GRI Secretariat and updating its knowledge on the GRI Guidelines and Reporting processes. CII rolled out its first educational programme in the year 2005, benchmarked to the content and intent of the Global Reporting Initiative Guidelines 2002.

The Global Reporting Initiative Guidelines 2002 were used to develop the Sustainability Reporting educational programmes with a larger objective to institutionalise a reporting process among Indian industry using an internationally accepted standardized framework and sustainability indicators. CII and GRI have signed an MoU in January 2006 at New Delhi. As follow up to this MoU, GRI endorsed the training materials developed by CII, based on GRI 2002 Guidelines in August 2006.

In 2006, CII-ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT developed educational programmes based on the new GRI Guidelines: G3 Version. The training programmes based on these guidelines are already being organized. CII-ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT has been providing assistance to the Indian industry through:

• Training Programmes:
  • Inter-company: Two-day inter-company training that profiles the GRI guideline principles and indicators for developing a Corporate Sustainability Report.
    
    
• Technical Assistance Programmes:
  • Benchmarking: Assessment of corporate preparedness and process for Sustainability Reporting with respect to the GRI Guidelines. CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT has embarked on studies to benchmark Sustainability Reports of several leading Indian companies with the requirements of the Global Reporting Initiative (GRI)'s Guidelines for Sustainability Reporting. The emphasis was on the 'Process of Reporting', rather than the 'Report Content' alone as an output of such a methodology. Indian industry find value-addition both in terms of reporting requirements as per GRI Guidelines as well as in an assessment of the extent to which the company had succeeded in imbibing the sustainability context, as intended in the GRI, in the context of the company's operations.
  • Facilitation of Report Preparation: Transfer knowledge and skills to the company for the drafting of a Sustainability Report.
    
    CII has facilitated the development of the sustainability report of several companies in India. The key features of the CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT methodology include:
    
    
  • Structured, step-by-step approach by beginning with what the company already has.
  • Establishing linkages with other aspects and tools of corporate sustainability management like identification of sustainability issues and vision, stakeholder engagements, etc.
  • Focusing on the value-addition to enhancing the company's business performance that the adoption of sustainability reporting brings about.
    
    
• Completed/Ongoing Projects
  
  The CII ITC Centre of Excellence for Sustainable Development (CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT) has promoted Sustainability Reporting amongst Indian industries, including providing technical services (in terms of benchmarking and report preparation) to companies including Larsen & Toubro, Vizag Steel, Gujarat Ambuja Cement Ltd, Sesa Goa, Tata Steel, Taj Hotels, Voltas Ltd, Tata TELCON, Tata Refractories Ltd, etc.

Sustainability Reporting - Small and Medium Enterprises

CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT is now focussing a specific attention to promote the uptake of this tool among small and medium companies of India. The Centre is providing assistance to SMEs though a special vehicle of public private partnership. Some of the SMEs who are being assisted in report preparation include Victor Gaskets Ltd, Varroc Engineering Ltd and Sumaya HMX Pvt Ltd.

Sustainability Reporting in SMEs

In recent years, the world has witnessed a shift in what constitutes a business asset. The ownership of physical assets, like manufacturing facilities, is only part of the market capitalization of a company today. Its value and the ability to grow in the long term is highly influenced by the natural, social and human capital including intangible assets such as management skills, reputation, human and intellectual capital, and the ability to work in partnership with stakeholders. Yet these capitals and assests are excluded from the balance sheet because of the difficulty in objectively valuing them. Globally, there is a trend towards businesses providing economic, environment and social information into the public domain through Sustainability Reports. It has also been internationally established that sustainability reporting leads to improved business performance through communication of information with stakeholder groups like customers, suppliers, employees, financial institutions, regulators and communities on a company's economic, environmental and social management and performance. Sustainability reporting addresses how societal trends are affecting the company, and how the company's presence and operations are affecting society. As such, sustainability reporting can demonstrate a company's motivation and willingness to position itself in a broader context.

With India emerging as an economic giant amidst the Asian economies and the burgeoning globalization, Sustainability Reporting is emerging as a trend in Indian and trans-national companies with operations in India. Gradually Indian companies are recognizing the challenge of going global and are bracing themselves to keep up with the competition in the international markets with respect to voluntary reporting initiatives becoming market-based instruments. The CII ITC Centre of Excellence for Sustainable Development (CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT) promotes Sustainability Reporting amongst Indian industry as a means to gain competitive advantage through informed decision-making and Sustainability Reports are seen by decision-makers as evidence of good corporate citizenship, and are increasingly used by financial institutions seeking more information to judge investment risk and opportunity. The specific role of CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT on Sustainability Reporting is to assist companies initiate or improve the process of reporting by measuring their economic achievements, their contribution to social up-liftment and environmental enrichment.

At present, several leading companies in India develop their Sustainability Reports, including Bhilai Steel Plant, Tata Steel, Reliance Industries, Ford India, Indian Oil, Dr. Reddy's, Jubilant Organosys, and others. CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT is now focussing a specific attention to promote the uptake of this tool among small and medium companies of India. CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT is providing assistance to SMEs though a special vehicle of public private partnership.

World Resources Institute (WRI) - New Ventures

The World Resources Institute's (WRI) New Ventures programme accelerates the transfer of capital to outstanding companies that incorporate social and environmental benefits. By providing sound investment opportunities in emerging economies, New Ventures demonstrates that investing in sustainable enterprises makes good business sense. After seven years of operations, WRI's New Ventures programme has launched a sustainability reporting pilot project to better understand the social and environmental impacts of ten selected companies from their global portfolio. To ensure a manageable, replicable self-reporting mechanism, the reporting process is drawing heavily on the GRI Reporting Framework. These select companies are working closely with WRI and experienced consultants worldwide to design and implement a practical report that will examine each company's operations, products, community engagement and governance.

New Ventures has been supporting an Indian company Sumaya HMX Systems Ltd in establishing its business which provides a less costly and more efficient alternatives to traditional air conditioning. Sumaya HMX offers innovative eco-friendly and energy efficient cooling solutions to its customers. The first of its products, HMX Ambiator is an eco-friendly and energy-efficient alternative to air conditioning systems. HMX has successfully commercialized Ambiator. The product has found a good acceptance among leading companies for various applications. Some of the key customers in different segments include Polaris, Wipro, ABB, Ford, Taj Hotels, Glenmark Pharma, Bosch and others. The other product offered by Sumaya HMX is the Hybrid air conditioners. Hybrid air conditioners, as the word indicates are hybrid systems. These are built on the company's core product - HMX Ambiator. The incremental cooling is done with regular refrigeration cycle as in regular air conditioning systems. Since the basic cooling is done with Ambiator, only the incremental cooling is with a compressor.

WRI engaged CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT to assist Sumaya HMX Systems Ltd to develop a sustainability report that will enable the enterprise to improve their operations and use their resources more efficiently. The report will also serve as a communication tool to better manage internal systems and attract new clients and customers. In addition, Sumaya HMX will receive specialized attention from New Ventures to communicate the results to multinationals (potential buyers) and investors. CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT has been extensively engaged with Sumaya HMX for the purpose of Sustainability Reporting and to assist Sumaya HMX in identifying its own business case of reporting. Towards this end, an intensive workshop and site visit was carried out by CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT at the Sumaya HMX plant in Bangalore.

The series of facilitated workshops by CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT provided Sumaya HMX an approach of identifying the business case for corporate sustainability; and gain an in-depth knowledge of Sustainability Report content. The workshops also provided knowledge about the features of the G3 Guidelines and how they can be used for Sustainability Report making. The various economic, environmental and social indicators which will be reported by Sumaya HMX were also decided upon during the workshop. Stakeholder meetings were also organized with Sumaya HMX's suppliers, employees and financial institutions, which were facilitated by CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT to understand the various issues and concerns of the stakeholders and would be further addressed though the reporting process. The scope of report assurance and feedback was also discussed during the workshop. The process of report writing has been initiated by Sumaya HMX and the report is expected to be complete in the next few months.

CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT looks forward to participation of other SMEs in such workshops and interactions with the objective that this practice of Sustainability Reporting is a systematic and integrated approach to optimize and manage the key economic, environmental and social impacts of a company's products/ services and processes. CII ITC CENTRE OF EXCELLENCE FOR SUSTAINABLE DEVELOPMENT is keen on assisting companies with an objective that developing sustainability reports lead to many tangible and intangible benefits linked to the core business process including enhanced decision-making, reduced risks, reduced costs, increased options and innovation, and increased number and loyalty of clients. These benefits position a company as partner of choice, attract talent and financial resources, and ultimately enhance competitiveness and profitability.