Prof.

Minal Waghchoure

Reporting and Assessments

Sustainable Reporting
 A report published by a company about Environment,
Economic and social impacts caused by its daily activities.
 It shows organization’s values and governance model and
exhibit the link between its strategy and its commitment to
a sustainable global economy.
 Companies would like to make their operations
sustainable and contribute to sustainable development.
Thus, Co’s measure, understand and communicate their
3Es performance with the help of sustainability reporting.
 Systematic reporting facilitates co’s to measure the impact
they cause or experience, set goals and manage change.
 This reporting is used as a platform for communicating
sustainability performance whether positive or negative to its
internal and external stakeholders.
 Conventionally financial accounting was the tool that aided
management control thus making it necessary to generate
information regarding management, planning, control and
decision making. But in recent years importance has been
given to how co’s match their resources to the needs of the
marketplace thus giving rise to concept to corporate
performance, management and measurement (linking strategic
management, management accounting and reporting).
 Co. thus set up a reporting cycle which
includes data collection, communication and
responses monitoring on an ongoing basis.
 Co’s objective should be managing change
towards global economy, long term
profitability with ethical behavior, social
justice & environmental care.
Sustainability Accounting

 Itis used to describe the new information

management and accounting methods that aim
to create and provide high quality information
to support a corporation in its movement
towards sustainability.
Global reporting initiative (GRI)
 It is a non profit organization that promotes economic
sustainability. The guidelines developed by them, Netherlands
is a significant system that integrates sustainability issues into
a frame of reporting.
 Also called as Ecological footprint, TBL reporting, ESG
reporting & CSR reporting.
 GRI seeks to make sustainability reporting by all
organizations as routine as and comparable to financial
reporting.
 GRI guidelines ensures quality reporting and are used by
more than 4000 co’s across 60 countries. Organization of any
size, sector or location can use it.
 GRI reporting principles-
 It provides reporting boundaries- (refers to range of entities
like subsidiaries, jt. Ventures, sub contractors, etc.)
 It considers 3Es impact
 Stakeholder inclusiveness
 Sustainability context- shows how organization contribute in
the future to the improvement or deterioration of 3Es at the
local, regional or global level. Also involves discussion of
limits or demands placed on environmental or social resources
at all levels.
 Completeness- it provides indicators to assess, timeframe to
assess
TBL Reporting/ ESG reports
 Coined in 1997 by John Ellington, noted management
consultant, the concept is based on premise that business
entities have more to do than just profits.
 People (human capital) pertains to fair and beneficial business
practices towards labor and the community and region in which
organization conducts business. Planet (Natural capital) refers to
sustainable environmental practices. It is the lasting economic
impact the organization has on its economic environment.
 A TBL company endeavors to benefit the natural order as much
as possible or at least do no harm and curtail environmental
impact. Profit is the bottom line shared by all commerce.
 Need to apply the TBL is caused due to-
 Increased customer sensitivity to corporate social
behavior
 Growing demands of stakeholders
 Legal costs of compliances and defaults
 Concerns over global warming
 Increased social awareness
 Awareness and willingness for respecting human rights
 Media’s attention to social issue
 Growing corporate participation in social upliftment
 What measures go into the index-
 Economic measures-
Economic variables ought to be variables that deal with bottom line
and flow of money- Income and expenditures, taxes, business
climate factors, employment, business diversity factors,..
 Personal income
 Cost of underemployment
 Establishment churn
 Establishment size
 Job growth
 Employment distribution by sector
 Percentage of firms in each sector
 Revenue by sector contributing to gross state product
 Environmental measures-
 Measurement of natural resources and reflect potential influences to
its viability. It could include air and water quality, energy
consumption, natural resources, solid and toxic waste, land use
 Sulphurdioxide concentration
 Nitrogen oxide concentration
 Selected priority pollutants
 Excessive nutrients
 Electricity consumption
 Fossil fuel consumption
 Solid waste management’
 Hazardous waste management
 Change in land use
 Social measures-
 Social dimensions of a community including measurement of
education, equity and access to social resources, health and
wellbeing & quality of life.
 Unemployment rate
 Female labor force participation rate
 Median household income
 Relative poverty
 Population percentage with post secondary degree or certificate
 Average commute time
 Violent crimes per capita
 Health adjusted life expectancy
 Thus local or community based projects can be taken and
these measures can be used to assess.
 Companies have identified the following variables for
their own TBL scorecard-
 Eco- Amount of taxes paid
 Social- Avg hrs. of training to the employee, from
welfare to career retention & charitable contributions
 Environmental/ safety- Safety incident rate, lost or
restricted workday rate, sales dollars per kilowatt hours,
greenhouse gas emissions, use of post consumer recycled
material, water consumption, amount of waste to landfill
Dow Jones Sustainability Index
(DJSI)
 Launched in 1999, 1st global indices tracking the
financial performance of the sustainability driven Co’s
worldwide. Out of 2500, more than 300 companies are
leading in sustainability practices as per DJSI.
Corporate sustainability assessment criteria includes-
Economic-
 Code of conduct/ Compliance/ Corruption & Bribery
 Corporate Governance
 Risk and Crisis management
 Industry specific criteria
Environment-
 Environmental performance
 Environmental reporting
 Industry specific criteria
 Social-
 Corporate citizenship/ Philanthrophy
 Labor practice indicators
 Human capital development
 Social reporting
 Talent attraction and retention
 Industry specific criteria
Weightage to these are given in percentage (%)
 Documents analyzed include-
 Sustainability reports
 Environmental reports
 Health and safety reports
 Social reports
 Annual financial reports
 Special reports (intellectual capital management,
Corporate governance, R&D, employee retention,…)
 All other sources of company information (Internal
documentation, brochures and website)
CSR Reporting

Stakeholders are holding companies liable on issues like product

quality, employee equity, community engagement,
environmental stewardship,..
Many stakeholders are trying that companies prove themselves
by openly sharing information on social and environmental
policies, programs and performance.
Effective CSR reporting and communication programs can build
trust by sharing successes, challenges, risks, opportunities and
strategic vision with stakeholders.
Thus reporting can act as a management framework to
systematically track, evaluate and improve a company’s CSR
performance over time.
Content of a CSR report-
1. Opening letter from the CEO or CSR executive showcasing commitment towards CSR,
discuss in challenges openly
2. CSR policy or mission statement
3. Forward looking statement disclaimer
4. Disclosures wrt stakeholders as follows-
 Shareholders- Addressing the company’s business model, corporate governance,
disclosure of role of management in risk management, in sustainability and in evaluating
CSR performance
 Employees- Addressing diversity, health and safety, training and mentoring, employee
relations and wages and benefits
 Customers- addressing customer service and confidentiality
 Suppliers- Addressing labor standards, whether suppliers are required to implement their
own CSR programs
 Communities- Addressing philanthropic activities, charitable contributions, community
investment and partnerships, volunteerism, environmental impact of operations.
 Governments and regulators- Addressing lobbying, public policy and effect of compliance
with the environmental regulations.
Social Accounting
 Also known as Social accounting and auditing, non financial
accounting or auditing
 It is a process of communicating the social and environmental
effects of organization’s economic actions to specific interest
groups within society and to society at large.
 Social accounting can also be used in combination with (CBM)
community based monitoring
 D. Crowther defines social accounting as an approach to reporting
a firm’s activities which stresses the need for the identification of
socially relevant behavior, the determination of those to whom the
company is responsible for its social performance and the growth
of appropriate measures and reporting techniques.
 SA8000 is a global social accountability standard for
decent working conditions, developed in 1997 and
overseen by Newyork Social Accountability
International (SAI). It was initiated by Council on
Economic Priority Accreditation Agency (CEPAA)
conventions, the Universal declaration on Human rights
and child.
 SAI contracts with Social accountability and
accreditation services (SAAS) which licenses and
oversees auditing organizations to award certification to
employers that comply with SA8000.
SA8000 covers-

 Child labor- Age no less than 15 can work

 Forced labor- No forces labor including prison and debt bondage, no lodging of deposits or
identity papers by employers
 Health and safety- steps to prevent injuries, regular health safety trainings, access to clean
washrooms and potable water, detect threats to health and safety
 Freedom of association/ collective bargaining- Right to form and join trade union and
bargain collectively
 Discrimination- Race, caste,….
 Discipline- No corporal punishment, mental or physical coercion, or verbal abuse
 Working hours- no more than 48 hrs per week, 1 day off compulsory, overtime to be paid and
not to exceed 12 hrs per week
 Compensation/ Remuneration- as per industry standards, sufficient to meet basic needs of the
workers and their families, no disciplinary deductions
 Management systems for HR- facilities seeking to gain and maintain certification must go
beyond simple compliance and integrate the standard into their management systems and
practices
ISO 26000- Social responsibility
guidance standard
 Also known as ISO SR
 It is a voluntary guidancestandard designed
for use by any organization.
 It can be used by any organization to plan and
implement their actions to improve
sustainability economically, socially and
environmentally.
 More than 75 countries came together to
develop ISO 26000 to offer a general roadmap
or guidance on social responsibility.
Organization using ISO 26000 should respect the 7
principles-
 Accountability for organizations on society and
environment
 Transparency in organization’s decisions and activities
having impact on society and environment
 Ethical behavior at all times
 Respect, for stakeholder interest
 Respect for the rule of law
 Respect for international norms behavior
 Respect for human rights
7 core subjects that ISO 26000 organizations
should focus on-
 Organizational governance
 Human rights
 Labor practices
 Environment
 Fair operating practices
 Consumer issues
 Community involvement and development
Global compact principles
 UN Global compact is a strategic policy initiative for businesses that
are committed to aligning their operations and strategies with 10
universally accepted principles.
 With over 12000 corporate companies from 145 countries, it is the
largest voluntary corporate responsibility initiative in the world.
 It works towards the vision of a sustainable and inclusive global
economy which delivers lasting benefits to people, communities and
markets.
 The UN global impact incorporates transparency and accountability
through Communication on Progress report (COP) report which is
posted annually thus showing participant’s commitment to global
compact principles.
 It’s a report to inform the company’s stakeholders about the
company’s progress in implementing global compact’s ten principles.
 UN Global impact principles-
Human Rights-
 Principle 1- Businesses should support and respect the protection of internationally
proclaimed human rights
 Principle 2- make sure that they are not complicit in human rights abuses
Labor-
 Principle 3- Businesses should uphold freedom of association and collective bargaining
 Principle 4- Elimination of all forms of forced labor
 Principle 5- Effective abolition of child labor
 Principle 6- Elimination of discrimination in respect of employment and occupation
Environment-
 Principle 7- Businesses should support a precautionary approach to environmental
challenges
 Principle 8- Undertake initiatives to promote greater environmental responsibility
 Principle 9- Encourage the development and diffusion of environmentally friendly
technologies
Anti Corruption-
 Principle 10- Businesses should work against corruption in all its forms, including
extortion or bribery.
Environmental Impact
Assessment
 Itis a technique which is devised to help organizations know the
potential environmental impacts of key developmental proposals.
 Both the process and the result of EIA is complex and confusing
leaving local communities uncertain as to how a development might
influence them.
 So this guide is planned as a wide introduction to EIA. The guide is
not planned to provide guidance as to how to prepare an EIA (for e.g.-
how to prepare archeological survey or landscape evaluation) but it is
to encourage local communities to engage in EIA because relying
only on experts for solution is not going to guarantee no impact at all
on the communities.
 Assessments are carried out to either assess individual proposed
projects (through EIA) or assessment of policies and programmes
(through Strategic Environmental Assessment)
 Thus EIA is an information gathering exercise carried out by
the developer and other bodies which facilitates a local
planning authority to recognize the environmental effects of
a development before making a decision whether to go ahead
or not.
 Thus EIA is meant to be a systematic process leading to final
product Environmental statement.
 UNEP defines EIA as a tool used to identify Environmental,
Social and economic impacts of a project prior to decision
making.
 It aims to predict the impacts at an early stage in project
planning and design, find ways and means to reduce adverse
impacts, shape projects to suit the local environment.
Steps in EIA/ Components of EIA-
 Screening to determine which projects require full or
partial EIA
 Scoping to identify which potential impacts are
applicable to assess (based on legislative requirements,
international conventions, expert knowledge and public
involvement), to recognize alternative solutions that
avoid, lessen or compensate unfavorable impacts on
biodiversity (including option of not proceeding with the
development, finding alternative designs or providing
compensation for adverse impacts) and to conclude to
derive terms of reference for EIA.
 Assessment and Evaluation of impacts and development
of alternatives, to forecast and identify the likely
environmental impacts of a projected project or
development, including the detailed elaboration of
alternatives.
 Reporting the Environmental impact Statement (EIS) or
EIA report including an Environmental management
plan (EMP) and a non technical summary for general
audience.
 Review of EIS based on Scoping and public &
authority participation
 Decision making on whether to approve the
project or not and under what conditions
 Monitoring, Compliance and enforcement and
environmental auditing so as to find
unpredicted impacts or failed mitigation
measures and address them in a timely
fashion.
Life Cycle Analysis or
Assessment (LCA)
 It is a technique of examining the environmental impacts
of a process, product or an activity along its lifecycle
(from the cradle to grave)
 The aim is to assist the food producers, manufacturers,
mining companies and product producers inspect inputs
(resources, raw materials and electricity) and outputs
(waste) and the impact of these to develop efficiencies
and make out where better environmental performance
can be achieved.
 The LCA approach forms the basis for a range of well
known footprint assessments including carbon footprints.
 ISO, a world wide federation for national standards
bodies has standardized LCA framework within the
series ISO 14040 on LCA
 Product or a service go through various life stages and
each stage is analyzed to understand its impacts on
various environmental factors such as pollution green
house effect, over fertilization, soil contamination,
energy consumption,…
 LCA not only helps in building reputation but also in
value chain engagement. In some markets its mandatory.
 Steps in LCA
 Defining goals and boundaries-
 Quantify product impacts
 Identifymain areas of improvements
 Compare alternative life cycle scenarios
 After deciding the goals, scientists must
decide which features of the products are to be
examined. A consistent unit of measurement
must be decided for assessment (For eg- per
kilo)
 Building the life cycle inventory-
Split up the process involved in producing the product so
as to examine iots impact. Collect the data from various
sources (crop growers, suppliers, Ecoinvent, LCA Food
DK database,…)
 Assessing impact and determining improvements-
When LCI is done, the information is transformed into
suitable impact factors such as water or carbon footprint.
For example- In manufacturing processes minimizing the
amount of water being flushed down drains may raise
levels of toxicity due to lower dilution factor.
Social Impact Assessment (SIA)
 Itis a methodology to review the social effects of infrastructural
projects and other development interventions.
 The origin of SIA comes from EIA model. Which first emerged in US as
a way to assess the impacts on society of certain development schemes
and projects before they go ahead. (Roads, industrial facilities, mine,
dam, port, airport,..) It has been since then added into the formal
planning and processes in several countries, in order to categorize and
assess how major developments may affect population, groups &
settlements. SIA is a carried out as a part of EIA but as of now is not as
widely accepted as EIA in formal planning.
 Thus SIA isa process of analyzing, monitoring & managing the intended
and unintended social consequences both positive & negative of
planned interventions like policies, programs, plans or projects.
 There is a growing concern of projects not
being efficiently conducted, disadvantaging
local people and not generating negative,
social and environmental impacts.
 It is a must that local people participate in the
design and implementation of proposed
developments. Adopting a participatory and
democratic research process or adopting an
advocacy role.
Greening the Supply Chain
(GSC)
 Broad array of actions that a no. of companies perform to
establish greater performance strictness and operational control
over the extended supply chains.
 Greening the supply chain initiatives are a part of process for
implementing a sustainable development plan aimed at
achieving improved environmental, health & safety
performance, increasing efficiencies in the use of energy, water
or other natural resources or raw materials, reducing the
environmental and societal impact of business operations upon
local communities and the global bio-sphere, & expanding
economic and quality of life enhancing opportunities that result
from the company’s business activities.
Elements of co’s interaction with suppliers-
 Applying common environmental and related standards and programs
across the parent company and its suppliers taking into consideration
local leagl framework and cultural characteristics
 Extending management system implementation to ensure greater
accountability of supplier performance on health, environment, safety,
resource consumption and social factors.
 Examining opportunities for business process design or innovation,
material substitution or product design.
 Adopting specific performance goals and metrics to evaluate the
performance of specific suppliers over time.
 Practicing greater transparency in reporting performance results
 Developing partnership with government agencies, NGOs, .. To improve
specific aspects of performance beyond a co’s specific capabilities and to
leverage to technical, managerial and financial resources.
Business Value of GSC initiative-
 Mitigating risk to the business- there is a rising expectation
of the stakeholders for the corporate governance of suppliers
too in today’s date (environment, health, safety, carbon
emission, increasing operational reliability, value chain
engagement)
 Reducing costs of energy consumption, other resources, raw
material inputs by way of improving efficiencies of
operating processes (heating, ventilation, AC, refrigeration,
storage facility, vehicle fleet maintenance, purchasing,
procurement, distribution, material recycling and reuse)
 Motivating better performing suppliers- On a global platform, today’s SCM
helps in rising eco. of scale, increases interdependency due to high quality
standards expectation from international clients. Thus implementation of
sustainable initiatives creates an opportunity to focus on fewer no. of suppliers
that can meet accurate sustainable performance measures.

 Preserving business continuity- Business operations in emerging markets often

experience trouble from disruption of electricity supplies or any other energy or
natural resource input required for production. Green supply chain focuses on
energy efficiency and other aspects of sustainability

 Enhancing market access and strategic degrees of freedom-Cocacola company

has formed a corporate objective of becoming water neutral by replenishing the
amount of water used in generating beverage products thus minimizing
competition for access to inadequate resource and avoiding the achievement of
its business goals in competition with those of consumers.