Only 5% of Indian companies published ESG reports
Only one-fifth of the companies have published their sustainability report, as revealed by CRISIL's environmental, social and governance ESG risk assessment of 586 Indian companies across 53 sectors. Services, including IT, lending, and auto OEMs, are the leaders in terms of disclosures of ESG disclosures, while chemicals, mining, construction EPC, and transport infrastructure are not good with disclosures. CRISIL also found that 12 companies published detailed sustainability reports for the first time compared to the last year's report. Nine of the companies that did earlier have no plans to publish for fiscal 2021 are yet to publish.
The leaders of ESG have shown a commitment to sustainability and have consistently delivered superior performance, according to Amish Mehta, Managing Director and CEO, CRISIL Ltd. In contrast, those in the weak' and below-average' categories have poor disclosures and inadequate ESG risk management practices. In India Inc., sustainability in decision making is very piecemeal because of the lack of stewardship and fiduciary persuasion to improve the ESG quotient. For ESG to be embedded and practiced in spirit, all stakeholders have to work together to create a favorable environment for ESG in India. In addition to focusing on targeted actions such as decarbonisation, a mindset shift is necessary to change from being merely complying to creating value and structurally mitigating risk in the near-term. In India only 1 in 5 companies reported their Scope 1 and Scope 2 emissions, which is a significant part of the rising average temperature worldwide and global warming. The disclosure on Scope 3 emissions was even worse - only 63 out of 586 companies published this data.
The report noted that none of the airline companies covered in the report disclosed their absolute percentage of sustainable aviation fuel SAF in overall fuel consumption. None of the auto ancillary companies disclosed their number of product recalls, either voluntary or involuntary. In Logistics, no one disclosed fuel consumption, or the number of EVs in their portfolio, or the use of eco-friendly packaging. On the bright side, 79 per cent of FMCG companies disclosed initiatives on packaging such as reduction in laminate based paper packaging, the elimination of single use plastic, and the use of recyclable packing material. 3 out of 4 hotels have disclosed the percentage of their portfolio with green building certification, averaging 28.5%.
The findings of the reports show the need to publish sustainability reports, as India aims to achieve net zero by the year 2070.