CG and Environmental Disclosure

A-59

Tarannum Ansari

In a world of changing expectations, companies must account for the way they impact the communities and environments where they operate. Climate change; community health, education and development; and business sustainability are some of the most pressing issues of our time Sustainability reporting is gaining momentum globally as an important communication tool for companies to disclose their sustainability plans and performance and enhance stakeholder confidence. The reporting scenario in India is still in nascent stage with nearly 68 companies disclosing their sustainability performance

Globally economic considerations, innovation, employee motivation and cost savings are some of key business drivers for companies to adopt sustainability; In India it has been observed that strengthening reputation and brand and ethical considerations prompt companies to embrace this concept. This contrast highlights that Indian companies still have not integrated sustainability into mainstream business strategy and operations. Companies have also not been able to use sustainability reports to get listed on sustainability indices globally which is evident from the fact that handful of Indian companies are listed on indices such as DJSI and FTSE4Good

Few companies have attempted to link sustainability framework to corporate governance and fewer companies have integrated sustainability elements in their risk management framework. The content of sustainability reports focus more on complying to the reporting guidelines requirements rather than elaborating on materiality, stakeholder engagement and future plans and targets. Climate change has emerged on the key sustainability risks across industries but only small number of companies report on climate change risks and also on other forums such as Carbon Disclosure Project (CDP)

Most of the Indian reporters use Global Reporting Initiative (GRI) guidelines to prepare the sustainability report while referring to other international standards and charters like UNGC guidelines, IFC standards on sustainable development, WBCSD focus areas and sector specific frameworks such as API/IPIECA guidelines and ICMM sustainable development framework. Of the companies declaring GRI application level, it has been observed that almost all companies declare the A/A+ application level

The GRI (Global Reporting Initiative) guidelines recommend the following to be included in sustainability reports:

A statement from CEO of an organisation Brief profile of an organization An executive summary and key indicators Key indicators of sustainability may be the use of packaging material, employee retention rates, net profit earnings, consumption of resources per unit of product. Vision and Strategy Policies, structure and management systems (the systems information may include management accounting, financial accounting, environmental management, health and safety, human resources related information) Performance (through environmental, economic, social and integrated indicators)

Ministry of Corporate Affairs, Government of India, in July 2011, came out with the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business'. These guidelines contain comprehensive principles to be adopted by companies as part of their business practices and a structured business responsibility reporting format requiring certain specified disclosures, demonstrating the steps taken by companies to implement the said principles. The requirement to include BR Reports as part of the Annual Reports shall be mandatory for top 100 listed entities based on market capitalisation at BSE and NSE as on March 31, 2012. BSE and NSE shall independently draw up a list of listed entities to whom the circular would be applicable based on the said criteria and disseminate the same in their websites respectively.

Other listed entities may voluntarily disclose BR Reports as part of their Annual Reports. A new Clause 55 shall be inserted to read as under, viz., Listed entities shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the format suggested as under:

1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. 2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product(optional): i. Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain? ii. Reduction during usage by consumers (energy, water) has been achieved since the previous year? 3. Does the company have procedures in place for sustainable sourcing (including transportation)? i. If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so. 4. Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors? 5. Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.

Indian department storechain promoted by the K Raheja Corp Group (Chandru L Raheja Group), started in the year 1991 First store in Andheri, Mumbai 51 stores in 22 cities across the country Shoppers Stop is listed on the BSE. Revenue: 2192 crores FY 11-12 Employees14,000 Annual growth rate of 17%

Brands in the portfolio

Shoppers Stop

Timezone

HomeStop

Clinique

Crossword

Hypercity

Mothercare

Este Lauder

Brands in the portfolio

Shoppers Stop: With an unparalleled assortment of the leading international and national brands in clothing for men, women, and kids; accessories, fragrances, cosmetics, footwear; home furnishing and decor products HomeStop is a complete home solution chain offering design, style, quality, convenience and value to the consumer. HomeStop provides high quality products required for homes with a deeper product assortment.

Crossword stocks the widest range of Books Movies- MusicToys- Stationery- Magazines and CD ROMs.

Mothercare stocks a variety of products for mothers and their babies, toddlers and children till eight years of age the focus being on style, function and safety. Este Lauder: The brand is a global leader in skincare, makeup and fragrance and is renowned for high-quality, innovative and technologically advanced products. Clinique is based upon the groundbreaking 3-Step Skin Care System. Clinique operates Thirteen stores in India today Timezone: Shoppers Stop forayed into the Entertainment sector by acquiring 45% stake in Timezone Entertainment Private Limited which is in the business of setting up and operating Family Entertainment Centres (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi Mumbai and Mumbai.

Environmental Disclosure
No environmental disclosure under clause 49 of corporate governance No sustainability report published

Environmental Initiatives
(As disclosed in annual report- CSR section)

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