Scoring Sustainability Reports Using GRI 2011 Guidelines for Assessing Environmental, Economic, and Social Dimensions of Leading Public and Private Indian Companiesby Ram Nayan Yadava, Bhaskar Sinha

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Scoring Sustainability Reports Using GRI 2011 Guidelines for Assessing Environmental, Economic, and Social Dimensions of Leading Public and Private Indian Companies

Ram Nayan Yadava1 • Bhaskar Sinha1

Received: 12 March 2014 / Accepted: 1 March 2015  Springer Science+Business Media Dordrecht 2015

Abstract Sustainability reporting guidelines developed by Global Reporting Initiative (GRI) provide a systematic approach for the companies to report their performance on social, environmental, and economic dimensions of sustainability. This study compared the sustainability reports of leading Indian public and private sector companies.

Reports were analyzed based on GRI guidelines toward their reporting on sustainability. A numerical score from 0 to 3 was assigned for each of the 84 performance indicators (9, 30, and 45 indicators for economic, environment, and social dimensions, respectively) of the GRI 2011 guidelines based on inclusiveness of sustainability report. The analysis showed that reporting on economic dimension was comparatively better as compared to social and environmental dimensions. Sampled companies did not show much difference in their reporting practices on economic performances. However, considerable difference was observed in their reporting practices on environmental and social dimensions. Reporting practices of Tata Steel were better in all dimensions of sustainability and emerged as a responsible company on sustainability reporting.

Keywords Global Reporting Initiative (GRI) 

Sustainability reporting  Environmental performance 

Social performance  Indian companies


The concept of sustainability is generally assumed to have originated in the Brundtland Report entitled ‘‘Our Common

Future’’ by the United Nations World Commission on

Environment and Development (UNWCED 1987). Subsequently, many countries have incorporated the principles of sustainability in their programs and policies on voluntary as well as mandatory basis. The recent pressing global problems such as climate change, poverty, human rights violations, and legal compliance have also forced corporate to pay attention toward social and environmental impact of their business. This has entailed many countries to enact legislations that mandate firms to act and report on their actions toward sustainable development thereby playing a positive role for shaping the future of societies globally (Kolk and Van Tulder 2010). As a result, firms are incorporating policies, procedures, tools, and approaches that go beyond regulatory compliance and contribute to achieving sustainable societies (Henriques and Richardson 2004).

These initiatives of the companies require a comprehensive framework to report their actions toward sustainability.

Sustainability reporting is one such practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance toward the goal of sustainable development (Global Reporting Initiative 2006). A comprehensive sustainability reporting framework developed by Global Reporting Initiative (GRI) is widely used across the globe. GRI guidelines are for voluntary use by organizations for reporting their economic, environmental, and social dimensions of sustainability, their activities, products, and services (Global

Reporting Initiative 2002).

There is a continuous growth in the number of organizations reporting on sustainability. In 2008, the survey & Bhaskar Sinha; 1 Indian Institute of Forest Management, Bhopal 462003, India 123

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DOI 10.1007/s10551-015-2597-1 showed that 79 % of the leading 250 companies of the

Fortune 500 (Global 250 2008) issued separate sustainability reports along with their annual reports, as compared to 52 % in 2005, while the rate of reporting practices among the largest 100 companies in 22 countries has risen on an average from 33 to 45 % between 2005 and 2008 (Slater 2008, p. 16). The emergence of such reporting practices has been accompanied by numerous attempts over the years to homogenize such practices. The number of firms following the GRI guidelines to report sustainability information increased from 44 in 2000 to 1973 in 2010. Morhardt et al. (2002) have attributed eight reasons to explain why firms engage in sustainability reporting practices, which are (a) stricter regulations and proactive cost reduction for future, (b) compliance with industry environmental codes, (c) reduction of operating costs, (d) promotion of stakeholder relations, (e) perceived environmental visibility of the firm, (f) notion that reporting on such issues can yield competitive advantage, (g) realization that without active environmental management, the organizational legitimacy of the company is questionable, and (h) sense of social responsibilities of doing business and desire to adhere to societal norms.

In India, out of 721,719 registered companies, only 68 companies have developed sustainability reports and a total of 104 reports have been submitted to GRI in the last decade. Besides, 15 companies have reported only once and not reported again (Shekharan 2012). It is to be noted that out of the total report submitted from India to GRI, only 20 reports were comprehensive in nature and only 11 reports were based on GRI 2011 guidelines (Global Reporting Initiative Resource Library 2011). Out of these 11 reports, only three government companies representing Oil and Gas (ONGC & Indian Oil), and Steel (SAIL) sectors have submitted. Two private companies, namely, Tata

Steel (Steel) and Reliance Industries (Oil & Gas) were also included in the study to compare reporting between the sectors as well as between public and private companies.

Such comparisons also assume significance in the light of recent passed Company Act (corporate social responsibility clause) which mandates that every company having a net worth of INR 5000 million or more, or a turnover of INR 10,000 million or more, or a net profit of INR 50 million or more during any preceding three financial year to spend 2 % of the average net profits toward corporate social responsibility (CSR) (Ministry of Corporate Affairs 2013).