Sustainability insights from PwC India's latest report

Why in News?

Recently, PwC India, a prominent professional services network, published a report titled ‘Navigating India’s Transition to Sustainability.’
This report shines a spotlight on the sustainability initiatives undertaken by leading companies in India, providing a comprehensive analysis of their efforts and achievements.

About the Report
- The report delves into how companies are adapting to the Business Responsibility and Sustainability Reporting (BRSR) disclosures mandated by the Securities and Exchange Board of India (SEBI). The analysis encompasses the BRSR reports of the top 100 companies for the financial year ending on 31st March 2023.
- The business sector is identified as a pivotal player in achieving India’s ambitious net-zero vision by 2070. Net zero refers to achieving a balance between greenhouse gas emissions produced and those removed from the atmosphere.

Key Findings
- Voluntary Disclosure: 51% of India’s top 100 listed companies by market capitalization disclosed their data for FY23, despite BRSR being a voluntary disclosure.
- Emission Reductions: 34% of companies have reduced their Scope 1 emissions, and 29% have reduced their Scope 2 emissions.
  - Scope 1 Emissions: Direct emissions from sources owned or controlled by the organization.
  - Scope 2 Emissions: Indirect emissions from the generation of purchased energy.
  - Life-Cycle Assessment: 44% of the top 100 listed companies conducted a life-cycle assessment of their products or services.
  - Renewable Energy Usage: 49% of companies have increased their energy consumption from renewable sources.
  - Net-Zero Targets: 31% of companies have disclosed their net-zero targets.
  - Key initiatives driving emission reductions include transitioning to energy-efficient technologies such as LEDs, adopting efficient HVAC systems, shifting to renewable energy sources, purchasing carbon offsets, and entering into off-site power purchase agreements.

BRSR aims to foster more meaningful engagement between businesses and their stakeholders by focusing on Environmental, Social, and Governance (ESG) considerations.
The BRSR framework encourages companies to adhere to improved governance, ethical conduct, environmentally sustainable practices, and social responsibility in their operations.
- Environmental Criteria: Assess a company’s impact as a steward of the environment.
- Social Criteria: Evaluate how a company manages relationships with employees, suppliers, customers, and communities.
  - Governance Criteria: Focus on leadership, executive compensation, auditing, internal controls, and shareholder rights.

The PwC India report provides valuable insights into India’s sustainability journey, highlighting the importance of ESG considerations. It serves as a guide for companies to comply with the BRSR framework introduced by SEBI, encouraging transparency and accountability in their sustainability efforts.
Enhancing Investor Confidence :
- By showcasing India’s commitment to sustainability, the report enhances investor confidence, positioning the country favorably on the global stage.
- Sustainable practices are increasingly seen as a competitive advantage, and this report underscores India’s proactive approach.
Policymaking and Regulation:
- Policymakers can draw significant insights from the report to shape regulations and policies that promote sustainable practices. The shift towards sustainability is not just about regulatory compliance but also about fostering responsible growth.

India has undertaken several initiatives to ensure ESG compliance among companies:
- National Voluntary Guidelines (NVGs): Introduced in 2011 by the Ministry of Corporate Affairs, these guidelines outline the social, environmental, and economic responsibilities of businesses.
- Business Responsibility Reports (BRR): Introduced by SEBI in 2012, these reports initially applied to the top 100 listed entities by market capitalization, later extended to the top 500 entities in 2015.
- Business Responsibility and Sustainability Report (BRSR): Replacing BRR in 2021, BRSR seeks disclosures on company performance against the nine principles of the National Guidelines on Responsible Business Conduct (NGBRCs).

Companies can use various reporting frameworks to demonstrate their commitment to ESG practices, such as the Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP), and Sustainability Accounting Standards Board (SASB).

The Securities and Exchange Board of India (SEBI) is a statutory body established in 1992 to protect investor interests and regulate the securities market.
Headquartered in Mumbai, SEBI plays a crucial role in promoting sustainability through its regulatory frameworks, including the BRSR.

The Navigating India’s Transition to Sustainability report by PwC India underscores the critical role of the business sector in achieving sustainability goals.
By adhering to BRSR disclosures and embracing ESG principles, companies can significantly contribute to India’s net-zero vision.
The report not only highlights current achievements but also serves as a roadmap for future efforts, emphasizing the balance between economic development and environmental and social well-being.
As India strides towards a sustainable future, this report offers valuable insights and guidance for businesses, policymakers, and investors alike.