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Corporate Sustainability Metrics and Reporting: Frameworks, Claims, and Critiques

1. Why Companies Report on Sustainability

Drivers:

  • Stakeholder Pressure: Customers, investors, regulators demand transparency
  • Risk Management: Address climate risks, social issues, supply chain vulnerabilities
  • Regulatory Compliance: Increasingly mandatory (e.g., SEBI BRSR in India)

2. Notable Corporate Sustainability Commitments

Company Commitment Year
Infosys Carbon neutral (Scope 1 & 2) 2020
Wipro Water positive 2015
ITC Carbon, water, solid waste positive 2006 (carbon), 2000 (water)
Microsoft Carbon negative by 2030 2020
Apple Carbon neutral (supply chain + product use) by 2030 –
Nestlé Net zero (value chain) by 2050 2019

3. Key Reporting Frameworks

Framework Origin Audience Focus Disclosure Type Adoption
GRI (Global Reporting Initiative) 1990s Stakeholders Comprehensive (climate, water, labor, governance) Modular, qualitative + quantitative Global, widely used
ESG (Environmental, Social, Governance) Investor-driven Investors, rating agencies Risk assessment, financial materiality Metrics, scores Used by MSCI, Sustainalytics
BRSR (Business Responsibility & Sustainability Reporting) 2023 (India) Regulators, investors Based on 9 principles (ethics, human rights, energy, etc.) Quantitative + leadership statements Mandatory for top 1,000 listed firms in India

4. Examples from Indian Companies

Wipro:

  • Report: GRI-aligned, BRSR-compliant
  • Disclosures: Scope 1, 2, 3 emissions; biodiversity; employee wellbeing; water positivity
  • Theme: "Leading with Resilience and Responsibility"

ITC:

  • Claims: Carbon neutrality (operations), water positivity
  • Focus: Social investments, rural livelihoods, watershed management

Comparative Parameters:

  • Net zero commitment
  • GRI alignment
  • Third-party assurance
  • Circularity focus
  • Social metrics
  • ESG integration
  • Tech use
  • Water stewardship
  • Biodiversity efforts

5. Critiques and Challenges

Common Issues:

  • Inconsistency: Same company gets different ESG scores from different agencies
  • Greenwashing: Reports used for PR, not real change
  • Measurement Bias: Focus on easily measurable metrics, not material impacts
  • Lack of Verification: Self-declared data, limited third-party assurance
  • Supply Chain Gaps: Often exclude Scope 3 emissions and indirect impacts

Key Questions:

  • Does a high ESG score mean a company is truly sustainable?
  • Is reporting leading to actual emission reductions or equity improvements?
  • Who verifies the data?

6. Future Directions

  • Mandatory Disclosures: e.g., SEBI BRSR (India), EU CSRD (Europe)
  • Tech-Driven Reporting: Real-time data, AI validation
  • Integrated Reporting: Combine financial + ESG metrics
  • Third-Party Assurance: Enhanced verification mechanisms
  • Policy Linkages: Green bonds, carbon market registries, climate-finance integration

7. Key Takeaways

  • Corporate sustainability reporting is evolving but still lacks credibility and accountability
  • Mandatory frameworks (e.g., BRSR) are a step forward, but enforcement is key
  • Stakeholders must critically evaluate reports—look beyond scores to real impact
  • Transparency, verification, and inclusivity (e.g., supply chain emissions) are essential

📘 Exam Tip

Understand the differences between GRI, ESG, and BRSR frameworks—their origins, audiences, and focuses. Use examples like Infosys, Wipro, and ITC to illustrate how companies report sustainability. Critically evaluate the limitations: greenwashing, inconsistent ratings, and lack of supply chain accountability. Emphasize the need for mandatory, verified, and integrated reporting for true corporate accountability.

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