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.