New Index Lists Top Indian Firms by Business Responsibility


The India Responsible Business Forum (IRBF), developed by Oxfam India in collaboration with Corporate Responsibility Watch, Praxis and Partners in Change, has released a comprehensive an index that analyses disclosures, policies and mechanisms of the top 100 Indian listed companies.

The IRBF Index is designed to engage Indian business leaders on expanding the scope of business responsibility beyond minimum compliance. In this first stage of the index, the focus is on social inclusion and will help people to understand and assess CSR activities through publicly available data.

In recognition of the expansion and growth of the private sector and the need for proactive action towards making it sustainable and equitable, the Ministry of Corporate Affairs, in consultation with civil society groups, has sharpened its focus on encouraging businesses to play a proactive role in ensuring sustainable and inclusive growth.

Taking cognisance of the fact that a purely philanthropic approach to business responsibility will only be a partial solution, the National Voluntary Guidelines for Social, Environmental and Economic Responsibilities of Business (NVGs) were launched in August 2011.

A welcome move that ensured leveraging the most from the guidelines was by the Securities and Exchange Board of India (SEBI), soon after the NVGs were launched. They mandated the top 100 listed companies to report on their performance through a Business Responsibility Report (BRR), which would then form a part of their annual report/ filings.

The index is a tool that has been designed to measure voluntary disclosure by companies as well as policy commitments of companies to NVG principles and, in so doing, incentivise greater levels of disclosure and policy commitments.

Launched in New Delhi on October 27, 2015, the index assess corporate performance across community development, community as a business stakeholder, inclusive supply chain, non-discrimination at the workplace and employees’ well-being.

Comprehensive in its coverage the index asses and compares corporate performance by sectors, including:

  • Capital goods;
  • Housing related;
  • Power and diversified;
  • Transport equipments and services;
  • Oil and gas chemicals and petrochemicals;
  • Finance; IT Telecom media and publishing;
  • FMCG textiles, healthcare and consumer durables; and
  • Metal products and mining.

Across all performance indicators the top ten companies in have been recognised as:

 

  1. JINDAL STEEL AND POWER LTD
  2. COAL INDIA LIMITED
  3. OIL INDIA LIMITED
  4. GAIL INDIA LTD
  5. NMDC LTD
  6. TATA STEEL LIMITED
  7. MAHINDRA AND MAHINDRA LTD
  8. INDIAN OIL CORPORATION LTD
  9. ITC LTD
  10. HINDUSTAN UNILEVER LTD

The top ten private sector performers are:

 

  1. JINDAL STEEL AND POWER LTD
  2. TATA STEEL LIMITED
  3. MAHINDRA AND MAHINDRA LTD
  4. ITC LTD
  5. HINDUSTAN UNILEVER LTD
  6. SIEMENS LTD
  7. AMBUJA CEMENTS LTD
  8. SESA GOA LTD Vedanta Industries
  9. DABUR INDIA LTD
  10. TITAN INDUSTRIES LTD

The public sector’s top ten are:

 

  1. COAL INDIA LIMITED
  2. OIL INDIA LIMITED
  3. GAIL INDIA LTD
  4. NMDC LTD
  5. INDIAN OIL CORPORATION LTD
  6. OIL AND NATURAL GAS CORPORATION LTD
  7. BHARAT HEAVY ELECTRICALS LTD
  8. BHARAT ELECTRONICS LTD
  9. NATIONAL ALUMINIUM CO LTD
  10. CONTAINER CORPORATION OF INDIA LTD

The full database and index is freely accessible here: http://www.responsiblebiz.org/

Analysis from the IRBF index has revealed that Indian firms do not hold suppliers to the same standard they expect from their own organisations, partner LiveMint has reported.

Documents of 99 companies available in the public domain such as annual reports, sustainability reports and business responsibility reports, among others, were used to draw up the index. According to the index, 61 companies did not acknowledge local suppliers, and an overwhelming 79 did not extend their employment policies to their supply chain.

While companies lag with regard to most parameters of supply-chain management, when it comes to procuring from local and small producers, they have done reasonably well. Seventy-one have systems under which they procure goods and services from local and small producers.

Tata Motors Ltd is one such company, with as many as 1,000 suppliers. At all its seven manufacturing plants across the country, it sources material from the auto hubs in the respective region.

With most companies ignoring chinks in the supply chain, issues such as employee strife over wages or unsafe work conditions can derail operations and impact business. Sectors such as manufacturing and consumer goods rely heavily on supply-chain partners. Those like banking and financial services don’t, the index shows.

Even though having a sustainable supply chain has its benefits, there are challenges as well.

The biggest hurdle KPMG reports is to get the suppliers to adopt it. Only when more companies add sustainability as a requirement do suppliers take this seriously. Comparatively, companies globally are many steps ahead of India firms. And since many Indian companies are supplying to global companies, they are increasingly exposed to global standards. So, it is a matter of time before Indian companies and suppliers begin to share the same standards of sustainability.