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DISCLOSURES and REPORTINGPRACTICES IN CSRCompiled By:Harleen Paul (232006)Juli Gupta (232009)

SUSTAINABLE REPORTINGThe practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development.'Sustainability reporting' is a broad term considered synonymous with others used to describe reporting on economic, environmental, and social impacts (e.g., triple bottom line, corporate responsibility reporting, etc.). A sustainability report should provide a balanced and reasonable representation of the sustainability performance of a reporting organization including both positive and negative contributions. A sustainability report also presents the organization's values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.There has been an increase in the number of social reporting requirements driven by regulatory bodies and stock exchanges around the world that have played a key role in advancing the field of social reporting.

Sustainability reporting: past, present, and trends for the futureThe International Integrated Reporting Council (IIRC) has proposed a revolutionary change in the way that corporations report activities to stakeholders, essentially by replacing current financial statements with integrated reports that contain financial information, operational data and sustainability information.1960s and 1970s was concerned about social issues women's rights, racial equality and world peace which became a focus of corporate reporting. Employee-relations and human-resource reporting evolved into social reporting. The physical environment only assumed importance later through some well-publicized environmental catastrophes and ensuing regulations. Most social reporting was disclosed in company financial statements rather than in separate reports. Much of corporate non-financial reporting originated as part of annual financial statements and focused on human resources and employee relations. For example, Hogner (1982) found that the US Steel Corporation's early financial statements included topics such as worker housing, community development, worker safety and mortgage assistance for employees.

Need for Sustainability reportingAn ever-increasing number of companies and other organizations want to make their operations sustainable. Moreover, expectations that long-term profitability should go hand-in-hand with social justice and protecting the environment are gaining ground. These expectations are only set to increase and intensify, as the need to move to a truly sustainable economy is understood by companies and organizations financiers, customers and other stakeholders. Sustainability reporting helps organizations to set goals, measure performance, and manage change in order to make their operations more sustainable.A sustainability report conveys disclosures on an organizations impacts be they positive or negative on the environment, society and the economy. In doing so, sustainability reporting makes abstract issues tangible and concrete, thereby assisting in understanding and managing the effects of sustainability developments on the organizations activities and strategy. Internationally agreed disclosures and metrics enable information contained within sustainability reports to be made accessible and comparable, providing stakeholders with enhanced information to inform their decisions

DISCLOSURESDisclosure efforts by Government1986Specified corporations shall submit an annual environmental audit.2008The Companies Act states that board of directors reports shall contain information on conservation of energy.2009Voluntary guidelines for CSR are issued. 2012 The Companies Bill 2012 makes it mandatory for companies with net worth of more than Rs 500 crore, or turnover of Rs 1,000 crore to adopt a CSR policy. 2013Indian government is moving ahead with implementation of the Companies Act that makes it mandatory for certain class of profitable enterprises to spend money on social welfare activities. 2014Indian regulator, The Securities and Exchange Board of India (SEBI) mandate greater voting data transparency and at least one female director on their board for listed firms.

Disclosure efforts by Stock Exchanges2011The Securities and Exchange Board of India mandates listed companies report on Environmental, Social and Governance (ESG) initiatives undertaken by them, according to the key principles enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.'

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Benefits Of CSR/Sustainability Reporting

Governments, businesses and stakeholders all directly benefitfrom it, and the positive impact on social, environmental and human rights issues is evident. The availability of sustainability information can be used by governments to assess the impact and contribution of businesses to the economy and to understand which issues are being tackled by which players.

Improved financial performance. CSR reporting can help you profit through: innovation, identifying inefficiencies and areas where you are losing money, improving customer loyalty and attracting a new quality of customer. Adds to your credibility as an organization: Reporting enhances companies accountability for their impacts and therefore, enhances trust, facilitating the sharing of values on which to build a more cohesive societyInnovation/better quality: Through looking at the workflow chains and organisational structure, the companys CSR report will identify possible areas for new business ventures and innovation.Enhanced brand image & reputation: A company considered socially responsible can benefit both by its enhanced reputation with the public, as well as within the business community, increasing a companys ability to attract capital and trading partners. Business focus and planning: It can help identify potential problem areas to tackle and also highlight previously untapped growth areas.Business opportunities: Many companies expect their stakeholders (like suppliers, vendors) to have a defined CSR strategy. Not having one could lead to missing these business opportunities

BENEFITS contd..Better efficiency: A well-produced CSR report can help you pinpoint the areas within your company that can benefit from cost-cutting and increased productivity e.g. less packaging, better logistics.Increased ability to attract and retain employees: A proud employee, who believes their company is working for good is more productive, has a stronger sense of loyalty and a better commitment to the organization. Reducing compliance costs: Comprehensive analysis of strengths and weaknesses, and the engagement with stakeholders that is necessary for sustainability reporting, can lead to more robust and wide-ranging organizational visions and strategies. Increased sales and customer loyalty: Customers stick with a brand when they know their money is going towards ethical practices. Long-term sustainability: Your CSR report will become something of a blueprint for your future. Making commitments to becoming a more efficient, cleaner and innovative company identifies your long-term goals as a business and safeguards your longevity.

Challenges And BarriersRegulators pushing for more disclosure From one-time event to an ongoing communication with stakeholdersNo supplier left behindImproving data collection efficiencies. Deciding who uses the information and how do they use it. What do people want to know about? How can reporting support an organizational culture of transparency and accountability, and enhance engagement with our stakeholders? - Nancie-Lee Robinson, General Manager, TelstraDeveloping the understanding within an organization that the report needs to be a balanced and comprehensive account of sustainability impacts and performance, not a promotional document for the companys good deeds - Dr Leeora Black, Managing Director of (ACCSR) Companies are still not sure how material the report itself is.Ensure easy and timely access of information to investors, customers and employees Analyzing performance at both a macro and micro level. While there is merit in frameworks like the Global Reporting Initiative (GRI) and assurance standards, the end result of compliance with these can be very long and inaccessible reports. Lack of compliance with so called best practice standards though can result in claims of green washing or spin

Some mistakes in CSR ReportingWeak goals:Sustainability reports built around weak organizational goals are doomed to fail. Know what success looks like for your company and build your CSR reporting around that.Mismanaged data:Good data collection is essential to gaining meaningful results from initiatives such as auditing or foot-printing. Assign data collection responsibilities to trained people either inside or outside your company and continuously check the numbers for accuracy.Disordered priorities:Recognize that the pillars of the triple bottom line are interconnected, and that long-term sustainability goes beyond shareholder profits.Discounting feedback:Reporting shouldnt be a one-way endeavor. Take the advice of third parties such as auditors and stakeholder panels, who can comment on your report and help verify data accuracy.

Mistakes in Reporting contd..Framework Deviation:One of the most common mistakes companies make when using CSR reports is to underutilize or neglect popular reporting frameworks such as the Global Reporting Initiative (GRI) as a necessary function for optimizing sustainability reports via report standardization.Tenuous comparisons:Companies are inclined to track their progress internally. Accept that youre one fish in a large sea. Stakeholders will want to know how sustainable you are compared to your industry peers, not necessarily your own benchmarks.Unreachable targets:Targets in CSR reporting should be linked to corporate priorities. Make them relevant and aggressive but still achievable.Under-reporting:Dont limit communication of your sustainability performance to the CSR report. Use a variety of media to communicate a consistent message across, on your progress and challenges. Inadvertently green-washing:While its important to convey your environmental and social progress, its a mistake to focus solely on the positives or on programs immaterial to your organization. Make reporting meaningful by acknowledging the areas where you still have room for improvement and tying your CSR goals back to your company mission.

The Carbon Disclosure Project (CDP)Global Reporting Initiative (GRI)Dow Jones Sustainability Index (DJSI)Focus areasMeasure and disclose their Greenhouse Gas (GHG), water, and supply chain performance. The primary focus of CDP is climate change mitigation and protection of natural resourcesGRI focuses on the economic, environmental, and social impact of an organization's material activities on its stakeholdersBased on an analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices. The trend is to reject companies that do not operate in a sustainable and ethical manner. It includes general as well as industry-specific sustainability criteria for each of the 58 sectors defined according to the Industry Classification Benchmark (ICB)AvailabilityPublically availablePublically availableCompanies must be invited and the results of the analysis are not available in the public domainStakeholdersInvestorsThe primary stakeholders of a GRI report are determined by the material issues for the company and typically include shareholders, employees, suppliers, customers, regulators, NGOs, and local communities.Investors

Global CSR reporting frameworks

National Voluntary Guidelines on Social, Environment and Economic Responsibilities of BusinessIndia's NVGs were released by the Ministry of Corporate Affairs (MCA) in July 2011 by Mr. Murli Deora, the former Honorable Minister for Corporate Affairs. The national framework on Business Responsibility is essentially a set of nine principles that offer businesses an Indian understanding and approach to inculcating responsible business conduct.

IndicatorsEssential IndicatorsLeadership IndicatorsCommitment of Top Management and supportive governance structureThe top management has developed an understanding of the principles and core elements as well as the issues involved therein and ensured its deployment across the business through appropriate action, regular review and guidance.There are specified Committees /Sub Committees in the governance structure responsible for implementation of these Guidelines. The issues related therein are regularly reviewed at the governance level.Policy deployment and Process managementThe business has established a policy related to the Principles and has put into place processes and process owners for implementation.The business has developed a Code of Conduct or has adopted nationally or internationally recognized Standards/global best practices with respect to the Principles and Core Elements. Based on this, the business has an identified strategy along with the relevant processes for implementation of the adopted Codes/Standards/Practices.Sensitization and trainingThe business sensitizes its managers and employees through awareness and training so that they are able to understand and work according to the processes laid down above.The business demonstrates its leadership by sensitizing (through regular and systematic training and awareness) not only the employees and managers but all the stakeholders including those within its supply chain as well as outside, on various aspects of corporate responsibility.Stakeholder engagementThe business identifies and engages with its priority stakeholders for implementing these Guidelines.The business systematically identifies all its stakeholders including within its supply chain and engages with them on various aspects of these Guidelines.Monitoring and EvaluationThe business undertakes self-assessment and review of its performance on various principles and core elements.The business undertakes third party assessment, verification and impact analysis of its performance on various principles and core elements. Where applicable the codes/ standards/practices adopted by the business would be regularly audited.Analysis and improvementThe business identifies and records critical deviations from the laid down processes and takes them up for corrective actions.All deviations from the laid down processes are recorded, analyzed and taken up for process correction as well as mitigation of any loss/damage to the enterprise and its stakeholders.Continuous InnovationThe business engages in continuous improvement keeping the growing expectations of stakeholders in mind.The business focuses on innovation in products, processes and methods of stakeholders' engagement, so as to continuously improve its performance on all business processes that impact the principles and core elements.DisclosureThe business discloses its performance on Principles and core elements to priority stakeholders.The business discloses its performance, including deviations and corrective actions, to the wider public.

Global Reporting Initiative (GRI) GuidelinesThe Global Reporting Initiative (GRI) is an independent institution whose mission is to develop and disseminate globally applicable sustainability reporting guidelines that help organizations to report on the economic, environmental, and social dimensions of their activities, products, and services. The aim of the GRI Guidelines is to assist reporting organizations and their stakeholders in articulating and understanding contributions of the organization to sustainable development through their reports.

There are four key elements in the framework:Sustainability reporting guidelines Indicator protocolsSector supplementsTechnical protocols

Who can use GRI Guidelines?The GRI Guidelines are intended to be applicable to organizations of all sizes and types operating in any sector. However, they were developed primarily with the needs of larger businesses in mind. According to GRI, the reporting framework being used by more than 1500 organizations, including many of the worlds leading brands.

Principles For Defining Report Content- Stakeholder InclusivenessPrinciple: The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.- Sustainability ContextPrinciple: The report should present the organizations performance in the wider context of sustainability.- MaterialityPrinciple: The report should cover Aspects that 1.Reflect the organizations significant economic, environmental and social impacts; or 2. Substantively influence the assessments and decisions of stakeholders- CompletenessPrinciple: The report should include coverage of material Aspects and their Boundaries, sufficient to reflect significant economic, environmental and social impacts, and to enable stakeholders to assess the organizations performance in the reporting period.

Principles For Defining Report Quality- BalancePrinciple: The report should reflect positive and negative aspects of the organizations performance to enable a reasoned assessment of overall performance.- ComparabilityPrinciple: The organization should select, compile and report information consistently. The reported information should be presented in a manner that enables stakeholders to analyze changes in the organizations performance over time, and that could support analysis relative to other organizations.- AccuracyPrinciple: The reported information should be sufficiently accurate and detailed for stakeholders to assess the organizations performance.- TimelinessPrinciple: The organization should report on a regular schedule so that information is available in time for stakeholders to make informed decisions.- ClarityPrinciple: The organization should make information available in a manner that is understandable and accessible to stakeholders using the report.- ReliabilityPrinciple: The organization should gather, record, compile, analyze and disclose information and processes used in the preparation of a report in a way that they can be subject to examination and that establishes the quality and materiality of the information.

GENERAL STANDARD DISCLOSURES

Strategy and AnalysisOrganizational ProfileIdentified Material Aspects and BoundariesStakeholder EngagementReport ProfileGovernanceEthics and IntegritySPECIFIC STANDARD DISCLOSURES

ITCITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal. Its diversified business includes five segments: Fats Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business & Information Technology.

It is ITC's policy:To identify and engage with all its stakeholders in a consistent and systematic manner ;To understand the concerns of stakeholders including those who are disadvantaged, vulnerable and marginalized and priorities their concerns ;To work towards addressing these concerns in an equitable and transparent manner.

CSR PolicyTo direct ITC's CSR Programs, inter alia, towards achieving one or more of the following - enhancing environmental and natural capital; supporting rural development; promoting education; providing preventive healthcare, providing sanitation and drinking water; creating livelihoods for people, especially those from disadvantaged sections of society, in rural and urban India; preserving and promoting sports;To develop the required capability and self-reliance of beneficiaries at the grass roots, especially of women, in the belief that these are prerequisites for social and economic development;To engage in affirmative action interventions such as skill building and vocational training, to enhance employability and generate livelihoods for persons from disadvantaged sections of society;To pursue CSR Programs primarily in areas that fall within the economic vicinity of the Company's operations to enable close supervision and ensure maximum development impact;To carry out CSR Programs in relevant local areas to fulfill commitments arising from requests by government/regulatory authorities and to earmark amounts of monies towards "Enterprise Social Responsibility (ESR)" activities and to spend such monies through ESR/CSR Cells of such administrative bodies of the government and/or directly by way of developmental works in the local areas around which the Company operates;To provide equal opportunities to beneficiaries of the Company's CSR Programs as vendors or employees on merit;To promote sustainability in partnership with industry associations, like the Confederation of Indian Industry (CII) through the CII-ITC Centre of Excellence for Sustainable Development, in order to have a multiplier impact.

Some Awards and RecognitionsITC is the first from India and among the first 10 companies in the world to publish its Sustainability Report in compliance (at the highest A+ level) with the latest G3 guidelines of the Netherlands-based Global Reporting Initiative (GRI), a UN-backed, multi-stakeholder international initiative to develop and disseminate globally applicable Sustainability Reporting Guidelines.ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 for its invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation.ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007, the Award for 'CSR in Emerging Economies 2005' and 'Excellence in Corporate Governance' in the same year. These Awards have been instituted by the Institute of Directors, New Delhi, in association with the World Council for Corporate Governance and Centre for Corporate Governance.The Readers' Digest Pegasus Award for corporate social responsibility, recognising outstanding work done by socially conscious companies.The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the Bombay Stock Exchange, Times Foundation and the NASSCOM Foundation.

Sustainability Policies

Sustainability Reporting

Sustainability Reporting Contd.

Communication to the stakeholders

CiscoCisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, that designs, manufactures, and sells networking equipment.

Focus Areas for CSR at Cisco

Some Awards and RecognitionsEnvironmental Sustainability

Climate Leadership Award for Excellence in Greenhouse Gas Management (Goal Achievement), U.S Environmental Protection Agency (February)20 Companies Transforming the U.S. Power Sector, GreenTech Media (April)Best Global Green Brands 2014 (#33), Interband (June)The A List : Climate Performance Leadership Index, CDP (September)Top Score of 100 for disclosure on CDP annual climate survey (September)

General CSR AwardsGlobal 100 most Sustainable Corporations (#11), Corporate Knights (January)Worlds most admired companies, Fortune magazine (February)Corporate Social Responsibility Distinctive, Mexican center for Philanthropy and Alliance for CSR (February)100 best Corporate Citizens (#16), CR Magazine (February)Asia best CSR Practice Award for community development to Cisco India, CMO Asia (August)Canadas Top 50 Socially Responsible Companies, Macleans (June)

Sustainability Reporting

Sustainability Reporting Contd.

Sustainability Reporting Contd.

ReferencesDisclosure laws:http://hausercenter.org/iri/about/global-csr-disclosure-requirementsBenefits:http://one4allcsr.com/corporate-social-responsibility-consultants/benefits-of-csr/https://www.globalreporting.org/resourcelibrary/The-benefits-of-sustainability-reporting.pdfhttp://www.fbrh.eu/CSR-faq-what-are-the-benefits.phphttp://www.mpasquali.com/blog/2011/08/22/csr-reporting-what-are-the-benefits/Challenges:http://www.triplepundit.com/2012/07/5-sustainability-reporting-issues-csr-executives-mind/http://www.probonoaustralia.com.au/news/2013/02/sustainability-reporting-challenges-and-benefits#http://info.greenstoneplus.com/blog/5-non-financial-reporting-challenges-that-csr-professionals-are-facingGlobal Frameworks:https://www.workiva.com/blog/understanding-csr-reporting-frameworkshttp://www.proveandimprove.org/tools/griguidelines.php#SectionFootnoteNVG-SSEhttp://www.mca.gov.inGRIhttps://www.globalreporting.org

ITChttp://www.itcportal.com

Ciscohttp://csr.cisco.com

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