In terms of ESG, corporations need to identify all stakeholder segments
According to a corporate governance survey, top 100 firms have recently identified environmental, social, and governance (ESG) issues as being among the most significant.
The NIFTY 100 companies' annual reports and website disclosures served as the survey's starting point as it examined factors that affect and make clear the corporate governance standards of businesses. Excellence Enablers, a corporate governance consulting company started by former SEBI Chairman M. Damodaran, performed it.
Public sector organisations, a few private and public sector banks, and some insurance companies are among the top 100 businesses. There are about 88 registered businesses in Tier 1 cities, seven in Tier 2 cities, and five in Tier 3.
Emphasising the engagement with stakeholders regarding ESG related disclosures, the report stated, “With the focus having shifted from shareholders to stakeholders, it is necessary for corporates to identify all categories of stakeholders in order to engage with them adequately. Conducting the affairs of the company in a manner consistent with the interest of all stakeholders, is a basic requirement.”
Out of 100 companies, 8 companies identified their stakeholders which included government/regulators (15 per cent), society-community (15 per cent), shareholders (17 per cent), consumers (17 per cent), Employers (18 per cent), Vendors/contractors (18 per cent).
Academic institutions, financial institutions, industrial organisations, contract employees, and trade associations are among other stakeholders that firms have recognised.
Out of the 17 companies, which were considered for their responsibility towards ESG, 12 per cent fulfilled it through sustainable development committee, 53 per cent fulfilled it through CSR and sustainable development committee, 6 per cent chased it through their board and 29 per cent fulfilled it through CSRC.
Coming to environmental factors, out of 20 companies that shared details, 22 per cent reported undertaking waste management measures, followed by water conservation (19 per cent), Energy conservation (18 per cent) and reduction in carbon emissions (16 per cent).
Among the social factors, health and workplace safety factors scored highest with 21 per cent of the companies investing in it. It was followed by employee welfare (15 per cent), human rights (15 per cent), and training and development (15 per cent).
Coming to governance factors, composition of board and committees scored 32 per cent followed by ethics and integrity and code of conduct at 21 per cent.