Sustainability Reporting for IT sector

8/9/2019 Sustainability Reporting for IT sector

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1

XIMB

Report OnStudying the present standard of

Sustainability Reporting in IT

companies and evaluating the

relevance of a GRI sector supplement

for IT sector.

Submitted By,

Swati Prava Pradhan

Roll No:u309058

For: NASSCOM FOUNDATION

Under the Mentorship of: Sagarika Bose,Vice President -

Research at NASSCOM Foundation


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Table of Contents

SUSTAINBILITY REPORTING: BASICS ................................ ................................ ................................ ... 3

What is Sustainability Reporting? ................................ ................................ ................................ ... 3

GRI REPORTING Framework ................................ ................................ ................................ ........... 8

Studying the present standard ofSustainability Reporting in Indian IT companies........................... 12

Introduction................................ ................................ ................................ ................................ . 12

Why sustainability? ................................ ................................ ................................ ...................... 13

Companies approach tosustainability ................................ ................................ ......................... 15

Sustainability Reporting ................................ ................................ ................................ ............... 18

Challenges ................................ ................................ ................................ ................................ ... 19

Balance Scorecard for Sustainability measurement ................................ ................................ ...... 20

Present state ofsustainability reporting: IT Sector ................................ ................................ ....... 22

GRI SECTOR SUPPLEMENT FOR IT SECTOR................................ ................................ ........................ 25

Various Process which can come underreporting guidelines................................. ....................... 28

Structure ofSector Supplements: ................................ ................................ ................................ 28


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SUSTAINBILITY REPORTING: BASICS

What is Sustainability Reporting?

Sustainability reporting is designed to provide information on an

entity's environmental, social and economic performance and impacts and

their initiatives for improving their performance in these areas. It should

be noted that the term "sustainability" does not mean that a corporation

or other entity is "sustainable" or that it will continue in existence for any

specified period of time.


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Why Sustainability Reporting?

The benefitsofsustainability reporting as a management tool can be significant

and benefits include:

Improved financial performance

There is a growing body ofevidence which linksfinancial and social performance

ofcompanies (According a CPA Australia report there is a correlation between

sustainability reporting and low probability ofcorporate distress).

Improved stakeholder relationships

The continuing engagement with various interest groups builds trust and

improves communication.


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Improved risk management

This is a very important benefit brought about by a better understanding of

non-financial material risks. Understanding risks and dealing with those risks

appropriately saves companies time, money and avoids lossofreputation .

Improved investor relationships

Due to the growing demand for ethical investment funds, particularly but not

limited to, by superannuation funds.

Identification of new markets and/or business opportunities

This is a particular welcomed side effect of improved relationships with

interest groups.

The value for regulators (governments) includes that business contributes

effectively to sustainable development goals and that it is much easier to

benchmark and monitor business activities within and across industries.

The primary value for the general public of sustainability reporting is the

transparency of all business transaction it provides. It provides the consumer

and other interest groups with all the relevant information to make informed

choices.

Companies are issuing sustainability reports for numerous reasons, including

the following:

y To demonstrate their interest in the health of the environment, their

employees and the communities they serve

y To demonstrate their commitment to and efforts involving human rights

and fair labour policies


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y To promote transparency and solicit feedback on their performance

from a growing number of stakeholders including non-governmental

organizations (NGOs)

y To demonstrate their efforts to build and maintain relationships with

external partiessuch as the community and otherstakeholders

y To better manage and communicate risk

y To enhance or protect theirreputation

y To grow shareholder and brand value

y To increase market share

Pressure to issue reportson non-financial measures also emanatesfrom

a growing body of stakeholders including competitors and peers, customers,

shareholders, potential investors, the media, employees, and lobby groups. e

accountable for all aspects of their performance, not just financial

performance, and, moreover, to act responsibly by reporting on it.

What readers want in a sustainability report?

A link between sustainability strategy and businessstrategy

Commitment tosustainability

Sustainability impact ofthe organization

Actions taken to addresssustainability issues

Innovative thinking

Translation ofsustainability into local business

Few questions that the report should seek to answer:-


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y What are the most important changes taking place, and how will they

affect us now and over the long term?

y How are we doing at maintaining both human and ecosystem well -

being?

y What are sustainable levelsofconsumption and pollut ion?

y What kind oflegacy are we creating forour children?

Key elementsofthe report include:

y Information about majorsustainability issues, and the driving forcesof

change.

y Policies, business practices and personal actions affecting sustainability.

y Commitments made toward sustainability, and how we are doing at

meeting them.

y Stories and statements illustrating the trends.

y Background analysis and commentary by experts.

y Progress in measuring sustainability.

y Furthersourcesofinformation.


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GRI REPORTINGFramework

The GRI is an international, multi-stakeholder effort to create a common

framework for voluntary reporting ofthe economic, environmental, and social

impact of entity-wide activity. It was convened by CERES and the Tellus

Institute in 1997. Shortly thereafter, the United Nations Environmental

Programme (UNEP) joined the GRI as a key partner. The GRI mission is to

elevate the quality and comparability of sustainability reporting practices

worldwide. They have developed a set ofsustainability reporting guideline for

reporting on environmental, social responsibility and economic performance.

Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines.

Sustainability reporting is designed to provide information on an entity's


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environmental, social and economic performance and impacts and their

initiativesfor improving their performance in these areas.

Protocols are the "recipe" behind each indicator in the Guidelines and include

definitionsfor key terms in the indicator, compilation methodologies, intended

scope ofthe indicator, and other technical references.

Sector Supplementsrespond to the limits of a one-size-fits-all approach.

Sector Supplements complement (not replace)use of the core Guidelines by

capturing the unique set ofsustainability issuesfaced by different sectorssuch

as mining, automotive, banking, public agencies and others.

Sustainability reporting communicates a wide range of subject matter

about environmental, social and economic impacts arising from an entity's

activities, products and services. Economic impacts include but are not limited

tofinancial performance in meeting the expectationsof investors and lenders.

Financial reporting, on the other hand, communicates about an entity's

performance in creating value for investors and its accountability for monetary

resources invested in it. Sustainability reporting and financial reporting both

communicate about risks and intangibles, but doso in ways that are different

and partially complementary.

As a result ofthe growing activity in reporting, demandsfor independent

assurance are increasing. Various third-party firms, e.g., public accounting,

consulting, certifying and engineering firms, have provided assurance on such

reports in Europe but no standardized approach exists. To augment the

credibility of their environmental or sustainability reports, a first wave of

leading companies is now seeking to have them verified independently.


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Major roadblocks to providing services with respect to sustainability

reports

y Suitable criteria forsustainability reporting need to be developed

y Companies reporting on sustainability matters need to develop reliable

and effective systems to provide such information

y Professionals will need to gain sufficient knowledge in s ustainability

reporting and expertise in certain non-financial matters related to

sustainability reporting

y It will be required hire or engage specialistson certain mattersrelated to

sustainability reporting

y Firms will need to develop a marketing strategy to position themselves

as providersofassurance servicesrelated tosustainability reporting.

Suitability

Suitable criteria must have each ofthe following attributes:

y Objectivity-Criteria should be free from bias

y Measurability-Criteria should permit reasonably consistent

measurements, qualitative or quantitative, ofsubject matter

y Completeness-Criteria should be sufficiently complete so that those

relevant factors that would alter a conclusion about subject matter arenot omitted.

y Relevance-Criteria should be relevant to the subject matter.


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Availability

The criteria should be available tousers in one or more ofthe following ways:

y Available publicly

y Available to users through inclusion in a clear manner in the

presentation ofthe subject matteror in the assertion

y Available to all users through inclusion in a clear manner in the

practitioner'sreport

y Well understood by most users, although not formally available (for

example, "The distance between points A and B is twenty feet;" the

criterion of distance measured in feet is considered to be well

understood)

y Available only to specific parties; for example, terms of a contract or

criteria issued by an industry association that are available only to those

in the industry.


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Studying the present standard ofSustainability

Reporting in Indian IT companies

IntroductionRegardless of how large or how profitable they are, businesses today do not stand alone.

They are inextricably linked with the societies in which they operate. Every decision they

makewhether its to close a plant, move operations to a different country or set a price for a

new productaffect the surrounding community and the natural environment, for better or

for worse. Regulations resulting from corporate scandals, the rising influence of

nongovernmental organizations, environmental concerns and the fact that nearly one third of

the worlds top 100 economic entities are corporations, not countries, have prompted the

emergence of a new trend: Sustainability. How successfully companies embrace these

concepts may well determine their ability to develop new markets, negotiate partnerships, and

compete for talent.

They have not only started talking about terms like regulatory compliance, business ethics,

and the environment but also acting upon them. The business leaders vocabulary is sprayed

with terminology like Corporate Social Responsibility, Corporate Responsibility, Corporate

Citizenship, Triple P (People, Planet, and Profit), Triple Bottom Line, and Being Green

often used interchangeably.

Even the most famous management thinkers disagree on how to approach sustainability.

Milton Friedman said the corporations sole responsibility is to maximize profits for

shareholders, who may then decide if they want to allocate the returns for social purposes.

And according toPeter Drucker, management must resist responsibility for a social problem,

except when contributing to a social opportunity creates an opportunity for performance and

results. At the other end of the spectrum, environmentalists warn against global warming and

argue that, irrespective of profit, huge investments are needed to turn the trend.

Companies all over the world of all sizes and across many industries have realized that

traditional ways of measuring business performance do not account for the needs of all

stakeholders. In order to ensure sustainability over the long term, management teams must do


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more than maximize shareholder profits. They must consider the needs of all stakeholders,

including employees, customers, and community members.

Why sustainability?

Sustainability is a long term approach to environmental protection and process

improvements. Sustainable design prevents pollution from the start and calls for systems

thinking, which acknowledges the connections between the economy, the environment and

social responsibility

Sustainability and Business

Businesses have realised to continue working with the same profit margin, they have to cut

down costs and look for newer avenues. Hence integrating sustainability into their process is

a safe bet. Given below are the steps for a business to adapt sustainable measures.


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MEASURE By properly addressing the need to integrate and validate data, companies can

benchmark their key sustainability activities using industry-accepted methodologies and

protocols such as those promulgated by the organizations. It can be as simple as installing

smart energy meters into data centres and integrating that data into resource management

dashboards. Or it can be as sophisticated as evaluating carbon accounting throughout the

supply chain, using guidance from industry organizations. Ultimately, the greatest challenge

is accessing and trusting the data.

REPORT As with financial performance, its essential to fully and formally disclose

sustainability performance to ensure transparency with key stakeholders and compliance with

regulatory agencies and no longer on merely a casual/annual basis. By regularly disclosing

an integrated, consistent source of quality information, companies can bind initiatives to a

common sustainability framework that promotes consistency across all lines of business

from the data center to the water treatment facility. Of course, buyers particularly in B2B

transactions are increasingly savvy. Reporting on metrics alone does not give a clear

enough view into the short-, medium-, and long-term strategies of the organization. Instead,

its essential that companies report on corporate goals and performance relative to targets to

avoid accusations of so-called green-washing.

IMPROVE After identifying and measuring the metrics that have the greatest impact on

sustainability goals, companies can make more informed strategic decisions. Insights into

activity costs provide information on the impact of these strategies on current operating

capital, ROI, or rate-of-return mandates and bottom-line profitability. Applying optimization,

forecasting and data-mining capabilities to analyze scenarios and run simulations can

improve response and successful strategy execution.

FORECAST Finally, a solid foundation of aggregated and well-structured sustainability

data enables the enterprise to manage the resources needed to achieve the desired outcomes

across the organization and within individual departments. Key strategies here include

prioritizing organizational strategies and aligning investments in new product innovation,

program development and talent management. Scorecards and strategy maps driven by the

sustainability goals of the organization also play important roles.


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Companies approach to sustainability

The stages in which the companies are reporting today depend on the approach they have

taken towards sustainability. Publishing a sustainability report depends highly on how the

business is structured. A company with on the first rung is most likely to publish its CSR

activities as achievements in the report where as another company a little higher up will be

showing its effects on the society and environment. The company with the ideal report will

have a 3600

evaluation of its processes and report will be based upon the impact assessment

drawn from a previously designed balance score card.

Companies typically embrace sustainability in three ways, each requiring a greatercommitment than the one before.

Worthy Causes

Many companies engage in philanthropic activities, investing on average about one percent

of pre-tax profits to sponsor a non-profit organization, make charitable donations or

contribute additional money to funds raised by employees for certain causes. Alternatively,

companies may grant employees time to work for charitable foundations or sponsor andencourage their staff to drive in hybrid cars to preserve the environment. The list of

possibilities is endless. What about the results?

Beside the feel-good benefits of giving back to the community, philanthropy is limited in its

ability to strengthen the bottom line. Although this approach will not affect a companys

performance, it may still provide intangible valuefor example, by improving employee

satisfaction or generating positive public relations exposure.

Sustainability as Part of Risk Management

Corporate image has an impact on businessand that management should address it if it

poses a threat to the performance of the business. Companies take risks when they violate the


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rules and needs of the communities and environments in which they operate. Many have

learned this lesson the hard way over the last few decades. If business practices lead to

environmental hazards that upset citizens, they will speak out. Shareholders and other

suppliers of capital, such as banks, want to be associated with a clean business. Government

officials can impose strict rules and regulations, while nongovernmental organizations

(NGOs) can influence consumer perception.

And its not only the behaviour of the business itself that matters. Stakeholders will evaluate

its relationships with suppliers and channel partners, and their actions will shape the brand.

For instance, fashion brands are held responsible for how their contract manufacturers treat

employees and the environment. And retailers must vouch for the safety of products they

place on the shelf.

The answer for companies that approach sustainability from a risk management point-of-view

is to establish clear codes of conduct and transparent operations. In this way, they can

mitigate the most common kinds of business risk:

a) Financial risk: The company should avoid fines or higher interest rates imposed

by banks that view their business as a high-risk association.

b) Operational risk: Prevent safety, health or environmental issues from shutting

down operations.

c) Customer risk: Limit the risk of a negative corporate image alienating current or

potential customers.

d) Strategic risk: Understand what your stakeholders require.

An Integrated Approach

Every business should consider sustainability as part of its risk management strategy. Also,

with the emergence of carbon taxes in various areas of the world, it simply makes sense to

adopt sustainability as a way to save costs. When sustainability becomes integrated into the

business model, it can actually create shareholder value, rather than simply protecting the

company from high-risk exposure. The benefits of this approach range from recruiting better

talent to unlocking new markets. And the key is to focus on social issues that are closely tied


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to the business. Sometimes socially aware companies discover viable new markets by

targeting underserved populations. Banks offering micro credits in Bangladesh have

experienced a 95 percent repayment rate, higher than the industry average. Opening these

types of markets often requires radically different business models with different cost

structures. But this type of CSR agenda can also drive innovation that becomes applicable

and highly profitablehigher in the customer pyramid.

The figure below is a graphical depiction of how integrated approach can work.


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Sustainability Reporting

Environmental and sustainability reporting involves nonfinancial and financial indicators of

an organizations impact on environmental, economic, and social dimensions of their

operations. As stakeholders (e.g., investors, consumers, governments, donors, employees) oforganizations demand more transparency from profit and not-for-profit entities,

environmental and sustainability reporting is a means to address this demand. Public interest

in the environmental and social impacts of corporations began in the 1960s and 1970s.

Protests against the Vietnam War, concern for the environment, and opposition to South

African apartheid were some reasons that investors reacted to more than companies reported

profits. A number of investors actively avoided manufacturers of weapons and sin products

(tobacco, alcohol, and gambling).

The emergence of socially responsible investing (SRI) funds provided investors with

opportunities to invest in companies that had positive impacts on society. Although SRI was

initially thought to be a short-lived fad, it still thrives today. The globalization of corporations

and widely publicized corporate misdeeds (e.g., Exxon Valdez oil spill, Nikes child labour

problems, Enrons accounting fraud) increased public scrutiny of corporate behaviour. Public

pressure for more corporate transparency is greater than ever. In an effort to respond to this

pressure, companies are reporting their environmental, economic, and social impacts.

Sustainability reporting benefits both internal and external users of the information. Internal

users are in a position to better manage the companys resources while external users can

assess the companys sustainable development and long term prospects.

Whose Job Is Sustainability Reporting?

The finance department should play a crucial role in sustainability reporting, although in

many companies this is driven by public relations or investor relations. In many ways,

sustainability reporting is like financial reporting in the sense that both require data collected

by entities per period, data aggregated according to rules, processes and data that may need to

be audited, support for analysis and scenario planning, and ways to associate documents with

particular performance indicators.


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Challenges

Corporate Reporting Challenges

1. The market is generally not looking for more, but better information

2. The deficiency associated with financial statements and elements of corporate reporting in

general is not so much their accuracy but their adequacy

3. Corporate reporting should mirror internal reality

As long as companies do not have a demonstrated business case for sustainability -and

therefore self-interest -, real integration into business is unlikely to happen. Without business

integration, all additional reporting will mainly result in additional information, and its

understand ability and hence value for decision making processes for investors and other

stakeholders will be limited.

For many organizations, sustainability reporting poses a challenge because it has additional

requirements not typically found in most financial analytics and reporting Sustainability

Reporting systems. There are typically many different data sources--such as operational

systems, financial systems, documents, published reportsand many different kinds of

indicators that must be collected and aggregated. The diversity of the relevant structured and

unstructured data further complicates matters.

But there's more to sustainability than just reporting. Sustainability initiatives should be part

of your overall performance management practices. This means:

y Including all stakeholder requirements and sustainability issues in your goal-setting

process

y Driving sustainability initiatives into financial and operating plans

y Monitoring and analyzing sustainability metrics and adjusting goals and initiatives to

achieve short- and long-term goals.


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Balance Scorecard for Sustainability measurement

As the most widely recognized performance management methodology, the balanced

scorecard manages and tracks performance across four perspectives of the business. The

Process Perspective tracks how efficient the company is; the Customer Perspective indicates

how is it perceived by customers; the Financial Perspective manages the bottom line; and the

Growth Perspective makes sure the other perspectives function equally well or even better in

the future. Sustainability indicators can be integrated into a balanced scorecard framework to

help you capture a complete picture of how the business is performing:

Suggestions for including sustainability indicators in the balance scorecard:

1. Traditional balanced scorecards could contain a few indicators aimed at social and

environmental factors, typically in the balanced scorecard process perspective.

2. A stakeholder perspective, such as a social and environmental perspective, could be

added.

3. A sustainability scorecard, specifically and only aimed at a companys sustainability

program, could serve as a special report that derives from the organizations overall

balanced scorecard.

4. Companies could choose to integrate sustainability in all other perspectives of abalanced scorecard. When sustainability is part of the business model itself, it serves

as a catalyst for improving performance in all areas of the business.

Societal Exposure for IT Sector

Direct Stakeholders Indirect Stakeholders

Internal Along the

value chain

Community Societal Internal Along the

value chain

Community Societal


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PERFORMANCE MEASURES

FINANCIAL CUSTOMER PROCESS GROWTH NON-

MARKET

yRevenue Growth

yProductivity

Growth

yAsset Utilization

y Market Share

y Customer

Acquisition

y Customer

retention

y Customer

Satisfaction

y Customer

Profitability

yInnovation

Process

yOperations

Process

yPostsale Service

Process

yFreedom of

Action

yLegitimacy

yLegality

PERFORMANCE INDICATORS

ISSUE INDICATOR

Policies, organisation andmanagement systems

Publicly available missions and values statement,

and social policy statements; social charters,

codes or voluntary initiatives; organisational

structure and responsibilities for oversight and

implementation of social policies; management

systems pertaining to social performance (e.g.

ISO 14001, SA 8000);

management systems for supplier and supply

chain

Stakeholder relationships

Basis for selection, definition and profile of major

stakeholders; approaches to consultation with

stakeholder (e.g. surveys, focus groups); number

of consultations; the use of consultation data;

plans for strengthening stakeholder consultation

Management

performance

Performance pertaining to internal social policies

and standards and voluntary initiatives; major

awards received regarding social performance

and activities; indicators of occupational health

and safety


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Corporate, employees,

community, suppliers and

customers

Ethical standards, bribery/corruption,

transparency, human

rights

Employee performance

Workforce diversity, freedom of association, child

labour, turnover rate, absenteeism, compensation

& benefits; community performance /

involvement, skills transfer, technology transfer,

complaints, community reinvestment,

philanthropy, taxes

Supplier performance

Procurement standards, partnership screens;

customer performance - product labelling, training

in product use

Present state of sustainability reporting: IT Sector

Indian IT sector is the source of a lot of foreign exchange that flows into the country. Besides

finances this sector is also a front runner in adopting best practices from around the world.

Though not all companies have adopted the sustainability as a part of their business process,

they are in various stages of doing so. The good news is that most of them have initiated

efforts towards sustainability reporting. Publishing a report cant be a standalone activity. To

bring about such a report a lot of processes undergo mammoth changes .The cost incurred is

also huge. Though the returns will be visible, its difficult for these companies to present a

business case for sustainability with positive ROI. Some research shows that adoption of

these measures will reduce consumption of raw materials and other lubricating resources.

Metric Best-in-Class Average Laggard

Paper Costs Decreased 11% Decreased 7% Increased 13%

Facilities Costs Decreased 10% Decreased 1% Increased 15%

Energy Costs Decreased 9% Decreased 2% Increased 10%

Waste/Disposal Costs Decreased 8% Remained Same Increased 7%

Packaging Costs Decreased 7% Decreased 1% Increased 1%

Transport/logistics Costs Decreased 5% Decreased 2% Increased 12%


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The above table shows the results of a study conducted by Aberdeen Group which shows that

the companies which have the best in class sustainability measures had successfully reduced

their consumption.

The IT companies reporting efforts can be mapped into 3 stages:

1. Initiators: These companies have started reporting their CSR efforts and

sustainable measures in their annual reports. The annual reports other than talking

about the financial gains have separate sections which deal with CSR. They deal

with what interventions they are carrying out and for whom but miss out on

absolute figures. The report gives the readers a feel good feeling about the

company and keeps the stakeholders happy.

2. Crusaders: These companies have taken up the tasks very seriously and have

started publishing separate CSR reports which are sometime called Corporate

Responsibility Report. These reports go into details of CSR and clearly present the

figures depicting the impact caused by their CSR activities. These companies are

now progressing towards establishing a defined network to capture data for the

sustainability report.

3. Champions: Companies like TCS, Accenture etc. who have successfully published

a sustainability report which not only speaks about what they have achieved butalso deals with the improvement areas. Establishment of sustainability measures

throughout their value chain has helped reach out to their stakeholders as well as

investors. Global recognition has helped them to open up new markets and better

business opportunities.

Some of the key highlights that TCS shows as a benefit of sustainability measures this

year are:

y Achieved 15.6% decrease in consumption of electricity in terms of kilowatts

per person per month

y Achieved 42.5% decrease in paper consumption

y Ensured 100% environment friendly disposal of e-waste

y The Computer-based Functional Literacy (CBFL) program has served over

1,20,000 learners in pilot studies all over India


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y TCS workforce is one of the most diverse amongst Indian IT companies, with

an international workforce comprising 67 different nationalities. Women make

up 30% of the workforce.

y TCS enjoys the lowest attrition rates in the IT Services industry

(http://www.tcs.com/news_events/press_releases/Pages/TCS-rated-Level-A-plus-

Sustainability-Report-GRI.aspx)


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GRI SECTOR SUPPLEMENT FOR IT SECTOR

Why develop Sector Supplements?

y Sectors differ with respect to material and labour requirementsy Laws of doing business also differs

y Effects caused by activities of a particular sector vary widely.

y Sustainability measurements also vary.

Sector Supplement Development Process Overview

When GRI works to updating existing documents or adds new documents to theReporting Framework this is the process it follows:

GRI assembles a small Working Group of about 20 experts with regional diversitythat represents different stakeholder groups, including business, civil

society, labour, investors and others as relevant. The participants volunteer theirexpertise to develop the particular document.

The Working Group process usually takes about one to two years to produce a draftversion of the document.

This draft is then released into the public domain for a minimum of 90 days, and allinterested parties are invited to submit their comments and suggestions about the

document.

A wider Practitioners Network, including experts, practitioners and otherstakeholders, can be formed. The Practitioners Network contributes to the Working

Group discussions and is kept informed as the development continues. The Working Group submits the document to GRIs Technical Advisory Committee

(TAC) who reviews the content and the development process to make sure it complieswith GRIs due process standards and quality expectations. These require:

1. High technical quality;2. Accuracy; and3. Development according to an inclusive multi-

stakeholder consensus-seeking process.

Based on results, the Technical Advisory Committee will present its

recommendations to the Board ofDirectors. The recommendations will either be that

the document must undergo an update or further development or that it can be

released in its final version. If the document under development is the Guidelines

themselves, the Stakeholder Council also reviews proposed amendments and issues a

concur/non-concur opinion to the Board.


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Each sector supplement first drafts widely what are its working areas.

Analysis for IT Sector:

y Similar division can be applicable to IT sector.

y Internal operations : a) back end technological requirements b) Infrastructure c)

Power requirements b) Travel

y Providing areas : a) Top notch suave customers to rural kiosks

y Technology Applications : a) Side effects of e waste disposal ( environmental) b)

Social Impacts ;-job creation opportunities for local areas ( SEZ implications)

y Areas being touched by the IT sector:

1. Customer Interaction services including call centres,

2. Back office operations/revenue accounting, data entry, data conversion including

finance and accounting and HR services,

3. Transcription/Translation services

4. Back office operations

5. Call Centers

6. Content Development / Animation

7. Data Processing

8. Engineering and Design

9. Geographic Information System Services

10. Human Resource Services

Case 1:

Telecom sector draft divides the areas widely into:

1. Internal Operations: specific practices related to managing the

organizations facilities and infrastructure

2. Providing Areas : Approaches to ensure equitable access to

telecommunication products and services

3. Technology Applications: Indicators to cover the impacts of

telecommunication products and services.


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11. Insurance Claim Processing

12. Legal Databases

13. Medical Transcription

14. Payroll

15. Remote Maintenance

16. Revenue Accounting

17. Support Centres

18. Web site services

Identifying the stakeholders:

1. Governments of India: Framework will borrow from the IT sector policies and how

are they being implemented. Regular reporting falls in line with the govt.'s voluntary

disclosure guidelines and so if more companies start reporting the image of the

industry as a whole improves.

2. IT Companies: They are the one who will put the guidelines to use. They will use this

framework to structure their activities, increase their sphere of influence and set in

place targets to measure ROI.

3. Local Self Gov (Municipalities or Panchayat): Governing bodies where the company

is located or where they are focusing the CSR activities. They can use the reports both

as a means of connecting with the companies as well as of monitoring their work and

can act as independent auditors.

4. IT Sector Partners: How they align to the reporting changes and what is expected out

of them??

5. Employees: How is the role that an employee will play in ensuring the company meet

the compliances?

6. Customers: How will the reporting standards affect the customer's perception about

the company if it starts using the guidelines? From the customers viewpoint, if they

are informed about reporting structures, they will also begin to take that into account

while choosing vendors to work with.

7. International governments: The EU for example plans to put in place regulations this

year onwards which will insist upon all companies (product or service) operating in

the EU to disclose their carbon footprint.


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Critical IT Sector Functions

y Produce and provide IT products and services

y Incident management capabilities

y Domain name resolution services

y Identity management and associated trust support services

y Internet based content, information, and communication services.

y Internet routing , access and connection services

Various Process which can come under reporting guidelines.

Structure of Sector Supplements:

Reporting Guidelines & Sector Services Sector Supplement

Product and Service Impact Indicator Protocols

Economic Indicator Protocols

Environmental Indicator Protocols


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Labour Indicator Protocols

Human Rights Indicator Protocols

Society Indicator Protocols

Product Responsibility Indicator Protocols

Each document deals with different protocols that the company should report on. There

are Indicator protocols defined and then described.

The following are few of the protiocols which can be burrowed from Financial Services

Protocols.

Sector specific disclosure on Management Approach

FS1Policies with specific environmental and social components applied to business lines.

This indicator is intended to provide an overview the reporting organisationsintention to consider environmental and delivery of delivery of core products and

services. If the company has a policy for environmental and social activities they must

describe the business line. That must include the following factors:

y Climate change

y Human rights

y Resettlement of communities

y Forestry

y Investment in countries or regions that are controversial

y Human rights

y Forestry

y Investment in countries or regions that are controversial

FS2

Procedures for assessing and screening environmental and social risks in businesslines. This will be used by companies which do not have a process in place.

FS3

Processes for monitoring clients implementation of and compliance withenvironmental and social requirements included in agreements or transactions

FS4

Process (es) for improving staff competency to implement the environmental andsocial policies and procedures as applied to business lines.

FS5

Interactions with clients/investees/business partners regarding environmental and

social risks and opportunities.

FS6


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Percentage of the portfolio for business lines by specific region, size (e.g.micro/SME/large) and by sector.

FS7

Monetary value of products and services designed to deliver a specific social benefit

for each business line broken down by purpose.

FS8

Monetary value of products and services designed to deliver a specific environmental

benefit for each business line broken down by purpose.

Auditing:

FS9

Coverage and frequency of audits to implementation of environmental and policies

and risk assessment procedures

FS10

Percentage and number of companies held in the institutions portfolio with which thereporting organisation has interacted on environmental or social issues

FS11

Percentage of assets subject to positive and negative environmental or social

FS12

Voting polic(ies) applied to environmental or social issues for shares over which the

reporting organisation holds the right to vote shares or advises on voting

Economic Indicator Protocols

EC1

Direct economic value generated and distributed, including revenues, operating costs,

employee compensation, donations and other community investments, retained

earnings, and payments to capital providers and governments.

EC2

Financial implications and other risks and opportunities for the organizations

activities due to climate change.

EC3

Coverage of the organizations defined benefit plan obligations.

EC4

Significant financial assistance received from government


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EC5

Range of ratios of standard entry level wage compared to local minimum wage at

significant locations of operation.

EC6

Policy, practices, and proportion of spending on locally-based suppliers at significant

locations of operation.

EC7

Procedures for local hiring and proportion of senior management hired from the local

community at significant locations of operation.

Environmental Indicator Protocols

EN1

Materials used by weight or volume.

EN2

Percentage of materials used that are recycled protected areas input materials.

EN3

Direct energy consumption by primary energy source.

EN4

Indirect energy consumption by primary source.

EN5

Energy saved due to conservation and efficiency improvements.

EN6

Initiatives to provide energy-efficient

EN7

Initiatives to reduce indirect energy consumption and reductions achieved.

EN8

Total water withdrawal by source.

EN9

Water sources significantly affected by

EN10


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Percentage and total volume of water recycled

EN11

Location and size of land owned, leased, managed in, or adjacent to, protected areas

and areas of high biodiversity value outside

EN12

Description of significant impacts of activities, products, and services on biodiversity

in protected areas and areas of high biodiversity

EN13

Habitats protected or restored.

EN14

Strategies, current actions, and future plans for managing impacts on biodiversity

EN15

Number of IUCN Red List species and national or renewable energy-based product

conservation list species with habitats in areas and services, and reductions in energy

affected by operations, by level of extinction requirements as a result of these

initiatives.

EN16

Total direct and indirect greenhouse gas Emissions by weight.

EN17

Other relevant indirect greenhouse gas


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REFERENCES

1. http://www.globalreporting.org

2. Trends in Sustainability Reporting by the Fortune Global 250: University of

Amsterdam, Amsterdam Graduate Business School, Netherlands.

3. www.oracle.com/solutions/business_intellegence

4. Sustainability Accounting and Reporting By Stefan Schaltgger, Martin D.

Bennett, Roger Burritt

Documents

Sustainability Reporting for IT sector