SimpliESG

Monthly Newsletter on ESG March 2024 Edition | 8th Issue | Spoctech Green Ventures Pvt. Ltd

Content

1.Editorial

2.Transforming ESG in Food Production

3.Monthly Tracker of Key Environment Data

4.Monthly EV and Renewable Energy Update in India

5.Industry Expert Talk

6.ESG News Update

• Global ESG News Update
• National ESG News Update

7. Research on ESG performance of Oil Industry

8. ESG Report Card of a large FMCG Company in India

Navigating the Complexities of ESG: A Roadmap for Simplification

Dear SimpliESG Community,

In the ever-evolving landscape of business and investment, Environmental, Social, and Governance (ESG) considerations have emerged as critical drivers of long-term value creation. As we embark on this journey toward sustainability and responsible business practices, it's essential to acknowledge the complexities and challenges that come with navigating the ESG terrain. At SimpliESG, we understand that for many organizations and investors, the sheer volume of information, frameworks, and standards can be overwhelming. From deciphering ESG reporting guidelines to identifying material issues and aligning ESG goals with business strategy, the path forward may seem daunting.

However, amidst these complexities lies an opportunity for simplification and clarity. Our mission at SimpliESG is to empower businesses, investors and other ESG ecosystem players with insights, and resources they may need to navigate the ESG landscape with confidence and ease. First and foremost, we believe in the power of education. By demystifying ESG concepts and providing accessible learning materials, we enable individuals at all levels to understand the significance of ESG and its implications for their organizations and portfolios. Furthermore, we recognize the importance of practical guidance and best practices. Through our platform, we offer actionable strategies and case studies that showcase real-world examples of successful ESG integration, helping our community members turn theory into practice.

Central to our approach is the notion of collaboration. We foster an inclusive community where professionals from diverse backgrounds can come together to share insights, exchange ideas, and collectively address common challenges. By leveraging the collective wisdom of our community, we accelerate progress toward shared ESG goals. As we look ahead, we are committed to staying at the forefront of ESG innovation and thought leadership. Through ongoing research and analysis, we aim to provide our community with timely updates on emerging trends, regulatory developments, and market opportunities, ensuring that they remain ahead of the curve in their ESG journey. In conclusion, while the path to ESG excellence may be complex, it is not overwhelming. With the right resources, support, and mindset, we can simplify the journey and unlock the full potential of ESG for the benefit of society and the planet. Together, let's embark on this journey toward a more sustainable and equitable future.

Sincerely,

Editorial Team, SimpliESG?

Transforming ESG in Food Production?

As global awareness of Environmental, Social, and Governance (ESG) principles continues to grow, industries are under increasing pressure to adopt sustainable practices. In the realm of agriculture, there's a notable shift towards regenerative farming methods. This article explores the burgeoning trend of regenerative agriculture and its transformative impact on ESG within the food production sector.

Key Components of the Regenerative agriculture & Food Production in ESG:

Regenerative Agriculture: Regenerative agriculture goes beyond sustainability, aiming to restore ecosystems, improve soil health, and enhance biodiversity. By integrating holistic practices such as cover cropping, crop rotation, and minimal tillage, regenerative farming not only mitigates environmental degradation but also addresses social and economic aspects of sustainability. This article delves into the multifaceted benefits of regenerative agriculture and its alignment with ESG goals.

Environmental Impact: Traditional agricultural practices often contribute to soil erosion, water pollution, and greenhouse gas emissions. In contrast, regenerative agriculture promotes soil regeneration, carbon sequestration, and water conservation. Through techniques like agroforestry and rotational grazing, farmers can restore degraded landscapes, mitigate climate change, and safeguard natural resources.

Social Dimensions: Regenerative agriculture fosters community resilience and equitable food systems. By prioritizing local markets, fair labor practices, and farmer autonomy, it strengthens social ties and supports rural economies. Moreover, initiatives like community-supported agriculture (CSA) and farm-to-table partnerships promote food security and empower consumers to make ethically informed choices.

Economic Imperative: While transitioning to regenerative practices may require initial investments, the long-term benefits are substantial. Improved soil fertility leads to higher crop yields and reduced input costs, enhancing farm profitability and resilience to climate variability. Furthermore, regenerative farming can create new revenue streams through ecosystem services like carbon credits and eco-tourism.

Innovation & technology Integration: In addition to traditional farming methods, the integration of innovative technologies such as precision agriculture, remote sensing, and blockchain can further enhance the efficacy of regenerative practices. These technologies enable farmers to monitor soil health, optimize resource use, and trace supply chains, fostering transparency and accountability. By harnessing the power of innovation, regenerative agriculture can continue to evolve, driving positive ESG outcomes while meeting the demands of a rapidly changing world.

Challenges and Opportunities:

Despite its promise, widespread adoption of regenerative agriculture faces challenges such as knowledge gaps, financial barriers, and market access limitations. Governments, businesses, and civil society must collaborate to overcome these obstacles and incentivize sustainable land management practices. By leveraging innovative financing mechanisms, policy incentives, and consumer demand, the transition to regenerative agriculture can accelerate.

Long-Term Value Creation: Regenerative agriculture represents a paradigm shift in how we approach food production, embodying the principles of ESG in action. By embracing regenerative practices, farmers, businesses, and consumers can collectively contribute to a more resilient, equitable, and sustainable food system. As we navigate the complexities of the 21st century, regenerative agriculture offers a compelling pathway towards a brighter future for people and the planet.

Stakeholder Engagement: Environmental issues are increasingly important to stakeholders, including customers, employees, communities, and regulators. Regenerative agriculture is facing financial barriers such as upfront costs for infrastructure upgrades and equipment that can deter farmers from adopting regenerative methods. Incorporating environmental considerations into investment decisions, investors can demonstrate their commitment to sustainability and align their interests with those of key stakeholders.

?Monthly Tracking of Key National Environment Data

Climate/ Environment has become the most important aspect of ESG in the current scenario due to high risk of climate change and therefore it is important to understand the factors which are responsible for carbon emission.

Coal Production

?Climate/ Environment has become the most important aspect of ESG in the current scenario due to high risk of climate change and therefore it is important to understand the factors which are responsible for carbon emission and one of those is coal burning. The table below shows coal production during the month of March.

The graph presents India’s coal production figures for the month of March, there has been a consistent upward trend in production, with March 2024 showing a significant increase of 8% from the previous year, marking a continuation of the growth trend. Comparing with 2022, the growth is even more pronounced at 21%, indicating substantial progress in coal production. This steady expansion reflects ongoing expansion of India's energy sector to meet the growing demands of its economy.

Carbon Dioxide Concentration in Atmosphere

Carbon Dioxide is an important gas in the environment and largely responsible for Green House Gas emission on the planet. Therefore, it is important to understand the concentration of CO? in the atmosphere.

CO? concentration in March 2024 425.38 ppm

The graph depicting the average monthly CO? concentration from March 2000 to March 2024 reveals a notable upward trend, signaling the persistent challenge of climate change. Throughout this timeframe, CO? levels have steadily increased, reaching a notable concentration of 425.38ppm by March 2024. Between 2000 and 2024, there has been a substantial 14.7% rise in CO? levels. This trend becomes more apparent when analyzing increments over five-year and ten-year periods. Over five-year intervals, CO? concentration has consistently climbed, indicating a sustained 2-3% increase annually. This suggests a steady yet accelerating accumulation of CO? in the atmosphere. Meanwhile, the rate of increase remains relatively stable over ten-year spans, averaging around 5-6%. These statistics highlight the urgent need for concerted actions to reduce greenhouse gas emissions and address climate change. As we move forward, it becomes increasingly critical to prioritize sustainable practices and implement effective policies to curb CO? emissions, safeguarding the well-being of our planet for future generations.

Global Temperature

Increasing concentration of atmospheric CO? is causing temperature rise across the globe. It is an alarming situation and point of discussion globally due to its ill effects. Trend of the decades shows that March 2024 was warmer globally than any previous March in the data record. March 2024 is 0.73℃ above the 1991- 2020 average for March and 0.10 ℃ above the previous high set in the March 2016. As per the European Union’s climate agency, the world experienced the warmest March ever due to a combined effect of El Nino and human-caused climate change, making it the 10th consecutive month since June last year to set a new temperature record.

Average Global Temperature in March 2024 1.67℃

The graph depicting the average global temperatures for March from 2000 to 2024 illustrates a worrisome pattern of increasing temperatures, reflecting the larger trend of climate change. Throughout this timeframe, there has been a notable rise in temperatures, reaching 1.67°C in March 2024. From 2000 to 2024, there has been a striking 101.20% rise in March global temperatures. The rapid increase becomes even more evident when analyzing the temperature increments over shorter periods. As per the Climate Copernicus EU, global sea surface temperature averaged for March over 60°S–60°N was 21.07°C, the highest monthly value on record, marginally above the 21.06°C recorded for February. March 2024 continues the sequence of climate records toppling in both air temperature and ocean surface temperatures, with the 10th consecutive record-breaking month. The current global average temperature has reached its highest recorded level, with the past 12 months showing an increase of 1.58 degrees Celsius above pre-industrial levels. Halting further warming necessitates swift reductions in greenhouse gas emissions.

Monthly Electric Vehicle (EV) Sales Overview in India

The graph on monthly electric vehicle (EV) sales for March 2023 and 2024 shows a picture of remarkable growth and increasing consumer interest in sustainable transportation options. Across all vehicle categories – 2-wheelers (2-W), 3-wheelers (3- W), and 4-wheelers (4-W) – sales experienced substantial upticks from the previous year.

There has been a notable surge in EV adoption, with the total number of EVs sold increasing by an impressive 50%. This growth trajectory underscores a significant shift towards cleaner and more environmentally friendly modes of transportation. Notably, 2- wheelers experienced the highest percentage increase in sales at 61%, suggesting a growing interest in electric scooters and motorcycles. This trend may be attributed to factors such as their affordability, suitability for urban commuting, and increasing awareness of environmental concerns. Meanwhile, 3-wheelers and 4-wheelers also saw substantial growth rates of 34% and 25%, respectively, indicating a broader acceptance of EVs across different vehicle categories. Overall, the data reflects a promising trajectory for the EV market, driven by advancements in technology, supportive policies, and growing consumer demand for sustainable mobility solutions.

Renewable Energy Installation Updates in India

The graph on Renewable Energy Sources (RES) installations for as on March 2024 shows diverse renewable energy sources, including Small Hydro Projects (SHP), Biomass Power (BP), as well as Solar and Wind Energy. Where Solar energy installed capacity is at highest end with 43% and Wind power and large Hydro is almost equal at around 24% each, whereas small hydro power and bio power together is 9% of total installed capacity.

Across India, installed capacity of Renewable Power as on 31.03.2024 is 190572.7 MW. These installations encompass diverse renewable energy sources. Solar Power installed capacity increased approx 30 times from 2600 MW to 70100 MW since 2014 and similarly Wind capacity increased 2 times from 21000 MW to 42600 MW since 2014. This highlights the country's dedication to increasing its renewable energy capabilities, in line with sustainability objectives and promoting energy stability. As India persists in prioritizing investments in renewable energy, these endeavors not only aid in addressing climate change but also drive economic advancement and employment opportunities. Looking ahead, consistent endeavors in crafting policies, innovating technologies, and enhancing infrastructure will be vital in propelling the shift towards a more environmentally friendly energy environment.

EXPERT TALK

Guest Expert-Mr. Prashant Kokil (Former CSO, Mumbai Ops.) and Former Head, Corporate Environment & Climate Change The Tata Power Company Ltd.

Host-Mr. Vikash Sharda (Director, Greenifit) along with Mohd. Hasan Khan and Priti Sharma

Q1. How do you see ESG evolving in India? And what do you think is the role of the company with respect to ESG being integrated in their core values and the core business practices?

As someone with extensive experience at the Tata Group, I can emphasize the crucial link between longevity in business and sustainability. It’s imperative for businesses to not only focus on financial goals but also prioritize Environmental, Social, and Governance (ESG) performance, which has become increasingly vital. While ESG principles were practiced before formal recognition, integrating them into business operations has become imperative. Prioritizing ESG doesn’t just incur costs; it can also enhance business prospects and longevity. We’ve observed a shift from mere compliance with regulatory requirements to proactive ESG initiatives, driven by the recognition of associated benefits such as market share and growth opportunities. Ultimately, adopting sustainable thinking as a fundamental business policy is essential for long-term success.

Q2. How do the organizations identify and prioritize those ESG issues which are relevant or material, because the materiality aspect is also important when it comes to the ESG performance of the company?

It is important to identify and prioritize ESG (Environmental, Social, and Governance) issues based on materiality and risk assessment. Materiality and risk are crucial drivers in determining priorities and actions related to ESG performance. Balancing stakeholder demands is essential in materiality assessment, ensuring a strategic approach to addressing issues such as quality and cost. Having a balanced stand on materiality, considering both internal perspectives and external stakeholder expectations, such as carbon emissions are important. It is necessary to develop a definitive plan for execution, integrating both materiality and risk mitigation considerations to formulate an effective ESG action plan.

03. As a company, what is your systems in place or the process in place to track and measure the ESG efforts or performances?

Evolution of regulatory requirements in sustainability is old, noting that voluntary participation began in 2003 before formal standards like GRI were established. It is also very important to integrate transparency and data collection as the starting point for sustainable practices. Beyond mere data reporting, there is a need for setting self-driven targets to drive meaningful ESG performance. The necessity of interventions aimed at achieving specific improvements, such as increasing renewable energy usage is highly required. It is important to note that commitment and resource allocation is required from management to initiate and sustain this process, noting that once implemented, sustainable practices can lead to cost savings and business enhancements over time.

4. How does your company balance long-term ESG goals, such as achieving net zero emissions by certain year, with annual key performance indicators to ensure progress on a year-to-year basis?

In setting sustainability goals, it is important to have self-set goals, termed as “smart goals”& stretch, manageable, yet challenging. Rather than adhering to specific standards, it is important to set targets that require strategic thinking and effort. There is a process where targets, such as reducing carbon emissions by a certain percentage annually, are established internally, prompting critical reflection on necessary actions. While acknowledging that reaching these ambitious targets may not always be feasible, it is important to evaluate efforts alongside results. There is always the need for continuous improvement and seeking external support if necessary. Note that goal setting should be dynamic, with timelines extending beyond a single year, aligning with the company’s long-term vision for sustainability and profitability.

Q5. So, when it comes to the collaboration in performing effectively in the ESG space, how do you see the collaborative approach and companies working in that space?

Collaboration and a definitive approach in sustainability initiatives is very important, acknowledging that it’s not a one-person endeavor. There is a process of defining focus areas and seeking both initiatives and partners to execute them effectively. Choosing the right partners who align with the organization’s goals is crucial. Clear goals and desired results are essential for tracking performance through lead and lag indicators. There is also the need for setting exit points to ensure sustainability initiatives remain effective and avoid perpetuating charity. Distinguishing between CSR and ESG can be confusing for many. While CSR involves actions benefiting society, the nature of these actions is at the discretion of the organization. However, the key lies in the impact generated. Simply fulfilling legal requirements isn’t sufficient, positive outcomes are essential. Results are what matters, and they are captured under ESG, not CSR.

Q.6 What is your opinion on new emerging trends in ESG? What are the new things coming in, which businesses need to be tracking?

Consideration of international influence in business operations, whether as a risk, opportunity, or material impact is crucial and it is necessary to integrate this aspect into strategy and policy. Many top companies streamline their reporting by preparing a single sustainability report that aligns with various reporting models such as GRI and CDP. Initiatives like BRSR are commendable for standardizing reporting requirements, facilitating benchmarking and peer comparison. While acknowledging the need for potential future enhancements, the current flexibility of BRSR is a good starting point, as it doesn’t prescribe specific actions or targets.

Q7. How does your company deal with your value chain partners? Because they are also an important part of ESG. Do you also ask them to follow the same BRSR format or you ask them to submit some information with respect to ESG performance or something else?

It is important to consider the affordability of initiatives for vendors or value chain partners before implementation. It is needed to communicate the benefits of these initiatives to ensure buy-in. As vendors or value chain partners can be of different sizes, the affordability of different initiatives has to be taken into account before forcing something down their throat. And you must make them understand that this is beneficial to them as well as you. Ultimately, it's about fostering understanding and collaboration within the value chain.

Q8. In the entire ESG euphoria, when people are talking about ESG, the large focus continues to be on the environmental aspect while the social and the governance aspects are also equally important. So, when it comes to really seeing the social aspect of the ESG performance, how do you see that aspect in your company.

It is great to see that Tata Group’s longstanding commitment to employee growth and well-being, specifically intangible benefits such as freedom and opportunities for self-development is what it makes Tata group standout. Despite potential salary disparities compared to peers, the overall package is perceived as more valuable due to these factors. This approach reduces employee turnover, yielding long-term benefits. Generally, an initial skepticism is observed towards efforts such as training and sensitization but ultimately it benefits both employees and operations. Overcoming initial resistance leads to recognition of the value and sustainability of such initiatives.

Q9. Considering the integration of ESG reporting into daily business operations, how do you propose establishing departmental responsibilities for aspects like water and waste management, as well as overall ESG performance tracking and reporting? Furthermore, how can smaller companies, particularly MSMEs, overcome challenges in implementing such policies and procedures to ensure meaningful ESG practices within their organizations?

In the realm of ESG consultancy, the importance of choosing experienced professionals over transient solutions is more beneficial. It is wiser to choose consultants who provide guidance and empower internal teams to take ownership of ESG initiatives, rather than perpetuating reliance on external services. Though initial costs may be higher, this approach avoids ongoing consultancy fees and fosters sustainable practices within organizations. Investing in quality consultancy proves worthwhile as it enhances your importance and performance, particularly in the context of upstream evaluation by stakeholders. By engaging in robust consultancy, companies can secure top rankings as preferred service or material providers. It is observed firsthand, having provided consultancy to smaller companies supplying items to automotive giants like Volvo and Volkswagen. Compliance with stringent requirements not only facilitates registration but also attracts orders from international markets. Importance of end-to-end carbon accounting to accurately determine the carbon footprint of products or services is becoming crucial. This data is critical for parent companies incorporating supplier's emissions into their overall calculations, making it a necessary practice.

Q10. So, in your company, what are the other mitigation measures you are taking to reduce carbon emission?

In our regulated sector, costs are passed through to customers, with profits determined by a fixed percentage. However, only essentials approved by regulators can be passed on, hindering implementation of research initiatives due to high costs. Despite progress in research, commercial execution is limited by high costs and fixed selling prices, particularly in the power sector, impeding efforts to address emissions despite its high intensity.

Q11. How do you perceive the global concern regarding carbon emissions and climate change, particularly in countries like India, where the Prime Minister has expressed commitment to achieve carbon neutrality by 2070 and outlined measures like the ‘Panchamrit’ initiative? Additionally, considering India’s published low-carbon development strategy, what is your perspective on the effectiveness of the country’s approach towards reducing carbon emissions?

We are swiftly moving towards addressing carbon emissions, which have tangible impacts reflecting climate change. Rather than dwelling on past emissions, the Prime Minister emphasizes the necessity of reduction efforts. Initiatives like renewable energy adoption not only lower costs but also enhance energy security by reducing dependence on oil imports. Regarding electric vehicles (EVs), while some criticize them, they offer potential emission control advantages compared to internal combustion engine vehicles. This shift in perspective towards comparing similar entities is a new paradigm in India’s approach to climate action.

Q12. Yeah, correct. The world is changing very fast and the kind of challenges which we are facing, probably we have not faced in the past. Therefore, the measures and the solution also will be very different from probably what we have not seen in the past. What is your view on this?

We are committed to achieving tangible results while considering social impacts through initiatives like the just transition action. This involves studying old power generation units for repurposing, supported by national and international collaboration, for example, one of the oldest power generation units in UP was studied for repurposing, ensuring the best use of resources supported by the State Electricity Board, Government of UP, and the Asian Development Bank. These efforts are focused on implementation rather than mere showcasing, with potential for replication across India, indicating promising prospects for the ESG sector.

GLOBAL ESG NEWS UPDATE

Rethinking Renewable Profitability: Challenges and Solutions

-Financial Times

In a thought-provoking new book, British academic Brett Christophers questions the viability of renewable energy within a capitalist framework, challenging the assumption that low-cost renewables necessarily translate to robust profits. Christophers argues that the intermittent nature of wind and solar power, coupled with market liberalization, has led to volatile and uncertain returns, stifling private investment in the sector. Despite state efforts to spur investment, Christophers suggests that public ownership may offer a more stable platform for renewable expansion, especially in the face of economic constraints in both developed and developing countries. While renewables continue to play a crucial role in climate action, Christophers' analysis urges a reevaluation of profit expectations and a more nuanced approach to sustainable energy transition.

Pioneering Sustainability in Food Packaging: ProAmpac and Sammi's Collaboration

-Financial Post

ProAmpac, a leader in flexible packaging, has joined forces with Sammi to introduce a revolutionary fiber-based modified atmosphere sandwich pack (MAP), heralding a significant advancement in sustainability within the food-to-go market. Sammi's commitment to sustainability aligns with its adoption of innovative packaging solutions, prioritizing reduced environmental impact and extended shelf-life. Leveraging ProAmpac's fiber-based MAP RAP Sandwich Wedge, designed for sandwiches and wraps, this collaboration offers a game-changing solution that combines modified atmosphere packaging with predominantly fiber materials. With a focus on freshness, visibility, and sustainability, this partnership underscores the industry's dedication to meeting evolving consumer demands for eco-friendly packaging options.

Brazil and France Launch €1 Billion Investment Program to Protect Amazon Rainforest

-Reuter

Brazil and France have initiated a significant investment program aimed at safeguarding the Brazilian and Guyanese Amazon rainforests, with a commitment of 1 billion euros in private and public funds over the next four years. French President Emmanuel Macron, during his visit to Brazil, joined forces with President Luiz Inacio Lula da Silva to promote an international roadmap for tropical forest protection, emphasizing the goal of halting deforestation in the Amazon by 2030. The collaboration also includes plans for developing innovative financial instruments and market mechanisms to support conservation efforts. Despite past disagreements, the two countries are now focused on reinvigorating their bilateral relationship and strategic partnership to address environmental challenges in the region.

EU Securities Watchdog Proposes Rules to Standardize Green Bond Reviewers -Reuters

The European Union's securities regulator, ESMA, has put forward proposals to regulate external reviewers of green bonds, aiming to ensure competition and lower costs for issuers. Green bonds are expected to play a crucial role in funding the EU's transition to a low carbon economy by 2050. ESMA's rules aim to standardize registration requirements for reviewers and prevent conflicts of interest, aligning with the EU's voluntary rules for green bond issuance approved last October. The proposals, subject to public consultation, are intended to be adopted in December to coincide with the implementation of new green bond regulations.

IBM Increases Investment in Sustainability Accelerator for City Resiliency

-IBM Newsroom

IBM has announced a new request for proposals (RFP) for its Sustainability Accelerator program, aligning with UN Sustainable Development Goal 11 to advance city resiliency through technology-driven projects. The company will increase its investment in the program by 50%, committing up to $45 million over the next five years in cash and in-kind donations. The Sustainability Accelerator leverages IBM technology, including AI and data platforms, to support vulnerable populations facing environmental threats. This year, IBM is partnering with EY to enhance the program's impact and participant experience. Nonprofit and government initiatives focused on city resiliency and urban climate adaptation can apply to the RFP until April 30, 2024.

Biden-Harris Administration Unveils Historic $6 Billion Investment to Decarbonize America’s Industrial Sector

-Reuters

President Biden's $20 billion investment in industrial decarbonization, supported by the Bipartisan Infrastructure Law, aims to revitalize manufacturing, create jobs, and reduce greenhouse gas emissions. Led by the U.S. Department of Energy, the initiative targets key industries such as aluminum, cement, chemicals, iron, and steel, with the goal of cutting over 14 million metric tons of CO? annually. These projects prioritize community engagement, especially in disadvantaged areas, aligning with President Biden's Justice40 Initiative. Each project will develop a Community Benefits Plan, representing a significant step towards an inclusive clean energy future.

DOMESTIC ESG NEWS UPDATE

March 2024 Marks Record High Global Temperatures

-Indian Express

The Copernicus Climate Change Service (C3S) reported that March 2024 has become the warmest March on record globally, with temperatures reaching 0.73 degrees Celsius above the 1991-2020 average and surpassing the previous high set in March 2016. This marks the 10th consecutive month to set a new temperature record since June 2023. The average temperature of 14.14 degrees Celsius in March was 1.68 degrees Celsius higher than the month's average for 1850-1900, indicating a significant increase primarily attributed to a combination of El Nino and human-caused climate change. The report underscores the urgent need for rapid reductions in greenhouse gas emissions to mitigate the impacts of climate change, including extreme weather events like droughts, wildfires, and floods, which have become more frequent and severe globally.

Adani Enterprises Ventures into Metal Industry with Sustainable Copper Refinery

-The Economic Times

Adani Enterprises' subsidiary, Kutch Copper, has initiated operations for the first unit of its greenfield copper refinery project in Mundra, marking the company's foray into the metal industry. With a planned investment of $1.2 billion, the project aims to establish a copper smelter with a capacity of 0.5 MTPA in the first phase, eventually reaching 1 MTPA over two phases. Upon completion, Kutch Copper is set to become the world's largest single-location custom smelter, prioritizing ESG performance standards and leveraging advanced technology and digitalization. The project is expected to create 2,000 direct and 5,000 indirect employment opportunities, catering to the rising demand for copper driven by renewable energy, electric vehicles, and infrastructure development. Gautam Adani, Chairman of Adani Group, emphasized the company's commitment to India's sustainable and self-reliant future through this ambitious project, aligning with national goals of carbon neutrality by 2070.

Navigating the ESG Landscape: Transforming Transportation and Logistics

-Financial Express

As businesses worldwide increasingly integrate Environmental, Social, and Governance (ESG) principles into their strategies, the transportation and logistics (T&L) sector faces a pivotal moment in addressing its significant contribution to greenhouse gas emissions. With the T&L sector set to play a crucial role in India's journey towards a USD 5 trillion GDP, initiatives like TCI's collaboration with IIM Bangalore to establish the TCI-IIMB Supply Chain Sustainability lab underscore the industry's commitment to sustainability. This collaboration aims to empower the ecosystem with research, tools, and solutions to foster sustainable logistics practices, aligning with broader efforts to balance financial success with environmental stewardship and social responsibility.

Key focus areas include fleet modernization, renewable energy adoption, sustainable supply chains, technological innovation, and employee education, collectively promoting social well-being and governance standards while setting industry benchmarks. As Vineet Agarwal, MD of TCI – Transport Corporation of India, emphasizes, this shift towards ESG integration signifies a deeper purpose beyond traditional business goals, urging organizations to take responsibility towards environmental and social welfare for future generations.

Learning from Start-up Success: Transforming Financial Reporting

-The Economic Times

Ajay Bhushan Pandey, Chairman of the National Financial Reporting Authority (NFRA), emphasizes the need for the financial reporting community to draw inspiration from India's thriving start-up ecosystem, ranking third globally in unicorn creation. Pandey advocates for similar innovation and growth within the auditing community, aiming to establish home-grown audit firms to rival the dominance of the Big Four. NFRA intends to collaborate with the Ministry of Corporate Affairs to facilitate this transition, alongside addressing issues of ESG and non-financial reporting. The conference, attended by international delegates and auditors, focused on leveraging technology, artificial intelligence, and sustainability to enhance financial reporting practices, fostering transparency and investor confidence in the Indian economy, ultimately driving sustainable and equitable growth.

Greening the Healthcare Sector: Indian Companies Embrace ESG Commitments

-Business Standard

A recent report by EY and the Confederation of Indian Industries (CII) reveals that 67% of Indian healthcare companies have established environmental, social, and governance (ESG) boards, demonstrating a strategic shift towards sustainability. Over half of these firms have adopted zero liquid discharge (ZLD) and sustainable sourcing practices, with 18% of energy coming from renewable sources. Additionally, 61% of inputs are sustainably sourced, indicating a progressive transition towards renewable energy and sustainable practices. The report highlights increased allocations towards environmental and social initiatives in research and development (R&D) and capital expenditure, emphasizing the industry's commitment to infrastructure and operational enhancements for a sustainable future, according to Kaivaan Movdawalla, partner and healthcare leader at EY Parthenon India.

EXAMINING THE ROLE OF MAJOR OIL COMPANIES IN INDIA'S ESG LANDSCAPE

Oil companies in India play a pivotal role in fueling the nation's economy and meeting its energy demands. With a rapidly growing population and industrial sector, the demand for petroleum products remains consistently high. Major players in the Indian oil industry include Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), Reliance Industries Limited (RIL), and Oil and Natural Gas Corporation (ONGC). These companies engage in various activities ranging from exploration and production to refining, distribution, and marketing of petroleum products. While contributing significantly to economic growth and employment generation, the operations of oil companies also raise environmental and social concerns, necessitating a balanced approach that considers sustainability and responsible.

Environmental Impact:

Carbon Emissions: Oil companies are major contributors to greenhouse gas emissions through their extraction, refining, and distribution processes. These emissions contribute to climate change and air pollution, intensifying environmental problems. Water Pollution: Oil drilling and refining operations can lead to water pollution through spills, leaks, and runoff, affecting aquatic ecosystems and water quality. Deforestation and Habitat Destruction: Infrastructure development associated with oil exploration, such as pipelines and access roads, can lead to deforestation and habitat destruction, threatening biodiversity

Social Impact:

Displacement of Communities: Oil exploration and infrastructure projects often require land acquisition, leading to the displacement of indigenous communities and farmers, causing social unrest and economic disruption. Health Concerns: Proximity to oil refineries and drilling sites can pose health risks to nearby communities due to air and water pollution, contributing to respiratory diseases and other health issues. Labor Rights: There have been concerns regarding labor rights violations, including poor working conditions and inadequate wages, particularly in the informal sectors associated with oil operations. ESG (Environmental, Social, and Governance) Requirements and Alignment: In recent years, there has been growing awareness and pressure on oil companies to address their environmental and social impacts and improve their ESG performance. Governments, investors, and consumers are increasingly demanding transparency and accountability from these companies. Environmental Responsibility: Oil companies are expected to adopt measures to reduce their carbon footprint, such as investing in renewable energy sources, improving energy efficiency, and implementing carbon capture and storage technologies. Social Responsibility: Companies need to prioritize the well-being of communities affected by their operations by engaging in meaningful consultation, respecting human rights, and investing in social development projects.

Governance:

Strong corporate governance practices, including transparent reporting, independent oversight, and ethical conduct, are essential for maintaining trust and credibility. Many oil companies operating in India have started to align their strategies with ESG principles to mitigate risks, enhance reputation, and attract responsible investment. They are increasingly investing in renewable energy projects, adopting cleaner technologies, and engaging with stakeholders to address environmental and social concerns. However, there is still much room for improvement, and continued pressure from regulators, civil society, and investors is crucial to drive further progress towards sustainable practices in the oil industry.

Strong corporate governance practices, including transparent reporting, independent oversight, and ethical conduct, are essential for maintaining trust and credibility. Many oil companies operating in India have started to align their strategies with ESG principles to mitigate risks, enhance reputation, and attract responsible investment. They are increasingly investing in renewable energy projects, adopting cleaner technologies, and engaging with stakeholders to address environmental and social concerns. However, there is still much room for improvement, and continued pressure from regulators, civil society, and investors is crucial to drive further progress towards sustainable practices in the oil industry.

Key insights of major oil companies in India:

To understand the overall performance of the oil companies with respect to their environmental footprint, social indexing, and governance part, BRSR report of the top 4 oil companies of India, namely IOC (Indian Oil Corporation), HPCL (Hindustan Petroleum Corporation Ltd.), BPCL (Bharat Petroleum Corporation Ltd.) and RIL (Reliance Industries Ltd.) are analyzed carefully and the detailed ESG performance is listed below.

Energy Consumption

Oil companies in India are significant consumers of energy due to the nature of their operations, which involve exploration, extraction, refining, and distribution processes. The energy consumption of these companies is primarily driven by the need to power machinery and equipment involved in drilling, transportation, and refining activities. Additionally, energy is consumed for various ancillary purposes such as lighting, heating, and cooling in offices and facilities. The energy consumption patterns of oil companies in India vary depending on factors such as the scale of operations, technological advancements, and efficiency measures adopted. Larger companies like IOC, BPCL, HPCL, and RIL typically have extensive refining and distribution networks, leading to higher energy consumption compared to smaller players

As per the BRSR report FY 2023, if we look at energy intensity, RIL is showing the highest energy intensity 837.7 GJ/Cr (Energy consumption per rupee turnover (GJ/Cr), followed by IOC (320 GJ/Cr) and BPCL (330 GJ/Cr) with almost similar intensity and lastly the HPCL with least energy intensity (119.83 GJ/Cr). The overall Renewable energy consumption is significantly very low for all the companies with as minimum as 0.07% of RE for BPCL to the highest of all with 1.42% for RIL. However, particularly Indian Oil has an RE portfolio of about 240 MW including captive consumption and grid electricity supply.

Water Consumption Details

Total water withdrawal & consumption pattern for HPCL, BPCL, and RIL is similar as these three companies are consuming the total volume of water they are withdrawing from different sources however IOC shows a different pattern with water consumption more than the total water withdrawn from different sources. The reason for higher consumption than total withdrawal is because IOC is also consuming nearly 26% of rainwater harvested water.

When it comes to wastewater discharge, it is interesting to see that HPCL is discharging almost 91% of total used water after treatment followed by BPCL discharging 44% of treated wastewater. RIL is discharging 17% of treated wastewater with IOC discharging only 8% of total treated wastewater. It is worth mentioning that at BPCL, close to 50% of Mumbai Refinery’s raw water consumption is met through usage of sewage treated water received from M/s RCF, Recycling of ETP water and Rainwater Harvesting (RWH).

Waste Management

Waste Management: Waste management is a critical component of environmental performance, and if we closely observe how these companies are managing their waste, it is found out that IOC and RIL are doing great when it comes to total waste recovery where IOC is able to recover 97.7% of its total waste by various means of recycling/ reuse / other recovery options with only 3% of waste going for safe disposal. Similarly, RIL is able to recover 97.2% of total waste generated with 2.8% of waste going for safe disposal. HPCL and BPCL are also able to recover 58% and 55% of total waste with 40% and 36% of total waste going for safe disposal respectively.

CO? Emissions

Oil industry is responsible for high greenhouse gas (GHG) emissions due to various factors such as energy-intensive extraction, refining processes, and distribution. These emissions, which primarily consist of carbon dioxide (CO?) and other greenhouse gases, contribute to climate change and environmental degradation. As a result, there is a growing emphasis on reducing GHG emissions within this highly emission intensive industry through energy efficiency measures and efforts essential for mitigating the industry's environmental footprint. The leading oil companies of India which are under study are showing different emission intensity for scope 1 & 2, where RIL shows the highest emission intensity of 67.1 Ton CO? Eq / Cr turnover followed by IOCL and BPCL with a close emission intensity of 22.29 Ton CO? Eq / Cr turnover and 20.47 Ton CO? Eq / Cr turnover respectively. HPCL has the lowest emission intensity of 10.94 Ton CO? Eq / Cr turnover. Scope 1 emissions are typically higher than Scope 2 emissions in oil companies due to direct combustion of fossil fuels in their operations, including exploration, drilling, extraction, and refining processes. These direct emissions result from energy-intensive activities and the release of gases such as methane during oil production, overshadowing the comparatively lower indirect emissions associated with purchased electricity and energy consumption. As per BRSR report, Scope 1 emission accounts for 98% of total scope 1 & 2 for RIL followed by IOC with 97%. BPCL’s scope 1 emission is 93% whereas it is 85% for HPCL.

Different initiatives and measures taken by these four oil companies are listed below:

IOC- The Company has adopted the target of achieving Net Zero operational emissions by the year 2046. Indian Oil is also exploring new low-carbon value chains, including carbon capture, utilization, and storage (CCUS), to further reduce its carbon footprint. Indian Oil has made a substantial push into the emerging green hydrogen landscape of the country by collaborating with ReNew Power and Larson & Toubro Limited to strengthen the green hydrogen ecosystem in India. The energy efficiency projects undertaken in refineries and petrochemical plants during 2022-23 are estimated to have an annual emission mitigation potential of 0.81 MMTCO?e.

BPCL- BPCL has blended 143.1 Cr. Litre of Ethanol in Motor Spirit (MS) FY 22-23 and achieved a blending percentage of 10.59%. The addition of Biofuels helps in reduction of emission. BPCL Blended 7415 KL of Biodiesel and achieved blending Percentage of 0.028% in FY 2022-23. Through its efforts in emission mitigation, water and energy conservation, waste reduction, improvement in energy efficiency, BPCL has been proactively working towards reducing its operational impact on the environment.

HPCL-HPCL has developed a validated roadmap for achieving Net Zero in Scope 1 and 2 emissions by 2040. Enhancing energy efficiencies in operations, using renewable power in refineries, replacing hydrogen requirements with green hydrogen, reducing flare gas emissions and abating emissions by CCU/offsetting are the key levers identified for achieving Net Zero. Some of the initiatives like best-in class technologies such as Volatile Organic Compound (VOC) monitoring and the Leak Detection and Repair (LDAR) program have been adopted for monitoring and controlling fugitive emissions at major installations.

RIL- Continuous efforts are being made to reduce greenhouse gas emissions. Reliance has committed to a net carbon zero emission goal by 2035. In this direction, the Company is taking various Green House Gases mitigation initiatives, it includes energy conservation measures to reduce energy consumption, flare reduction with continuous monitoring, site specific best practices and usage of agri-based biomass as renewable fuel to produce green power and green steam at petchem and polyester sites. RIL is investing in renewable energy mainly for solar and biomass. In FY 2023 renewable energy consumption increased by 115% and RIL is working towards continuing this trend. The Company aims to establish 20 GW of solar energy generation capacity by 2025, which will be utilized to fulfil the captive energy requirement.

Social Indexing

It is important for oil companies to not only consider but incorporate social factors into ESG strategies, as it is essential for long-term sustainability, resilience, and the overall success of oil companies in a rapidly evolving global landscape Every company is striving to fulfill its social obligations and contribute positively to society. By implementing a range of programs aimed at improving employee well-being, supporting community growth, and engaging stakeholders, these firms exhibit their commitment to generating mutual benefits and promoting lasting social progress.

Gender diversity at workplace is being considered and given importance under ESG framework, however, there is still a huge gap seen in gender diversity part, and a poor gender diversity index is observed at companies under evaluation with HPPL having 13% of female employees followed by IOC having 10%, BPCL 9% and RIL having 7% only. Similar situation is seen in female representation at BOD (Board of Directors) with BPCL having 23% followed by HPCL at 17%, RIL 15% and lastly IOCL with almost 7% of female representation at BOD.

Other Social Factors

Oil companies prioritize health and safety training to ensure the well-being of their workforce, recognizing the inherent risks associated with oil exploration, extraction, and refining processes, Other Social Factors By instilling a culture of safety awareness and preparedness, oil companies aim to mitigate accidents, minimize injuries, and safeguard both personnel and assets. Considering the high risk associated working with these companies, Total Recordable Work-Related Injuries were reported by all four oil companies where during FY 23 BPCL recorded the highest no. 69 followed by RIL with 47 and HPCL reported total 13 work related injuries.

IOC recorded the least no. of injuries i.e., 5 nos. There were also recorded no. of fatalities where BPCL recorded 55 no. of fatalities, HPCL recorded 4, IOC recorded 2 and 0 fatalities recorded at RIL. Companies are also forging partnerships and implementing procurement policies that prioritize sourcing input material directly from MSMEs and small producers, thereby supporting their development and enhancing supply chain resilience.

The oil companies are aligning with direct sourcing from MSMEs and small producers for their input materials. HPCL sourced almost 39% of its input material from MSME/small producer followed by BPCL and IOC sourcing 37% and 29% respectively. RIL is still far behind with a mere 4.3% of input material directly sourced from MSME/ small producer but sourced almost 84% of input material directly from within the district and neighboring districts. Other Social Factors Oil companies are driven by regulatory pressures, cost considerations, and growing environmental awareness. Furthermore, Oil companies in India are increasingly prioritizing ESG considerations, recognizing the importance of environmental sustainability, social responsibility, and good governance practices. They are investing in renewable energy projects, adopting cleaner technologies, and implementing measures to reduce carbon emissions and environmental impact. Additionally, these companies are engaging with local communities, supporting social development initiatives, and enhancing transparency and accountability in their operations to align with global ESG standards and address stakeholder expectations.

ESG Report Card of a large FMCG Company in India

Here are the key sustainability highlights from ITC Ltd. for the Financial Year 2023

Environment

Energy Consumption

In FY23, ITC Ltd.'s overall energy usage surged by 10% to 26,888 TJ from 24,394 TJ in FY22. Despite this increase, the energy intensity per unit of turnover decreased by 6%, dropping from 413 GJ/crore-INR in FY22 to 387 GJ/crore-INR in FY23. Fuel procurement accounts for 92% of their total energy consumption. Furthermore, there was a 13% rise in the procurement of renewable energy in FY23 compared to FY22, with renewable sources contributing to 43% and 42% of total energy consumption in FY23 and FY22, respectively.

Water Consumption

ITC Ltd. maintained a steady total water withdrawal between FY23 and FY22, with figures of 34.5 million KL and 33.7 million KL respectively. The majority portion of ITC's water is sourced from surface water, accounting for approximately 79%, while the remaining portion is obtained from groundwater sources and third-party suppliers. Notably, their water intensity per rupee turnover decreased by 13%, declining from 569 KL/crore-INR in FY22 to 497 KL/crore-INR in FY23.

GHG Emission

In FY23, ITC Ltd.'s Scope 1 emissions increased by 8%, rising from 1258 kilo tons of CO?eq in FY22 to 1355 kilo tons of CO?eq. Similarly, their Scope 2 emissions experienced a 25% increase, reaching 241 kilo tons of CO?eq from 193 kilo tons of CO?eq in FY22. Scope 1 emissions contribute to 85% of the total Scope 1 and Scope 2 emissions. However, despite these increases, their emission intensity decreased from 25 tonnes-CO?/Lakh-INR in FY22 to 23 tonnes-CO?/Lakh-INR in FY23.

It's worth noting that ITC Ltd.'s Scope 3 emissions saw a decline of 5%, dropping from 315 tonnes-CO? in FY22 to 298 tonnes-CO? in FY23.

Waste Management

In FY23, ITC Ltd. generated a total waste of 713 kilo tonnes, slightly lower than the 726 kilo tonnes recorded in FY22. Notably, as ITC has claimed plastic neutrality for both FY22 and FY23, they have not disclosed any specific data regarding plastic waste for these periods. Of the total waste generated, 96% is classified as non-hazardous & more than 99% of their total waste is getting recycled.

Social

ITC Ltd. boasts a workforce of 88,413 individuals, comprising 49,824 employees and 38,589 workers. Among these, 52% of the total employees are non-permanent, while 67% of the total workers fall under the non-permanent category. Ensuring comprehensive coverage, ITC extends health and accident insurance to 100% of its workforce, including non-permanent employees and workers. Additionally, all female employees are entitled to maternity benefits, and 44% of permanent male employees enjoy paternity benefits. Every member of the workforce receives benefits such as PF & Gratuity, with 12% of employees and 20% of workers covered under ESI. In terms of turnover, the worker turnover rate for FY23 stands at 7%, maintaining consistency over the past two years. Conversely, the turnover rate for employees has seen a gradual increase, rising from 8% in FY21 to 12% in FY23. Notably, the turnover rate for female employees is 1.5 times that of male employees, while for workers, female turnover is three times higher than that of male workers. Regarding complaints, ITC received one sexual harassment complaint and two wage-related complaints in FY23. In FY22, two sexual harassment complaints were filed, all of which were successfully resolved. Furthermore, to foster inclusive growth and bolster the local economy, ITC procures 19% of its total input directly from MSMEs and sources 53% of its input from neighboring districts.

Governance

The Board of Directors (BOD) of the company consists of 16 members, with female representation accounting for 12.5%, or 2 female members. Among the Key Management Personnel (KMP), there are 5 male members and no female members. In regard to consumer and stakeholder feedback, ITC received a total of 18,991 complaints during the year, broken down as follows: 144 from employees and workers, 18,846 from customers, and 1 from an investor & shareholder. At the time of reporting, 1,656 complaints were still pending resolution.

ESG Advisory Services by Spoctech Green Ventures Private Limited:

We provide the following services:

Climate Advisory

Sustainability Reporting

1) ESG/ BRSR Reports based on standards prescribed by the regulators in India

• SEBI has prescribed Business Responsibility and Sustainability Reporting (BRSR) format based on Global Reporting Initiative (GRI) and other international standards reporting

2) Online BRSR Reporting Platform for Micro Small & Medium Enterprises and other corporates

• Database to provide dashboard showing key ESG matrices
• ESG performance of an entity on key principles

3) Green House Gas (GHG) Emission / Carbon Footprint verification and validation Reporting#

Validation & Certification

1) Energy Audit

2) Green House Gas (GHG) Emission / Carbon Footprint Verification and Validation Reporting under

• ISO 14064-1,
• ISO 14064-2 and
• ISO 14064-3

3) Product Carbon Footprint under ISO 14067 4) Green Product Certification 5) Forest Stewardship Council – (Responsible sourcing of wood)

ESG Audit

• Review and evaluation of ESG Vision and Net Zero Goal if any
• Evaluation & Audit of ESG Performance covering the following

1.Environment Matrix- Review of Business Process & policies with respect to environment, review of procedures for collecting data regarding CO2, energy, water, wastewater, waste etc, evaluation of actual performance with respect to each stated item of environment & ESG commitments

1. Social Matrix- Review of key policies with respect to employees and evaluation of actual performance with respect to gender diversity, minimum wages, key regulatory benefits including training and development. review of progress as per the ESG commitments.

2. Governance Matrix- Review of key governance matrix as per BRSR Reporting requirements.

For details please contact:

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