'Indian firms lax in corporate responsibility'
Most Indian companies give out information on corporate responsibility as a part of their annual reports but very few of them take it seriously, says a survey by consulting firm KPMG. Himani Chandna Gurtoo reports. Lagging behindbusiness Updated: Aug 16, 2011 22:59 IST
Most Indian companies give out information on corporate responsibility as a part of their annual reports but very few of them take it seriously, says a survey by consulting firm KPMG. Only 16% of India's top 100 listed firms have a corporate responsibility (CR) strategy with well defined objectives and targets in place, says the survey.
"Some of the companies who have the best CR reporting strategy include ITC, NTPC, ONGC, Taj Group, Infosys, Ultratech cement, Tata Motors, SAIL, Larsen & Toubro, Dr Reddy Labs and Reliance Industries," the survey said.
Construction and building material companies are leaders in sustainability reporting followed by mining, oil and gas and chemical companies. But transportation, finance, trade, retail and media companies lag behind with almost none of the top 100 listed companies reporting the aspect.
The ministry of corporate affairs (MCA) recently proposed that listed profitable companies voluntarily devote 2% of their after-tax profits to corporate social responsibility (CSR).
It said 23% of the companies surveyed reported the business risk of climate change, 21% disclosed their green house gases emissions and 13% identified and disclosed the business risk of corporate responsibility issues in their supply chain.
"Such reporting is highly prevalent in the developed nations and helps companies raise better financial resources and supply chain management," said Arvind Sharma, director, climate change and sustainability, KPMG in India.
Though corporate reporting is nascent among Indian firms but the report also reflects the willingness of companies to seek third party opinion on their reports with 52% of reports being externally assured. "It is interesting to note that most reports are externally assured and find value in third party opinion, especially from professional services firms. This trend shows that Indian firms are willing to change the way they run their business," said Sharma.