ESG Easy Wins: How growing organisations can start meeting ESG criteria
Havells is one of the pioneers of environment conservation and customer satisfaction through its Environmental, Social and Government (ESG) initiatives. Almost a decade ago, the company stopped the usage of trace Kr-85 radioactive isotope in its Ceramic Metal Halide lighting range due to its detrimental effects on environment and human health. Today, none of their products have radioactive components.
Moreover, all the plants are equipped with zero discharge facility and state-of-art water harvesting system. Its renewable energy initiatives include manufacturing solar lamps and several other resource conservation methods. Havells has set an outstanding example of integration of principles of National Guidelines on Responsible Business Conduct (NGRBCs) in its business operations.
The Business Reporting Sustainability Report (BRSR) mandated by SEBI for the top 1000 listed companies emphasises the adherence to nine principles of NGRBC. Understanding these principles will enable businesses, regardless of size or scale, to take practical steps to ensure they achieve growth in a responsible manner, while also staying prepared to meet future regulatory requirements.
1. Integrity, Ethics, Transparency and Accountability
Businesses should inculcate the principles of integrity, ethics, transparency and accountability in their operations in the start-up stage. Once the foundation of the company is established on the basis of these core values, it will pave the way for good governance practices that will attract banks, investors, and consumers and retain quality employees.
One way to achieve this is for organisations to establish a core set of ethical values to be followed by the entire workforce. In addition to this, they need to set up well-defined hierarchical frameworks and decision-making structures to ensure there is clear assignment of accountability and transparency in organisational policies.
2. Safe and Sustainable Goods and Services
While manufacturing and designing products, businesses must ensure the optimum use of resources and minimise adverse impact on the environment. A considerable focus on waste management for proper disposal of byproducts is also essential to build a sustainable product life cycle. An efficient supply chain and production cycle will lower the risk of action from regulating agencies and consumer activists.
3. Well-being of Employees
This principle focuses on developing practices and policies that ensure the dignity and well-being of employees. By creating and implementing people-friendly policies will help improve labour relations resulting in fewer disruptions in day-to-day operations. A motivated team member is less likely to be absent from work and will contribute immensely to the productivity and growth of the organisation. Moreover, treating employees well also leads to an enhanced reputation among consumers.
4. Respect and Responsiveness to all Stakeholders
Businesses operate in an ecosystem consisting of several stakeholders like the shareholders, NGOs, investors, governments and regulatory agencies. Developing environmentally and socially responsible policies as well as addressing stakeholder issues will aid businesses greatly from an ESG perspective.
5. Respect and Promote Human Rights
Promoting a work culture that upholds human rights principles is a fundamental requirement for businesses to thrive and prosper. Fostering an open and flexible work culture where every team member's voice is heard without discrimination is vital to retaining a quality workforce.
6. Respect, Protect and Restore the Environment.
Making business choices that reduce greenhouse gas emissions and promote responsible use of natural resources is essential for safeguarding the environment. Business owners must engage with environmentally conscious partners to further their business goals and reduce disruptions in business operations.
7. Responsible and Transparent Policy Advocacy
Businesses can learn how to integrate national and international legislative frameworks into business processes. Adopting transparent business and accounting policies will lead to positive interactions with the regulating authorities.
8. Promote Inclusive growth and Equitable Development.
Both large corporations and SMEs can develop innovative technology and integrate it with the business model to address the socio-economic challenges of the country. Employing citizens purely on the basis of merit will help deserving individuals who, in turn, will further organisational goals. It is important to note that business success, inclusive growth and equitable development are interdependent.
9. Provide value to consumers responsibly.
Value creation must be at the heart of any business policy. Businesses must provide consumers with goods and services that are safe and beneficial for them. This is paramount to building customer loyalty and a positive brand image.
These principles are designed to assist all companies in meeting ESG regulatory requirements. Organisations should intrinsically integrate these principles into their business models to build sustainable operations and promote conscious consumerism. Finally, an effective implementation of ESG norms signifies an organisation's commitment to risk management, reduce expenditure and care for the environment.