Ravi Mishra_NMIMS Net Zero -Ethical Accountability & Industry Compliance.pdf

Net zero ethical accounting

1. EnvaPlax Private Limited, India
Mr. Ravi Mishra
Director EnvaPlax Pvt.Ltd, Mumbai
•CEO&DirectorEnvaPlaxPvt.Ltd,India(since2022).
•FormerManagingPartnerShivTrivTradeviseLLP,India
(2020–2022)
•FormerCEO,HeadofNorthAmericanOperations
AmeriBlendInc/SwissSingaporeInc(AdityaBirlaGroup),
Houston,Texas,USA(2016-2020)
•Former Vice President, Procurement, AmeriBlendInc ( Birla
Carbon) New Orleans, Louisiana, USA (2009-2016)
•FormerHeadofProcurement,ProjectandHighValueStores
AdityaBirlaNuvoLtd(ABNL)(2006-2009)
•FormerChiefFinancialOfficerSchmetzIndiaPvtLtd
(Germany)(1998-2006)
Net Zero-Ethical Accountability in Industry
Indian (BRSR) & International (GRI, IFRS) Compliance & Implications
Expert’s Profile

2. Net Zero-Reporting Frameworks
IndianFramework:
BusinessResponsibilityandSustainabilityReporting(BRSR):CompassforsustainablebusinessinIndian
context.
•Mandatoryfortop1000listedcompaniesasperSEBIGuidelines
•AlignedwithUnitedNation’sSustainableDevelopmentGoals(SDGs)
•AlignedwithGlobalReportingInitiatives(GRI)andInternationalFinancialReportingStandards(IFRS)
•Basedon9PrinciplesbyNationalGuidelinesforResponsibleBusinessConduct(NGRBCs)
KeyComponentsofBRSR&BRSRCore
•Environmental:Coversaspectssuchasenergyconservation,wastemanagement,pollutioncontrol,and
sustainableresourceutilization.
•Social:Focusesonemployeewelfare,diversityandinclusion,communitydevelopment,humanrights,and
stakeholderengagement.
•Governance:Includestransparencyindecision-making,ethicalbusinessconduct,riskmanagement,
compliancewithregulations,andboarddiversity.
InternationalFramework:GlobalReportingInitiative(GRI)&IFRS
•Reportingisencouragedasperstandardsinmultiplecountries
•InvestorsandLendershavestrictpoliciesregardingadherencebycompanies
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3. •SinceFY2022-23,theBRSRformat
hasbeenamandatorydisclosure
requirementforthetop1,000listed
entitiesbymarketcapitalization.
SEBI circular dated 10 May 2021 SEBI circular dated 12 July 2023
•TheBRSRframeworkhasbeenrevised
withCoreKPIsandglidepathforBRSR
Corereasonableassurance.
•ThescopeofvaluechainforwhichBRSR
Coredisclosuresandassuranceare
applicable,hasbeenclarified.
SEBI board meeting dated 29 March
2023
•StartingFY2024-25,preparingdisclosures
andundertakingreasonableassuranceon
BRSRCoreKPIshavebeenmandatedfor
thetop150listedentitiesbymarket
capitalization.
•SinceFY2024-25,BRSRCoreKPIshave
beenextendedtoincludethevaluechainof
thetop250listedentities.
Fast Evolution of BRSR in India
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4. BRSR-A Startup Initiative to Evaluate & Implement Net Zero
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⚬Organizationsize,location,product,employees,CSRactivitiesetc.
⚬Climateeffectsduetooperations-protectedareas,water-stressed
zonesetc.
Section-A
General Disclosures
⚬Informationonpoliciesandprocessesrelatedtoleadership,
governance,andstakeholdersengagement.
⚬Reviewoforganizationtoseeithasallelementstoconductbusiness
inaresponsiblemanner.
Section-B Management and
Process Disclosures
⚬Specificdisclosuresonvaluechain,labourwelfare,representationof
womenanddifferentlyabled.
⚬Essentialquestionsareforallcompanies
⚬Leadershipquestionsarevoluntary
Section-C principle wise
Disclosures
(9 Core Principle by NGRBC)
BRSRReportingfrommajororganizationswillactasacomprehensivedatawarehouse
andhelpinformulationofEnvironmentalandSocialPoliciesandalsointegrating
economicinterestsofmajorcorporationswiththeESGinitiativesplannedtoachieve
NetZero

5. BRSR Principles aligned with United Nations SDG
P5
Human
Rights
P4
Stakeholders
Engagement
P3
Employee
Wellbeing &
Engagement
P2
Product
Stewardship
P1
Ethical
Business
Practices
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6. P 9
Consumer
Focus
P8
Inclusive &
Equitable Goal
P7
Public Policy
Advocacy
P6
Environmental
Engagement
BRSR Principles aligned with United Nations SDG
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7. Board of Directors-
Must ensure:
•Membershavethenecessaryexpertiseand
experienceinESG-relatedmatters
•ProactiveexpansionoftheBoard'sknowledge
onESGmatters,especiallywithrespectto
BRSR,BRSRCore,andNGRBCprinciples
•SpecificdirectorshaveresponsibilityforBRSR
and/orthecommitteeforESG-relatedmatters
Responsibledirectorsissueastatement
highlightingESG-relatedchallenges,targets,and
achievements(aspartofBRSRdisclosure)
•Boardapprovalisissuedfortheentity's
stakeholderpolicies
•AssuranceproviderforBRSRCoremeets
necessaryindependencerequirementsto
eliminatethechancesofconflictsofinterest
•ESG/sustainabilitydisclosuresarereviewedand
inlinewithregulatorandstakeholder
expectations
Must review and provide strategic guidance to
the listed entity to:
•EstablishgovernancestructurestoalignESG
disclosureswithfinancialdisclosures
•Riskmanagementpolicy(periodicreviewat
leastonceintwoyears)
•Aligntheentity'sstrategywithidentifiedESG
risksandmitigationmeasures
•Decideonaframeworkandapproachto
identifyinternalandexternalESG-relatedrisks
thattheentityfaces.
•DevelopitsESGstrategy,objectives,andtargets
(carbonneutrality,netzero,waterneutrality,
wastemanagement,diversity,etc.)
•IncurmajorESGcapitalexpenditure
(technologyupgrades,acquisitions,divestments,
etc.)
CommitteeslikeESG,CSR,Risk,Audit,Remuneration,etc.
Must monitor that the listed entity:
•AdherestoreportingtimelinesforBRSR(tobe
reportedaspartofannualreport)
•IscompliantwithBRSRandCSR-related
disclosureandassurancerequirementsforits
operationsandvaluechain
•HasprocessestoidentifyESGrisks
•HasauditingprocessestoreportESG
KPIs/metrics
•Hasestablishedappropriatemethodologies,
systems,andprocessesforinternalcontrol
•Hasaligneditsstakeholderpolicieswiththe
NGRBC'snine(9)principles
•Ismeasuringperformanceonayear-on-year
basisacrossBRSRCoreKPIsandother
materialESGmetrics/KPIs
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8. ESG Investment Funds Mandate
Benefits
Capital
Allocation
Risk
Mitigation
Value
Creation
Market
Influence
ESG(Environmental,Social,andGovernance)investmentfundsmandate
referstothecriteriaandguidelinesthatgoverntheinvestmentdecisionsof
fundsfocusingonsustainabilityandresponsibleinvesting.Thesefundsare
mandatedtoinvest65%oftheirAUM(AssetUndermanagement)in
companieswhicharereportingoncomprehensiveBRSRandarealso
providingassuranceonBRSRCoredisclosures.ThebalanceAUMofthe
schemecanbeinvestedincompanieshavingBRSRdisclosures.
ImplicationsforIndustriesandBRSRFramework:
•FMCGcompanieswithstrongESGpractices,suchassustainable
sourcingofrawmaterials,eco-friendlypackaging,andethicalmarketing,
arefavoredbyESGinvestmentfunds.
•Automakersfocusingonelectricvehicles,fuelefficiency,emissions
reduction,sustainablesupplychains,andethicallaborpracticesare
preferredbyESGfunds.
•Textilecompaniesemphasizingsustainablefashion,ethicalsourcing,
fairtradepractices,laborrights,andwastereductionstrategiesare
prioritizedbyESGinvestmentfunds.
•Chemicalcompanieswithafocusongreenchemistry,productsafety,
pollutionprevention,responsiblewastemanagement,andregulatory
compliancearefavoredbyESGfunds.
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9. Importance of Ethical Accountability in Industries
TrustandReputation(NGT,PCB,Social&Employeerelatednoticesformpartofdisclosures):Withstakeholders,including
customers,employees,communityandinvestors.Ensuressmoothbusinessoperationsthroughtransparencyandenhancesbrandvalue
andattractspotentialinvestmentsandcollaborations.
LegalComplianceandRiskMitigation(Insurance&FinancingCos&Regulatoryauthoritiesfactorthese):Ensuresminimal
businessdisruption,reducestheriskofpenalactions,fines,andreputation/trustdamageassociatedwithnon-compliance.With
reasonableassurancemandate,italsobuildinvestorconfidence.
Shareholdervalueenhancement(CloselywatchedbySEBI&InvestorAdvisoryServices):Strongbrandvalue,compliance,risk
mitigationandinvestorconfidencehelpinenhancingtheoverallshareholdervalue
CompetitiveAdvantage(EvolvingtrendtodealmorewithResponsibleCorporations):Abovefactorsprovidecompetitive
advantageinmarketing,costreduction,attractingtoptalentandgainpreferentialtreatmentfromsociallyresponsibleinvestorsand
consumers.
SustainabilityandLongevity:Ethicsandaccountabilityisintegraltosustainablebusinesspractices.Byconsideringenvironmentaland
socialimpacts,companiescontributetothewell-beingoffuturegenerations,ensuringthelongevityandresilienceoftheiroperations.
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10. Ethical Accountability Initiatives
FMCGIndustry:AdherencetoConsumerProtectionBill.Implementingfair
tradepractices,adequateproductdisclosure,sustainable&reusablepackaging,
ensuringsupplychaintransparency.
AutomobileManufacturing(PostVolkswagen):Effectivelyreportingand
reducingcarbonemissionsinproductionprocessesacrossproductionandsupply
chains,andpromotingworkplacesafetyanddiversity.
TextileIndustry:Responsibleemissions,alternates,recycledandupcycled
products,ethicalsourcingofmaterials,ensuringlaborrightsandfairwagesin
supplychains.
ChemicalSector:Investingingreenchemistryinitiatives,conductingthorough
productsafetyassessments,andproactivelymanagingchemicalwastedisposalto
minimizeenvironmentalimpact.
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11. Prevent Greenwashing
Greenwashingreferstomisleadingorfalseclaimsaboutenvironmental
responsibilitytoappearmoresustainablethanacompanyactuallyis.
GenuineBRSRcompliancedemonstratesacompany'scommitmentto
transparencyandethicalpractices,leadingtotrustandcredibilityamong
stakeholders.
•FMCG (Fast-MovingConsumerGoods)Industry:Challenge:
Greenwashinginthissectorofteninvolvesmisleadingclaimsaboutproduct
sustainability,suchasusing"natural"or"green"labelswithoutsubstantial
evidence.
•AutomobileManufacturingIndustry:Challenge:Greenwashingcan
occurthroughvaguestatementsaboutvehicleemissionsorenvironmental
impactreductionwithouttransparentreportingonactualemissions
standardsorsustainablemanufacturingpractices.
•TextileIndustry:Challenge:Greenwashingintextilesmayinvolvelabeling
clothingas"organic"or"sustainable"withoutsufficientcertificationor
evidenceofethicalsourcing,fairlaborpractices,orenvironmentallyfriendly
productiontechniques.
Transparent
Reporting
Verification &
Certification
Stakeholder
Engagement
Lifecycle
Assessment
Continuous
Improvement
Key Aspects
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12. Maximizing Stakeholder Benefits
Key Strategies for Maximizing Stakeholder Benefits
Stakeholder
Engagement
⚬Dialogue and
Collaboration
⚬Partnerships
Value Creation
⚬Quality
Products and
Services
⚬Innovation
Ethical Practices
⚬Transparency
and Integrity
⚬Ethical
Conduct
CSR
⚬Social Impact
⚬Environmental
Stewardship
Employee Well-
being
⚬Workplace
Culture
⚬Training and
Development
Financial
Performance
⚬Long-term
Value Creation
⚬Risk
Management
⚬Enhanced Reputation
⚬Competitive Advantage
⚬Resilience and Adaptability
⚬Sustainable Growth
Benefits of
Maximizing
Stakeholder
Benefits
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13. Ethics & Accountability in Carbon Black Industry (CB) Case Study:
Informal Carbon Credit Trading in 2006-07 Guided by State PCB
Carbon Black (CB)
Background
⚬CBisintheRed
CategoryofPollution,
indicatingsignificant
environmentalimpact.
⚬CarbonCreditTrading
in2006-07wasinformal
andguidedbyState
PCB(PollutionControl
Board).
CB's Carbon Credit
Positive Status
⚬Despiteitspollution
category,CBbecamea
netCarbonCredit
positiveentity.
⚬Thiswasattributedto
itsCo-Generation(Co-
Gen)facility,utilizing
wasteheatforpower
generationandselling
excesspowertoState
ElectricityBoard.
Credit Transfer and
Trading
⚬AccumulatedCarbon
Creditsweretradedtoa
pollutingindustryin
SIPCOTIndustrialarea.
⚬Therecipientindustry
hadexceededemission
limitsandfaced
temporaryshutdown
orders.
⚬Thecredittransfer,
mostlygovernedby
StatePCB,allowedthe
entitytocontinue
operations.
Unstructured Credit
Transfer
⚬Thecredittransfer
process lacked
structure,withState
PCB playinga
significantrole.
⚬Pricingandtermswere
privileged,
Ethics and Accountability
⚬Thecasehighlightsthe
importanceofethics
andaccountabilityin
CarbonCredittrading.
⚬WhilebeneficialforCB,
theunstructurednature
ofcredittransferraises
questions about
transparencyand
fairnessinsuch
arrangements.
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14. Case Study: Consol Coal's Transformation of Surface Changes
into Value-Added Assets-Ethical Behaviour
Located in Pittsburg, PA,
USA, Consol Coal is a
major coal miner in
North America.
Utilizes Long Wall
mining techniques for
underground mining
operations.
Consol Coal
Background
Long Wall mining
techniques resulted in
significant surface
changes over time.
Unleveled foundations
of houses in surrounding
communities were
observed, though
technically unfounded.
Surface Changes and
Community Impact
Converted the acquired
lands into golf courses,
transforming them into
valuable assets.
This strategic move
added significant value to
Consol's business in
terms of Environmental,
Social, and Governance
(ESG) considerations.
Land Conversion and
Value Addition
Consol Coal addressed
the impact on
houseowners by paying
them off.
Acquired the entire lands
affected by surface
changes.
Response and
Resolution
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15. Case Study: IMO 2020 Mandate and Scrubber
Adoption in the Shipping Industry
IMO 2020 Mandate
Mandated ship owners to reduce sulfur levels in fuel from 3.5% to 0.5% to reduce
logistic emissions.
Industry Adoption
Smaller ships adopted low sulfur fuel to meet the mandate.
Bigger ships retrofitted scrubbers for sulfur emission control.
Scrubber Types
Close loop scrubbers discharge sludge onshore.
Open loop scrubbers discharge into the ocean.
Emission Improvement
Overall, the shipping industry's emission standing has improved due to these measures.
Concerns with Open Loop Scrubbers
Open loop scrubbers raise concerns about pollution release into the ocean.
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16. Thanks
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