Stock Exchange Takes a Stand on Corporate Social Responsibility
The Bombay Stock Exchange (now called BSE Limited) has taken a step towards promoting greater corporate social responsibility in India by releasing a guidance document specifically on ESG disclosures.
The ESG Guidance was published in 2018 and, at the time, was the only initiative to encourage more sustainable practices in the sector. Other sustainability theme-based indices like S&P BSE Carbonex and S&P BSE Greenex were also launched.
The BSE is part of the United Nations sustainable stock exchanges initiative, which looks to the sustainable development goals to focus its initiatives and has also signed a Memorandum of Understanding with the Ministry of Corporate Affairs to launch a corporate social responsibility index.
The idea behind the BSE ESG Guidance is to help listed corporates wanting to incorporate ESG reporting into their existing reporting processes. There is no regulatory requirement for ESG reporting and adherence to the guidelines is entirely voluntary. But it is hoped that the ESG Guidance will pave the way for the creation of wealth without compromising on the integration of innovation, customer needs, improved stakeholder awareness, and environment, social, and governance factors alongside the ultimate vision of the company.
The ESG Guidance is a collaborative effort and is continuously updated. It is underpinned by a conviction that businesses will only be successful in the long term if their models respect the triple bottom line of “profit, planet, and people”. The document states that the importance of ESG reporting can be seen in the way it raises transparency and broadens organizational disclosures beyond financial metrics. Sustainability reporting also strengthens risk management and builds stakeholder engagement and communication.
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