Infosys, Mindtree, TCS, Wipro and Kotak Mahindra Bank have emerged as the top five entities in terms of environmental, social and governance (ESG) scores assigned by Crisil Ltd. for 225 companies across 18 sectors in India.
Infosys, Mindtree, TCS, Wipro and Kotak Mahindra Bank scored 79,77, 75,75 and 74 respectively out of 100.
The lowest scorers include India Cements (37), Vodafone India (40), Star Cements(41), Godfrey Phillips (41) Coal India (43) & JSPL (43).
The ESG scores are based on information available in public domain, including from third-party providers, Crisil said.
“The scores are based on Crisil’s proprietary framework and is assigned on a scale of 1-100, with 100 denoting best-in-class ESG performance. The current evaluation analyses three annual reporting cycles through fiscal 2020,” the rating agency said, adding it was a first-of-its-kind study in India.
“ESG is already playing a material role in the decisions of governments, regulators, investors, lenders and corporates,” said Ashu Suyash, MD & CEO, Crisil. “This will not only transform the investment management industry, but also redefine corporate India’s approach to risk management for sustainable value creation.”
Information technology (IT) and financial companies bagged relatively high overall ESG scores, given their inherently lower natural-resource intensity, resulting in lower emissions, waste generation and water usage.
“These companies are also high employment generators and have relatively better disclosures,” it added.
In contrast, oil and gas, chemicals, metals and mining, and cement companies secured lower ESG scores, reflecting high natural-resource intensity, and thereby higher emission levels, extractive use of natural resources, potential adverse environmental and community impact, and generally more moderate levels of disclosure, it said.
The proportion of renewable energy in consumption mix — an important environment score assessment parameter— remains low at 14% on average. Encouragingly, that number for the real estate, fast-moving consumer goods and IT sectors is more than 25%, it said.
“That said, gender diversity at the board level and in the workforce of companies assessed remains low at 17% and 13%, respectively,” it added.
Independent director representation on boards is also modest at 47% with nearly 12% of companies having less than one-third independent directors, it said.
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