Committed to a sustainable future
Our sustainability framework forms the foundation of our approach, guiding our actions to address material risks and opportunities that impact our customers, investors, employees, value chain partners, and the communities in which we operate. This framework underpins our commitment to sustainability and drives our continuous evolution towards best practices and solutions. We have adopted a top-down approach to embed the values of sustainability across our operations, ensuring that our commitment permeates every level of our organization.
We’ve pledged to become leaders in ESG within the manufacturing sector – a bold ambition powered by a clear purpose. This belief drives our ESG mission and fuels our sustainability initiatives and investments. To mainstream ESG into our operations, we have set ambitious targets and developed a robust decarbonization roadmap. An ESG Committee, led by our Executive-cum-Joint Managing Director, ensures oversight and guidance, reinforcing our dedication to creating a sustainable future.
The Company understands well that ESG is about assessing the impact of environmental, social and governance issues on a company’s performance. Also, every rating agency has its own definition of what it considers those issues to be. Bharat Forge took cue from this and started working on various aspects of ESG. This helped Bharat Forge to change its narrative around ESG and improve the ratings.
Careful consideration of the requirements in the questionnaire used by different agencies to do the ESG assessments has provided insights on the disclosures that need to be made by the Company.
Specific efforts were made to improve the ESG ratings and ensure our priorities are aligned with the priorities of our customers and investors. To demonstrate the Company’s focus towards ensuring a sustainable business, ESG committee was formed at the Board level. The Committee provided directions and guidance to draft the ESG strategy and roadmap. Since then, ESG mandates are factored in all decisions including investments made by the Company. A gap analysis against its peers helped the Company to identify the areas which need to be focused on short term as well as long term. Materiality assessment supplemented the efforts made as part of the gap analysis.
In the CDP (Carbon Disclosure Project) Assessment, the Company was at ‘F’ in 2021. Prompt disclosures were made around the mechanisms deployed in the system to monitor the energy consumption and the energy efficiency projects taken up year-on-year. Also, actions such as mapping of carbon footprint for the organization and the commitment made to Science Based Targets Initiative (SBTi) to reduce near-term emissions strengthened the aspect of climate strategy. The Company was reporting the direct and indirect emissions earlier, which then included the Scope 3 emissions in the assessments. This helped the Company to gain ‘B’ rating in 2023 and proved that Bharat Forge is truly concerned about climate change and keen on actions around climate mitigation and adaptation.
In the S&P Global Assessment, the Company had a rating of ‘18’ in 2021. Again, prompt disclosure of the existing policies and practices around regulatory compliances, environmental initiatives, human rights compliance, human capital development, health and safety helped it to move to ‘41’ in 2022. The Company continued with the actions such as framing of missing policies, revamped its risk management framework and focused on supply chain sustainability. This helped the Company to improve its score to ‘46’ in 2023.
Publishing GRI-based Sustainability Reports for the Company three years in a row since FY2021 ensures that interested stakeholders are made aware of the initiatives taken by the Company around sustainability. While the report published in FY2021 was not assured by a third party agency, the reports published in the subsequent financial years were assured by third party agency. This helped in improving the Sustainalytics rating of the Company from ‘29’ in FY2021 to ’21.7’ in FY2023.
Focus was maintained towards supply chain sustainability and initiatives such as revision of Supplier Code of Conduct and general terms & conditions, and supplier sustainability assessments. This helped the Company to move from a score of ‘37’ in 2021 to ‘52’ in 2023 in the EcoVadis assessments.
Note: 2019 is considered as baseline year
