Independent Report for Sustainability Disclosures
Compilers’ Note: SEBI has mandated the top listed companies to make disclosures related to Sustainability (or ESG as popularly called). Several companies have, in their annual report (called Integrated Report) for the financial year 2020-21, included such disclosures. These disclosures are quite detailed and contain a lot of information in graphs, charts, diagrams for ease of readability and understanding. A few such companies also feel the need to have an independent verification of these disclosures and have appointed external agencies for the same. Given below is an illustration of one such independent report for sustainability disclosures.
RELIANCE INDUSTRIES LTD. (31ST MARCH, 2021)
From Integrated Report
Independent Assurance Statement to Reliance Industries Limited on their Sustainability Disclosures in the Integrated Annual Report for Financial Year 2020-21
To the Management of
Reliance Industries Limited, 3rd Floor,
Maker Chambers IV, 222, Nariman Point,
Mumbai 400021, Maharashtra, India.
Introduction
We, _____, have been engaged for the purpose of providing assurance on the selected sustainability disclosures presented in the Integrated Annual Report (‘the Report’) of Reliance Industries Limited (‘RIL’ or ‘the Company’) for FY 2020-21. Our responsibility was to provide assurance on the selected aspects of the Report as described in the boundary, scope and limitations as mentioned below.
Reporting Criteria
RIL has developed its report based on the applicable accounting standards and has incorporated the principles of the International Integrated Reporting Framework (<IR>) published by the International Integrated Reporting Council (IIRC) into the Management’s Discussion and Analysis section of the Report.
Its sustainability performance reporting criteria have been derived from the GRI Standards of the Global Reporting Initiative, United Nations’ Sustainable Development Goals (UN SDGs), American Petroleum Institute / The International Petroleum Industry Environmental Conservation Association (API / IPIECA) Sustainability Reporting Guidelines and Business Responsibility Reporting Framework based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVG – SEE).
RIL has also referred to new and emerging frameworks such as Task Force on Climate-related Financial Disclosures (TCFD) recommendations and World Economic Forum’s WEF-IBC metrics.
Assurance Standards
We conducted the assurance in accordance with:
- The requirements of the International Federation of Accountants’ (IFAC) International Standard on Assurance Engagement (ISAE) 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information.
– Under this standard, we have reviewed the information presented in the Report against the characteristics of relevance, completeness, reliability, neutrality and understandability.
– Limited assurance consists primarily of inquiries and analytical procedures. The procedures performed in a limited assurance engagement vary in nature and timing and are less in extent than for a reasonable assurance engagement.
– Reasonable assurance is a high level of assurance, but it is not a guarantee that it will always detect a material misstatement when it exists.
Boundary, Scope and Limitations
- The boundary of our assurance covers the sustainability performance of RIL’s manufacturing divisions, refineries, exploration and production in India; business divisions such as chemicals; fibre intermediates; petroleum; polyester; polymers; Recron and RP Chemicals units in Malaysia; petro-retail division facilities under Reliance BP Mobility Limited (RBML), terminal operations and LPG; Reliance Jio Infocomm Limited1; Reliance Retail Ventures Limited1 and corporate office at Reliance Corporate Park, for the period 1st April, 2020 to 31st March, 2021.
(1 Limited to total number of employees, new employee hires and employee turnover, parental leave, total man-hours of training and diversity of governance bodies and employees)
The sustainability disclosures covered as part of the scope of reasonable assurance process were reduction in energy consumption, renewable energy consumption, water withdrawal, water discharge, water recycled, total number of employees at Reliance, employee turnover, diversity of governance bodies and employees, parental leave and total man-hours of training. Additionally, the disclosures subject to limited assurance process included direct (scope 1) GHG emissions, energy indirect (scope 2) GHG emissions, emissions of particulate matter, oxides of nitrogen, oxides of sulphur, markets served, scale of the organisation, mechanisms for advice and concerns about ethics, governance structure, chair of the highest governance body, requirements for product and service information and labelling and new employee hires.
The assurance scope excludes:
- Aspects of the report other than those mentioned above;
- Data and information outside the defined reporting period;
- The Company’s statements that describe expression of opinion, belief, aspiration, expectation, aim or future intention and assertions related to Intellectual Property Rights and other competitive issues.
Assurance Procedures
Our assurance process involved performing procedures to obtain evidence about the reliability of specified disclosures. The nature, timing and extent of procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the selected sustainability disclosures whether due to fraud or error. In making those risk assessments we have considered internal controls relevant to the preparation of the Report in order to design assurance procedures that are appropriate in the circumstances. Our assurance procedures also included:
- Assessment of RIL’s reporting procedures regarding their consistency with the application of GRI Standards.
- Evaluating the appropriateness of the quantification methods used to arrive at the sustainability disclosures presented in the Report.
- Verification of systems and procedures used for quantification, collation, and analysis of sustainability disclosures included in the Report.
- Understanding the appropriateness of various assumptions, estimations and materiality thresholds used by RIL for data analysis.
- Discussions with the personnel responsible for the evaluation of competence required to ensure reliability of data and information presented in the Report.
- Discussion on sustainability aspects with senior executives at the different plant locations and at the corporate office to understand the risks and opportunities from the sustainability context and the strategy RIL is following.
- Assessment of data reliability and accuracy.
- For verifying the data and information related to RIL’s financial performance we have relied on its audited financial statements for the FY 2020-21.
- Review of the Company’s Business Responsibility Report section to check alignment to the nine principles of the NVG-SEE.
- Verification of disclosures through virtual conference meetings with manufacturing units at Barabanki, Dahej, Hazira, Hoshiarpur, Jamnagar DTA, Jamnagar SEZ, Jamnagar C2 complex, Jamnagar Pet Coke Gasification unit, Nagothane, Naroda, Patalganga, Silvassa, Vadodara; Recron (Malaysia) facilities at Nilai and Meleka; RP Chemicals Malaysia; Petro-retail division facilities under RBML, Terminal Operations and LPG; On-shore and off-shore exploration and production facilities at Gadimoga and Shahdol; Reliance Jio Infocomm Limited; Reliance Retail Ventures Limited; and Corporate office at Reliance Corporate Park, Navi Mumbai.
Appropriate documentary evidences were obtained to support our conclusions on the information and data verified. Where such documentary evidences could not be collected due to sensitive nature of the information, our team verified the same using screen-sharing tools.
Independence
The assurance was conducted by a multi-disciplinary team including professionals with suitable skills and experience in auditing environmental, social and economic information in line with the requirements of ISAE 3000 (Revised) standard. Our work was performed in compliance with the requirements of the IFAC Code of Ethics for Professional Accountants, which requires, among other requirements, that the members of the assurance team (practitioners) be independent of the assurance client, in relation to the scope of this assurance engagement, including not being involved in writing the Report. The Code also includes detailed requirements for practitioners regarding integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. ____ has systems and processes in place to monitor compliance with the Code and to prevent conflicts regarding independence. The firm applies ISQC 1 and the practitioner complies with the applicable independence and other ethical requirements of the IESBA code.
Responsibilities
RIL is responsible for developing the Report contents. RIL is also responsible for identification of material sustainability topics, establishing and maintaining appropriate performance management and internal control systems and derivation of performance data reported. This statement is made solely to the Management of RIL in accordance with the terms of our engagement and as per scope of assurance.
Our work has been undertaken so that we might state to RIL those matters for which we have been engaged to state in this statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than RIL for our work, for this report, or for the conclusions expressed in this independent assurance statement. The assurance engagement is based on the assumption that the data and information provided to us is complete and true. We expressly disclaim any liability or co-responsibility for any decision a person or entity would make based on this assurance statement. By reading this assurance statement, stakeholders acknowledge and agree to the limitations and disclaimers mentioned above.
Conclusions
Based on our assurance procedures and in line with the boundary, scope and limitations, we conclude that, for selected disclosures subjected to limited assurance procedures as defined under the scope of assurance, nothing has come to our attention that causes us not to believe that these are appropriately stated in all material respects, in line with the reporting principles of GRI Standards. Non-financial disclosures that have been subject to reasonable assurance procedures as defined under scope of assurance, are fairly stated, in all material respects and are in alignment with the GRI standards.
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