Ranking Indian Companies on Sustainability Disclosures Using the GRI-G4 Framework and MCDM Techniques

Abstract

In this research paper, the researcher attempts to calculate the level and quality of corporate sustainability reporting practices of companies in India that use the Global Reporting Initiative (GRI). The study also seeks to measure the relative reporting performance of these companies and rank them based on sustainability disclosure criteria—namely economic, environmental, social, and governance parameters—as outlined in the Global Reporting Initiative Guidelines (GRI-G4). A Multi-Criteria Decision Making technique is employed to assess improvements in the sustainability reporting practices of GRI-based reporting companies in India. The present study uses a content analysis technique to examine the level and quality of sustainability disclosure based on the GRI-G4 reporting framework. A binary coding system is applied to measure the level of corporate sustainability reporting (CSR), wherein '1' indicates that the item is disclosed and '0' indicates otherwise. To calculate the quality of sustainability disclosure, a four-point scale (ranging from '0' to '3') is used. Furthermore, the Multi-Criteria Decision Making (MCDM) technique, such as Entropy, is used to calculate criteria weight, and the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) is used for ranking. The findings of this study are useful for various stakeholders, including potential investors, asset managers, rating agencies, NGOs, customers, academics, students, and policy makers like the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs, as they make more informed decisions.