Methodology For Ranking India’s Most Sustainable Companies 2023

India's Most Sustainable Companies, an initiative to rank companies on their sustainability performance was established by Sustain Labs Paris, and is currently in its 3rd edition. The ranking methodology is designed to evaluate, score, and benchmark 200 of India's largest companies through a transparent, methodologically rigorous, and data driven process. Companies are interviewed through a year-long research programme conducted by the Sustain Labs Paris team. There is no fee charged by Sustain Labs Paris to the 200 companies to participate or engage in any manner whatsoever. There is also no conflict of interest as Sustain Labs Paris does not undertake consultancy projects.

At the core of the ranking lies the Sustain Labs Paris Sustainability Cube, a framework developed by Sustain Labs Paris through years of research and industrial expertise. This comprehensive cube encompasses 6 aspects of sustainability: Resource Efficiency, Social Entrepreneurship, Financial Management, Employee Wellbeing, Clean Revenue, and Inclusive Supply Chain. Within these aspects, data is collected for each company and analysed for a total of 31 Key Performance Indicators (KPIs).

Each KPI carries an equal weightage of 10 points. Notably, the sustainability cube places particular emphasis on critical practices such as waste management, employee wellbeing, and diversity, and therefore it includes several KPIs relevant to these practices. If data for a specific KPI is unavailable, a penalty score of -2.5 is assigned. Similarly, if a KPI is deemed irrelevant to a particular sector, it is marked as "not applicable" for all companies within that entire sector. Following this, a straightforward formula is employed, where the sum of total points for a company is calculated, and then divided by the total number of applicable KPIs.

Sustain Labs Paris follows a 12-step process to arrive at definitive scores for each company across 31 KPIs in order to then rank them. It begins with the identification of the research universe of India’s largest 200 companies by revenue during the previous financial year, excluding companies that suffered court convictions in the last three years. The Sustain Labs Paris team collects data on all 31 KPIs from audited documents published by each company in the research universe.

Detailed interviews are then conducted with CXO-level executives of all companies. These interviews offer valuable perspectives as well as help fill data gaps. The next step involves evaluating each KPI within the SLP sustainability cube, comparing companies within the same sector based on peer performance.

To validate the assessment results, a sector-level jury of sustainability experts from academia and think tanks provide their comments on companies in their sector. This provides Sustain Labs with deep sector-level insights, leading to the sector-level ranking of companies.

The concluding step is an inter-sector comparison, resulting in the final ranks of India's Most Sustainable Companies.