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Global Environment, Social, and Governance (ESG) standards are becoming increasingly important for industries worldwide, including the coal sector. These standards focus on reducing carbon emissions, managing waste, minimizing environmental damage, and ensuring better governance practices. For coal companies, this means adopting cleaner technologies and complying with stricter environmental norms to reduce their carbon footprint.
ESG standards also emphasize social responsibility. This includes improving labor practices, engaging with local communities, and ensuring health and safety standards. Coal companies are now more accountable for the impact they have on workers and the surrounding communities, which includes reducing their negative effects on both.
In terms of governance, ESG standards require transparency, ethical business practices, and robust risk management. Companies are expected to disclose their ESG performance, which helps build trust and accountability with stakeholders. This has led to more stringent reporting requirements, which coal companies must follow to ensure their practices align with ESG guidelines.
Public Sector Undertakings (PSUs) under the Ministry of Coal are increasingly adopting sustainable and socially responsible practices that adhere to ESG standards. Coal India Limited (CIL), for example, has started publishing detailed Business Responsibility and Sustainability Reports (BRSR), linking their financial results with their ESG performance. This reporting is part of an effort to show the public how CIL is advancing sustainability goals alongside financial growth.
The Coal Block Development and Production Agreement (CBDPA) for commercial mining mandates that the successful bidder implement modern, mechanized coal extraction, transport, and evacuation methods in line with current technologies. It also requires bidders to minimize carbon emissions, reduce environmental pollution, and promote sustainability in their operations.
To ensure compliance with ESG standards, CIL discloses its progress through the Business Responsibility and Sustainability Report (BRSR). The Securities and Exchange Board of India (SEBI) has mandated that the top 1,000 listed companies disclose their ESG performance. CIL’s BRSR for FY 2023-24 was published as part of its Annual Report, which is filed with the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
CIL has undertaken several initiatives in line with ESG goals. These include afforestation and green cover programs, efficient water management, emission reduction through cleaner coal technologies, alternative uses of overburden, and the adoption of blast-free mining technologies. Additionally, CIL is promoting energy efficiency, using electric vehicles, developing eco-parks, providing mine water to communities, and supporting renewable energy projects. Through its Corporate Social Responsibility (CSR) programs, CIL also focuses on improving social conditions. The company continues to work on enhancing transparency and accountability in its governance practices to ensure trust with all stakeholders. |
