Propagating Green Audits
With India poised to step on the growth accelerator, there is mounting concern about the long-term environmental costs that such growth could entail. The panic buttons were pressed when a recent World Bank study focusing on rapidly growing countries like Thailand, Indonesia and the Philippines revealed that a doubling of the GDP cost these countries as much as a ten-fold increase in pollution levels.
The corporate sector here is launching a whole battery of measures to confront the problem. The basic thrust is to make the corporate sector more responsive to and accountable for its actions affecting the environment. The government too is cognizant of the issues at stake. The approach paper for the Ninth Plan states the objective of: Ensuring environmental sustainability of the development process through social mobilisation and participation of people at all levels.
In pursuit of this objective, the ministry of environment and forests is launching a five-year programme (1997-2001) with the United Nations Development Programme (UNDP) aimed at field level interventions in land, water and forest resource management with a special thrust on environment education and waste disposal schemes.
But what really is at stake for companies? Everything, say spokespersons of chambers of industry including the Associated Chambers of Commerce (Assocham) and the Confederation of Indian Industry (CII). Given the pressures of doing business in a scenario where each is vying with the other for a global presence, companies seek to gain a competitive edge by improving their image, by projecting themselves as adherents of processes that take the least toll on the environment.
And this is what the government and non-government organisation (NGO) efforts are trying to capitalise on. The only precedent for such an effort in the developing world is the Indonesian governments initiative, funded by the World Bank, which was defined as a reputational incentive programme.
In the developed world, there are already a number of bodies in place monitoring the working of industry from the environmental point of view. Among these are the Council on Economic Priorities (which rates 700 US companies based on parameters determining their compatibility with the environment), IMUG in Germany and IRIS in the United Kingdom.
However, an earlier effort in India to provide reputational incentives in the form of eco-labelling had fizzled out. Even though the eco-mark fad was well entrenched in the West, and 16 categories of consumer products had been shortlisted by the Bureau of Indian Standards for rigorous tests for environmental standards, the scheme was not met with much enthusiasm as the concerned companies did not see it as a value-addition that would affect their market share, says a UNDP official.
Those were early days yet, goes the counter argument. Today, its time has come. Most players are standing at the threshold of expansion. As they get into core competencies and strive for international standards, they can be urged to incorporate technologies that will improve efficiency while also keeping environmental costs to the minimum. Foreign collaborators too are wary of potential risks and liabilities and would want efficient systems in place. The sheer pressure of public opinion and pressure groups acting to stymie the hazardous impacts of industry should do the trick, it is believed.
For instance, CII with the Canadian International Development Agency (CIDA), has launched an eco-labelling project last September. According to sources, a policy paper on eco-labelling is expected by the end of this year, detailing existing eco-labelling schemes across the world and drafting terms of reference for India. In fact, a number of industries have been working on environment-friendly technologies for some time now, though these have not been publicised, says a CII official.
Meanwhile, eco-label standards are to be ratified by early 1998 and a new series launched called the ISO 14020 series.
Keeping time with these efforts, CII is also coming out with Emerging Imperatives, a volume that will focus on the need for environment-friendly technologies and eco-labelling to improve corporate profiles. The volume is expected to hit the stands by mid-1998.
Non-governmental initiatives in this direction are also gaining prominence today. One such effort was announced in the capital last week by the Centre for Science and Environment (CSE), which launched what it calls the Corporate Environmental Responsibility Programme (CREP).
Speaking at the launch, former finance minister, Dr Manmohan Singh, said that the time has come when being eco-friendly alone makes good economic sense. The command and control method has its limitations and it is therefore left to pressure groups to see that the countrys future is not mortgaged at a heavy environmental price.
The programme aims at persuading industries to analyse and curtail environmental costs right through its life cycle from the procurement of raw materials stage through manufacture and usage to the ultimate disposal of a product. Being a non-governmental effort, the programme cannot put in place legally-binding regulatory mechanisms. As Anil Aggarwal, director, CSE, put it, it implies using nuisance value to achieve ends it cannot by any other means. As the programme develops, CSE hopes to be able to come up with some kind of a green rating of companies. For this, criteria and weightages will have to be drawn up keeping in mind Indias compulsions, say CSE sources.
The CREP project will not rake up past wrongdoings or damages. Instead, it looks at future initiatives, stated commitments and systems in place to effect targets. It would also entail public disclosure of companies that already have systems in place, like the Steel Authority of India Ltd (SAIL), which has been doing environmental audits, or Essar, which willingly parted with data even the pollution control boards were reluctant to part with, says Pradeep Dutt, coordinator of the programme.
To begin with, the project targets the lead players in every sector. Smaller players can then benchmark their performance accordingly. The focus initially will be on the automobile and paper and pulp industries. The automobile industry has maximum impact on the environment as the final product that hits the road, while the paper and pulp industry impacts the environment most at the raw material extraction stage.
The project will begin as a data collection and dissemination exercise. The first nine months are to be spent in data collection and some preliminary analysis of information assembled. Data will be accumulated from primary (the companies themselves and pollution control boards) and secondary sources (local populace, NGOs and others). Information collected on individual companies will be compiled to prepare sectoral profiles with assistance from business and technical advisory panels, who in turn will establish weightage and criteria to effect some kind of a green rating of companies.
However, some quarters have expressed their apprehensions about the proposed green rating mechanism. Though the criteria have not been established, and will not be enumerated before detailed studies are undertaken, there are misgivings since the figures are bound to be comparative, relative and will tend to fluctuate over time.
But a preliminary survey by CSE indicated tremendous interest in the effort, says Dutt. The chairman of the Steel Authority of India (SAIL), Arvind Pande, welcomed the move, stating that SAIL has an internal movement of sorts, with eco-clubs for all its workers. The results of attempts to control air and water pollution have begun to show results with an increase in productivity, he argued, saying that next on the agenda was a check on noise levels.
The new technology today comes with pollution control devices in place, so there is no additional burden, says Pande.
But a nagging concern is the fact that most of these technologies will be accessible only to the larger players. Even the CSE initiative is currently not addressing the small and medium scale industries, which are major offenders of pollution control norms. And since the economics of scale will not work for the smaller players, environment-friendly technologies may also prove too expensive for them.
In the case of the bigger players, though, with all information being openly available, it should be easy for local communities, NGOs or other concerned bodies to keep offending companies on a leash. The ministry of environment and forests has declared that Environmental Impact Audits, which are statutory, will now be made public.
Many other scattered efforts are also taking place. According to sources, the Bank of Baroda has signed the Green Banking Charter which will help it leverage more environment-friendly technologies from companies the bank lends to.
Such initiatives come not a day too late. And since, as Dr D K Biswas, chairman of the Central Pollution Control Board puts it, Environment is too serious an issue to be left to the government, it is just as well that there is pressure on industries and regulatory mechanisms to make all information public. After all, it is their reputation that is at stake.
Environment is too serious an issue to be left to the government.
Dr D K Biswas, chairman of the Central Pollution Control Board