Draft Corporate Environment Policy Institutionalising Corporate Environmental Responsibility

In Depth

Draft Corporate Environment Policy Institutionalising Corporate Environmental Responsibility

Dr. Lakshmi Priya Vinjamuri | August 2012

The environmental concerns are today at the world’s development agenda and govt. of India is taking a cue from such developments as it wants its corporate sector to be in sync with all applicable environmental standards. Such approach finds its expression in the draft corporate environment policy. Dr. Lakshmi Priya Vinjamuri takes a look at the merits of having such a policy.

The economy of a nation is driven by the environment, natural resources and continued sustainability efforts. To create a balance between the human needs and holistic environmental protection and conservation has been at the forefront of sustainable development debate.

The well known National Environment Policy, 2006 (NEP) of the Ministry of Environment & Forests (MoEF) to strengthen the constitutional provisions for environmental protection, the judicial interpretation of Article 21 by addressing main stream environmental concerns of conservation, protection from degradation of the livelihood resources, and the NVC onSEERB notified by the Ministry of Corporate Affairs focusing on the framework guidelines for voluntary responsible conduct of business, irrespective of the size, sector or situation and investment in India, are presently operational.

CORPORATE ENVIRONMENT RESPONSIBILITY

The policy on corporate environmental responsibility (CER) is proposed to streamline the process and enhance, envisage and enrich the postulates of the existent policies so as to strengthen environmental actions and access, identify, monitor, assess, document and analyse the impact of various business activities in the country.

The CER policy guideline, focusing on the 3S i.e. size, scale and scope of the organisation, gives room for fine manipulations as it does not impose or mandate but suggests integration and promotion of self regulation of the legal aspects of environmental regulations, compliances and laws with a commitment for allocation of funds and personnel for its implementation, aligning the organisation’s promotion as being environment compliant and further energy compliant to enable perhaps the ease of acquisition of global certifications such as ISO 14001 or OHSAS 18001.

Environment is a global concern and the norms for safe, secure and sustainable environment ought to be treated as a right on par with the fundamental right to life and should not be based on the 3S philosophy. The defined targets for reduced emission, discharges and treatment of generated wastes should be regularly monitored for efficiency and performance. The awareness of the repercussions on acts against the environment is to become aninherent belief in the organisation. The organisations, through the implementation of the policy, with the required amendments, should comprehend the extent, nature and scope of the damage on non compliance to specified standards while focusing not only on the local occupational health and safety but the global impact of the act. The draft CER policy can be an excellent initiative on the part of the government, only if it isprudently implemented with transparent policies for review, repair and regeneration.

L&T is implementing the objective of the policy, ahead of times and do not consider the proposal as a compliance burden. However, we do wish that the regulatory overlap be avoided. While Ministry of Corporate Affairs and Ministry of Environment & Forests are involved in inclusive growth and sustainable future, SEBI is working with MCA to bring out a format of business responsibility report. It is a wish that convergence be attained by standardisation in all inclusive reporting. Extra pages to the annual report are a concern, an environmental impact, if looked differently.

On Annual Environment Performance Report

Corporate sustainability report should be made mandatory and annual environment performance report should be part of CS report. As CEOs report to the board of directors, the same should be altered accordingly in the organisational set up keeping board at the top of the structure.

On better environmental compliance

While setting up waste management targets in consonance with the mandate of the policy, the elements of recycle, reuse and reduction of waste should be added while planning such targets. The policy talks about awareness but training is not mentioned. The organisations should identify training needs. It should require that all personnel, whose work may create a significant impact upon the environment, should have received appropriate training.

For environmental safe guard, incorporation of the requirement of a facility manager should not be confined tothe representation on the organisational structure but should be a ramified act of incorporating regular monitoring measures for improvisation and incorporation of changes, so as to conserve energy and preserve the environment.

The proposal is a proactive and viable solution to many an environmental concern but is evident by the constraints, challenges of its implementation and its lack of power of prosecution against crimes committedagainst the environment. Disincentivisation and review of non-compliances have to be mandated for an effective corporate environmental performance (CEP) that ought to be incorporated in the annual report of the organisation.

The compliance to guidelines may be made mandatory but monitoring and thorough implementation of the same is subject to acquisition of certifications, which necessarily may not be through transparent means.

Mere identification of information on noncomplying aspects of efficiency and effectiveness, vain promises of future action and formulation of policies on paper with little or no practical implementation may be the attire donned by the corporate environmental responsibility (CER) policy for projects and activities of the corporate sphere; it is being an offshoot of the fiasco corporate social responsibility. The corporate environment responsibility policy to be proposed and implemented may not see this result, if required non diplomatic and un-biased amendments were incorporated with judicious prudence.