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[`Management of Environment Role played by corporate bodies in India.

Dr. Manoj Goswami. Tinsukia college, Tinsukia

(Abstract: Climatic changes across the globe bear the testimony to the fact that we are mismanaging our future. Natural environment is public goods and shared by all. Therefore any dangerous change in natural environment is ultimately bad for the public not only for present generation but also for future generations. It is a recognized fact that the acts of businesses are mostly responsible for environmental degradation. Business is a micro unit; they do economic activity mainly to maximize the wealth of the owner. But due to mismanagement of natural environment the cost of environmental degradation has been shared by all individuals for the benefit of a few. Therefore, it is the ethical responsibility of the business to look after environmental sustainability of their activity and to minimize the environmental degradation by using proper policy for environment management. This study is an attempt to find out the policy adopted by business for management of environment. In course of the study, the environmental policies of 15 corporate entities have been studied as sample unit to have an insight into environment management policy. It has been observed that presently most protection of natural resource. But to expedite environment.) businesses are concerned about environment and have adopted policies to minimize the level of degradation and the efforts some regulatory measures become necessary so that every business should take steps for proper management of natural

Introduction: Management of environment is becoming a big challenge before the present human civilization. Human activities depend upon the provision of air and water, the absorption of waste and other essential life-support functions that only nature can supply. But the gradual degradation of green coverage and increase in pollutant substances in the atmosphere have brought about drastic climatic change and are creating manifold problems. If such degradation is not tackled

2 now, it may turn human beings into endangered species in near future. It will also affect the food security. Climate of the universe being the public goods, shared by all; nobody can be excluded from it. Thus any dangerous change in climate, leads to ultimate public bad. The universal declaration of human rights by the UNO on December 10, 1948 established that, every one has right to life, liberty and personal security. Thus every one has the responsibility to protect environment, inaction in the face of the threat posed by climatic change would represent the immediate violation of human right. Human/industrial activity is solely responsible for the recent climatic change. Due to the development of human civilization, the economic activities have increased to fulfill the human needs. This has resulted in indiscriminate use of natural resources and environmental Though every country has accelerated economic growth by raising GDP (gross

degradation.

domestic product) through increased economic activities, if one takes into consideration the environmental degradation and human welfare, it may show a reverse picture for many countries having very high growth of GDP, as most of their developmental activities were done without considering environmental degradation. During the last few decades there is a lot of debate regarding measurement of economic development and a consensus has been arrived at that economic development can best be defined in terms of reduction of poverty, inequality, and unemployment. Lack of safe drinking water, highly polluted atmosphere, massive deforestation and climatic change can not bring well being for the nation. As a result, environmental effects on economic development have become a matter of great concern all over the world. Environmental degradation and Climate change is not a problem of any region or area, but is a global problem. Universe is linked through global climate. When a person switches on an air conditioning unit in America or refrigerator in Europe, the environmental degradation due to such an activity can affect the most vulnerable people, including small farmers eking out a living in

3 Ethiopia, slum dwellers in Manila and people living in Ganges delta. These effects are also linked to future generations. However, rich countries have capacity to defend the consequences of environmental degradation, but poor nations are suffering from the consequences. Thus, rich countries have established themselves as rich at the cost of poor nations. Therefore, it is the collective responsibility of every one to look after the environmental effect of each and every activity, without considering the immediate effect on oneself. Considering present climatic changes, Human Development Report 2007-08 has set out carbon budget for 21 st century, drawing upon best climatic science and states that if we continue on our current emission trajectory, the carbon budget for 21 st century will expire in 2030. Our energy consumption patterns are running up vast ecological debts that will be inherited by future generations-debts that they will be unable to repay.1 The Kyoto Protocol is an international agreement under which the major industrial economies committed to reduce their emissions of greenhouse gases including carbon dioxide, methane, nitrous oxide, and several other substances. In many other international agreements, pressure has been put on all the nations to reduce environmental degradation. It is a recognized fact that the acts of businesses are mostly responsible for environmental degradation. A Business degrades environment by increasing the contamination of green houses gasses emitting (CO2, CH4, CFCs, N2O) to air, uneconomical use of natural resources like water, energy etc. disposing waste, producing more polluted products, reducing green coverage by setting up their plants in green areas etc. Business is a micro unit; they do

economic activities mainly to maximize the wealth of the owner. But due to mismanagement of natural environment, the cost of environmental degradation has been shared by all individuals, for the benefit of a few. However, it is also an equally recognized fact that in the name of preservation of natural environment, all cannot sit idle. People have to work for survival and growth. In this process, business has to work for production and distribution of goods and services. The only way

4 to expedite developmental process as well as minimize the environmental loss is by looking for sustainable development. The concept of Sustainable development that was brought by World Commission on Environment and Development (WCED) to the centre of international agenda is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. But it is impossible that every generation will leave the world environment as it was found. Therefore, by adopting the well designed policies, one can minimize such degradation and can reflect the commitment to expand the substantive freedom that people enjoy today without compromising the ability to build that freedom in future. It is the ethical responsibilities of the business to do their activities with a well designed policy to manage our natural environment. A business can minimize environmental degradation by Offering Green Products and Services Reducing emission level by using appropriate technology. Adopting 3-D approach; reduce, reuse and recycle, Using renewable source of energy, Converting industrial waste to resources. Increasing green coverage. Objectives of the study: The present study is undertaken to have insight about the efforts made by Indian business to manage natural environment and protection of environment. Main objectives of the study are to find out how Indian corporate bodies perceived environmental liabilities and what types of activities were undertaken to discharge such liabilities. It also sought to examine levels of environmental disclosures of the corporate entities. Methodology:

5 The study is based on primary data. For the primary data, the environment policies of 15 sample Indian corporate entities have been studied by consulting their annual reports and environment policies from financial year 2005 to 2008. The sample entities have been selected randomly form the list leading corporate entities of (BSE) Bombay Stock Exchange sensex covering corporate bodies from manufacturing and service sectors. The collected data have been analyzed by using a structured data analysis sheet. The data collection and analysis sheet was framed to gather data on key environmental protection indicator. The following areas have been as key areas of environment management. (1) Reduction of emission level. (2) Use of alternative source of non-renewable resources. (3) Solid waste utilization. (4) Policy of reduce, reuse and recycle, and (5) Increase of green coverage. Environment management initiatives in India: Indian civilization has a long tradition of taking care of environment. The old age Hindu mythology gives evidences on need of environment protection. The "Rig-Veda", the oldest religion theorem of Hindu Philosophy mentioned, sky is like a father, earth is like a mother, space their children" reflects that environment is to be valued like parents and loved like children. Recognizing the importance of environment, and its protection, the Indian constitution has included it in the directive principles of state policy and fundamental duty. The 'Directive identified

Principles of State Policy' state that, it is the duty of the State 'to protect and improve the environment and to safeguard the forests and wildlife of the country'. It is also the 'Fundamental

6 duty' of every citizen 'to protect and improve the natural environment including forests, lakes, rivers and wildlife'. The government of India has maintained well defined policy to protect environment. Every one has to follow the provisions of such policy. It has already issued National Environment Policy - 2006, a policy in response to our national commitment to a clean environment mandate in the Constitution. In addition to that, The Ministry of Environment and Forest has enacted the

following laws, specifying guidelines to protect environment and maintain ecological balances: Environment (Protection) Act, 1986 (EPA) Water (Prevention and Control of Pollution) Act, 1974 Water (Prevention and Control of Pollution) Cess Act, 1977 Air (Prevention and Control of Pollution) Act, 1981 The Wildlife (Protection) Act, 1972, Amendment 1991 The Forest (Conservation) Act, 1980 National Green Tribunal Bill 2009 Again it has also signed many multilateral environment agreements (MEA) and like: Convention on International Trade in Endangered Species of wild fauna and flora (CITES), 1973 Montreal Protocol on Substances that deplete the Ozone Layer (to the Vienna Convention for the Protection of the Ozone Layer), 1987 Basel Convention on Transboundary Movement of Hazardous Wastes, 1989 UN Framework Convention on Climate Change (UNFCCC), 1992 Kyoto protocol 1997 Convention on Biological Diversity, 1992 UN Convention on Desertification, 1994 conventions

7 International Tropical Timber Agreement and The International Tropical Timber Organisation (ITTO),1983, 1994 Thus everyone, irrespective of individual or business, should have to follow the guidelines covered by the above policy. Ministry of Environment and Forest, Government of India, acts as a monitor on implementation of such regulation. However, considering awareness and desire to leave an

environmentally safe world for future generation, it is felt that corporate giants are more environment friendly and have undertaken many other activities besides the statutory obligations. The other aspects of such activities are also to create positive images and save cost. The findings on the basis of the study have been presented in the tables and discussed below: Environment Management Efforts: On the basis of the study the aggregate efforts of the sample companies are presented below: Table-1 Environmental management efforts Specific Efforts 1. Reduction of Emission Level 2. Use of alternative source of non-renewable resources 3. Solid waste utilization 4. Policy of reduce, reuse and recycling 5. Increase of green coverage Source: Annual report * figure shown in bracket is percentage (1) Reduction of Emission Level: Emission is the major factor responsible for air pollution. Due to industrial emission and burning of fossil fuel in business process, the contents of carbon monoxide in the air have been increased. This increases the average level of temperature in the earth and brings many other natural disasters like flood, drought etc. We have already experienced 2008 11(73) 8(53) 9(60) 11(73) 8(53) No of companies 2007 11( 73) 6 (40) 8(53) 10 (67) 8 (53) 2006 8(53) 5(33.3) 5(33.3) 6(40) 6(40) 2005 6(40) 3(20) 4(26.6) 6(40) 5(33.3)

8 glacial melt, El-neno, rise in sea level as an effect of such climatic change. Therefore, it becomes

the urgent need to reduce the emission level. By using less pollutant fuel and appropriate technology, a business can reduce the level of emission and protect the environment. The study

found that companies have paid emphasis on lowering of emission from their current level. Among the sample companies, 73% companies presently considered reduction of emission as the major agenda which was increased from 40% in the year 2005. Many such companies have also disclosed the results of such efforts in terms of percentage of reduction of green house gases and some them have even revealed their target for reduction of corbondoxide (CO2) and other harmful gas emission level. Most of such entities are committed to Clean Development Mechanism

(CDM) initiatives proposed by UN under Kyoto protocol. 2. Use of alternative source of non-renewable resources: Indiscriminate use of natural

resources is one of major causes of environmental imbalance. Use of non-renewable resources may sink our resource base and can affect the prospects for growth of future generation. Due to continuous use of fossil fuel, the reserve has been depleting. The only way is the use of nonconventional source of energy like solar energy, wind energy, bio-fuel etc. as an alternative source to non-renewable resources. By converting non conventional sources of energy like wind energy, solar energy, we can reduce the use of non-renewable resources. However, India is an energy stressed economy, where hydro energy generation and supply are inadequate to meet the steep requirements of growing economy. Alternative source thermal energy attributes to pollution and associated problems like fly ash management, waste disposal and air pollution control measures. In such situations, use of non- conventional energy source is very significant. Study reveals that 53% of the sample companies use alternative sources of non-renewable resources like solar energy bio-gas to some extent as an alternative to conventional source of energy. This has increased from the corresponding figure of 20% on 2005. It might well be mentioned that, some sample companies have already started to cultivate some seeds to produce alternatives of fossil fuel like

9 petrol, diesel etc. Reliance industries limited (RIL), one of the sample entity has already started activities to generate bio-diesel through Jatropa seeds. BHEL has successfully launched products like wind electric generators, solar heating systems, solar photovoltaic systems, solar lanterns and battery powered road vehicles. The initiative for use of non-conventional source of energy as an alternative to non-renewable source has shown an increasing trend. . 3. Solid waste utilization: solid waste is one of the major agents of pollution. The mismanagement of solid waste can pollute air, water etc. Solid waste is the one that emits toxic chemical and diluting it with air and water, it can harm the ecology. Thus, management of solid waste is the major issue for environment management and becomes the causes of worry for big corporate giants as Industry and business often produced waste in different forms. By developing downstream industry business can use such waste to develop other products. This can reduce the cost of product and increase the profitability. The other way to manage solid waste is to discharge properly and reduce the generation of such waste by using improved technology. Study reveals that out of the sample companies, 60% companies take care of solid waste utilization and has proper system of solid waste management which has improved from the 26.6% of the sample companies in 2005. Many such companies used the waste for recycling like solid waste is use produce vermicomposting; fly ash is used for construction of road, houses of employee and other building etc. It clearly reflects an increasing trend and indicates that companies are more concerned about environment and are trying to use it properly. 4. Policy of reduce, reuse and recycle: Though some resources are renewable, it cannot pace the

with the growing demand as rate of depletion is faster than rate of replenishment. But

approach of reduce, reuse and recycle (3-R) can minimize the resource use, make possible for maximum use by using them again and again instead of passing it on to the waste stream and recycling them leads to ways in achieving the goals of sustainability. This approach reduces

10 pressure on our resource base as well as reduces the waste generation and pollution. The study found that 73% of Sample Company has already used the 3-D approach in the year 2008, which has increased from 40% in 2005. Sample companies are trying to reduce the use of scarce resources like water consumption, paper consumption and trying to reuse it by improving technology as a part of environment management programme. Many of the sample companies have adopted regeneration policy like rain water harvesting, watershed management. 5. Increase of green coverage/ aforestation: Decrease in green coverage is one of major causes of ecological imbalance. The way ahead to fight global warming is by decreasing the release of green house gases and sequestering the green house gases of which CO2 is the component from atmosphere. Though a lot of emphasis has been paid to decrease green house gases to fight

against climatic change, it is next to impossible to eliminate emission all together. Therefore, along with reduction of such gases, we need to concentrate on sequestering the green house gases. The one and only way to sequestrate CO2 is through trees. In the eco-system, trees have important role for the protection of environment and maintaining ecological balance by sinking carbon dioxide and generating oxygen. Thus, growing tree is a part of solution to the problem and aforestation has important implication in the management of environmental sustainability. The study found that many sample companies have already initiated their efforts to increase green coverage through afforestation programme. Some study companies have also planted trees in and around their plants to have natural air and also purify the air from the pollution created by them. Some other entities extensively carried afforestation programmes as a part of their social responsibility initiatives. The popular names in this regard are Reliance Industries Limited, Steel Authority of India, Infosys Technologies Limited, Bharat Heavy Electrical Limited who have planted trees in and around their factory to maintain ecological balances. These initiatives show an increasing trend and 53% of sample companies have implemented such programme in 2008 as compared to only 40% in 2005.

11 Corporate Environmental Reporting in India: Corporate environmental reporting may be termed as the way of communicating about

environmental activities undertaken by corporate. Although some countries Denmark, Netherlands Norway, Sweden, U.S.A, Canada, European Union etc. have issued some guidelines on environmental accounting and reporting but in India, there are no any statutory guidelines about environmental accounting and reporting except disclosure of details of conservation of energy, technology absorption in board directors report under section 217 of companies Act 1956 . However, it has been observed that many Indian corporate entities have disclosing their environmental initiatives voluntarily in annual report and some other ways to as part of transparency mechanism to exploit favorable benefits from all corners. Following is the details about environmental reporting by the sample companies in their annual report: Table2 Environmental reporting by sample companies No of companies / Financial year 2008 2007 2006 1. In separate Report 5 (33.3) 4(26.6) 3(20) 2. As a part of directors Report 5(33.3) 6(40) 6(40) 3.In directors report but not 1(6.6) 1(6.6) 1(6.6) directly 4. In corporate profile & 1(6.6) 1(6.6) 1(6.6) directors reports 5. Not disclosed 3(20) 3(20) 4(26.6) Total 15(100) 15(100) 15(100) Source: Annual reports * Figure shown in bracket is in percentage Place of reporting

2005 2(13.3) 6(40) 1(6.6) 1(6.6) 5(33.3) 15(100)

From the above it has been clear that Indian corporate entities have a tradition of caring the environment and disclosing it. The table 1 shows that such practices have been improved over the year as in 2005, 67.7% sample companies disclosed it which has been increased to 80% in 2008.

12 Observing to the reporting forms it becomes clear that there is an increasing tendency among the companies to disclose it as a separate report. This gives an indication that corporate bodies

becoming more concern about environment protection and communication of such activities. Conclusion: Management of natural environment as well as achievement of economic development is a big challenge before the human race. These two seem to be contradictory, since economic

development cannot be achieved without compromising with nature. Therefore, the only solution is to minimize the environmental loss by adopting a proper policy to achieve economic development. Business entities, which are generally considered instrumental for economic development as well as deterioration of natural environment and major agent of the climatic changes, have to discharge a lot for the survival of future generation. Study reveals that most of the business entities have developed a range of management practices in response to the various environmental issues that confront them. These practices have shown an increasing trend over the year. All the business entities have obeyed the environmental regulation applicable to them. In addition to this, some other practices have been developed to manage environment and such practices have been communicated to stakeholders either in board of directors reports or through separate sustainability reports. But it seems that lack guidelines there is a wide variations in forms and contents of such disclosures. However, before drawing any concrete conclusion about role played by the business, it is important to assess the impact of environmental degradation done by them. But due to lack of any transparent mechanism, it is impossible to compare the positive contribution with negative impact. Therefore it is the urgent need to develop a mechanism to assess environmental liability of each business and disclose the same publicly, so that stakeholder can compare the environmental impact of the business. However, form the study of their positive

disclosures, and efforts like continuous carbon emission reduction, initiative for (CDM) as per UN guidelines, reduction and reuse of water consumption, recycling of waste, and drive afforestratin

13 etc, we may conclude that business entities are very much aware about the consequences of climatic change and have put their possible efforts to mange their growth, considering environmental sustainability. ******

Human development report 2007-08

Annexure-I Name of the Sample company Name of the companyURL1. Reliance Industries Limitedhttp:// www.ril.com/2. Jindal steel and power Limitedhttp:// www.jspl.com/3. Hindustan Unilever Limitedhttp://www.hll.com/4. Steel Authority of India Limitedhttp:// www.sail.co.in5. Tata Steel Limited http://www.tatasteel.com/6. Wipro Limitedhttp://www.wipro.com/7. Ranbaxy Laboratories Limited http:// www.ranbaxy.com/8. Oil and natural Gas Commissionhttp://www.ongcindia.com/9. Infosys Technologies Limitedhttp://www.infosys.com/10. Bajaj Auto Limitedhttp://www.bajajauto.com/11. ITC Limitedhttp://www.itcportal.com12. Bharat Heavy Electrical Limitedhttp://www.bhel.com13. Cipla Limitedhttp://www.cipla.com14. Nestle India Limitedhttp://www.nestle.in//15. ICICI bankhttp://www.icicibank.com
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[1]Banerjee Dr. Bhabatosh: Corporate Environmental Accounting and Reporting: The

Chartered Accountant April 2006

2. Human Development report 2007-08: UNDP 3. Herv Le Treut (France), Richard Somerville (USA): Historical Overview of Climate Change Science: Cambridge University Press, 2007 4.. Malarvizhi Dr.P & Yadav Ms.Sangeeta: Corporate Environmental Reporting on the Internet: seminar paper submitted IIT Kanpur, May 8 10, 2008 5. Pramanik Alok Kumar, Shil Nikhil Chandra& Das Bhagaban: Environmental Accounting and Reporting with Special Reference to India: The Cost and Management :Vol. 35 No. 6:November-December,
2007

6. http://www.eoearth.org 7. http://www.envfor.nic.com 8. http://www.un-documents.net/wced-ocf