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One small step.....

One small step..... when green begins to mean 'stop, look and then proceed', corporate bigwigs and chief executives had better take note. The green watch on industry in India has begun, initiated by a non-governmental organisation (ngo). On May 2, 1997, the Centre for Science and Environment (cse) launched its much awaited Green Rating Project (grp) and Corporate Environment Responsibility Programme in New Delhi. For the first time, industry in India is going to be rated on the basis of its eco-friendliness.

The failure of state measures to curb pollution and overuse of resources by industry has prompted the birth of the grp. The last 50 years have clearly shown that bureaucratic measures to control pollution have failed miserably, resulting in an unsustainable and environmentally dangerous growth pattern.Government controls permit industry to produce waste on condition that it is treated before being discharged into the environment. Some industrial firms invent ingenious ways to circumvent their responsibilities. Therefore, in practice, the entire process has been reduced to the farce of obtaining clearances from ministries and pollution control boards, giving rise to new forms of corruption that have permitted polluters to go scot-free.
The launch
 Speaking at the project's inauguration in New Delhi, Manmohan Singh, former finance minister and the architect of industrial liberalisation in India, pointed out that for Indian industry, "being environment-friendly is not only a moral obligation, but also makes good economic sense". Referring to the directives he had given while in office, to the Central Statistical Organisation, to include environmental costs in national income accounting, Singh said that it was unfortunate that, no such steps had been taken so far in this direction. He emphasises that with increasing environmental awareness the world over, it had become essential for Indian companies to use eco-friendly processes to compete in the international arena.

Stressing that economic growth was a must for India, Anil Agarwal, director, cse, stated that it was imperative not to forget environmental concerns, and the launching of the project was a small step in that direction.

The response to the project has been good. The grp has been approved by the ministry of environment and forests and has been accepted by the undp for inclusion in its country plan (1997-2001). Telco, Essar, Eicher, the Taj hospitality group and Hero Motors Ltd are some of the corporate giants which have evinced interest in the project. Speaking during the occasion of the project's launch, Arvind Pande, chairperson of Steel Authority of India Ltd (sail), said that the initial efforts made by his organisation in pollution control have been paying rich dividends in terms of higher productivity among workers, and increased profitability for the past 10 to 12 years. According to him, sail has been regularly making huge investments in pollution control and prevention for the last 15 years and would now like to take full advantage of it, in terms of getting national and international recognition for the efforts in favour of environment protection. "We would now like to take a leadership position in environment protection and disclose our achievements regularly in our annual reports and other documents," Pande said. "Others should do the same."
Motivation
 For Indian industry, which is about to emerge from the crysalis to which it had been confined by the controls of the pre-liberalisation era, the grp has not come a day too soon. Expansion in industry means a corresponding increase in industrial output and, hence, a rise in pollution generated by industry (see box: The question of timing). This is why it has become imperative to educate - through the grp - the consumer, the financier and the producer about the hazards of unsustainable growth.

Moreover, it has been observed that in the absence of a method for establishing relative industrial environmental performances, more environmentally conscious industry leaders are not receiving any recognition for their efforts. Certain progressive segments of industry have already adopted state-of-the-art technologies - but have never made their environmental performance standards public. On the other hand, segments which are lagging in environmental performance do not feel any public pressure to improve.By making this information public, the grp promises to go a long way in enhancing the image of socially and environmentally responsible firms, thereby giving them a competitive edge in local and international markets and pressurising the poor preformers to bring in radical changes in their manufacturing processes and practices.

The project could also turn out to be a boon for individual stakeholders and financial institutions, which are beginning to feel that their investments would be more secure in companies which have a high regard for eco-friendly practices. Financial institutions can refuse to fund companies with poor track records and consumers may prefer not to patronise the products of such organisations; unrestrained industrial growth could be counter-productive as it could take away the right to a healthy environment from future generations.

Germination

 The preparations for the project had begun in early 1995 with initial feasibility studies, brainstorming sessions, field surveys and a pilot study to assess Indian industry's response, which was positive. In October 1996, a consultant from the Council for Economic Priorities (cep), a public interest research organisation in New York (us ), joined the team. Following this, the Government of India recommended the United Nations Development Programme (undp) to include grp in its country plan for 1997-2001.

The grp is not a wholly new concept. But this is the first time an ngo in the developing world is undertaking green rating of industrial projects. Similar projects exist in Indonesia and the us. In the us, for instance, the cep undertakes such an exercise. The Indonesian rating is carried out by the government and does not make the information public. The cep concentrates on subjective issues like corporate structure and policy and the procurement of raw materials. The cep does make this data public, though it totally depends primarily upon the information provided by the companies and the Toxic Release Inventory, a regular data input on pollution generated by different industrial firms in the us.

The grp will develop a system relevant for Indian industrial scenario. The project will take into account company data, but it will also look at feedback from other sources like state pollution control boards, the media, public opinion and ngos to cross-check whether the information provided by the companies is true and fair. If companies refuse to cooperate, the grp will undertake independent research about the environmental commitments of that company and provide the report to the company for comments before making the assessment public.

The grp differs from environmental management systems like the iso-14001 which focuses on how the environmental concerns are built into the management structure of a company. The project, on the other hand, follows the larger approach of comparing environmental performances of different companies in a chosen sector as a benchmark. Moreover, iso-like systems are designed to monitor a firm's own improvements in environmental performance and, therefore, do not require to make their achievements public. In fact, a company that has an internal management system like iso-14001 stands at an advantage while participating in the grp since its environmental performance would most probably be better monitored than those companies that do not have such a system.

The focus

 The procedure for assessment followed by the project is quite simple. It will l focus on a company's future environmental commitments and not its past track record;

l give high weightage to voluntary disclosure of information;

l provide the company the first opportunity to inspect the report; and,
l operate on a transparent rating methodology.

All companies in a sector chosen for rating will be approached for information on the ways they take care of the environmental concerns arising out of their operations. Questionnaires with respect to a company's performance and the sector's performance in this area will be distributed to the firms for responses. These responses will then be collated with the information gleaned from other sources to arrive at the company environment profile, which will be publicly disclosed and disseminated. Before making the assessment public, however, each company will get the opportunity to view the report and give its clarifications and further inputs which can then be incorporated in the final report. A business advisory panel and a technical advisory panel comprising of leading industry figures, environmentalists, policy makers and research and development experts will be involved in defining the evaluation criteria for grp's assessment procedures (see rating flow chart: Data collection and analysis).

cse plans to evaluate the paper and pulp sector and the automobile industry in the first phase of the project. The assessment will then be extended to more sectors and as per the project's expectations, all 50-60 sectors of Indian industry will be covered under it within approximately four years.In theory, municipalities and government institutions can also be rated for their environmental performance. However, for the project to undertake ratings of other institution will depend entirely on the level of success achieved by it during its first phase (that is, during the rating of the papers and pulp and automobile sector).

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