Environment CSR and Climate Change Mitigation
Environmental Declarations and their impact on CSR
Since the United Nations Conference on the Human Environment that was held in Stockholm, Sweden in 1972, that laid down 26 principles on effective management of environment and development, ecological issues like water conservation, preservation of biodiversity, carbon footprint, ecological footprint and sustainability, have taken forefront and have become hot topics for debate and discussion amongst corporates and development professionals alike. The Earth Summit or the Rio Summit, as it is popularly known, addressed issues that would involve corporations and industries in the development sphere even more. The issues addressed included:
• Systematic scrutiny of patterns of production - particularly the production of toxic components, such as lead in gasoline, or poisonous waste including radioactive chemicals.
• Alternative sources of energy to replace the use of fossil fuels which delegates linked to global climate change.
• New reliance on public transportation systems in order to reduce vehicle emissions, congestion in cities and the health problems caused by polluted air and smoke.
• The growing usage and limited supply of water.
These issues stemmed a new way of looking at corporate philanthropy and sustainable development activities of the corporates. Emphasis on sustainable development and environment friendly business practices increased substantially. This paved the way for the new-age CSR activities of the corporates, across the globe as well as in India.
Climate Change and its Impact on CSR
With the coming of the new Companies Act 2013 and the new CSR law for corporates, companies have now started moving away from traditional philanthropic projects and have begun institutionalising CSR activities strategically, thereby bringing business responsibility to the forefront.
Simultaneously, climate change has become an inescapable reality and corporates are now expected to rethink corporate social responsibility in the age of climate change. Climate change challenges present organisations such as companies, corporations, non governmental organisations (NGOs), communities, and citizens with the need to redefine current views on corporate social responsibility from a voluntary luxury to being a necessity. By mid-century, climate challenges are expected to seriously disrupt business-as-usual and change the way citizens live their lives around the world. Indeed, many countries are already experiencing the vanguard of challenges and many organisations are planning for the projected risks they will face such as limited clean water, expensive and unreliable energy.
But what does Green CSR and CSR for Environment really mean? And do businesses really have the potential to tackle the global menace of climate change? A decade ago, the most common CSR activity with a focus on the environment was planting trees. Subsequently, the concept of Environmental CSR gained popularity. It aimed at reducing any damaging effects on the environment from business processes. It focussed mainly on limiting an industry's contribution to waste, radioactive chemicals, etc. taking a cue from the declarations made at the Rio Summit. These activities mainly focussed on energy use, water use, waste management and recycling and eco-friendly office and business travel policies etc.
Over the last couple of years, especially since the coming of the Paris Agreement at CoP21, Environment CSR and sustainability activities of corporates have taken a more strategic turn and are now focused on mitigating climate change from their business practices and putting in place policies and practices that have a long-term effect and are capable of providing real solutions to climate change.
Though industry, with its high level of emissions, waste generation and fossil fuel consumption has traditionally been viewed as the chief villain in the fight against climate change; CSR programmes being undertaken by several large companies in India suggest that they have started thinking about their impact on the environment and are striving to become responsible corporations.
Data analysed by the Ministry of Corporate Affairs for CSR expenditure of all Indian companies in 2014-15 showed that 14 percent (INR 1,213 crore) of total CSR spending in India was made on activities focusing on conserving the environment. It was the third highest expenditure on a social impact issue after education (32 percent) and health (26 percent) and was greater than the amount spent on rural development (12 percent).
These figures highlight that companies today have an increasingly broad understanding of the risks and opportunities that climate change poses to their strategies and operations and that larger issues of sustainability triggered by climate change are becoming an integral component of dialogues with the major stakeholders.
CSR spends on environment and ecology are undergoing a slow, however gradual evolution. The focus is now on sustainable projects with long-term impact that has seen a shift from philanthropy to responsible business and strategic CSR. Mainstreaming sustainability into business operations and the rise of shared value projects has been observed and several large companies are starting to work on shared value projects which create value for both the community and for the business.
Corporates have also now, started emphasising the need of educating the future generations of the evils of climate change. Wipro Ltd, a corporation that has been serious about its philanthropy and sustainability practices, long before the coming of the mandatory compliance of the CSR law in 2014, has been running successful programmes all across India focussing entirely on its desire to educate school and college going children to drive sustainability thinking and action through the learning process in school and colleges across India. The programme serves a dual purpose - it provides students with exposure to multiple perspectives on biodiversity and water and promotes integrated sustainability education in schools and colleges and to co-create educational practices within institutions.
Another interesting initiative in this regard is that by the Tata Sustainability Group. Its 'Climate Change Champions Programme' seeks to lay down the fundamental scientific principles behind climate change and global warming, climate change impacts and the issue of mitigation and adaptation -- that is, solutions to dealing with the challenges presented by climate change. It aims to inculcate the best of environment friendly business practices amongst its participants with the aim to sensitise the participants regarding environmental, business and social sustainability.
But are these sustainability education programmes enough? The trends visible in CSR projects about the environment highlights a dichotomy in the way companies approach environment protection interventions in India. While some are thought leaders in the space and see sustainable development and environment protection as an opportunity; for many others, the pressing need for acting on conserving natural resources hasn’t arrived yet.
CSR spends with a focus on Environment and Ecology have to move away from the traditional planting of tress as a CSR activity and need to start looking at sustainable development and environment protection as an opportunity that sets in place, a new set of business practices that are in direct harmony with nature, a long-term redress mechanism to climate change and the foundations of a system that creates innovative models that generate sustainable livelihoods in large numbers without compromising with the environment.
We can now, only hope for the best, as we move towards a low-carbon economy, with the aim to fulfil India’s commitment to its Intended Nationally Determined Contribution (INDC) to the Paris Climate treaty. It is time for Indian corporates to demonstrate their commitment to the environment they have so indiscriminately exploited. ■