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The Corporation and the Environment
Ashok Khosla
C orporations
have great impact on the environment – often negative, sometimes
positive. Currently, corporations and environmentalists do not see
themselves as natural allies and rarely work with each other.
However, the corporate sector is a major actor in the economy and
could be a powerful force to promote sustainable development.
For
this to happen, some fundamental changes will have to take place in
existing production systems, marketing approaches, pricing
structures, corporate objectives.
Consumption, particularly of materials and energy, cannot continue
to grow forever, and sooner rather than later corporations will have
to find ways to grow other than by promoting ever growing demand for
their material-intensive products.
One
such way is to make sustainable development itself into a good,
profitable business. Businesses can also promote sustainable
development as an adjunct to their regular work. The possibilities
include :
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1. |
The business uses
cleaner production as a way to reduce pollution, introduce
renewable resources and raise resource productivity. (Results:
reduced costs and risks, cleaner working environment). |
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2. |
The business is
socially responsible and ensures that its operations and
policies do not create environmental and social problems. In the
Third World, this means a heavy emphasis on resettlement and
rehabilitation (R&R). (Results: smoother operations, new
clients). |
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3. |
The business
contributes philanthropically with financial, technical or
marketing support to NGOs, CBOs and other voluntary initiatives
in conservation and sustainable development. (Results:
friendlier neighbours, tax incentives). |
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4. |
The primary
objectives, products or services of the business are sustainable
livelihoods, poverty eradication, basic needs satisfaction,
cleaner production, pollution control, use of renewable
resources, regeneration of nature. (Results: new markets and
business opportunities). |
To
introduce such approaches, businesses need access to technical
expertise and innovative financing systems which currently is not
provided by government agencies, private sector consultants or
academic institutions. Independent organisations, including
technically oriented and environmentally sensitive NGOs, are in a
good position to provide such services.
Development Alternatives has several programmes to help reorient the
private sector :
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1a. |
Technology and
Renewables in Manufacturing (TRIM) :
We have carried out
a number of projects in small scale industries -electroplating,
recycled paper, etc.- to introduce cleaner production systems.
Our experience shows that great positive impact can be achieved
on the local environment. Other projects included recycling of
handmade paper in conventional industrial products (e.g.
Purolator Company for substituting paper for aluminium in diesel
fillers) and converting industrial wastes into useable products
(BMTPC for converting stone crusher waste into building
materials). |
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1b. |
Environmental
Assessment :
With its full range
of environmental management facilities, including environmental
quality laboratory, mobile monitoring van, portable water
and air quality testing kits, GIS and technical information for
establishing new plants and cleaning up old ones, Development
Alternatives has provided such services to Tata Steel Company,
Shriram Food & Fertilisers, etc. |
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2. |
Environmental and
Social Report (ESR) :
We have worked as World Bank consultants to introduce ESR at the
Board level for major infrastructure companies (e.g. IL&FS,
Powergrid, TN Urban Infrastructure and Financial Services) with
considerable success. This process involves detailed and lengthy
negotiations and persuasion, but the payoff is large. Such
consultancies are capable of generating good income for
independent organisations such as NGOs. They also provide good
opportunities for seeding and financing microenterprises based
on the use of local renewable resources. |
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3.
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Business
Initiatives in Rural Development (BIRD):
We have received
financing from a number of companies (including Hindujas, United
Distilleries, etc.) to carry out development projects on their
behalf. Many linkages with business have enabled Development
Alternatives to access technology support, markets and other
facilities which large corporations are able to provide at low
or no cost. |
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4. |
TARA :
the commercial wing of Development Alternatives is, itself, a
sustainable development business. TARA manufactures and markets
sustainable technologies and products through a decentralised
network of franchises and microenterprises. All its products are
carefully designed to maximise benefits to the community and
local economy and to minimise damage to the environment and
resource base. Sustainable businesses : |
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* |
are small,
decentralised |
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use renewable, local
resources |
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* |
create jobs |
Development Alternatives has also taken on itself a number of public
service commitments to sensitise and persuade the bigger corporate
sector of its responsibilities towards the attainment of sustainable
national development.
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Industry Initiatives
for Environment Compatibility:
A Case
Study of Shriram Foods and Fertilisers Industry
Background
Shriram Industrial
Enterprises Limited (SIEL) is a major producer of chemicals,
sugar, compressors and household products like vanaspati and
soap. Committed to "green production", SIEL asked Development
Alternatives to review the environmental programme instituted
at one of its plants, Shriram Foods and Fertilisers Industry (SFFI).
The objective of this review study was to confirm that the
case of SFFI demonstrates that environmental and economic
demands can co-exist in harmony.
The 1985 gas leak
Soon after the Bhopal
gas leak in 1984, SFFI experienced a big jolt when oleum gas
leakage occurred from its acid plant in Delhi. The gas leak
led to the closure of the plant and was subjected to strict
vigilance and surveillance by expert committees constituted by
the government, Delhi Administration and the Supreme Court.
Upon re-opening the industry after a year, SFFI adopted a
well-thought-out action plan to implement measures that were
even more stringent than the conditions. This was made
possible in a short span due to the cooperative efforts of
management and shop floor employees.
The survival factors
Realising the company’s
responsibilities towards society, the management of SFFI chose
to go beyond the mandatory steps. It adopted an agenda of
sustainable environmental management accounting for all
stakeholders. The strategy adopted by SFFI encompasses:
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a)
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Corporate
level management measures to ensure safety and quality of
life of people in and around, conservation of natural
resources and energy, proactive approaches to reduce
wastes and hazards. |
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b) |
Workplace
related management measures to improve labour-management
relations, health, safety and literacy of employees and to
create personal accountability. |
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c)
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In-plant
management measures to address safety and preparedness,
energy and material conservation, preventive maintenance,
recycle, reuse, and R&D for continuous improvement. |
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d)
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Stakeholder -
oriented management measures to satisfy the expectations
of customers and the general public. |
Role of Development
Alternatives
In order to inspire
NGOs, other plant operators of SIEL and other corporate
establishments, Development Alternatives has reviewed and
documented the commendable initiatives adopted by SFFI.
Development Alternatives has also suggested some measures for
continuous improvement. It was a unique experiment for
Development Alternatives to join hands with the corporate
sector and promote the concept of internalisation of
environmental concerns into business decision making. |
In the
late 1980s, Development Alternatives convened and organised two
major national Roundtables on Industry and Environment. These
multi-stakeholder Roundtables brought together several hundred
representatives from industry, trade unions, government, NGOs,
academic and research organisations and were instrumental in the
creation of widespread awareness of environmental issues in
industry. They also initiated several activities that led to the
creation of legislation, institutions and databases which are now
part of industry’s everyday concerns.
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Project to Introduce
Cleaner Production in Electroplating Units
Development Alternatives
in partnership with the Anand Parbat Industry Association has
initiated a demonstration-cum-dissemination study for pollution
prevention in the electroplating sector. The study was sponsored
by United States-Asia Environment Partnership (USAEP) and Asia
Foundation together under the NGO-Business environmental
partnership programme. This programme was initiated by USAID
after realising the potential impact that NGOs can have in
promoting environmental concerns among business. With the
co-operation of the Anand Parbat Industry Association,
Development Alternatives is demonstrating best practices for
pollution prevention in two selected units. Development
Alternatives is providing all technical help to the
entrepreneurs and trains the shopfloor personnel. To ensure
continuity of practicing pollution prevention, Development
Alternatives is also conducting awareness meetings for the
entrepreneurs and the workforce. Realising the benefits of
pollution prevention, the entrepreneurs will be promoting these
concepts among other entrepreneurs in the Anand Parbat
industrial cluster. For large scale dissemination, Development
Alternatives is preparing an audio-visual training module for
the benefit of small scale electroplaters.
q
Dr. K. Vijaya Lakshmi |
Currently, Development Alternatives is an active role player in the
Confederation of Indian Industries’ efforts to improve the
participation of corporations in national development. It is a
member of CII’s committees on Environment, Renewable Energy and
Rural Development.
In
1992, as co-organisers of the NGO forum at the Earth Summit at Rio,
Development Alternatives was largely responsible for the inclusion
of the business sector in the independent sector’s activities. We
worked closely with the Business Council for Sustainable Development
and the International Chamber of Commerce in various initiatives
that have subsequently had considerable world-wide impact.
Subsequently, Development Alternatives has continued to work closely
with industry at the international level through various forums such
as the UNEP Industry & Environmental Programmes, The Prince of Wales
Business Leaders Forum, ICC and WBCSD.
« « « «
Development Alternatives and TARA are independent, non-profit
organisations working on issues of sustainable development. Their
particular focus is on the development and delivery of appropriate
technologies, improved environmental managemental methods and more
effective policies and institutions for attaining the goals of
national development. They are largely financed from their income
from the sale of products and services. Their research programmes,
mainly for the development of new technologies are partially
supported by project grants from the Government of India, various
donor agencies, primarily the governments of Switzerland(SDC) and
Canada (IDRC) and funders such as the MacArthur and Ford Foundation.
Approximately 10 per cent of the activities of Development
Alternatives are devoted to the corporate programmes described
above. Even though TARA is a not-for-profit, since it has no
shareholders and does not distribute profits, it operates as a
self-financing business, depending for its operations entirely on
its own earnings. In working towards corporate objectives that are
driven wholly by the imperatives of sustainable development and
operating in a business-like manner, the Development Alternatives
group is pioneering a new institutional structure we would call a
"Social Enterprise".
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