Post Graduate Diploma in Environmental Management (PGDEM)

Paper - V

Unit - 10
Corporate Environmental Responsibility

EPCO INSTITUTE OF ENVIRONMENTAL STUDIES

EPCO Paryavaran Parisar, E-5 Arera Colony, Bhopal 462016 (M.P.)
Tel. 2466970, 2464318, 2466859 Fax: (0755)-2462136
Website www.epco.in email: [email protected] , [email protected]
Corporate Environmental
Responsibility
Corporate Environmental Responsibility

v Building Blocks of CSR/Sustainability

v Overview of CSR/Sustainability

v The Triple Bottom Line Approach

v Philanthropy – Conventional and Strategic

v Environmental and Social Issues

v Labour and Related Issues

v Ethical and Governance Issues

v Human Rights – UN Charter

What is Corporate?

A body of people acting as one individual e.g. for administration or business purposes.
Or
Involving corporation: relating or belonging to a corporation.
Or
Of corporation's employees: designed for, suitable for, or associated with people who
work for large corporations
Or
Incorporated: legally united to form a body that can act as a unit.

Corporate responsibility

Corporations are now held accountable not just by the government, but also by the
public. Corporate responsibility must now take into account how dealings with
customers, shareholders and employees are seen by the world. Large global
corporations know that people are watching them and that any wrongdoing will not go
unnoticed.

Approach

We strive to operate safely, protect our workers and deal ethically with our stockholders,
partners and the public.

Ø Ethics & Governance

Ø Human Rights
Ø Diversity
Ø Workforce Health & Safe

Community

We invest in improving public health, bolstering education and developing local

economies.

Ø Economic Development
Ø Health
Ø Education
Environment

We are dedicated to preserving a robust and diverse natural environment wherever we

operate.

Ø Climate Change
Ø Fresh Water
Ø Biodiversity
Ø Energy Efficiency

Reporting

Our corporate responsibility reporting details our commitments and successes

Current Status of CSR In India

Ø Today, CSR in India has gone beyond merely charity and donations, and is
approached in a more organized fashion. It has become an integral part of the
corporate strategy. Companies have CSR teams that devise specific policies,
strategies and goals for their CSR programs and set aside budgets to support
them.

Ø CSR Programs could range from overall development of a community to

supporting specific causes like education, environment, healthcare etc.

Corporate Social Responsibility

Corporate Social Responsibility is a company’s commitment to its stakeholders to

conduct business in an economically, socially and environmentally sustainable manner
that is transparent and ethical. Stakeholders include employees, investors, shareholders,
customers, business partners, clients, civil society groups, Government and non-
government organizations, local communities, environment and society at large.
Corporate enterprises are expected to conduct their business operations and activities in
a socially responsible and sustainable manner at all times.
Philanthropy – Conventional and Strategic

Strategic Philanthropy: is a unique and powerful way to combine your company

marketing goals with your desire to increase the well-being of mankind

Basic Philanthropy: Many businesses already engage in basic forms of philanthropy,

such as:

Ø Donating gift certificates to a church silent auction

Ø Allowing a high school club to set up a car wash on the company parking lot
Ø Contributing coffee for a community event
Ø Buying a school yearbook ad
Ø Sponsoring the local childrens sports team
Philanthropy in India

Emergence of Philanthropy in India

The key principle of philanthropy is 'giving for a specific reason'. Such kind of giving is
aimed at attacking the root cause of a problem, issue or social concern. Families thus
focus on issues such as conservation of environment, education, health, disaster
management, unemployment, preservation of heritage etc that may be out of their line of
business.

Corporate Social Responsibility

As businesses grew, the kind of 'giving for social good' of corporate organizations also
shifted towards being more organized and business related and viewed as strategic
investments made to achieve a desired goal.
In recent years, corporate philanthropy has developed to include the concerns and
expectations of the companies' stakeholders and communities at large, the results and
outcome thus being measured on set parameters. According to the respondents of a
survey conducted by McKinsey, companies should utilize the opportunities a family
foundation offers to optimize the impact of their social development endeavours.

Environmental Issues

Environmental issues are one of the primary causes of disease, health issues and long
term livelihood impact for India.

Major issues:

Ø History
Ø Population growth and environmental quality
Ø Pollution- Water, Air, Noise, Solid waste, Land or Soil
Ø Greenhouse gas emissions or Chemical Pollution
Ø Environmental issues and Indian law
Ø Conservation
History:

Ashoka Pillar Edicts were one of earliest efforts in India that focused on respecting and
preserving environment, forests and wildlife

Population growth and environmental quality

A growing population exerts pressure on agricultural land, causing environmental

degradation, and forcing the cultivation of land of poorer as well as poorer quality. This
environmental degradation ultimately reduces agricultural yields and food availability,
causes famines and diseases and death, thereby reducing the rate of population growth.

Pollution- Water, Air, Noise, Solid waste, Land or Soil

Ø and its resoup Floods are a significant environmental issue for India. It causes
soil erosion, destruction of wetlands and wide migration of solid wastes.
Ø Air pollution, poor management of waste, growing water scarcity, falling
groundwater tables, water pollution, preservation and quality of forests,
biodiversity loss, and land/soil degradation are some of the major environmental
issues India faces today.
Ø India's population growth adds pressure to environmental issues rces

Air pollution:

In India is a serious issue with the major sources being fuel wood and biomass burning,
fuel adulteration, vehicle emission and traffic congestion. India is the world's largest
consumer of fuel wood, agricultural waste and biomass for energy purposes. Traditional
fuel (fuel wood, crop residue and dung cake) dominates domestic energy use in rural
India and accounts for about 90% of the total. In urban areas, this traditional fuel
constitutes about 24% of the total. Fuel wood, agri waste and biomass cake burning
releases over 165 million tonnes of combustion products into India's indoor and outdoor
air every year. Vehicle emissions are another source of air pollution. Vehicle emissions
are worsened by fuel adulteration and poor fuel combustion efficiencies from traffic
congestion and low density of quality, high speed per 1000 people

Solid waste pollution:

Trash and garbage disposal services, responsibility of local government workers in India,
are ineffective. Trash and garbage is a common sight in urban and rural areas of India. It
is a major source of pollution. Indian cities alone generate more than 100 million tons of
solid waste a year. Street corners are piled with trash. Public places and sidewalks are
despoiled with filth and litter, rivers and canals act as garbage dumps. In part, India's
garbage crisis is from rising consumption. India's waste problem also points to a
stunning failure of governance.

Land or Soil pollution

In March 2009, the issue of Uranium poisoning in Punjab came into light, caused by fly
ash ponds of thermal power stations, which reportedly lead to severe birth defects in
children in the Faridkot and Bhatinda districts of Punjab. Land pollution in India is due to
the poisonous pesticides and fertillisers as well as corrosion during 2009. Another main
reason of this type of pollution is poor garbage disposal services in both the rural and
urban areas of India. It is very common in India to find heaps of garbage on street
corners

Greenhouse Gases (GHG)

99 per cent of our atmosphere is made up of only two gases: 78 per cent nitrogen and
21 per cent oxygen. They do not really affect the climate regulation on the planet.
Greenhouse gases are those that can absorb and emit infrared radiation, but not
radiation in or near the visible spectrum. In order, the most abundant greenhouse gases
in Earth’s atmosphere are:

Ø Water vapor (H20)

Ø Carbon dioxide (CO2)
Ø Methane (CH4)
Ø Nitrous oxide (N20)
Ø Ozone (03)
Ø CFCs

Environmental issues and Indian law

v Since about the late 1980s, the Supreme Court of India has been pro-actively
engaged in India's environmental issues. In most countries, it is the executive
and the legislative branches of the government that plan, implement and address
environmental issues; the Indian experience is different. The Supreme Court of
India has been engaged in interpreting and introducing new changes in the
environmental jurisprudence directly. The Court has laid down new principles to
protect the environment, re-interpreted environmental laws, created new
 institutions and structures, and conferred additional powers on the existing ones
through a series of directions and judgments.

v The Court’s direction on environmental issues goes beyond the general

questions of law, as is usually expected from the highest Court of a democratic
country. The Supreme Court of India, in its order, includes executive actions and
technical details of environmental actions to be implemented. Indeed, some
critics of India's Supreme Court describe the Court as the Lords of Green
Bench or Garbage Supervisor. Supporters of India's Supreme Court term these
orders and the Indian bench as pioneering, both in terms of laying down new
principles of law, and in delivering environmental justice.
Global warming and climate change

The six trace gases that are blamed for global warming make up only 1 per cent of
gases in the atmosphere. The gases created mainly by human activities are:

v Carbon dioxide
v Methane
v Nitrous oxide
v Sulphur hexafluoride
v Hydrofluorocarbons
v Perfluorocarbons

Conservation

v India is a large and diverse country. Its land area includes regions with some of
the world's highest rainfall to very dry deserts, coast line to alpine regions, river
deltas to tropical islands. The variety and distribution of forest vegetation is large.
India is one of the 12 mega biodiverse regions of the world.
v Indian forests types include tropical evergreens, tropical deciduous, swamps,
mangroves, sub-tropical, montane, scrub, sub-alpine and alpine forests. These
forests support a variety of ecosystems with diverse flora and fauna.
v Until recently, India lacked an objective way to determine the quantity of forests it
had, and the quality of forests it had.

Social Issues

v Education Breakthrough
v The Panchayat
v Uplift of the Rural Poor
v Environment, Ecology and Forestry
v Women
v Welfare
v Welfare of SCs, STs, Backward Classes and Others
v Minorities
v Children and Drug Abuse
v Family Welfare Programme
v Planned Parenthood
v Child and Mother Care
v AIDS
v Medical Education
 v Rural Health Services
v Housing and Urban Development

Labour and Related Issues

v Labour structure in India

v Labour relations: 1950-1990, 1990-2000, 2000-2011
v Unorganised labour issues

Migrant
Debt bondage
Child labour

v Labour laws in India

History
Criticism

v Reforms

Current Scenario:

The labour sector of the Indian economy consists of roughly 487 million workers, the
second largest after China.[1] Of these over 94 percent work in unincorporated,
unorganised enterprises ranging from pushcart vendors to home-based diamond and
gem polishing operations.[The organised sector includes workers employed by the
government, state-owned enterprises and private sector enterprises. In 2008, the
organised sector employed 27.5 million workers, of which 17.3 million worked for
government or government owned entities.

v India -487 million workers

v China -795 million workers
v United States -154 million workers

Labour structure in India

v Over 94 percent of India's working population is part of the unorganised

sector.[2] In local terms, organised sector or formal sector in India refers to
licensed organisations, that is, those who are registered and pay sales tax,
income tax, etc. These include the publicly traded companies, incorporated or
formally registered entities, corporations, factories, shopping malls, hotels, and
large businesses. Unorganised sector, also known as informal sector or own
account enterprises, refers to all unlicensed, self-employed or unregistered
economic activity such as owner manned general stores, handicrafts and
handloom workers, rural traders, farmers.
v This classification categorized India's unorganised labour force by occupation,
nature of employment, specially distressed categories and service categories
Agriculture, dairy, horticulture and related occupations alone employ 52 percent
of labour in India.
v About 30 million workers are migrant workers, most in agriculture, and local
stable employment is unavailable for them.
 v India's National Sample Survey Office in its 67th report found that unorganised
manufacturing, unorganised trading/retail and unorganised services employed
about 10 percent each of all workers nationwide, as of 2010. It also reported that
India had about 58 million unincorporated non-Agriculture enterprises in 2010.
v Given its natural rate of population growth and aging characteristics, India is
adding about 13 million new workers every year to its labour pool. India's
economy has been adding about 8 million new jobs every year predominantly in
low paying, unorganised sector.
v The remaining 5 million youth joining the ranks of poorly paid partial employment,
casual labour pool for temporary infrastructure and real estate construction jobs,
or in many cases, being unemployed
Labour relations

v About 7 per cent of the 400 million-strong work forces were employed in the
formal sector (comprising government and corporates) in 2000[contributing a
whopping 60 per cent of the nominal GDP of the nation. The Trade Unions Act of
1926 provided recognition and protection for a nascent Indian labour union
movement. The number of unions grew considerably after independence, but
most unions are small and usually active in only one firm.
v In 1997, India had about 59,000 trade unions registered with the government
of India. Of these only 9,900 unions filed income and expenditure reports and
claimed to represent 7.4 million workers. The state of Kerela at 9,800 trade
unions had the highest number of registered unions, but only few filed income
and expenditure reports with the government of India. The state of
Karnataka had the fastest growth in number of unions between 1950s to 1990s.

v In 1995, India had 10 central federations of trade unions, namely (arranged by

number of member unions in 1980): INTUC, CITU, BMS, AITUC, HMS, NLO,
UTUC, UTUC-LS, NFITU and TUCC. Each federation had numerous local trade
union affiliates, with the smallest TUCC with 65 and INTUC with 1604 affiliated
unions. By 1989, BMS had become India's largest federation of unions with 3,117
affiliated unions, while INTUC remained the largest federation by combined
number of members at 2.2 million. The largest federation of trade unions,
INTUC, represents about 0.5% of India's labour force in organised sector and
unorganised sector. In 2010, over 98% of Indian workers did not belong to any
trade unions and were not covered by any collective bargaining agreements
Labour relations during 1950-1990

v Between 1950 and 1970, labour disputes nearly tripled in India, from an
average of 1000 labour disputes per year, to an average of 3000 labour
disputes per year. The number of labour relations issues within a year peaked
in 1973 at 3,370 labour disputes. The number of workers who joined labour
disputes within the same year, and stopped work, peaked in 1979, at 2.9 million
workers.
v The number of lost man-days from labour relation issues peaked in 1982 at
74.6 million lost man-days, or about 2.7% of total man-days in organised
sector. While the 1970s experienced a spike in labour unions and disputes, an
sudden reduction in labour disputes was observed during 1975-1977, when
Indira Gandhi, then prime minister, declared an emergency and amongst other
things suspended many civil rights including the worker's right to strike.
Labour relations during 1990-2000

v Politicians have often been union leaders, and some analysts believe that
strikes and other labour protests are called primarily to further the interests of
political parties rather than to promote the interests of the work force.
v However, the figures for 1990 and preliminary data from 1991 indicate declines
from levels reached in the 1980s, when between 33 to 75 million workdays
per year were lost because of labour disputes. In 1999, the government of
India recorded about 927 strikes and lockouts, or about half of those for 1990.
The number of lost man-days was about the same for 1999 and 1991, even
though Indian economic output and number of workers had grown significantly
over the 1990s.
v Many in the urban unorganised sector are Self employed labourers, street
vendors, and other services providers who neither pay union dues nor belong to
any particular union.

Labour relations during 2000-2011

v Between 2004 and 2011, India has experienced a decline in unionised labour.
The number of labour disputes has dropped to 400 annually over the same
period, compared with over 1,000 in the 1990s. The annual number of man-days
lost to labour disputes in early 1990s averaged around 27 million; by 2010, while
Indian economy has grown significantly and Indian labour force has expanded,
the average number of man-days lost has dropped by about 30%.
v The downward trend continues both in terms of number of disputes and lost man-
days per dispute. For example, India experienced 249 disputes in the first 5
months of 2010, and 101 disputes in 2012 over the same period.
Unorganised labour issues

Many issues plague unorganised labour. India's Ministry of Labour has identified
significant issues with migrant, home or bondage labourers and child labour.
.
v Migrant workers-Migrant skilled and unskilled labourers of India constitute about
40 to 85 percent of low wage working population in many parts of the Middle
East. They are credited to having built many of the notable buildings in the Arab
countries, including the Burj Khalifa in Dubai (above). Various claims of poor
living conditions and labour abuse have been reported.
v India has two broad groups of migrant labourers - one that migrates to
temporarily work overseas, and another that migrates domestically on a seasonal
and work available basis.
v About 4 million Indian-origin labourers are migrant workers in the middle east
alone. They are credited to have been the majority of workers who built many of
Dubai, Bahrain, Qatar and Persian Gulf modern architecture, including the Burj
Khalifa, the tallest building in world's history which opened in January 2010.

v These migrant workers are attracted by better salaries (typically US$2 to 5 per
hour), possibility of earning overtime pay, and opportunity to remit funds to
support their families in India. The Middle East-based migrant workers from India
remitted about US$20 billion in 2009. Once the projects are over, they are
required to return at their own expenses, with no unemployment or social security
 benefits. In some cases, labour abuses such as unpaid salaries, unsafe work
conditions and poor living conditions have been claimed.
v Domestic migrant workers have been estimated to be about 4.2 million. These
workers range from full-time to part-time workers, temporary or permanent
workers. They are typically employed for remuneration in cash or kind, in any
household through any agency or directly, to do the household work, but do not
include any member of the family of an employer. Some of these work
exclusively for a single employer, while others work for more than one employer.
Some are live-in workers, while some are seasonal. The employment of these
migrant workers is typically at the will of the employer and the worker, and
compensation varies.

v Debt bondage-Bonded labour is a forced relationship between an employer and

an employee, where the compulsion is derived from outstanding debt. Often the
interest accrues at a rate that is so high that the bonded labour lasts very long
periods of time, or indefinitely.
v Estimates of bonded labour in India vary widely, depending on survey methods,
assumptions and sources. Official Indian government estimates claim a few
hundred thousand labourers are bonded labourers; while estimates by activists
and social organisations range between 2.6 to 5 million. The major employment
sectors for debt bonded labour include: agriculture, stone quarries, brick kilns,
religious and temple workmen, pottery, rural weaving, fishing, forestry, betel and
bidi workers, carpet, illegal mining and fireworks. Child labour has been found in
family debt bonded situations. In each survey, debt bonded labourers have been
found in unorganised, unincorporated sector.
v Child labour- India had 12.6 million children, aged 5–14, who work either part-
time or full-time. Of these over 60 percent work in unorganised agriculture sector,
and the rest in other unorganised labour markets.[27] Poverty, lack of schools,
poor education infrastructure and growth of unorganised economy are
considered as the most important causes of Child labour in India.
v Article 24 of India's constitution prohibits child labour. Additionally, various laws
and the Indian Penal Code, such as the Juvenile Justice (care and protection) of
Children Act-2000, and the Child Labour (Prohibition and Abolition) Act-1986
provide a basis in law to identify, prosecute and stop child labour in
India.[32] Nevertheless, child labour is observed in almost all unorganised, small
scale, informal sectors of the Indian economy.
v Scholars suggest inflexibility and structure of India's labour market, size of
informal economy, legal hurdles preventing industries from scaling up and lack of
modern manufacturing technologies are major macroeconomic factors
encouraging demand for and acceptability of child labour
Labour laws in India

History: The laws of India originated and express the socio-political views of leaders
such as Nehru from pre-1947 independence movement struggle.
India has numerous labour laws such as those prohibiting discrimination and Child
labour, those that aim to guarantee fair and humane conditions of work, those that
provide social security, minimum wage, right to organise, form trade unions and enforce
collective bargaining. India also has numerous rigid regulations such as maximum
number of employees per company in certain sectors of economy, and limitations on
employers on retrenchment and layoffs, requirement of paperwork, bureaucratic process
and government approval for change in labour in companies even if these are because
of economic conditions. Indian labour laws are considered to be very highly regulated
and rigid as compared to those of other countries in the world. The intensity of these
laws have been criticised as the cause of low employment growth, large unorganised
sectors, underground economy and low per capita income. These have led many to
demand reforms for labour market

v India has over 50 major Acts and numerous laws that regulate employers in
matters relating to industrial relations, employee unions as well as who, how and
when enterprises can employ or terminate employment. Many of these laws
survive from British colonial times, while some have been enacted after India's
independence from Britain.
v India is a federal form of government. Labour is a subject in the concurrent list of
the Indian Constitution and therefore labour matters are in the jurisdiction of both
central and state governments. Both central and state governments have
enacted laws on labour relations and employment issues. Some of the major
laws relevant to India are:[
ü Workmen’s Compensation Act of 1923
ü Trade Unions Act of 1926
ü Payment of Wages Act of 1936
ü Industrial Employment (Standing orders) Act of 1946
ü Industrial Disputes Act of 1947
ü Minimum Wages Act of 1948
ü Industries (Regulation and Development) Act of 1951
ü Maternity Benefit Act of 1961
ü Payment of Bonus Act of 1965
ü Payment of Gratuity Act of 1972
Ethical and Governance Issues
Good ethics and governance are not just "moral" or "compliance" issues. In the long
term, they are essential behavioural traits for the organisation that strengthen brand
equity and help ensure stable growth.

The Indian economy is on a roll. Organisations are increasingly becoming global. From a
simple "let's export" mindset, companies are moving to the next stage — establishing
marketing, manufacturing and distribution networks abroad. Operational excellence,
quality systems, proactive human resource strategies, logistics — Indian companies
have ultimately arrived. What, then, is the next global frontier for India Inc? Which is the
one area that no Indian company can afford to ignore, as double-digit growth rates
become the norm and organisations scramble to globalise? It is ethics and governance.
Indian organisations — especially the small and medium sized ones — need to be
aware of one requirement as they begin their globalisation journey. Not only do they
need to be ethical, they have to be seen to be so. Global customers will demand to see
proof of ethics and governance systems at work. This means documentation, systems
and processes. Just as quality management system certification and capability maturity
models (ISO 9001, CMM and the like) became minimum requirements for establishing
credibility, ethics and governance policies and processes will be the "next wave"
sweeping the global market place.
Tracking issue: While individual organisational approaches may vary, here are some key
steps to be followed in tackling this "next frontier":

ü Establish an Ethics and Governance Policy for the company

ü Publish the Policy, along with a Code of Conduct for the employees
ü Communicate the policy widely and repeatedly
ü Encourage dialogue and challenge, in order to improve understanding and
"ownership" of the policy at an individual level
ü Set the example from the top; practice the policy consistently and visibly. This is
critical, the ultimate fate of the policy depends on this.
ü Circulate the policy amongst customers and suppliers. This will make it easier for
the employees to follow the policy.
ü Establish an Ethics Hotline which is secure, confidential and available to all
employees
ü Review the policy at regular intervals, to make sure it stays current with changing
regulatory and market requirements.
ü Good ethics and governance are not just "moral" or "compliance" issues.
Human Rights – UN Charter

In India the concept of human rights emphasizing pivotal position of individual citizen
stretches back to the first millennia. Human rights have been an inherent component of
various philosophies that have flourished in India. The leaders of the Indian National
Movement stressed the primacy of human rights in the future constitutional set-up. The
Indian Constitution, as a result, stands as one of the most comprehensive and self-
contained documents on human rights.
India took active part in drafting of the Universal Declaration on Human Rights. Dr (Mrs).
Hansa Mehta, a Gandhian political activist and social worker who led the Indian
delegation, had made important contributions in drafting of the Declaration, especially
highlighting the need for reflecting gender equality. India is fully committed to the rights
proclaimed in the Universal Declaration. India is a signatory to the six core human rights
covenants, and also the two Optional Protocols to the Convention of the Rights of the
Child.
India has been advocating a holistic and integrated approach that gives equal emphasis
to all human rights, based on their inter-dependence, inter-relatedness, indivisibility and
universality, and reinforces the inter-relationship between democracy, development,
human rights and international cooperation for development.

India had played an active role as member of the Commission on Human Rights (CHR)
since its creation in 1947. India was elected in 2006 as a member of the newly
established Human Rights Council (HRC), which replaced the CHR, by securing the
highest number of votes among the contested seats. India was re-elected again as a
member in 2007 by securing the highest votes by polling 185 votes out of 190 votes
cast. India attaches great importance to the Human Rights Council and is committed to
make the Council a strong, effective and efficient body capable of promoting and
protecting human rights and fundamental freedoms for all.
INDIA AND UNITED NATIONS- HUMAN RIGHTS

Ø Human Rights Quotations of the Day

Ø *"Peace can only last where human rights are respected, where the people are
fed, and where individuals and nations are free.“
-- 14th Dalai Lama
Ø * "You can chain me, you can torture me, you can destroy this body, but you will
never imprison my mind.“
-- Mahatma Gandhi
Ø * "Injustice anywhere is threat to justice everywhere.“
-- Martin Luther King