Home In the News

Long-term Framework Required to Engage Companies in Sustainability Initiatives

Logo ISC 2013New Delhi – The second India Sustainability Conclave (ISC 2013), organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), came to a close on 26 February. The two-day Conclave saw several recommendatory measures come up to engage the private sector in sustainability initiatives.

Ms. Lise Grande, UN Resident Coordinator and UNDP Resident Representative, while speaking at the Inaugural Session of the India Sustainability Conclave, highlighted the “Triple Wins for Sustainable Development” which aims at achieving economic growth, social development and environmental sustainability at the same time. Ms. Grande said, “The private sector needs to take decisive actions to adopt environmentally intelligent practices for triple win solutions to work effectively. Without the active participation of private sector, not much can be achieved.”

The Conclave brought to the forefront issues like the lack of capacity for environment management and due diligence. Speaking at the Conclave, Dr. Prodipto Ghosh, Chairman – FICCI Climate Change Task Force and Former Secretary, Ministry of Environment & Forests, Government of India, said that low levels of awareness on environmental sustainability amongst CEOs, capture of regulatory framework by vested interests in political class, civil society’s lack of legitimate constructive attitude towards sustainability, and the absolutist stance taken by both environmental rights groups as well as pro-industrialization groups, must be addressed on priority for business goals to be balanced in a sustainability paradigm.

Dr. A. Didar Singh, Secretary General, FICCI, stated that business leaders are increasingly realising the need to integrate environmental and social issues within their business strategies. Many Indian businesses have begun taking concrete steps towards developing and implementing a sustainability strategy. But despite the growing interest, many businesses lack the capacity and know-how for managing such initiatives. Therefore, it becomes crucial for the government to provide the framework for companies to engage in sustainability.

Dr. Dipak Dasgupta, Principal Economic Advisor, Department of Economic Affairs, Ministry of Finance, Government of India, stated that a policy framework is required for R&D at a national level. While China has 2% of GDP set for R&D in clean technologies, India has decreased its contributions from 0.9% of GDP to 0.8%. He said that the private sector in India will have to take the lead in R&D initiatives in clean technologies.

The session on “CSR Provisions in the Companies Bill” also saw some interesting deliberations. Mr. Manoj Kumar, Joint Secretary, Ministry of Corporate Affairs, Government of India, said that the Companies Bill has no provision for any adjudicatory body to overlook the implementation of the CSR provisions and added that the Board of Directors of companies would play an important role in deciding which initiatives would be taken up by the company as part of CSR. The new provisions of the Companies Bill would cover more than 3000 companies and close to Rs. 15,000 crore to be spent as part of CSR initiatives. He added that India is the first country to pass such a legislation and we hope India would be a trailblazer for the rest of the world by implementing this exercise in the right manner.

FICCI ISC 2013On the theme of “Sustainable Production and Consumption”, the Conclave highlighted that there is a need to bring in a generational change in mind-set and that sustainability should become part of academic curriculum in schools. There is a need to bring behavioural change in consumption patterns and a necessity to bring ethics into media and advertising which promote consumerism.

A panel of CEOs, who spoke on the theme “Driving Sustainability from the Top”, agreed that sustainability makes good business sense. Marks & Spencer India CEO Mr. Venu Nair spoke about M&S’ sustainability initiatives which are termed “Plan A” within the company, and said sustainability initiatives of the company are cash positive and 31% of M&S’ products today have an eco attribute. Renewable energy can be one of the most cost effective, environment-friendly options for the corporate sector to adopt as part of their sustainability agenda, said the two CEOs Mr. Rakesh Bakshi, CMD, RRB Energy, and Mr. V. Sai Baba, CEO of Lanco Solar & Chairman of FICCI Solar Energy Task Force, representing wind and solar energy sectors, respectively.

In the financing session, one of the leading banks participating in the Conclave added that there is need to not only press for renewable energy obligation to be enforced and implemented by state governments, but also a policy to have a renewable lending obligation for the banks. This will ensure that banks lend to the renewable energy sector.

Mr. Ranjan Chatterjee, Expert Member, Principal Bench, National Green Tribunal (NGT), speaking at the Valedictory Session of the Conclave, said that issues of development cannot be looked at in isolation from environmental and social disruptions. Mr. Chatterjee pointed out that the NGT has an important role to play in driving the sustainable development agenda by ensuring that cases of environmental violations are dealt with in an appropriate manner and the polluter pays principle (PPP) is enforced. He also stated that the NGT was a unique institution and that its intent was not to be a road-block in development but to ensure that the people adversely affected by development projects were adequately compensated with minimal environmental and social damage.

Ms. Rita Roy Choudhury, Senior Director & Head – Environment, Climate Change, Renewable Energy, FICCI, stated, “We heard several success stories of corporate sustainability in India; it only goes to show that companies are taking sustainability seriously and believe that it will provide them a competitive edge while making them a good corporate citizen. For this to build momentum across the corporate sector, companies seek a policy environment that will provide incentives to those that are delivering beyond mere compliance and recognition for those who have leapfrogged as far as sustainability goes. They seek a differentiator status.”

Source: FICCI.