MARUTI UDYOG LIMITED GURGAON The car major saved Rs 26 crore in the first two years of obtaining its ISO 14001 certification in 2001

Last year, Tata Steel in Jamshedpur found an innovative solution to a small but nagging problem. Every day, the 4-million-tonne steel plant produced 3,000 litres of oil and grease as waste. Traditionally, the waste oil had been sold to small-time buyers at throwaway prices, but the company was never happy about it, and not because the oil fetched Rs 2 a litre. Rather, Tata Steel's discomfort lay in the fact that it never knew what the buyers did with the oil and how much of it actually ended up polluting the environment. As an ISO 14001 company committed to protecting the environment, the steel giant decided to do something about it.

After several weeks of brainstorming, the plant's engineers hit upon an idea: instead of selling the waste oil, they would simply use the oil as fuel in the blast furnaces. At an investment of less than Rs 7 lakh, an elaborate network of storage tanks and pipelines was devised to inject the waste oil into four blast furnaces. There were two advantages to doing so: One, the company now knew for sure that the oil wouldn't contaminate ground water anywhere. Two, it saved Tata Steel a tidy sum. Every kilo of oil could replace 1.5 kg of coke, which cost Rs 10 a kilo. Says R.P. Sharma, Chief (Environment & Occupational Health), Tata Steel: "There's a clear business case here: You improve the environment and that directly improves your bottom line."

It's taken a long while, but companies in India have finally got the message: that going green isn't so much about saving Mother Earth as saving their own organisation. Consider the alacrity with which the big companies are getting themselves ISO 14001 certified. At the end of 2003, there were less than 800 companies with the coveted certification, but by the middle of this year, the count had crossed 1,260. Besides, there are 350 certifications in the pipeline. Which are the industries that are getting environmentally friendly? Just about all: from chemicals to it, from refining to steel-making and from power to hospitality. Says K.P. Nyati, Head (Environment Management Division), Confederation of Indian Industry (CII): "When we started off 12 years ago, we had a tough time convincing companies to go green because most of them saw it as an additional expense. But when we switched tack and told them that waste was actually a sign of inefficiency, the penny dropped."

JUBILANT ORGANOSYS GAJRAULA, UP At the distiller's, treated waste water is piped to farmers and co2 sold to cola majors

Concern for the environment is relatively a recent phenomenon in the country. It wasn't until 1983 that the Ministry of Environment was set up, and the first major environmental regulation came up in 1986 (the Environment Protection Act) in response to the Bhopal gas tragedy of December 1984 that killed thousands of people and is considered to be the worst industrial disaster in the world. That's when industries in India woke up to the issue of industrial safety and environmental protection. According to Nyati of CII, back in 1984, compliance rate in the 17 industries categorised as the most-polluting was an abysmal 30 per cent. By 1994, it had shot up to 80 per cent, and today it is said to be 100 per cent. What's forcing companies to go green? Regulatory and consumer pressure within and outside the country. Says S.K. Jain, Director (HR), BHEL: "During a recent project in Oman, the customer not just insisted on ISO 14001 certification but also ISO 14001-trained engineers."

Not surprisingly then, the market for pollution control and environment consultancy services has been booming. In 1992, it was estimated at a piffling $500 million (Rs 2,300 crore, at current exchange rates).

Today, it has grown into a whopping $6-billion (Rs 27,600 crore) industry (if pollution prevention technologies, i.e. green machines, are included, the market size goes up to $10 billion, or Rs 46,000 crore, according to CII). To put that in perspective, the environment protection business has grown at double the rate of the average industry growth, and most experts agree that this momentum is likely to be sustained until at least 2010. What helped was the fact that in 1996 the International Standards Organisation (ISO) issued the first standard for environment management systems under the ISO 14000 series, taking serendipity out of environment management.

Until that happened, the corporate focus was primarily on pollution control or, as it is called, end-of-the-pipe solutions. But companies realised that waste was not an inevitable by-product of manufacturing, and that by deploying environmentally-friendly "front of the pipe" and "through the pipe" technologies, they would not only produce less of hazardous waste but actually save money. Maruti Udyog, for instance, saved a whopping Rs 26 crore in the first two years after it obtained its ISO 14001 certification in 2001. Says Jagdish Khattar, the company's Managing Director: "When we cut down on raw material consumption and wastage, not only do we save money for ourselves but are also able to pass on the benefits to our consumers." By the way, stakeholders have some strong views on what their favourite companies should be doing about environment protection (See The Green Brigade, a BT-AcNielsen ORG-MARG survey, on page 102).

More often than not, environment management is more about innovative thinking. Take the case of Jubilant Organosys. The Rs 1,175-crore company operates the largest distillery (an industry usually considered to be one of the worst polluters) in Asia at Gajraula in up, but under a "Back to Mother Earth" programme it has discovered ways of profiting from waste. For instance, the carbon dioxide that the distillery generates as part of the distillation process is captured, treated and sold to Coca-Cola and Pepsi. Last year, it fetched the company Rs 8 crore. Similarly, the waste water generated by the distillery is piped to sugarcane farmers for irrigation, since the water is rich in nutrients. And solid waste is mixed with pressed mud bought from sugar mills and given away to farmers to use as bio-compost. Says A.K. Ghosh, Chief (Environment, Health & Safety), Jubilant: "It took us more than three years of research to come up with such solutions. But now we have farmers queuing up for our waste water and bio-compost."

ITC CLEAN PAPER, GREEN PAPER

Think green: ITC's Bhadrachalam unit is the first paper mill to go chlorine-free The pulp and paper industry is one of the most environmentally unfriendly industries in the world. Not only is the industry directly responsible for deforestation, but it is also an energy hog and a large user of chlorine, which is used to bleach the pulp and when released as effluent, ends up polluting water bodies. ITC's Bhadrachalam paper unit, however, has achieved a unique distinction: It was the first paper mill to go chlorine-free. Its investment in the green technology: Rs 500 crore. End of September, the Delhi-based NGO, Centre for Science and Environment, rated the Bhadrachalam unit as the best paper unit in the country, although it noted that "water usage is still too high, and effluent disposal still pollutes the river". Yet the unit beats international standards according to the same report. Surely, there must be a business case for investing Rs 500 crore in green technologies? There is. As an "elemental chlorine free" (ECF) paper facility, the Bhadrachalam unit can make the more profitable food-grade paper that is compliant with the US and EU regulations.

Long Way To Go

Despite the progress corporate India has made over the last 10 years, a lot more remains to be done. Hazardous leakages like that of mercury at Hindustan Lever Ltd.'s thermometer plant at Kodaikanal, or industrial accidents (like the fire at Ranbaxy's Mohali plant in June last year) still occur with some frequency. More worryingly, a large universe of small enterprises is still indifferent to environmental issues for a variety of reasons that range from a lack of awareness to a lack of resources. CII estimates that compliance among the four million-odd small scale units is just 40 per cent. "Perhaps financial incentives and low-cost pollution control technologies will help them become environmentally responsible," says Sunita Narain, Director, Centre for Science and Environment (CSE), a Delhi-based NGO.

Bird-friendly: Indian Oil's refinery in Mathura draws flocks of migratory birds

The good news, however, is that the larger corporations may actually have a role to play in helping the smaller companies. In two ways: One, by turning the screws on their suppliers to be environmentally responsible and thus creating a ripple effect across their supply chain. Says J.N. Amrolia, Executive Director (HR), Ashok Leyland: "We actually have a programme that's called Greening the Supply Chain Management." Two, most of the progressive corporates-such as ITC, Gujarat Ambuja, Dr. Reddy's Labs, besides Tata Steel and Jubilant-are already looking beyond mere greening of their facilities. Among them, triple bottom line reporting (on environment and society, besides company finance) is the new buzzword. In fact, on July 30 this year, when ITC Chairman Y.C. Deveshwar addressed shareholders at the company's 93rd annual general meeting, he spent less than two minutes on the company's financial performance. For the rest of his 40-minute speech, Deveshwar spoke about what ITC was doing to help the society and protect the environment. Says Narain of CSE: "Gone are the days when companies could say that they don't give a damn about the environment. Everybody today at the least pays lip service to going green."

You can count on there being more converts-especially when they realise that what's going out of their pipelines and chimneys is not hazardous waste but money.

-additional reporting by Kushan Mitra in Delhi and Abir Pal in Mumbai

Corporate Environmental Responsibility There is a need for higher environmental accountability from the corporate world.

Ravi Uppal Vice Chairman & Managing Director, ABB India In an increasingly globalised and networked world, where consumer demands are boundless, costs and pricing are under constant pressure and competition is all-pervasive, the wheels of industry are moving at a faster pace than ever before. This 'more and more for less and less' philosophy creates untold pressure on corporates to maximise efficiencies, enhance productivity, streamline their supply chains, optimise their input costs, minimise their overheads and sweat their assets to the fullest. While this is certainly a sign of the times and an inevitable step in our march to progress, it also raises several short- and long-term concerns on the environmental front as we put increasing pressure on resources and deplete the natural asset base at an increasing rate. There is now a growing need to balance 'doing well' with 'doing good'. An increasingly aware and environmentally conscious public is demanding higher environmental accountability from the corporate world. Indiscriminate extraction of raw materials, unnecessary wastage, inappropriate disposal of effluents and waste, inefficient energy consumption and pollution are only the tip of the iceberg. The corporate world has a critical role to play in terms of its approach to these concerns and needs to act with a sense of heightened responsibility. It is moving on from the compliance stage and slowly coming to the realisation that it is no longer enough to have impressive bottom lines and contribute to charities. Corporates must realise their responsibility to all their stakeholders-going beyond investors and returns. There is wider acknowledgment today that caring for environmental issues also makes direct 'business sense' besides playing a significant role in shaping reputations and building brand equity. Businesses can ensure environmental sustainability in many ways, starting with their own products and facilities. These include ensuring that their suppliers and channel partners adhere to environmental norms, implementing sound environmental management systems, and targeting resource efficiency in areas like transport, energy and waste management. Initiatives such as using renewable sources of energy and recycling can play a key role in environmental responsibility. Implementing internal programmes such as rainwater harvesting, water recycling at the plants, effluent treatment and pollution control are essential. Innovative product designs and production methods can also be major contributors to reducing environmental impact. On another level, measures such as industry certification, environmental practices benchmarking, aesthetic considerations, greening initiatives, and awareness programmes for employees and public also contribute to environmental responsibility. Though environmental awareness is on the rise around the world and in India, and commitment as well as compliance levels are far higher than before, we still have a long way to go. Standards, certifications, valuation and reporting are only part of the story. It is no longer a 'nice to have' but a 'must have' that makes sound business sense.