Business Today Net Special

The BT-TERI Green Companies Survey

BT-TERI Survey of Environmental Management Practices in Indian Corporates

Tata Steel In Jamshedpur TERI began with the first ever survey of environmental management practices in Indian Corporates, in March 2000. 450 corporates in different manufacturing sectors- Engineering, Mining and minerals, Chemicals and Pharmaceuticals, Service industry and other industries were polled using a detailed questionnaire for information on their Organisational profile; Environmental management policies and practices; and information on environmental performance aspects. PSUs, Financial services and IT companies were however excluded from the survey. The survey elicited a response from 48 corporates.

The exercise aimed at:

1) Identifying the Top 10 corporates in terms of the maturity of environmental systems and practices adopted by them

2) Analysing the key trends and dominant environmental practices currently observed in Indian corporates, in general and for different categories of corporates (categorisation based on sale turnover, exports, sectors represented and parentage)

Evaluation methodology of the corporates and their environmental management practices was based on parameters (with different weightages)- Environmental policy, Organisational structure, Environmental audits, Target setting practices, Training, Reporting systems, System of awarding performance, Awards obtained, Information disclosure and Voluntary standards / codes. Caveats in the analysis exist, the survey being based on data provided as per mailed questionnaires. However, internal consistency checks have been applied on information in various sections of the questionnaire.

Findings

1) With response from 48 corporates (response rate of about 10.62 %), it seems that transparency and information sharing, in Indian corporates, on sensitive issues like Environment is not upto the desired levels. Corporate’s apprehensions against responding to the poll varied:

- Information sharing on issues could result in more stringent standards
- Responding on environmental issues is not a priority job
- Response on such questions already a part of the corporates reply to different enforcement agencies.

Does this mean that we lack transparency on sharing information or is it that we are too panicky on such initiatives?

2) 60% of the corporates had an ISO certification in either of their facilities. But the number of facilities with such certification or certification process in progress is a mere 24%.

Is it that Indian corporates are still to realise the benefits and potential of getting their environmental management systems accredited?

3) System of filling the legally mandatory environment statement (Form V audits) and comprehensive audits was popular with only 55% of the corporates.

Are we abiding by the regulatory requirements? Do we have adequate systems in place to measure our performance?

4) Though target setting vis a vis resource conservation and improvement in environmental performance is in place in most of the corporates, benchmarking is primarily wrt own facilities (63%). Only 21% of the corporates benchmark against Indian industry leaders.

Does this imply that Indian corporates do not have an access to best in practice information of the leading Indian and International corporates or is the practice of benchmarking against the leaders still not very prevalent?

5) Only 61% of the corporates had a separate department looking after their environmental functions. In other cases the R&D wing, QC cell or the safety department looked after this function.

Are we co-ordinating our environmental responsibilities in an organised manner?

6) 77% of the respondents had an environmental policy at corporate level but only 20% had realised the need of having policy at both corporate as well as the facility level- an ideal situation.

Have we clearly understood the need and implications related to the policy documents we define?

Top 10 vs Others

Getting their environmental management systems recognised was more customary with the Top 10 corporates. The leaders additionally had environmental policies at both corporate and facility level in 50% of the cases; separate environmental departments; better system of auditing and reporting performance levels. Target setting was also better with mixed benchmarking against own facilities, Indian leaders and counterparts Internationally. Environmental reports and Annual reports were primarily used for disclosure of information on environment and the top 10 had better systems in place to take care of stakeholder complaints.

Does Big imply environmentally better? (Analysis based on turnover of Corporates)

Corporates with turnover greater than 1000 crores were placed better with more ISO certifications, more appropriate environmental policy, a better organisational approach in terms of a separate department and widespread environmental disclosure.

However companies in category with turnover between 500-1000 crores and less had bagged more of Indian and International awards and had a healthier practice of awarding and encouraging environmental achievements internally.

Does corporate parentage serve as a pathfinder to better environmental management? (Analysis based on parentage of Corporates)

Corporates with a greater foreign/ NRI shareholding had environmental policies defined in a desired manner with more of benchmarking against their Indian and International counterparts. Similarly, ISO certifications also seem to be more popular with companies in this category. However the authoritatively mandatory Environmental statements were more common with corporates having some form of dominant control (like greater share of public/FIs/ Government/ Promoters

Do export requirements influence your environmental performance? (Analysis based on percent exports)

Surprisingly, corporates with exports less than 5% appeared to be healthier with more ISO certifications and better organisational set-up vis a vis environmental management. Similarly target setting wrt own facilities and Indian corporates and Form V reporting was better in this category. Environmental policies were defined in a better way for the other category of corporates with exports greater than 25%

Are some sectors performing better as compared to the others? (Analysis in different manufacturing sectors)

In general the sensitive sectors like Chemical & Pharmaceuticals and Mining & Minerals had a greater maturity of environmental management systems with separate departments and environmental policies better suited to their lines of activity. Information disclosure in annual and environmental reports and auditing was also practised in a more responsible manner.

Detailed findings of this survey (India's Greenest Companies: A BT-TERI Project in PDF) available in Business Today’s issue hitting the stands on The World Earth Day, 22 April 2001. Details are also available at their web site - www.business-today.com

For further information, please write to
Mr Harpreet Singh Kandra
Centre for Environmental Studies
Email: hskandra@teri.res.in

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