Which are India's most eco-friendly companies? What kind of 'green' policies do they follow? Are bigger firms more environmentally responsible? And does eco-efficiency help or hurt the bottomline? A first-of-its-kind BT-TERI, cross-country study of environmental management practices finds out.

BT-TERI GREENEST COMPANIES SURVEY

Not long ago, Coromandel Fertilisers' plant in Vizag was an eyesore: sulphur dust from the facility had the locals up in arms. Today, the plant is setting the standards in eco-efficiency.

There's little in common between breeding earthworms and making power equipment. But at ABB's Vadodara facility, vermiculture has helped the company dispose of tonnes of wooden waste. The engineering major now wants to lower even further the other wastages that occur at its plant.

At Philips India's Pimpri facility, flushing of tubelights with mercury no longer poses any environmental risk. Using a new technology, the consumer electronics giant has got rid of harmful mercury emissions. In the bargain, it has saved money as well.

It's far from a groundswell yet, but slowly corporates across India are hitching themselves to the green bandwagon.

Stricter environmental regulations across the world, growing consumer preference for eco-friendly companies, and the inherent cost advantages in lowering toxic waste, are encouraging industries big and small to clean up.

Of the 47 companies surveyed by BT and the Tata Energy Research Institute (TERI) (See How We Did It), more than three quarters had an environmental policy in place. While only four out of 10 had a formal environment certification (ISO 14001), 60 per cent had a separate environment department.

At a majority of these companies, the environmental policy operated either at the plant level or at the corporate level, but a fifth had such a policy at both the corporate and facility levels-an ideal situation. In four out of 10 cases, the environment head had a direct reporting line to the CEO, but in an equal number of companies, the function was clubbed with production or operations and, in some cases, even with R&D, quality control, or safety. Almost all respondents had some form of target setting in place; that is, they worked towards lowering emissions.

Ironically, while benchmarking was the preferred means of identifying improvements, only about a quarter the polled companies used rival companies, Indian or foreign, as measures. The majority benchmarked themselves against their own other facilities. Encouragingly, 70 per cent had an environmental audit system in place, but more than half adhered only to the mandatory Form V audits, which were usually annual and conducted by internal auditors.

Is Bigger Better?

To understand the impact of a company's turnover on its environmental policies, BT-TERI divided companies into four categories: In A category were companies with more than Rs 1,000 crore in annual sales; B comprised those with Rs 500 crore-to-Rs 1,000 in sales; and C consisted of firms between Rs 100 crore and Rs 500 crore in size. The chunk of companies, however, are in the B and C slots. A not-so-insignificant 14 made it to the A category. The findings were revealing.

As a rule, companies with larger turnover had better environmental practices, but size in itself was not a guarantee of a higher commitment. For instance, B category companies fared better than those in A in some parameters such as having a proper environmental policy and a separate department in place, using comprehensive audits, and investing in environmental training and internal awards.

Corporate parentage emerged as one of the key factors in determining the presence of proper environmental practices at the companies surveyed. For instance, corporates where foreign ownership was higher, seemed more environmentally conscious. A good two-thirds with significant foreign holding had an ISO certification in at least one of their facilities. In stark contrast, only 10 of the 33 corporates with dominant public or governmental holding dc had ISO certifications, and a bare 7 per cent had certified facilities. Not surprisingly, then, the number of DCS that had environmental policy across all lines of their activity was very low (just 12 per cent). And corporates that no longer had a foreign holding came up somewhere midway between transnationals and DCS.

But what comes as a bigger surprise is that the international market requirements for exports have not succeeded in pushing corporates towards ISO certification. In fact, those with a high share of exports (25 per cent and above of sales) had fewer such certifications than companies with less than 5 per cent export reliance. A saving grace, however, was that export-oriented companies tended to have better defined policies.

Eye On Regulations

In general, chemicals and pharmaceutical companies showed a greater maturity of environmental management practices. The reasons are easy to guess: higher impact on environment, and stricter waste treatment and disposal guidelines. Green policies at these companies were more prevalent at the plant level, whereas in the minerals and mining sectors both the corporate office and facilities were covered.

Engineering came off as one of the weakest sectors in terms of eco-efficiency. Consider: Only two-thirds of engineering companies polled had environmental policies (the figure was 80 per cent in the case of mining, chemicals and pharma sectors); only a third of the engineering firms had a separate environment department, and an equal number had no internal reporting system. Worse, only half of the engineering corporates had an audit system in place.

The survey, however, leaves little doubt about the growing importance of environment in corporate strategy. Four-fifth of the respondents had a firm environmental training programme in place, while nine out of 10 did some form of safety training at their installations. A tendency to reward green practices among employees was also noticed. Four of 10 companies had systems for rewarding environmental performance, and most of these rewards were either at the individual level or at the department level.

But what should gladden the heart of green activists is that more than half of the companies surveyed had planned improvement measures. Most of them were related to manufacturing processes and housekeeping measures, followed by upgradation and modernisation of production equipment. Better still, three out of 10 planned to adopt better pollution control systems, and a quarter their environmental management systems. And 42 per cent of the respondents said that those improvements would be part of their expansion programmes. An unmistakable sign that corporates are waking up to the fact that it pays to be green.

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