© Confederation of Indian Industry 1 Corporate Responsibilities for Environmental Protection Corporate Responsibilities for Environmental Protection Sustainable Growth in Organizations By SHIKHAR JAIN Senior Counsellor Confederation of Indian Industry CII-ITC Centre of Excellence for Sustainable Development

© Confederation of Indian Industry 2 CII - Centre of Excellence for Sustainable Development New Delhi Raising the Bar in Sustainable Business Excellence

© Confederation of Indian Industry 3 Transforming business-as-usual to sustainable business Enable transformation of Indian businesses through proactive adoption of approaches and practices that promote sustainability…thus contributing to India’s agenda for inclusive growth and sustainable development

© Confederation of Indian Industry 4 The four objectives that guide our activities 1. Promote awareness 2. Encourage thought leadership 3. Capacity building 4. Recognise excellence

© Confederation of Indian Industry 5 Sustainability Portfolio of Strategies: Current Reality & Future Vision Tomorrow Today External Internal Eco- Efficiency Footprint reduction Unmet needs New Markets Clean technologies Creative destruction Stakeholder Engagement Sustainability Reporting

© Confederation of Indian Industry 6 1. Promote awareness Publications Quarterly magazine: Sustainability Tomorrow Monthly e-newsletter: Sustainability Outlook Thematic papers: event specific Events Sustainability Summit Asia CleanTech Forum Law & Sustainable Development Business Leaders Programme Other topical About 1200 people reached through annual Summit Over 1000 subscribers to ‘Sustainability Tomorrow’ About 250 senior management trained in collaboration with Prof Stuart Hart, Cornell University

© Confederation of Indian Industry 7 2. Encourage thought leadership Indian companies encouragingly are responding to measure & disclose their carbon emissions…but there is still lot of spade work to be undertaken to beef-up their capacities Innovation is critical for the future success of any business. Making markets work for sustainable businesses Sustainability issues are forcing companies to undergo radical transformation redefining competitiveness

© Confederation of Indian Industry 8 2. Encourage thought leadership Helping governments build low-carbon economies & create green jobs Developing green procurement guidelines for India Encouraging voluntary carbon disclosure through CDP Working with governments & businesses for encouraging carbon positive facilities Driving corporate policy towards integration of TBL to CG Developing new business models to tackle impending social and environmental challenges

© Confederation of Indian Industry 9 3. Capacity building ● Occupational Health & Safety (IRCA approved) ● Social Accountability (SAI approved) ● Environment (IEMA approved) ● Integration of Management Systems ● Sustainability Reporting (GRI-certified) ● Sustainability Performance Assessment ● Corporate Strategies for Climate Change ● Sustainability Strategy Over 5000 individuals trained through 100 training programmes in Design & implementation of management systems Technical assistance Benchmarking About 400 vendors being ‘greened’ in the supply chain of one of India’s largest auto companies

© Confederation of Indian Industry 10 Sustainability Reporting The largest utility services company in the world The largest engineering & construction conglomerate in India The largest power company in India 3. Capacity building Management Systems Developed a unique GVDP model to ‘green’ supply chains of large companies Helping Sri Lankan food processing industry improve environment and social practices Over 150 large companies & 500 SMEs have improved their management systems About 11,000 KL of water per month is reduced through process improvements in 50 auto SMEs About 1200,000 units of energy is reduced through process improvements in 50 auto SMEs

© Confederation of Indian Industry Recognise excellence 36 companies recognised since 2006 Identify & recognise exemplars Endeavour to put forward role models Impart knowledge, build capacity & promote best practices 1000 man-hours per applicant Free assessment report to over 110 applicants Adapted from the EFQM Business Excellence Model

© Confederation of Indian Industry 12 Our stakeholders in change Governments Companies Media Think tanks Industry groups Academia Bi-multi-laterals Consumers

© Confederation of Indian Industry 13 Partners & clients in change

© Confederation of Indian Industry 14 Corporate Sustainability 2/3 of 1990s Fortune 500 exited from list of of top 100 economic entities in the world are companies Business risks are dynamic Rich-poor divide widening Triple bottom line approach

Regional workshop on SR, Malaysia, 14 to 16 December 2010 Globalization

Rising Influence & Power of the Private Sector Country/CorporationGDP/Sales ($ million) 1United States11,667, Japan4,623, Germany2,714, United Kingdom2,140, France2,002, China1,649, Canada979, India691, Turkey301, Austria290, Wal-Mart Stores258, Indonesia257, Saudi Arabia250, Poland241, Exxon Mobil213, South Africa212, Greece203, General Motors195, Finland186, Ford Motor164, Country/CorporationGDP/Sales ($ million) 37Hong Kong, China163, General Electric134, Malaysia117, Israel117, ChevronTexaco112, ConocoPhillips99, Colombia97, Pakistan96, Citigroup94, Chile94, Intl. Business Machines89, Egypt85, Hewlett-Packard73, Peru68, Verizon Communications67, Ukraine65, Home Depot64, Berkshire Hathaway63, Altria Group60, Bangladesh56, Source: Ranking based on corp. revenue data from Fortune Magazine, October 1, 2005; and GDP data from World Bank World Development Indicators (WDI) Report 2005.

$113 bn$7 bn$106 bn75% Stock Market Value Net Book Value Goodwill% $380 bn$41 bn$339 bn89% $199 bn$21 bn$178 bn90% $499 bn$23 bn$476 bn95% $104 bn $8 bn$96 bn92% $202 bn$31 bn$171 bn85% $60 bn$8 bn$52 bn87% $46 bn$19 bn$27 bn59% $35 bn$8 bn$28 bn78% $149 bn $72 bn $77 bn52% Source: Interbrand/Citibank league table, 2001 Evidence of the Importance of Goodwill

© Confederation of Indian Industry 18 Corporate need to align their operations, processes and activities towards ensuring sustainable growth Sustainable Growth: The simultaneous creation of societal value while reducing environmental footprint along the value chain for a resource efficient, greener and more competitive economy

© Confederation of Indian Industry 19 MEO-CCP RGSS Adopting integrated Social Policies

© Confederation of Indian Industry 20 Accountabilityan organization should be accountable for its impacts on society and the environment Transparencyan organization should be transparent in its decisions and activities that impact on others Ethical behavioran organization should behave ethically at all times Stakeholderan organization should respect and consider the interests of its stakeholders Rule of lawan organization should respect the rule of law International an organization should respect relevant international norms where norms these norms are more favorable to sustainable development and the welfare of society Human rightsan organization should recognize both the importance and the universality of human rights The 7 Responsibility Principles as per International standard ISO

© Confederation of Indian Industry 21 Overview: Changing demands related to information disclosure High trust Low trust The emerging ‘show me’ world Low transparencyHigh transparency Trust me Tell me Show me Involve me As trust diminishes, the demand for transparency in the form of assurance mechanisms increases

22 Seven Sustainability Revolutions #AspectOld ParadigmNew Paradigm 1.MarketsComplianceCompetition 2.ValuesBusinessSocietal 3.TransparencyClosedOpen 4.Life cycle technologyProductFunction 5.PartnershipsIsolationCo-operation 6.Time-frameShort-termLong-term 7.Corporate GovernanceAdvisoryAccountable

© Confederation of Indian Industry 23 Sustainable Growth Challenges in Organizations Regulatory Technology Governance Transparency and Accountability Stakeholders (Internal and External)

© Confederation of Indian Industry 24 Regulatory Risks Compliance to regulations is the first step towards Sustainable Growth Challenges 1.Adhering to applicable existing Environmental regulations in an organization 2.Adapting to new and updated Environmental regulations Responses 1.Continually identify and monitor applicable regulations 2.Monitor and review activities for parameters under identified regulations for compliance 3.Modify activities where non-compliance is identified 4.Implement activities for parameters of new identified regulations

© Confederation of Indian Industry 25 Technology Risks Continual technology implementation is required to ensure competitiveness and moving beyond compliance to regulations Challenges 1.Using Obsolete and Inefficient Technology 2.Reduced Effectiveness and Efficiency 3.Contesting with technologically advanced competitors Responses 1.Monitoring performance of activities to identify areas for improvement through technology 2.Devoting sufficient resources to R&D for new technologies based on past experience and global best practices 3.Implementing new technologies into existing activities 4.ICWAI to be involved for environmental cost accounting

© Confederation of Indian Industry 26 Governance Risks A Governance Structure involving Top, Middle and Lower management persons helps to fully integrate EHS practices in an organization Challenges 1.Lack of EHS Philosophy in the organization 2.Effectively Assessing, Prioritizing and Addressing EHS risks Responses 1.Forming a structured and systematic EHS management system, strengthening EHS philosophy 2.Promoting EHS vision & policy to all employees 3.Giving ownership to employees for EHS performance 4.ICSI to be involved for Environmental governance

© Confederation of Indian Industry 27 Transparency and Accountability Risks Transparency and Accountability helps to instill trust and integrity between the organization and stakeholders Challenges 1.Balancing the right to know with the need for security 2.Providing positive and negative impacts of organizations activities 3.Understanding stakeholder expectations for disclosing meaningful, factual and appropriate information Responses 1.Engaging with stakeholders on the data they would expect the organization to publicly disclose 2.Disclosing positive and negative consequences of data in a structured and comprehensible manner 3.ICAI to be involved for transparent environmental disclosures

© Confederation of Indian Industry 28 Stakeholder Risks Stakeholder inclusivity helps to ensure transparency and accountability leading to positive reputation, trust and integrity Challenges 1.Ensuring stakeholders can appropriately voice their views and addressing their views 2.Identifying material issues to the organization from the raised views 3.Preventing loss to reputation from negative Environmental impacts 4.Loss of customers due to negative brand image Responses 1.Implementing a Stakeholder Engagement Model for identifying, prioritizing, interacting with stakeholders and collecting stakeholder views 2.Minimizing the effects of Environmental impacts

© Confederation of Indian Industry 29 Government Interventions The Government has to ensure a suitable climate to facilitate widespread industry transformation towards sustainable growth Government Interventions 1.Revising regulations and developing standards to mandate shift towards green practices (Load based standards) 2.Strengthening relevant government institutions to oversee aspects of sustainable growth (DPE Guidelines for CPSEs) 3.Providing incentives to industry for positive performance in minimizing environmental impacts (ETS, market based incentives, MCA Voluntary Guidelines for Business Responsilibity) 4.Promoting research and development in clean technologies (today only 100% accelerated depreciation for pollution control equipments as per Sec 32 of IT Act) 5.Create funding opportunities to areas requiring financial needs, e.g. technology development and ensuring compliance in MSMEs

© Confederation of Indian Industry 30 Civil Society Interventions Civil society has a role to play as a partner and watchdog to industry’s & regulatory practices Civil Society Interventions 1.Assisting industry in societal and livelihood development for communities 2.Scrutinizing activities of industry to ensure compliance with regulations and minimal impacts to the surroundings

© Confederation of Indian Industry 31 Corporate Responsibility – from Top to Bottom 50,000 feet: VISION Define corporate values Build a vision Understand macro trends Educate and manage stakeholders Assure transparency and accountability 30,000 feet: STRATEGY Create a clear value proposition Develop a strategic plan Integrate and align Build a communications and engagement strategy Create a measurement system Ground: EXECUTION Implement Communicate Report Evaluate How is your company articulating its mission and vision? How is your company creating a strategy? How is your company executing on its strategy?

© Confederation of Indian Industry 32 THANK YOU