Abstract
The world is going through unprecedented environmental crisis. The type of destruction and dissolution of natural resources and elements by individuals and institutions that has been witnessed in the last century is much more than that witnessed in the previous millennia. To tackle this, for more than three decades, a number of discussions have taken place at diverse international fora, and frameworks and propositions have been put forth for corporate implementation. Consequently, a perceptible change has come about in the understanding of corporations and their approach towards the Natural Environment, as a vital organizational stakeholder. While many companies use the pro-tection and preservation of the Natural Environment as a tool for brand building and corporate communications, many others have integrated economic and environmental goals to create mutually beneficial win-win situations. This article attempts to study such Natural Environmental Responsibility (NER) practices in corporate India. Through a mixed-method inductive study the article also proposes ‘Natural Environmental Responsibility Framework’. This is based on the triangulation of data wherein the quantitative data has been gathered through responses to an Executive Perception Survey with 400 responses from 125 organizations; and qualitative data has been gathered through personal interactions with 40 senior management executives from six eminent corporations across industry categories in India. The framework and its major components are based on empirical data of practices as existent in corporate India in contemporary times. Hence, the framework could be considered as a working model of NER in India.
Keywords
Introduction
People, communities and nations are caught in inequality traps, as affirmed by the World Development Report, 2006. It attributes the skewed distribution of wealth to the social stratification of people and nations into groups that dominate and others that are dominated. These inbreeding political, social, cultural and economic inequalities are preferred and perpetuated by the elite. The dominated or oppressed groups, unable to find their way out of poverty, are left with no choice but to internalize and submit to these inequalities. An International Labour Organization (ILO) Report (2006) 2 mentioned that labour productivity in India shot up by 84 per cent between 1990 and 2002, but real wages in manufacturing fell 22 per cent during the same period. Incomes and livelihoods of workers deteriorated despite their increased efficiency. According to the World Health Organization (WHO) 2004, 3 India has a huge pharmaceutical industry, but the largest number of people, an estimated 649 million, without regular access to essential medicines. This is the combined effect of poor availability and poor affordability. Unethical drug promotion, high profits and large trading margins, circumventing drugs under price control by producing and promoting high priced alternatives are among questionable practices that need to be tackled.
There is also substantial prevalence of inequalities of opportunities in education in the developing countries. India has elite schools that provide students with air conditioned comforts and fastidious choice of food to cater to different tastes and preferences, while, at the same time, there are a huge number of children who have nowhere to go, a lot many who drop out of schools and many others who do not even have access to two square meals a day.
Obviously, there are considerable unexploited talents in the middle and poorer groups. The society and the nation are the worse for it. Economic, political and social inequalities tend to perpetuate and gather strength over time and across generations, giving rise to the phenomenon, designated by the World Development Report (2006) 4 as ‘Inequality Traps’. The trends indicate that the inequalities have been on the rise in India, the US and China too.
Growth can Harm Too
Short-sighted growth initiatives can do more harm than good. The process of economic growth has witnessed the emergence and proliferation of cities and urban pockets. Trees and forests have had to give way for concrete jungles. Reclamation of lands necessitated filling up of lakes and sea fronts. Jobs and better wages compel farmers to abandon their farms and the resultant exodus to cities and towns causes urban congestion and gives birth to slums, health hazards and other social problems. Consequently, lifestyles change, demand exceeds supply and inflation overtakes the enhancement in earnings and industrial strife tends to become frequent.
Blinded by short-term prospects individuals and institutions have resorted to criminal deforestation, forgetting that forests constitute the lung for the nation, hold water, moderate weather conditions and absorb toxins, thereby keeping in check pollution effects. With largely depleted forest cover, the risks of wild fire, droughts and floods increase causing damage to life and property. Economic progress may come to a dead end when man finds that there are no more trees to cut or jungles or lakes to be cleared for human occupation. As a result, misery for the present generation and for generations to come will persist.
Norman Myers, 5 the British economist and environmental expert, offers a list of the Earth’s top ten environmental problems (Figure 1).
Role of Corporate Enterprises
Pollution, environmental degradation, inequalities in economic distribution, mounting social aberrations, conflicts and urban squalor are factors that point to the destination eco-catastrophe. The escape route lies in a quick and sharp political, economic and social awakening, and insight. Most religions lay special stress on social justice and duty towards the poor. The prime responsibility, for removing the inequalities and ushering in well-being for all, rests with the governments of the developed countries, in reversing their exploitative policies and postures, and the governments of the developing countries, in toning up their policies and actions on principles of equity and building good economic institutions that provide equitable services and expand affordable access to poor people and poor areas; making these noble intentions operational calls for participation and cooperation from business, civil agencies and the public. Enterprises, markets and nations have to work in unison rather than as disparate entities. In particular, the initiatives and efficiency of corporate enterprises have to be harnessed.
The initiatives of corporate organizations are crucial not just because the governments of nations have failed in their duties or have not lived up to the expectations of the citizenry and fulfilled the mandate before them. Undoubtedly, in many cases, they have failed. But, corporate involvement, commitment and contribution are crucial more so because companies have the scale of resources—financial, technical and human—to make a positive difference to the lives of the people, over and above the accomplishment of their primary and explicit raison d’être of growth, profits and success.
Natural Environment: A Vital Organizational Stakeholder
The natural environment is the silent provider of all the natural renewable and non-renewable resources used by corporate organizations in manufacturing and allied processes. A lack of concern for its well-being and protection would be at the organizations’ own peril in the long run. This could be in the form of increased and compulsory costs imposed in the form of stringent environmental regulations by the government and other statutory bodies or in the form of a destroyed ecosystem, the price of which has to be paid not only by the corporate organization but by mankind as a whole.
Highlighting the economic sense that heightened environmental sensitivity makes Dechant, Altman, Downing and Keeney (1994), Hart (1995) and Shrivastava (1995) stated that being proactive on environment issues can lower the costs of complying with present and future environment regulations. Russo and Fouts (1997) further added that environmental responsiveness can enhance firm efficiencies and drive down operating costs.
Environmental welfare and concern can make a lot of business sense as well and could be a major source of economic and competitive advantage for corporate organizations. In recent times, green products, green processes and even green companies have become the order of the day. More than a decade ago Shrivastava (1995) had suggested that firms can create distinctive, ‘eco-friendly’ products that appeal to customers, thereby creating a competitive advantage for the firms. He further stated that being environmentally proactive not only avoids the costs of negative reactions on the part of key stakeholders, but can also improve a firm’s image and enhance the loyalty of such key stakeholders as customers, employees and government.
In a study by Narasimhan and Schoenharr (2012) based on survey data from 434 manufacturing plants, it was observed that Environmental Management practices can result in process improvements impacting actual quality, and also create a favourable image of the company among customers, thereby enhancing the perceived quality of the firm’s products. Thus, it was a key strategic driver along with Supply Management practices aiding in further differentiation of firms.
Albertini (2013) conducted a meta-analysis of 52 studies over a 35-year period that confirmed a positive relationship between environmental performance and financial performance. Moderators’ analysis revealed that the relationship is significantly influenced by the environmental and financial performance measures, the regional differences, the activity sector and the duration of the studies.
Highlighting the benefits of including the Natural Environment as one of the key stakeholders of an organization, Michael Jacobs (1997) observed,
At the philosophical level it would not be too difficult to widen the notion of stakeholding to include the natural environment, not least because it is a major contributor to economic performance. It supplies us with raw materials, it assimilates the wastes that are inevitably produced in economic activity and it provides various life-support services such as climate regulation and the maintenance of genetic diversity. The environment is affected by the decisions of companies and by the economy as a whole. It contributes and is also affected. If the environment were regarded as a stakeholder at this philosophical level, either of society as a whole or of an individual company, its protection would become one of the company’s and of society’s responsibilities. Of course protection of the environment is already a responsibility of companies, to some extent, and certainly of society as a whole.
The author further mentioned another way of seeing the environment as a stakeholder which is through the interests of future generations. This is how environmental protection is often articulated, notably in the concept of ‘sustainability’, which now provides the dominant discourse of the environmental debate.
Cora (2013) presented the concept of environmental transformation in which environmental management is employed by industrial organizations such that it affects every level of decision-making including planning for assessment of industrial activities, formulation of a corporate-wide environment policy and modification of corporate cultures to incorporate the policies.
In their noteworthy contribution, Wheeler and Sillanpaa (1997) have identified the following organizational measures for the benefit of the Natural Environment:
The development of a new or updated environment policy should include some element of stakeholder consultation. Policy drafts should be ideally tested on focus groups with employees, customers and other important groups. The policy should cover all significant environmental impacts and risks, including those which arise in unplanned or emergency situations and which may affect local communities. Reference should be made to continuous improvement and meeting or exceed all regulatory requirements. There should be a commitment to publication and active communication of both the environmental policy and details of environmental performance. Business decisions including those involving products and processes, should formally take into account environmental implications. There should be a commitment to training and awareness-raising, at least for employees, customer and suppliers. There should be explicit references to resource conservation and waste minimization and a clear statement of principle on the company’s attitude to pollution.
The Rio Earth Summit, 1992
The United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, in June 1992, widely known as the Rio Earth Summit, kick started the initiatives in bringing Corporate Social Responsibility and the concept of Sustainable Development into focus. It was unprecedented for a UN conference, in terms of both its size and the scope of its concerns. Twenty years after the first UN Conference on the Human Environment at Stockholm in 1972, the UN sought to help governments rethink economic development and find ways to halt the destruction of irreplaceable natural resources and pollution of the planet. 172 governments participated at the Summit, with 108 at the level of heads of State or Government. Over 2,400 representatives of non-governmental organizations (NGOs) also attended. The deliberations therein helped global and other corporations to examine and evolve ethical practices in dealing with the stakeholders. A range of issues including employee relations and welfare, environment protection, community development etc. also came to the fore. Experiences based on some of the practices already being followed by some of the corporations were shared. CSR was thus launched into the mainstream.
International Initiatives and Agreements for Corporate Responsibility and Sustainable Development (1992–2012)
Since the Rio Summit in 1992, a number of international initiatives have been taken from time to time to address issues of global concern, leading to a series of international agreements on the coordinated remedial actions to be taken on the identified issues of the then current concern, to promote and sustain universal betterment. An observer at the ILO, a division of the United Nations observed that 400 such codes and agreements exist across the world. Many of the issues covered in them are similar. However, there are differences in the language and focus due to the time, place and circumstances under which they were proposed. The significant ones among these agreements over the last two decades have been briefly discussed in Table 1 in chronological order.
International Initiatives and Agreements for Corporate Responsibility and Sustainable Development (1992–2013)
These multifarious initiatives, programmes and policy documents have been proposed by countries across the globe focusing on how corporate organizations can and should be more inclusive in their approach towards diverse and multiple stakeholder constituencies affecting and affected by the organizations’ functioning, primarily the society, local community and the larger ecosystem. However, there is a need for transition for companies in terms of implementation from the letter to the spirit, from mere compliance to greater transformation, in order to benefit from the varied prescriptions highlighted in these codes.
Natural Environment Responsibility: Corporate Best Practices
The latest work of Porter and Kramer (2011) on ‘Shared Value’ aimed at integrating the business and social agendas in seamless whole. According to them, the concept of shared value can be defined as ‘policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress. They maintain that companies can create economic value by creating social value through three distinct ways: By reconceiving products and markets, redefining productivity in the value chain, creating local clusters. For each of these they have highlighted certain noteworthy practices wherein corporations have linked corporate strategy with environmental sensitivity thereby leading to financial success with minimal harm to the Natural Environment. Some of these include:
Eco-friendly and environmentally sensitive products. For example, GE’s Ecomagination series of products that singularly reached sales of US$ 18 billion in 2009. Taking a relook at logistics in terms of reduction in shipping distances, streamlining handling and improving vehicle routing which would in turn lead to reduced emissions and also reduced costs of transportation across continents. For example, Mark and Spencer’s who would save 175 million pounds annually by 2016 by stopping the shipping of supplies from one hemisphere to the other. Better utilization of natural resources enabled by improving technology. For example, reduction in the consumption of one billion gallons of fresh water by Dow Chemicals at its largest production site. This also led to a saving of US$ 4 million. Newer and alternative modes of product and service distribution to reach hitherto underserved and media dark regions. For example, Hindustan Unilever’s Shakti Project that provided employment to over 40,000 women entrepreneurs in India catered to 100,000 villages across 15 states and also contributed to 5 per cent of the revenues of Unilever in India. Greater focus on local sourcing and processing thereby reducing emissions and increased local employment opportunities. For example, Walmart’s experience in sourcing produce for its food section from farms nearer to its warehouses more than offset the lower prices of farms farther away through savings on transportation costs and restocking in smaller quantities.
Through this concept of Shared Value, Porter and Kramer (2011) maintained that profits involving a social purpose represented a higher form of capitalism, one that would enable society to advance more rapidly while allowing companies to grow even more. The result would be a positive cycle of company and community prosperity, which would lead to enduring profits. They emphasized that social good linked to and integrated with corporate performance and growth would have a far greater and longer effect than initiatives based out of external, local or community pressures, government regulations or mere goodwill building.
Objectives of this Article
The major objectives of this article are:
To study Natural Environment-related practices of select corporations in India, some of which have led to significant financial benefits for the organizations while making noteworthy impact on the protection and preservation of the Natural Environment. To present a comparative analysis (of the Natural Environment-related corporate philosophy and initiatives) of quantitative inputs gained through the survey and qualitative inputs gained through case study compilation and analysis. To propose a ‘Natural Environmental Responsibility Framework’ based on grounded theory for Indian corporations based on the existing practices of eminent corporations. This framework is inductive in nature and is formulated based on triangulation of data gathered through primary and secondary sources.
Methodology of the Study
Triangulation of data has been used in the process of proposing the framework.
The primary source of data collection includes:
Responses to a Stakeholder Management Perception Survey wherein responses to nine variables relating to the natural environment were gained from 400 corporate executives across organizations and industry categories in corporate India. Sampling and methodology of data collection have been detailed in the section ‘Sampling and Methodology of Data Collection’. Details about the nine variables have been provided in the section ‘Parameters for Studying Natural Environmental Responsibility (Quantitative Approach)’. Qualitative inputs were gained through personal interaction with 40 top management executives from six corporate organizations. Details regarding the philosophy, approach and actual implementation of initiatives with respect to the natural environment of each of these organizations were elicited. Details of these organizations have been provided in the section ‘Cross-company Compilation (Qualitative Approach)’. List of interviewees has been given in Appendix Table A2.
The secondary source of data collection included data available in the public domain for each of the corporate organizations as stated in the section ‘Cross-company Compilation (Qualitative Approach)’. These include annual reports, sustainability report, triple bottom line reports, company websites, special analysts’ documents, press releases, company newsletters and such others.
Sampling and Methodology of Data Collection
The sampling methodology was convenience sampling. The target audience (population) was individuals working in organizations for more than a year at any level of management hierarchy and any functional area.
The survey was pretested with a group of subject matter experts and the feedback received was appropriately incorporated before it was finally administered to the target audience.
The survey was administered in hard copy format in person, through post, 6 through email and also through online hosting (on hosted ware survey website). About 1,600 copies of the survey were circulated through the various media and the responses received indicated that one in every four prospective respondents responded.
Responses Received
A total of 400 responses were received for the survey from 125 companies.
Management hierarchy—the respondents were from all levels of the organizational hierarchy—topmost Level (includes CEO levels)—34 respondents, senior level (reporting to the CEO)—127 respondents, middle level (reporting 2–3 levels below the CEO)—151 respondents and junior level (reporting 4–5 levels below the CEO)—88 respondents.
Functional domain—executives from across functional areas responded. These include—General Management (71 respondents), Finance (64 respondents), Sales and Marketing (83 respondents), Human Resources (46 respondents), Operations (38 respondents), Systems (42 respondents) and others (56 respondents).
Respondents were from across 18 industry categories (both in the public and private sectors) and from 18 metropolitan and tier 2 cities of India.
Parameters for Studying Natural Environmental Responsibility (Quantitative Approach)
Based on the extant national and international literature relating to the Natural Environment and the best practices of select successful organizations in India, the following nine variables were identified by the author to comprehensively analyze the perception of corporate executives. These variables include:
Environmental management policy. Long-term focus on sustainable development. Proactive policies for pollution reduction and waste minimization. Specific buying guidelines and procedures to avoid negative impact on the natural environment. Environmental risk analysis as an integral part of the strategic planning and supply chain process. Responsible methods for waste handling and disposal. Employee training and awareness for environmental management and allied practices. Expert advice sought on continuous improvement in environment-related activities. Formal Environmental Audit Department.
Using a Likert’s scale, responses with respect to the actual implementation of each of these nine variables by the corporate organizations were gained from executives (across the management hierarchy) working in those respective organizations through an Executive Perception Survey by the author. This gave insights with respect to those areas wherein Indian corporates have been doing good work with respect to the natural environment. It also highlighted those areas wherein there is scope for improvement.
Grouping of the Parameters using Oblique Principle Component Cluster Analysis (OPCCA)
The grouping of this set of nine variables is based on the Oblique Principle Component Cluster Analysis (OPCCA). The name cluster analysis is usually given to a number of methods to partition a set of observations of some indicator variables into subsets, called clusters, using a wide variety of criteria. Such a cluster can subsequently be viewed as representative of its original constituent observations. This procedure can be used, for example, to cluster countries into regions or products into product groups. In the case of OPCCA, the term Cluster Analysis is used for a procedure, based on the concept of principal components (PCs), which creates new variables, called clusters. Typically these new variables should have the following properties:
Independence: The clusters should be independent of each other, which can be helpful in further analysis (e.g., subsequent regression analysis). Interpretation: The clusters should be created in such a way, that one can assign every original indicator (referred to as ‘variables’ in this article) to exactly one cluster. Conversely, every cluster can be characterized by a set of typical indicators.
The OPCCA first computes PCs and then transforms them to obtain new variables (clusters), which are easier to interpret. Analogous to PCs, clusters are new variables that are linear combinations of the original indicators. But whereas in PCA every indicator gets a nonzero weight in every PC that is created, in OPCCA every indicator typically gets a nonzero weight in just one cluster. This method, therefore, lays more emphasis on the second objective stated earlier. Furthermore, applying OPCCA typically yields less clusters than there are indicators, thereby reducing the number of variables. This analysis has been done in this study using the ‘proc var clus’ of the SAS Systems. This procedure (proc) enables the researcher to know the major clusters under which each of the stakeholder variables get classified based on the similarity or difference in the respondents’ response patterns. This enables the organization to focus on major clusters which subsume all the stakeholder-related variables of a particular type/order.
Cross-company Compilation (Qualitative Approach)
The qualitative compilation of NER-related variables is based on a study of six corporate organizations undertaken by the author.
7
Data for these cases has been gathered by the author through personal interviews with top management executives and through secondary sources available in the public domain. These have been listed in Appendix Table A2. The organizations include (in alphabetical order):
Bharat Petroleum Corporation Ltd.—Energy Sector. HDFC Bank Ltd.—Banking Sector. Hindustan Unilever Ltd.—FMCG Sector. Larsen & Toubro Construction—Construction Sector. Reliance Industries Ltd.—Diversified. The Tata Group—Diversified.
Enumerating the list of initiatives undertaken across corporate organizations, provides a comprehensive list of approaches and practices undertaken by eminent corporate organizations across industry categories in India. Such a comprehensive compilation based on actual practices is also an important contribution of this article. The cross-company analysis of NER initiatives has been given in Appendix Table A1. The list of consolidated activities has been provided under cross-case analysis in Table 2.
Qualitative and Quantitative: A Comparative Analysis of Parameters to study the Natural Environmental Responsibility
This includes a comparison of the diverse variables collated through the quantitative and qualitative methods. The quantitative compilation is based on the nine variables for the Natural Environment as identified and included in an Executive Perception Survey undertaken by the author. The grouping of this set of variables is based on the OPCCA as detailed in the section ‘Grouping of the Parameters using Oblique Principle Component Cluster Analysis (OPCCA)’.
The qualitative compilation is based on the cross-company compilation detailed in the section ‘Cross-company Compilation (Qualitative Approach)’.
The main objective of this comparative analysis (of the variables gained and grouped through quantitative analysis and qualitative case study compilation) is to observe the existing similarities and differences between the quantitative and qualitative approaches used by the author. In the extant literature reviewed, such a comparative analysis of the qualitatively collated and quantitatively analyzed NER-related variables has not been attempted. This study attempts to bridge this gap in the existing literature.
In Table 2, the variables have been arranged in an alphabetical order. While the grouping of the quantitative variables is based on the OPCCA, the grouping of the qualitative variables is based on the author’s understanding. Appropriate observations have been made at the end of each of the analyses.
Development of the ‘Natural Environmental Responsibility Framework’
Based on the comparative analysis of the qualitative and quantitative variables, an attempt has been made to present a comprehensive set of implementation variables for the Natural Environment. This combines both the qualitative and quantitative variables and attempts to present the same in a logical grouped format based on the author’s understanding. Since these have been derived based on inputs from different sectors and industry categories, these could be considered as being a representative set.
A ‘Natural Environmental Responsibility Framework’ has been attempted through these logical groupings based on the author’s understanding of the inter-relationships studied in the various case studies. The framework could be considered as indicative for those corporate organizations desirous of contributing towards the Natural Environment as a part of their organizational philosophy and approach to business and its management. Based on the extant literature reviewed, such a framework development exercise has not been reportedly attempted, especially in the Indian context.
Limitations and Scope of the Study and Methodology
This quantitative analysis is limited to the 400 responses received for the Executive Perception Survey undertaken by the author.
The qualitative cross-case analysis is limited to the six companies for which data was gathered through personal interviews with the top management executives.
The Natural Environmental Responsibility Framework has been proposed based on the primary data gathered through qualitative and quantitative means and have not be validated through actual implementation in corporate organizations.
Development of the Natural Environmental Responsibility Framework
Oblique Principal Component Cluster Analysis
Table 2 details the two major clusters formed as a result of the OPCCA undertaken using ‘proc var clus’ of SAS for the natural environment.
Observations:
All nine variables have been included and classified into two clusters:
Using multiple regression analysis at 95 per cent confidence level, an attempt has been made to formulate the Natural Environment Welfare Index based on the two aforementioned clusters.
Observations:
From the earlier mentioned equation it is observed that the cluster of ‘Holistic Approach’ has the most significant impact on the Natural Environment Welfare Index. All the five variables included in this cluster (as detailed in Table 3) mainly deal with the organization’s holistic approach to natural environment. Thus, it can be said that in the Indian context, the existence of a policy, an approach of sustainability and a department for overseeing its implementation could have a great impact on positively benefitting the natural environment in the long run.
Natural Environment—OPCCA
Parameter Estimates for the Natural Environment
Natural Environment Welfare Index = 0.05261 + 0.52327HOLIAPP + 0.46876ORGPI
Qualitative and Quantitative Analysis
Table 4 gives the Qualitative and Quantitative variables comparison for the Natural Environment across the six case study companies studied.
Observations:
The qualitative list gives a very comprehensive set of environment-related initiatives undertaken by organizations studied in this work. These cover very diverse aspects relating to the Natural Environment—its protection and preservation.
A separate group entitled ‘Reporting’ has been collated under the qualitative compilation. Environment-related reporting has become mandatory in recent times for many industries and a number of guidelines/standards such as GRI and the Global Compact are available for corporate organizations to follow and comply with.
The compilation indicates in brief the limited yet noteworthy contributions made by the select yet eminent organizations for the protection and preservation of the Natural Environment through their NER initiatives. A few observations about some noteworthy practices which integrated corporate and environmental objectives to create win-win situations have been highlighted as follows:
While the needs of the Natural Environment across organizations are more or else similar, the practices undertaken by the organization to satisfy the needs are diverse and industry-specific. For example, BPCL has used the route of massive jatropha plantations to support biodiesel and thereby save the scarce fossil fuels. L&T Construction has used the Green Building concepts. It supports the use of alternate materials such as fly ash in order to save the precious sand and other natural resources used in the construction industry. HUL has done a lot of work in water conservation, effluent treatment and waste minimization in its factories across the country. It has also promoted water shed development and sustainable agricultural practices in and around its factory areas to support the local community. Although it is commonly believed that only organizations belonging to the manufacturing and mining industries only have environment-related responsibilities, HDFC Bank’s example indicates that a company in the Banking industry can also contribute to environment protection through astute measures. The bank aims at reducing the usage of plastic cards and substitutes the same with alternate biodegradable materials. It is also working towards finding ways to reduce energy consumption for its massive country-wide IT infrastructure and hardware.
Comparative Analysis of the Variables for NER
It can be stated without doubt that over a period of time, each of these initiatives would increase in their scale and magnitude and would benefit larger populations; thereby having a greater multiplier effect across corporate India and the country at large. These initiatives can be said to be indicative of the type of contributions corporate organizations especially in India and other South Asian countries can make towards the growth and development of their country and neighbouring regions beyond purely business considerations and integrating economic and environmental goals.
Natural Environmental Responsibility Framework
Natural Environmental Responsibility Framework (Figure 2)
The organization’s approach to the Natural Environment, its preservation and protection forms the basis of the protection and preservation of the Natural Environment. This approach gets reflected in the organizational processes with respect to the Natural Environment and the various sensitivities that get reflected in the organization’s functioning in its interface with the Natural Environment. It is also seen in the various proactive initiatives undertaken by the organization for the benefit of the environment. The reporting of this through varied documents and media is another important component. Thus, the protection ad preservation of the Natural Environment is an outcome of these three major areas. The variables under each of the earlier mentioned areas are listed as follows:
Holistic Approach
Business Activities Exhibiting Environmental Sensitivity. Centralized Environment Wing/Environment Audit Department. Expert Advice. Implementation of an Effective and Proactive Environment Policy across the Organization/Adoption of a Climate Change Policy at Company/Group Level. In House Awareness. Responsible Logistics. Strategic Environment Management System. Sustainable Development. Organizational Processes and Initiatives. Biodiversity and Aquatic life Preservation. Carbon Footprint Study. Collaborations with NGOs. Developing and Optimally Utilizing Alternative Sources of Energy. Eco-friendly Production Processes and Effluent Treatment in Factories. Energy Efficiency. Environment Risk Analysis. Green Initiatives—Green Buildings and Infrastructure, Green Procurement Policy. Pollution Control. R&D. Reduction in ODS Emission. Reforestation Initiatives. Sustainable Agriculture. Use of Biotechnology. Waste Management and Safe Waste Disposal—Recycling Initiatives, Electronic Waste Management. Water Management. Reporting. Corporate Sustainability. Environmental Reporting. Triple Bottom Line Reporting.
The earlier mentioned groupings of variables under each of the major components of the Natural Environmental Responsibility Framework provide a comprehensive set of initiatives for the natural environment that have been collated by the author from diverse quantitative and qualitative sources. The listing of these provides a comprehensive set of NER-related initiatives currently undertaken by leading organizations in India. These initiatives could be considered as some of the best practices in this field as practiced by leading corporate organizations and can be benchmarked and emulated by other organizations desirous of endeavouring towards the protection and preservation of the natural environment.
Conclusion
One of the major criticisms against the various codes and frameworks proposed by diverse countries and bodies is that while the United Nations estimated that there are approximately 70,000 multinational corporations across countries with many thousand subsidiaries, only a few branded companies were actively engaged in the implementation process. Of the 2,000 companies that joined the UN Global Compact in 2005, only 350 had completed triple bottom line audit based on the GRI guidelines and procedures. So there is vast scope of improvement in terms of large-scale involvement of corporations in implementing the recommendations of the various bodies and integrate them into the larger organizational decision-making framework.
The Natural Environmental Responsibility Framework as developed and proposed through this article gives an indicative structure which would assist corporate organizations desirous of contributing towards the protection and preservation of the Natural Environment in their own unique and customized fashion and suited to the time, place and circumstances that the organizations would find themselves in. The detailed list of approaches, initiatives and activity sets provided under each of the major components of the framework would further assist organizations in this process. The framework proposed in this article and the initiatives listed therewith are based on the actual best practices of eminent and leading corporate organizations in India. The inductive nature of the study and the framework make it more relevant to actual ground-level practices in corporate India.
As stated in the framework, the holistic approach to NER forms the basis of the entire effort of corporate organizations to protect and preserve the Natural Environment. If the basis of the approach is a long-term one, with a genuine desire to the conserve the Natural Environment and not just for legal compliance, then the initiative would be a sustained one. An effective and efficient methodology and appropriate reporting mechanisms would then assist in the implementation of innovative initiatives. However, if the organizational approach is a skewed one, wherein goodwill generation for the organization, developing of a positive brand image and gaining financial benefits alone are the objectives of the CSR and Environmental Responsibility initiatives; the implementation of project or activity would stop the moment the expected benefits to the organization cease. The recommended way would be to integrate the environmental and commercial goals of the organization seamlessly such that it leads to win-win situations for the organization as well as the Natural Environment.
Shaping a better world involves arresting the current slide down on social, ecological, environmental and human relations fronts and initiating accelerated progress in these areas. This calls for a radical shift in the mindset of the leaders of all nations, in the political, social and business groups. They should not vie with one another for getting the best pick, but consciously work together for the well-being of all.
At the national level in India, a major shift in attitudes and involvement of the political and administrative set-up is the most essential prerequisite for launching policies and actions for all-round national and global progress, covering the various dimensions, identified in the MDGs and the Global Compact. With money and muscle power adorning the corridors of power, the prospects may seem dim. But when we take note of the increasing public awareness of their rights and obligations and their rising expectations from those holding the reins of power, we may hope that better sense would prevail and an era of ‘good’ governance at the state and national levels will arrive, sooner than later.
Footnotes
Appendix
List of Interviewees: Company-wise
| Sr. No. | Name | Designation | Type of Interview |
| Bharat Petroleum Corporation Ltd. | |||
| 1. | Chairman & Managing Director | Personal | |
| 2. | General Manager (Marketing) | Personal | |
| 3. | Deputy General Manager (HR) | Personal | |
| 4. | Manager (Admin Facilities) Corporate | Personal | |
| 5. | Deputy Manager (Secretarial) | Personal | |
| HDFC Bank Ltd. | |||
| 1. | Managing Director | Personal | |
| 2. | Executive Vice President and Head (Marketing) | Personal | |
| 3. | Executive Vice President (Legal) and Company Secretary | Personal | |
| 4. | Vice President (HR) | Personal | |
| 5. | Head, Corporate Social Responsibility | Telephone | |
| Hindustan Unilever Ltd. | |||
| 1. | Vice Chairman & Chief Financial Officer | Personal | |
| 2. | Executive Director—Sales and Customer Development (Currently, Chairman, Unilever Russia) | Personal | |
| 3. | Executive Director—Legal and Company Secretary | Personal | |
| 4. | Executive Director—HR | Personal | |
| 5. | Executive Director—Supply Chain and Vice President—Supply Chain, South Asia | Personal | |
| 6. | Head—Supply Management, South Asia | Personal | |
| 7. | Head—Corporate Communications | Personal | |
| 8. | Head—Corporate Social Responsibility | Personal | |
| 9. | General Manager—Human Resources (Employee Relations) | Telephone | |
| Larsen & Toubro Construction | |||
| 1. | Member of the L&T Board & President (Construction) | Personal | |
| 2. | Former Deputy Managing Director—L&T | Personal | |
| 3. | Vice President—Finance, Accounts & Administration | Personal | |
| 4. | Vice President & Head—Materials Management & Vendor Development | Personal | |
| 5. | Vice President & Head—People & Organization Development | Personal | |
| 6. | Vice President—Bulk Materials Handling Unit | Personal | |
| 7. | Head—Corporate Communications | Personal | |
| Reliance Industries Ltd. | |||
| 1. | Senior Vice President (Polymer Business) | Personal | |
| 2. | Vice President—Corporate Communications | Personal | |
| 3. | Vice President—Company Secretarial | Personal | |
| 4. | General Manager—HR | Personal | |
| 5. | General Manager (Operations), Polymer Manufacturing and Technology | Personal | |
| Tata Group | |||
| 1. | Managing Director, Tata Industries Ltd. | Personal | |
| 2. | Managing Director, Tata Services Ltd.; Former Managing Director, Tata Metals and Strips Ltd. | Personal | |
| 3. | Former Director (Exports), Tata Motors Ltd. | Personal | |
| 4. | Executive Vice President and Head, Business Excellence, Tata Consultancy Services Ltd. | Personal | |
| 5. | Global Head (Marketing), Tata Consultancy Services Ltd. | Personal | |
| 6. | Company Secretary, Tata Motors Ltd. | Personal | |
| 7. | Vice President (Group CSR), Tata Group | Personal | |
| 8. | Head, Tata Administrative Services and Sourcing–Group HR, Tata Group | Personal | |
| 9. | Vice President (HR), Tata Consultancy Services Ltd. | Personal | |
| 10. | Chief HR Officer, Tata Steel Ltd. | Online | |
