Environmental CSR in Building Industry
Indian cities are emblems of ‘grey architecture.’ On the occasion of World Environment Day on June 05, Realty Pus took a look at the state of environment related CSR by private sector companies.
Concrete and steel characterize urban cities, the hubs of brisk urbanization and migration.Since this often comes at the expense of the environment, it is imperative that the citizens, businesses and government authorities make a shift towards greener infrastructure. In fact, the growing awareness of climate change among organizations is driving them to adopt eco-friendly initiatives as part of their CSR.
The Paris Agreement entered into force on 4 November 2016 with 195 UNFCCC Memberscountries signing the agreement. The Paris Agreement for the first time brings all nations into a common cause to keep the increase in global average temperature below 2⁰C. It requires all parties to put forward their best efforts through nationally determined contributions (NDCs). There will be a global assessment every 5 years of the collective progress towards achieving the purpose of the Agreement.
According to the Agreement, each country is obliged to maintain and report its contribution towards global warming mitigation. India has the third largest greenhouse gas emissions at 6.81%, following China (29.51%) and United States (14.34%). However, if the current rate of environmental degradation persists, then India is expected to witness an increase of over 85% by 2030.
Controlling the status of the environment needs an urgent remedy from the entire world. Various watchdogs like CDP, LEEDs, and CEPs are pushing organizations to disclose their climatic contributions.
Scenario in India
The building & construction sector is responsible for 22 percent of India’s annual CO2 emissions. Global statistics suggest that the construction industry uses 30 percent of all available natural materials and 20 percent of the water resources; the figures are not much different in India. Moreover, construction activities are a direct cause of soil erosion and contamination, air contamination by asbestos particles and dust, and noise pollution.
Every year, the Carbon Disclosure Project (CDP) presents researched environmental data, which provides aggregated scores of different companies all around the word. The companies are judged on the basis of their climate score, water score and forest score. Even though India, realizing its environmental status is, keenly aligned with the Paris Climate Agreement, major Indian industries are still lagging behind in keeping up with their environmental responsibilities.According to the CDP Report 2017, out of 219 Indian companies, 173 are lagging behind in almost every criterion, scoring a dull F.
Ambuja Cements Ltd. set a benchmark in sustainability with being ranked at No.2 in the world in the latest sector research report by CDP. Commenting on this accomplishment, Ajay Kapur, MD & CEO, Ambuja Cement said, “We are delighted as we have topped in Climate Governance & Strategy. In fact, CO2 emissions’ reduction is one of the key indicators in our sustainability agenda. We lay strong emphasis on development and strict implementation of sustainability to pursue goals beyond financial gains. Our concerted efforts guided by our low-carbon road map have helped us reduce 30% of our CO2 emissions since 1990.”
Indeed, the vast private sector in India could work together to find solutions for the prevailing environmental problems. For instance, Bengaluru based Embassy Group supported ZontaInfratech in its collaboration with the Bruhat Bengaluru MahanagaraPalike (BBMP) to create segregated waste collection bins. These bins were placed in Bangalore CBD and the BBMP now plans to emulate this initiative around the city. Likewise. Embassy Group’s Ecogram project in partnership with The Anonymous Indian Charitable Trust (TAICT), focuses on waste management, soil quality and water conservation.
ShainaGanapathy, Head of Community Outreach and Education, Embassy Group commented, “Government action alone isn’t enough to reduce the risks of climate change. Only with a strong aligned focus on the Government and private industries partnering together, identifying innovative solutions and executing projects can there be a clear path towards future success. In a country such as India, where infrastructure in the environment is often lacking, corporations can come together to lobby for better government action.The mandate to donate towards and undertake Corporate Social Responsibility (CSR) in India ensures that there are many opportunities for the private sector to aid the Government in lessening the impact of climate and environmental damages.”
Similarly, Gaurs Group in Delhi-NCR has taken a number of steps to ‘make the environment human-friendly.’ At their township project Gaur City, at Greater Noida West, which houses more than 25 thousands families, the real estate developer has implemented ‘Zero Garbage Transplant’ program that ensures all garbage produced in the township is utilized within the society in form of fertilizer. Gaurs Group’s residential projects are also equipped with sewage treatment plants (STP) and have adopted rainwater harvesting.
“I believe private players can give the maximum contribution in improving the climatic conditions. They have ample of resources to follow all the measurements, which are necessary to make our environment a blessing for our life. All they require is a fruitful attention from the government, which will certainly boost their confidence and encourages them to take their initiatives on a larger scale,” statedManoj Gaur, Vice-President, CREDAI National & MD, Gaurs Group.
Many other companies are working towards driving a positive change. Mumbai based importer and distributor of Wood products,Eximcorp’senvironmental policy is committed to the responsible sourcing of Wood and Wood productsfrom well-managed forests that have been certified to credible certification standards such as PEFC, SFI etc.
On the other hand, Mahindra & Mahindra CSR activity named Project Hariyali saw planting of 7.9 million trees including four million trees in the tribal belt of Araku Valley. TATA Power conservation initiative ‘Act for Mahseer’for saving endangered species included setting up a breeding centre in Lonavala as part of its eco-restoration and eco-development project for the lakes. The programme has produced and distributed in various water bodies seeds of Mahseer in excess of 10 million in India and internationally.
These are but just some of the examples of growing involvement of private companies that shows, they have started thinking about their impact on the environment and are striving to become responsible corporations.
The annual CSR Tracker, compiled by business body Confederation of Indian Industry (CII), revealed thatthe CSR in area of environment and ecology saw a 66% increase in FY17 as against the previous fiscal.
Focus on Long-term Impact
Indian businesses are giving social and environmental performance due recognition. According to industry sources, areas that witnessed significant rise in CSR spend include community development, infrastructure, social welfare, sports and slum development. Several large companies are starting to work on shared value projects which create value for both the community and for the business.
Till few years back, eco-friendly activity meant planting trees. Now, Indian companies today are more focused on creating a long term impact through activities like solar powered lighting systems, water conservation, garbage management, water pollution, waste management, resource crisis and more.
The most attractive environment-related CSR initiative is the use of renewable energy such as solar street lamps and rooftop solar projects. The other focus area is water-related issues and projects like watershed development and rainwater harvesting. Such projects involving access to clean water and energy has several cascading effects on the social and economic development of the communities and thus, are seen as more impactful by building & construction companies.
The companies today have an understanding of the risks of climate change that may poses risks to theirbusinesses as well. Sustainability issues thus are becoming an integral component of CSR embedded in their mainstream business operations and strategy. Most manufacturing companies are moving towards creating sustainable growth models linked to business continuity in different ways.
Only about a third of the top 100 companies spent a significant portion of their CSR budget on environment-related activities, with such projects accounting for a mere 10 percent of the total number of CSR projects carried out in FY15-16, as per the study conducted by NextGen to analyse the CSR expenditure of companies.
More Miles to Go
Though there has been a significant increase in Green CSR activities at the government & private levels, sustainability is still not at the forefront of CSR activities among a majority of Indian companies. Theenvironmental policy of most companies focuses on compliance with legislation. Only a few go a step beyond to contribute in a positive way to the environment.For example giving a push to the cleaner environment by joining Swachh Bharat Abhiyaan to build toilets, reducing air pollution by investing in pollution abatement equipment, water saving and management through initiatives for communities and as part of company operations and off the grid energy systems for saving fossil fuel and carbon footprint.
It is high time corporate partnered with the state governments and NGOs to incorporate environmental CSR plans in their company’s long term goals. The issues of environmental degradation should get more attention and the joint Green CSR initiatives should be continued for long time for fruitful advantage to stakeholders.
The country is making an effort to become a low carbon economy by reducing carbon emission per unit of GDP- by 33-35 percent from 2005 levels over 15 years (as a part of the Paris Climate Treaty). Hopefully, more companies will use the opportunity of the 2 percent CSR obligation to work towards mitigating their negative impacts on the environment.