Thursday, 22 November 2012

How green are Indian companies?

How green are Indian companies?

Recently Newsweek released its fourth 2012 Green Ranking of the 500 largest publicly-traded companies in the world in collaboration with environmental research providers Trucost and Sustainalytics, They assessed each company’s environmental impact, environmental management, and transparency.  One key aspect of this rating is inclusion of Environmental Disclosure where each company’s transparency with regard to its environmental performance is assessed.

Table: Newsweek Green Ranking 2012: Indian Companies
Industry Sector
Industry Rank
Green Score
2011 Green Score
Rank Change
Information Technology & Services
Tata Consultancy Services
Information Technology & Services
Information Technology & Services
Larsen & Toubro
Industrial Goods
Tata Motors
Vehicles & Components
Reliance Industries
State Bank of India
Tata Steel
Coal India

Of the 500 worlds top companies in the list 13 were from India. Out of which 7 are from manufacturing operations (who have intensive environmental impact) and 6 are from services area like IT and finance. Wipro comes second in the overall ranking among the world’s top 500 companies and other two IT giants TCS and Infosys are within top 20. But surprisingly world’s first company to be carbon positive, water positive and zero solid waste discharge ITC, does not feature in the list. 

It is easier for service companies to get a good score simply because they do not have any visible air, water or solid discharge and hence almost no environmental compliance to adhere to. At best their impacts can be secondary as in consumption of electricity that comes from a power plant or consumption of paper and other such resources whose manufacturing affects environment not the use. Although they can play a big role in dictating terms on suppliers for stringent environmental compliance and that element is taken care in most other reporting under sustainability criteria. While for manufacturing industries one of the major components of environmental impact and management is very visible in the form of contaminated air, water and solid waste discharge whose control is not only non productive but also very expansive.

One also has to bear in mind that these rankings are based on secondary reports that are generated by the companies with their choice of environmental consulting firms. As anyone working in environmental field knows too well, the weak monitoring and reporting system – a mere submission of monthly report- and myriads of small consulting firms who will do anything to retain their clients, makes it all too obvious how much of the reporting can be taken on the face values. 

But that’s not all. This ranking and all other such reporting do not take in account the inherent and irreversible environmental damage caused by the lobbying!  

The recent exposes like Coalgate, Arvind Kejriwal’s allegation on how Reliance twists the policies (It’s been insinuated since the time Dhirubhai Ambani was heading the group) in its favour and the Nira Radia tapes that shattered the myth around Tata being the considerably honest company, this ranking becomes questionable. 

Take example of the Coalgate scam and the irreversible and long lasting environmental damage the indiscriminate mining operation have caused. Since no matter how much a corporation scores on environmental compliance or environmental management it will be reporting on an alternate scenario -where there should have been no mining in the first place- if it lobbied for favorable environmental policies or evaded some policy restriction by contributing funds to the ruling political parties. Take also for example the case of Posco. No matter how much environmental compliance they do in the future, just by overriding provisions of National Environmental Protection Act 1984 and Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 they will do irreversible harm.  

Before Nira Radia tapes became public there wasn't much evidence of corporate lobbying being done in India by professionals the way it is done in USA. The companies did the liaison by themselves mostly the owner of the business directly contacting someone in the party to have favourable policies in lieu of fat party fund. Donations to political parties for various favour is done without impunity in both developed and developing countries. While in some cases corporations in developed countries influence policies in their home country as well as in other developing countries where they either have outsourced the manufacturing or have independent operations. Association for Democratic Reforms an NGO has compiled a report Analysis of Donations of Political Parties on the donation received by political parties in India. It shows that predominantly all mining and associated services industries are the one who have paid huge sum of money as donation to all major political parties. 

While in USA there exist political and business ethics research organization like the Center forPolitical Accountability and University of Pennsylvania’s Zicklin Center forBusiness Ethics Research who study and report political transparency or private companies there is no such report available on the Indian companies.

Even if it is merely 2 % Its good news that there are companies in India who care for their image and participate in such reporting. It would be unfair to brush all companies in one stroke as practicing crony capitalism but Indian companies have long way to go to emulate ethical practices of their counterparts in Europe and elsewhere.

Ethics and Employment

Ethics and Employment 

The Exchange of labour for goods or money is one of the oldest customs amongst humans and is also one of the most important modes of interaction among humans and group of humans be it clans, tribes, societies or nations. It is also a great equalizer since in this exchange religion, race, caste, creed and nationality never comes in the way. But that benign and simple exchange has become complex with the advent of modern means of production and the sophistication in skill requirement that has come with globalization.

While the exchange of goods for goods was not performed outside a few tribes, we all are aware how this oldest form of exchange of labour for money became a one sided equation with corporations and governments - two chief employers - becoming big and powerful and reducing employees' rights to only paying them for services. We know about sweat shops and other aspect of mass production, but we hardly pay attention to the countless other employees who along with their wages also take away health related problems which were not explicitly a part of the agreed upon exchange.

The primary reason of work is earning a livelihood. Apart from professions such as the police or the military that involve explicit threat of physical and mental harm, there is inadequate recognition of the risks faced by employees in dangerous professions and the need for adequate safety procedures and equipment for employees who exchange their labour for monetary gain without recognition or compensation for the risks to their health and life.

Motivation for the protections that could eventually be enacted as part of a legal framework of labour and work environment laws should be an ethical and humanistic one. Legalistically we can only go so far in protecting the rights of an employee. With so much social development, today it becomes pertinent to put the ethical perspective on it, at the very least as a point of debate. Even on today’s vitally important issue of climate change, it was ethical considerations that made it necessary for the developed countries to take the responsibility to cut the major share of carbon emission that was emitted by them.

A vast proportion of our population faces occupational hazards. Some die in work-site accidents, others such as those who handle chemicals like benzene die slowly over a period of time with prolonged illness including cancer. Hundreds of thousands of people acquire ailments from back pain to loss of vision to simply fatigue that saps their energy to have any meaningful life after work. There are also the mental illnesses ranging from anxiety disorders to suicidal depression that result from workplace stresses.

Employers are not compelled to reduce their profits by making provisions for improved safety. However, it can be argued that their profits can be preserved by externalizing the cost to the customers rather than transferring it to employees in the form of occupational hazards. After all, consumers should have to pay the costs of the health and environmental hazards that are incurred by the producers of goods and services.  We have heard of only big corporations like Nike and Apple who have turned blind eye to the abuses their contractors inflict on their employees. Ironically enough of these companies not only make unimaginable profits but also cater to customers from very high economic section for whom the additional cost would not hurt as much as the life time affliction those workers have to take.

What we never hear about are workers in mechanics shop who suck petrol out of tanks by mouth and in the process ingest some of the most hazardous compounds, or the petrol pump attendant inhaling petroleum fumes all day, or the workers who carry benzene in frozen form in small industries in Vapi, or the accident and materials hazards in building and road construction. Millions of workers who work in the informal sector and the road and building, neither have knowledge of the hazards of work nor are given any substantial protective equipment. They also have no patron who will raise a voice on their behalf.

How can one be so callous when it comes to these uneducated, unskilled and defenseless workers?  Is it fair to cite only the non-existent law and regulation to justify the absence of concern? If these workers are provided with the necessary safety equipment the cost will be such an insignificant part of the total cost of the projects that it will never reach the books. A hard hat costs Rs. 300, an ear muff Rs.25, a cloth dust filter Rs.50. If you have a thousand employees working on a highway or a building project, covering them all with basic safety equipment will hardly cost a few lakh rupees compared to the total cost of these projects that run upwards of hundreds of cores of rupees!

In the Surat textile market one might see a man pushing a hand cart with hundreds of kilos of yarn mounted more that 6-7 feet high for less than hundred rupees, a pittance compared to the cost of the goods being transported. What would be the cost of transporting these goods in a manner that is not so body breaking to the laborer? One wonders why we have such apathy to that miserable worker. In New Delhi few weeks back a 19 year old boy died while cleaning a sewer line due to poisonous methane gas. He could have been provided with an oxygen cylinder if the work manager had a toxic gas detector to ascertain the safety level in the drain. These are costly but then how many of such units one needs to save a life? If the manager had no legal or technical framework to guide him, was he not simply concerned as a human being?
In India we now have corporations like Infosys who have gone beyond the call of legal requirements to provide every comfort to their employees but they also do it because their customers are mostly western countries and if it does not step up to that level, it will lose its global market share. While we have giant manufacturing companies that flout every norm and have different standards of treatment for their employees on roll, contractor employees and the truck drivers who wait outside a plant for whole week with nothing but a roadside vendor to feed them, and stray dogs for company. And this happens after the fact that India has no less than a dozen labour related laws since it enacted first Factories act in 1948! But it has only about fifteen hundred factory inspectors and they cover only the formal sectors that employ less than 10 percent of the population. Despite having so much money and resources and now the easily accessible knowledge by Internet, corporations and government are still not doing much in this direction.

Because we do not see those workers at the lowest level, we have developed a blind spot for them and we have yet to understand and practice how to ethically treat another human being.

Contrails Vs Rail Travel

Photo courtesy

Was published here

A study conducted by Centre for Asia Pacific Aviation(CAPA) show that the domestic air travel in India is on rise due to its booming and consistent economy. In December 2011 the number of people traveling by air was 5.63 millions. This took the number of domestic flyers in 2011 just past the 60 million mark, up 16.6% from previous year's figure of 52 millions averaging out at 5.1 million passengers per month, and up 74% from 2006 levels. And India is going to remain fastest growing aviation market in the world with the 2011-12 fiscal likely to record a growth of 17-18%.

On domestic level there is not so cheerful news related to aviation that rocked Indian politics and economic world. India’s premier flying company Kingfisher owned by glamorous tycoon Vijay Mallya recently filed for bankruptcy which was decried by many on the hint from government that it might offer financial help when the banks refused to lend more money. Besides, national carrier Air India is already in red for long time and is still undergoing financial and labour woes and must be restructured if it has to survive. The largest stand-alone carrier is  IndiGo with a 19.5% market share, it’s  also the fastest growing carrier simply because its cheapest. And that is why it becomes worth exploring why a developing and poor country where only less than 2% people travel by air has virtually no decent, efficient and cheap rail travel, is worth exploring.
Professor Peter Head recipient of OBE for his contribution in sustainable cities development work and founder of a charitable organization Ecological Sequestration Trust advocates in his report that aims to demonstrate creation of ecological tow, that in low and middle income countries any new airports should be focused on international/ regional travel over approximately 600 km and they should be located on high speed rail routes and connected into local urban areas with mass transit systems. Citing the example on Europe he writes that Europe now have a viable high speed rail network which is more attractive option available than regional air travel for distances up to 600km.When high speed rail was introduced rail user numbers doubled and on some routes such as the 300 km Paris-Brussels route air travel dropped to a negligible level. This experience has also been confirmed in Japan. High speed railway investment along with the capacity for rail freight movement with links built directly to city edge consolidation centers will be very efficient way forward. This is the one area of ecological footprint reduction from urban centers.

According to many scientific studies it has been predicted that air travel and its emission is going to be one of the biggest source of carbon emission in atmosphere. One only have to look up of clear blue sky day to see the crisscrossing  contrails  formed as a plane flies at high altitude. Taking train instead of plane can cut almost 90% of carbon emission. In a study Eurostar the high-speed railway service connecting London with Paris and Brussels shows that taking the train to Paris instead of flying cuts CO2 emissions per passenger not just by a measly 10% or 20% or even 50%, but by a staggering 90%. This is not to mention the time saving from security check which has increases post 9/11 where it takes 2 hours to check in for an hour of flight. Incidentally, the environmental benefit of taking the train instead of a plane may be much greater than 90%.  Airliners emit their CO2 directly into the upper atmosphere, where it is likely to do over twice the damage of the same quantity of CO2 emitted at ground level (estimates vary between 2 & 3 times the damage, but 2.7 is the factor normally used). This factor isn't included in the Eurostar findings.

Indian case is interesting since despite being a developing country it has leapfrogged to air travel without providing an efficient rail travel that can easily take the pressure off the aviation industry an economically unviable alternative. Only Indigo airline has shown rising profit margin rest of them are not doing great. Considering the fact that the four metros and forty-one other more than a million population cities   where business class flies lies within 600-800 kilometers, sustainable transport studies researchers and urban planner recommend that high speed rail investment should have equal priority with roads. More thrust should be given for efficient travel within the radius of 300-600 kilometers as it is more sustainable to have a ground transport that is be efficient, cheaper, environment friendly and sustainable than forcing commuters to choose costly air travel.

Some 10 years back there was talk of improving the 500km tracks between Mumbai-Ahmadabad, one of the most lucrative business travel corridor with the cost of roughly three quarter of a million dollars per kilometer. Now there has been a renewed talk of Golden Rail that can possibly travel with upward of 200km/hr. Currently travelling roughly 1400km from New Delhi to Bombay takes almost 15-17 hours with these new trains it will be cut to just 6 or 8 hours which will really take away huge chunk of air travel off not only making it accessible and convenient to all but also cutting down green house gas emission.  More detail on high speed rail project development in India is given here.

There has been a metro system in Kolkata for long time and Delhi has it for over a decade now. Similar projects have been completed in Bangalore and one in Bombay is underway. Since neither technology nor finance for such projects has wholly indigenous and its been done by foreign or multilateral institutional funding and imported technology, considering the post liberalization growth, rising income, and specially knowing the possible effect of climate change variability, if not all this but just to save foreign exchange on petro-products, pollution, congestion and convenience to ordinary people, we should have had them almost a decade back at least in all metropolitan area. But our policy and planing division works as  a kirana store which is so busy catering to its trifle concerns that the larger and future development evades it.

And it not only the big projects like this that has been neglect for decades. One only have to walk for five minutes anywhere in India to realize that no one from public agency has ever come out to see what has be done and specially how it has been implemented. It is not the larger masses that is poor and uneducated but the selected and elected people at the top that is neta-babu nexus that has shown utter contempt to its own profession forget about living up to the need of people.

Monday, 19 November 2012

Ethics of Climate Change

Dr. Donald A Brown  of Rock Ethics Institute of U Penn is discussing "Disinformation Campaign: Is This A New Kind of Assault on Humanity?" in this article. 

I totally agree with him as he states in the opening paragraphs that, before being anything, before being political or policy issue taken alone on the scientific consensus, primarily Climate Change is ethical issue.

It's Ironical and I don't know how to put the point across. Western civilizations that are supposed to be champions of ethics and free, just and equitable rights and society have always been so at their own comfort and at the cost of exploiting poor and indefensible, otherwise they are just like anyone else; vile and deceitful! 

One just had to look at the British Empire. When they were exploiting poor and weak all over the world, they themselves lived in moral world and talked and discovered philosophy, political ideologies and art. Even Americans became what they are and what they have today after systematic decimation and marginalization of native Indians, and later by going the way of Empire, that is creating sweatshop all across the world to have cheaper goods.

One can not expect just and agreeable action from that society, they will do everything to maintain what they have got after so much exploitation of others. They will do it all over again before they agree to take care of historical emission and being responsible for putting the biosphere in mess in the first place.

In the line of blood diamonds and blood minerals we should term the existing carbon stock in atmosphere as Blood Carbon!

Going Grim

Going Green but Getting Nowhere

This article in NYT sums up exactly what I feel about this whole climate change debate. There can be no individual level solution despite we adding that up to 6 or 8 billion people. If only one understand the complexities and multiplying effect of nature and the elements of modern technology he will understand how ill equipped he is to take his sole action to a credible level of intended result.

Long back in his book small is beautiful  F F Schumacher hinted that unless we pay full price, the externalized price of everything we use we will never be able to catch up with the adverse impact that will be generated by our technology & economy.