What is Environmental CSR? Benefits & Design

What is Environmental CSR?

Environmental CSR refers to a company’s efforts to minimize its impact on the environment and to promote sustainability. It involves taking responsibility for the company’s actions and ensuring that they are environmentally responsible, from the production process to the distribution and disposal of products.

Issue in Environmental CSR

Corporate environmental responsibility today has expanded to cover substantially more than legal compliance, waste minimisation, and pollution prevention.

• Air Pollution
  
• Water Pollution
  
• Soil Pollution
  
• Bio Diversity
  
• Destruction of Livelihoods
  
• Industrial Accidents
  
• Industrial Material Disposal
  
• E-Waste

Air Pollution

Various emissions from the industrial processes contaminate air, water and land resources. For instance, Carbon dioxide (CO₂ ) emissions are one of the major causes for climate change and global warming.

Fossil fuel combustion for energy generation causes about 70-75% of the carbon dioxide emissions, this being the main source of such emissions. The remaining 20-25% of the emissions is caused by land clearing & burning and by emission from motor vehicle exhausts.

Most carbon dioxide emissions derive from industrial processes. Companies therefore need to take steps to reduce air pollution for sustainable development.

Water Pollution

Companies often contaminate water bodies affecting the ecosystem as a whole. For instance, Tirpur, which is a textile hub of India, uses 90 million litres of water and discharges 87 million litres of waste effluent water (Ninan, 2003) into local rivers which have become the natural drainage courses that stagnate in the riverbeds and percolate into the groundwater contaminating the water bodies and aquifers (Dwivedi, 2007).

Thus making it essential for companies to take corrective actions to reduce their environmental impact. For instance, in the Tirpur Case companies need to adopt cleaner production systems, construct individual or common treatment plants to treat and recycle water to fulfil their environmental responsibility.

Soil Pollution

Soil pollution is caused due to pesticides and fertilisers sprayed on crops resulting in bio accumulation6 which contaminate the food chain with carcinogenic chemicals resulting in harmful diseases like cancer and others.

A case in point is Punjab’s cotton belt which is engulfed by lethal pesticides causing major health problems like cancer, reproductive disorder, birth of mentally challenged children and other pesticide related diseases.

Bio Diversity

Biodiversity is largely damaged due to the harmful processes of the industries. For instance, Ecuadorian Amazon was declared as a biosphere reserve in 1989 after biologists found that a mere 2.5 acres of this forest contained as many tree species as that in the United States and Canada combined. However today after the oil exploration in the Amazon, the species are on the brink of extinction (Enström, 2008).

Destruction of Livelihoods

The depletion of natural resources caused by companies as stated above in this table affects the livelihoods of the communities that are dependent on the environmental resources. For instance: The Environment Ministry of Indonesia, found that the Indramayu Petroleum Plant polluted the sea by spreading crude oil to as far as 25 kilometres.

The pollution had a direct and terrible impact on the lives of the 17,000 fishermen and the 32,000 shrimp farmers of Indramayu. Fishes caught in the sea were often contaminated with crude oil and had no market.

Industrial Accidents

Industrial accidents have long term effects on the environment and health of the communities. For instance the Bhopal gas tragedy even after 20 years of the aftermath finds children in that community are victims of mental retardation and various physical disabilities.

The ground water is largely contaminated and has varied effects on plants, animals and humans. Thus it is essential for companies to take steps to mitigate potential environmental accidents.

Industrial Material Disposal

The depletion of natural resources caused by companies as stated above in this table affects the livelihoods of the communities that are dependent on environmental resources. For instance: The Environment Ministry of Indonesia, found that the Indramayu Petroleum Plant polluted the sea by spreading crude oil to as far as 25 kilometres.

The pollution had a direct and terrible impact on the lives of the 17,000 fishermen and the 32,000 shrimp farmers of Indramayu. Fishes caught in the sea were often contaminated with crude oil and had no market.

E-Waste

As electronic products become cheaper gradually, they tend to rapidly become obsolete. The manufacturing of these products consist of hazardous materials. Disposal of these materials create health hazards. Companies like Attero are working on recycling e-wastes by combining business lucrativeness with social benevolence.

Benefits of Environmental CSR

Environmental CSR initiatives impacts climate change, water use, footprint and energy use effectiveness by improving their operational efficiency, developing eco friendly product designs, and innovative technologies.

• Reduction of Risks & Financial Penalties
  
• Costs and Returns
  
• Access to a New Market -Carbon Credit
  
• Lesser Government Intervention
  
• Technological Innovation
  
• Product Recall and Differentiation
  
• Credibility and recognition
  
• Global Marketplace Advantages

This leads to opportunities for cost savings, revenue generation, and can even influence overall brand strength through positive environmental reputation.

Reduction of Risks & Financial Penalties

Companies failing to implement CSR at environment have faced various risks and large financial damages. For instance Dupont, U.S.A, had to pay the largest civil penalty ever levied of $382 million by the court to clean up a site, pay punitive damages and monitor 8000 residents in the area for signs of cancer due to dumping toxic arsenic, cadmium and lead at the plant endangering their health (Urbina, 2008).

Costs and Returns

Although implementing CSR practices for environmental sustainability is an additional cost in the initial stage, in the long run, it results in large cost savings due to the innovative technologies.

For instance, Kansai Nerolac Paintings Ltd. (KNPL) has given emphasis on waste water treatment at its manufacturing sites thereby saving huge amount of money. (KNPL Environmental report 2013).

Access to a New Market -Carbon Credit

‘Carbon credits are generated by enterprises in the developing world that shift to cleaner technologies and thereby save on energy consumption, consequently reducing their greenhouse gas emissions.

For each tonne of carbon dioxide (the major GHG) emission avoided, the entity can get a carbon emission certificate which they can sell either immediately or through a futures market, just like any other commodity. This is a new source of income, as it is a trading market.

Lesser Government Intervention

Environmental CSR provides for services beyond legal compliance thus reducing government interference in achieving organisational goals and objectives.

For instance, Freeport McMoran, Indonesia, one of the largest mining organisations across the globe, has taken very limited steps to reduce their large environmental impact at Grasberg and hence, has been facing large government and NGO interventions which has affected its regular operations, vigilance from external authorities, and even lending from international sources. (WALHI-Indonesian Forum for Environment, 2006).

Technological Innovation

Many companies are investing in research and development to build systems and processes that will reduce/minimise pollution and liabilities, which consequently reduce their operational and environmental costs (Radley.Y, 2004).

For instance, Google responded proactively to the natural disaster in Uttarakhand in 2013. Google leveraged its core competence in search engine optimization to develop software to locate and track displaced, injured and deceased pilgrims.

Product Recall and Differentiation

Embracing environmental socially responsible practices is a unique strategy for product differentiation and higher product recall. Companies promote their products having eco friendly features like use of recycled paper, less energy consumption and so on.

Credibility and recognition

Companies adopting Environmental CSR approaches have greater credibility and recognition in the market through various awards, newspaper articles and others. For instance, Madhya Pradesh Madhyam, India has received Award of Association Business Communicators of India (ABCI) for its Social Responsibility Communication Report 2012. Such recognitions provide public credibility.

Global Marketplace Advantages

Companies require environmental standards / compliances to have a market place advantages as well as credibility of being an environmentally sustainable company. For instance, companies like Marks & Spencer’s, Dupont, Bayer require their suppliers to adhere to environmental standards like ISO 14000 and others9 in order to be regular suppliers to them.

Designing Environmental CSR

• Review current environmental compliance status in the company.
  
  
• Formulate an environmental department and formulate an Environment Safety and Health (EHS) policy.
  
  
• Set goals and targets to protect environment.
  
  
• Design processes and systems to increase compliance and environment conservation standards in the company.
  
  
• Conduct environmental health and safety awareness events for the employees on a monthly basis to develop capacities of the staff.
  
  
• Develop regularly monitoring processes of EHS activities. Develop an internal audit system.
  
  
• Report EHS activities to all stakeholders so as to increase transparency, accountability and credibility.