Corporate Environmental Responsibility
1
CER: Definition
• Corporate Environment Responsibility is a responsibility of
a corporate, institution, and organization to strengthen
and improve the environmental quality by conserving,
managing, and enhancing all environmental dimension
• Corporate environmental responsibility (CER) fosters pro-
environmental actions at work
• CER fosters employees’ intrinsic, not extrinsic, pro-
environmental motivation
• Employees’ intrinsic pro-environmental motivation leads to
pro-environmental actions
• CER for financial reasons might not inhibit intrinsic pro-
environmental motivation
• Organizations can have a large impact on the environment
through, for example, energy use, transport, and waste
production
CER: Definition, Concept
• Promisingly, more organizations are adopting
Corporate Environmental Responsibility (CER)
policies to reduce their negative impact on the
environment
• As major employers, organizations can, through
their CER activities, also influence the pro-
environmental action of employees
• Efforts to reduce the environmental impact of
businesses have seen many organizations
introduce corporate environmental responsibility
(CER) goals and policies
Factors of Corporate
Environment Responsibility
• Natural Resource Based mechanism (NRB)
• Institutional Mechanism
• These two theories are adopted to encourage to undertake
environmental actions and evaluate environmental strategies
• The NRB is a theory of how an individual firm might gain a
competitive advantage by going green
• Institutional theory emphasizes the social, cultural and
governmental pressures imposed on the organization
• The institutional mechanisms are further classified as
regulatory forces, Market forces, self-regulation,
and stakeholder influence
Regulatory forces
• Legal frameworks frequently measure compliance against
“industry standards business”
• Public performance audits and Industrial Associations
Factors of Corporate
Environment Responsibility
Market Pressure (EMS, ISO 14001), Green auditing
•A major driver of corporate environmentalism is competitive market pressure
•Globalization, in particular, has greatly contributed to governance reforms in
developing countries
Stakeholder pressure
•As a result of pressures from multi-stakeholder groups organizations
have heightened their focus on accountability and transparency across a range
of
corporate behavioral issues. When a positive connection is made, positive
opinions
•The rising influence of societal stakeholders as communities, civil society, and
consumers is one of the most significant developments in international affairs
•
•
Factors of Corporate
Environment Responsibility
Self-regulation
•Self-regulatory mechanisms such as voluntary
agreements, bilateral agreements
•Global Reporting Initiative and United Nations
Global Compact are some of the
self-regulatory means, which focus on the
sustainable business practices keeping
in mind transparency and ethical issues
CER: Key Components
Environmental Compliance: Ensuring compliance with
environmental laws and regulations governing pollution control,
waste management, and natural resource conservation
Pollution Prevention and Control: Implementing measures to
prevent pollution and mitigate environmental harm, such as
adopting cleaner production technologies and implementing
pollution control measures
Resource Efficiency: Promoting resource efficiency through
measures such as energy conservation, water management, and
sustainable use of raw materials
Environmental Management Systems: Establishing
environmental management systems to identify, assess, and
manage environmental risks and opportunities within the
organization
Stakeholder Engagement: Engaging with stakeholders, including
local communities, environmental groups, and government
agencies, to address environmental concerns and promote
transparency and accountability
CER: Legal Framework in India
A. Environmental Governance
The Environment (Protection) Act, 1986:
•For industrial operations, waste management, and
pollution control
Water (Prevention and Control of Pollution) Act,
1974:
•This law regulates the discharge of pollutants into water
bodies and sets standards for effluent quality. It
establishes Pollution Control Boards at the central and state
levels to enforce compliance and promote pollution
abatement measures
Air (Prevention and Control of Pollution) Act, 1981:
•Similarly, this legislation aims to curb air pollution by
regulating emissions from industries, vehicles, and other
sources. It mandates the establishment of Air Pollution
Control Boards to monitor air quality, enforce emission
standards, and implement pollution control measures.
CER: Legal Framework in India
B. Corporate Governance and Disclosure Requirements:
Companies Act, 2013:
•It incorporates provisions related to corporate social
responsibility (CSR), mandating certain qualifying companies to
allocate a portion of their profits towards CSR activities, which
may include environmental conservation initiatives
Securities and Exchange Board of India (SEBI)
Regulations:
•SEBI, the regulatory authority for securities markets in India, has
prescribed disclosure requirements pertaining to environmental,
social, and governance (ESG) factors for listed companies. These
regulations mandate the disclosure of material environmental
risks, initiatives undertaken to mitigate them, and the
integration of sustainability factors into business strategies
Ministry of Corporate Affairs Guidelines:
•The Ministry of Corporate Affairs issues guidelines and circulars
to enhance corporate transparency and accountability, including
in the realm of environmental responsibility
Corporate Sustainability
Reporting
• Corporate Sustainability Reporting refers to the practice of
companies providing public reports that detail their
economic, environmental, and social performance and how
they incorporate sustainability into their management
systems
• These reports serve to meet regulatory requirements,
enhance stakeholder relations, and achieve legitimacy
• Sustainability reporting is a direct consequence of public
demand for more ethical behavior by firms, visible in the
form of increased monitoring and policing by firms
• Companies indulge in the publication of sustainability
reports to achieve legitimacy
• Firms publish sustainability reports to meet certain
regulatory requirements, avoid sanctions, reduce operating
costs, or enhance relations between stakeholders
Corporate Sustainability
Reporting
International Framework
Global Reporting Initiative (GRI): Environmental, social,
and governance (ESG) information
Carbon Disclosure Project (CDP): is an international
nonprofit organization that provides an environmental
impact disclosure system for use by both the private and
public sectors
CDP promotes annual environmental reporting and
transparency as critical for building a sustainable economy,
combating climate change and creating a net-zero future
Integrating sustainability into overall performance
disclosures: Another option is to incorporate sustainability
into the company's overall performance disclosures
International Integrated Reporting Committee (IIRC)
Guidelines: The IIRC has developed guidelines for
integrated reporting, emphasising the importance of linking
financial and non-financial information
Corporate Sustainability
Reporting
The Dow Jones Sustainability Index (DJSI): The
DJSI is a prominent benchmark that assesses the
sustainability performance of companies across
various industries
By meeting the criteria set by the DJSI, companies
can enhance their credibility and reputation in terms
of sustainability
Framework in India
Business Responsibility and Sustainability
Report (BRSR) BRSR Core represents a subset of
the comprehensive BRSR and includes a specific set
of key performance indicators (KPIs) / metrics across
nine ESG attributes
Environmental Performance
Index
• The environmental performance index (EPI) is a tool that
ranks the sustainability of states worldwide with the
help of different indicators on environmental health and
ecosystem vitality
• This index is biyearly organized by Yale University and
Columbia University in collaboration with World
Economic Forum, highlighting the environmental health
of countries that inspires them to move toward a
sustainable future
• It can be used by policymakers, environmental
scientists, and conservationists to know the
environmental health of a particular region
• India scored 27.6 out of 100 in the EPI 2020
• India also ranked lower than the national average in
biodiversity and ecosystem services
Environmental Performance
Index
• The report shows that black carbon, carbon
dioxide, and greenhouse emissions per capita have
increased during the last 10 years
Environmental Indicators
• Calculation method environmental “footprints” can
also be employed, where the different “footprints”
measure the consumption of natural resources
• Considering that several footprint evaluation
methods can be used in the life cycle sustainability
assessment of industrial systems, corresponding
indicators are offered here for representing the
environmental performance
Environmental Performance
Index
Environmental Peformance
Index
Indicator Content Description
1. Arable land It measures the
amount of
2. Pasture land “biologically
[Link]/ productive” land
woodland or water that
enables
4. Built-up land sustainable
5. Productive sea development,
space including sub-
Ecological
indicators like the
footprint (m2)
use of arable
land, pasture
land,
6. Forest land to forest/woodland,
absorb CO2 built-up land,
productive sea
space, and forest
land to absorb
Environmental Peformance
Index
1. Blue water
2. Green water It refers to the
total amount of
fresh water
used, consumed,
or polluted,
directly or
indirectly. In
which, blue is
the consumption
Water footprint of surface and
(L) groundwater,
3. Grey water green is the total
consumption of
rainwater
resources, grey
is the amount of
water needed to
be treated for
Environmental Peformance
Index
It represents
the total
amount of
carbon
dioxide and
other
Carbon footprint greenhouse
(kg) gases (GHGs)
emitted
during the
entire life
cycle of a
process or
product
Environmental Performance
Index
1. Renewable
energy
footprint
(wind, solar, It refers to the
etc.) total energy
consumption
of the
evaluated
object in a
certain period
(except for the
Energy
food
footprint
consumption),
2. Fossil or which is used
fossil energy to indicate the
footprint energy
dependence of
a system,
Environmental Performance
Index
It is the total
amount of
emissions that a
system or
product releases
Emission into the air (SO2,
/
footprint (kg)
particles, CO,
CO2, etc.), water
(COD, etc.), and
soil (waste
residue)
Environmental Performance
Index
It refers to
the actual
land area
needed to
produce a
Land
/ product, or
footprint (m2)
establish a
system, or
implement
human
activities.
It represents
the loss of
biodiversity
or excessive
Biodiversity depletion of
/
footprint biological
Green Auditing
• Green auditing is the process of identifying and
determining whether an institution’s practices are
eco-friendly and sustainable
• Over the period of time excess use of resources
like energy, water, chemicals are become habitual
for everyone especially, in common areas
• It is necessary to check whether our processes are
consuming more than the required resources?
• Whether we are handling waste carefully? Green
audit regulates all such practices and gives an
efficient way of natural resource utilization
• In the era of climate change and resource
depletion, it is necessary to verify the processes
and convert them into green and clean ones
Environmental Auditing
• An environmental audit is a systematic process, in
which corporate businesses bear some ethical and
moral responsibility for their commercial
enterprises
• The conventional and already existing accounting
systems did not account for non-commercial
effects and impacts
• There was a need to devise a new system to
evaluate the environmental and social risks
attached to these commercial operations as well
and hence, this gave rise to environmental audit
• An environmental audit is a methodical, organised,
documented, and systemic process used to assess
an enterprise’s activities and operations in order to
gauge its environmental effects and ensure
compliance with regulatory requirements.
Environmental Auditing
Green/Environmental Auditing
• There are various benefits of investing in environmental
auditing services, such as:
Increased Customer Base
• Customers, nowadays, want to know about the
environmental footprint of the brand or the business they
associate with. The customer preferences can be seen
shifting towards ‘environmentally-friendly’, ‘eco-friendly’,
‘cruelty-free’, and ‘organic’ products
Increased Investor Confidence
• The ethical practices adopted by a business play a key role
in investment-making decisions as many venture
capitalists and investors across the world can be witnessed
selecting brands and businesses that have incorporated
environmental and social metrics in their business
strategies, as opposed to those that haven’t
Green/Environmental Auditing
Reduced Costs
•Initially, investing in environmental auditing
services may seem like an additional financial
burden as the same would require various
resources like time, money, human personnel, etc.,
thereby making it seem like a big investment;
however, these audits help businesses and
companies identify cost recover by assessing any
hidden and potential risks involved and provide with
saving opportunities by developing plans for waste
management, resource conservation, effective
waste disposal, promoting recycling & reusing,
saving energy, etc.
Green/Environmental Auditing
Types of Environmental Audit
Environmental Compliance Audit
•Under an environmental compliance audit, it is ensured
that a specific checklist is ticked off by the organisation.
•Under this, it is ensured by the environmental auditing
services providers that the organisation adheres to the
applicable rules and regulations and obtains necessary
approvals and licenses, such as ones pertaining to waste
management, waste disposal, air or water quality controls,
etc.
Environmental Management Audit
•Environmental management audits are performed to see
whether the business or the enterprise is complying with
the environmental policies and objectives that have been
set in place by the management itself.
•For reference, ISO 14001 Standards are followed as a
general practice to ensure and evaluate whether a
Green/Environmental Auditing
Functional Environmental Audit
•In functional environmental audits, auditors are
concerned with a specific targeted area, for
instance, energy efficiency, resource
conservation, waste management, pollution
prevention, etc., with an objective to improve ways
to enhance performance in that particular area
Green/Environmental Auditing
Purpose of Green Auditing in
Universities/Institutions
•Assess facility of different types of waste management
•Increase environmental awareness throughout campus
•Identification and documentation of green practices
followed by university.
•Identify strengths and weaknesses in green practices
•Conduct a survey to know the ground reality about green
practices
•Analyze and suggest solutions for problems identified from
the survey
•Identify and assess environmental risk.
•To motivate staff for optimized sustainable use of
available resources
•Used for the NAAC accreditation
•