- Indian corporates must prioritise the shift from the Social Sector to the Environmental Sector, with a concentration on carbon-sequestering channel such as afforestation or restoration, in order to increase their Corporate Social Responsibilities spending.
- For corporates, restoration is a challenging CSR activity because of its long gestation periods, extended completion phases, and lack of qualified implementing agents.
- Indian states must also re-evaluate existing policies and mechanisms in order to achieve restoration objectives. They should also develop strategies to encourage corporate participation.
- This commentary is a reflection of the author’s views.
For India, tree planting or forest restoration is now one of the key routes to achieving net zero targets by 2070, as committed at the climate conference COP26 held last year in Glasgow.
Businesses, regardless of size, are responsible for a large carbon footprint while striving to maximise profit. India was the first country to adopt this approach. The first country to make mandatory corporate social responsibility (CSR).Companies Act (2013) – All companies must spend 2 percent of their average profit on CSR activities if they are within a certain financial limit. The Securities and Exchange Board of India’s (SEBI) mandated a shift from the Business Responsibility Reporting (BRR), towards Business Responsibility and Sustainability Reporting. This is a welcome step, and provides opportunities and a platform for companies to perform larger social and environmentally-related functions.
Principle 6 is based on international standards and is a key component of the RBC (Responsible Businesses Conduct Guidelines)The public expects corporations to take steps to restore and protect the environment. With a special focus upon the environment, shareholders and consumers now drive the sustainability agenda of corporations. It is more relevant in India, where there are challenges such as poverty and a degraded ecosystem.
Businesses can help with restoration efforts. India, as indicated in its report about the Bonn challengeThis is not so encouraging Private companies were responsible for only 193,290.3 hectares (2%) of the 9,810,944.2 hectares that were restored in six years. This data could be misleading due to limitations in data collection. CDP, an international non profit organisation, recently stated that there have been reports of Indian corporations.Not disclosing all informationTheir impact on the climate crisis and water shortage, as well as deforestation.
However, there are many examples that corporate can make a significant contribution to environmental conservation, including tree planting and mandatory compliance. Initiatives like Project Hariyali Mahindra, Sustainable Model of AgroforestryITC Ltd. Afforestation projectsNTPC Ltd. Allergan Lake RestorationAbbVie’s Tree Planting Initiative is one example of many corporate initiatives that are associated with restoration activities.
Why is the environment becoming a less important priority?
The environment and related issues are not as important as other social issues, such as poverty, education, health, sanitation, etc., that companies have prioritised in the past. Here is a quick look at CSR spending over the past seven years. Corporate Social Responsibility Data PortalThe Ministry of Corporate Affairs in India revealed that CSR spending is mainly focused on education, with an average of 38% spending towards this sector. Health and sanitation (22%) was followed by rural development (10%) and environment sector (8%).
The environment sector is favored for spending, with initiatives such as awareness, renewable energy projects, and green initiatives. There is a small allocation for tree planting, rejuvenation, and restoration of natural resources, like water bodies, forests, and grasslands. The agroforestry industry received a small amount of continued funding, which supports both livelihood and carbon sequestration. This bias is towards education, poverty, and health with sanitationIt has remained the exact same since 2014. This requires proactive re-examination as well as some corrective actions.
It is important to put emphasis on restoration
The incredible carbon sequestration capacity of forests offers an opportunity to help achieve net-zero targets. This requires all stakeholders to participate. The UN Decade on Ecosystem Restoration is designed to stop and reverse ecosystem degradation on every continent and ocean. Globally, to restore 350 MHA degraded land by 2030. 26 MHA in IndiaIt is important that restoration be prioritized under various environmental programs of governmental and non-governmental organizations, as well as corporate. Corporates can compensate for the decreasing budget of many forest departments in many states by using their CSR funds.
Corporates face many challenges when trying to bring about restoration under CSR
Tree planting is one of the many challenges corporations face when adopting restoration programmes. It has a long gestation period, and takes longer to complete than other social activities. This, along with the inability of qualified implementing agencies such as NGOs and lack of policy interventions to facilitate hassle-free selections of areas including degraded forest areas, makes it more difficult for corporates to put this priority into action.
For forest restoration activities to work, which are technical, it is necessary to have the right training and capacity-building interventions. For the provision of quality planting material as well as technical guidance, state forest departments should be a strong partner. No matter if the areas are in the forests or on private or institutional lands outside the forest, we must take care of the interests of communities by providing the necessary tools and means to ensure that our approach is participatory and results-oriented.
These obstacles aside, there were instances of geographic biases, easy interpretation of activities and camouflaging that have undermined the sole goal of achieving sustainability goals. The 2020 research of WWF Tree planting by businessesFor European countries, this means that there is very little evidence that they (businesses), pay enough attention to tree plantation, or to the role trees play in a wider perspective. The focus is clearly on the quantity of trees planted. This is a reason to encourage corporate change in order to shift towards multipurpose forest rehabilitation rather than tree planting.
The way forward
Indian corporations are the main agents of the development process. They also have the responsibility to balance development and the environment. These mandated provisions should be used by corporates to help them become change agents for sustainable development. They must look beyond CSR mandates and avoid geographical biases, greenwashing, camouflaging, and greenwashing.
There is a need to prioritize the shift from social sector to environmental sector. Much of the focus should be on carbon-sequestering channels, such as Afforestation, as well as restorative measures by Indian Corporate under their spending pattern for CSR. An integrated approach must be used to ensure the network of implementing agents, especially NGOs, their capacity-building and training with appropriate incentives. It is also necessary for the states to review the existing policies and mechanisms in order to achieve the restoration goals. They should also develop strategies to facilitate corporate involvement. This reorientated and renewed approach to corporate can help India achieve its net zero targets and create a balance between business environment.
The author is a senior IFS officer in Telangana. He tweets as @pargaien.
Continue reading:Study shows that India’s forests are capable of reducing the climate impact of global warming.
Banner imageTwo-year-old Miyawaki forest, Ramagundam, Telangana. Photo by Mohan Chandra Pargaien.