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Digging the Arctic & India’s new CSR Law


Climate change is one of the most significant threats facing the world today. According to the American Meteorological Society, there is a 90 percent probability that global temperatures will rise by 3.5 to 7.4 degrees Celsius (6.3 to 13.3 degrees Fahrenheit) in less than one hundred years, with even greater increases over land and the poles. These seemingly minor shifts in temperature could trigger widespread disasters in the form of rising sea levels, violent and volatile weather patterns, desertification, famine, water shortages, and other secondary effects including conflict. (read more)

One day after the 66th Year of its formation, India gifted itself with one of the most profound laws in the World.

Friday, August 16, 2013:  With the aim of ensuring environmental sustainability, India becomes the first country to pass a Corporate Social Responsibility that proposes larger companies who have made a profit of at least $80 million over the past three years spend 2 per cent of each year’s profit on initiatives that will help in sustaining the environment.

With this law the Country could  have steped into the history of humankind as the Messiah. But a close look at the sentence …”who have made a profit of at least $80 million over the past three years spend 2 per cent of each year’s profit “…dashes all hope. A mere 2% of profit will not even save the Krills in the Arctic ocean,(click) without which the complete ecosystem would collapse as they are one of the principal factors of carbon capture.

With this single sentence, it joined the club of countries whose thoughts and actions don’t match.

It is a telling report on the moral bankruptcy of those whom we think would lead this modern civilization out of the mess we are already in. It also indicates how the ones who actually want to bring in change;  there are still many among our ever increasing corrupt politicians, who are clean & honest;  are sidelined by those who want to “keep the change” of silver coins in their coffers already spilling with blood money.

Yes! Blood money..because humans can’t even cook a decent meal or build a cottage without killing some life-form in the process. It is a sad commentary on those who consider “realpolitik” superior to statesmanship.

India joins Arctic Council May 16, 2013India’s bid for observer status in the Arctic Council was successful on Wednesday along with that of five other countries — China, Italy, Japan, South Korea and Singapore — at a meeting in Kiruna, Sweden.Ministry of External Affairs, New Delhi, welcomed India’s admission. An MEA spokesperson said India would contribute its scientific expertise, particularly its polar research capabilities, to the work of the Arctic Council to support its objectives.However, at the level of Realpolitik, India will be looking at the opportunities for hydrocarbon exploration offered in the Arctic circle by joining hands with one of the five countries gearing up for the purpose — the U.S., Canada, Norway, Russia and Denmark.From the point of view of geographical distance, Russia will be the most attractive partner. With the Arctic ice melting fast and opening up business opportunities in the region, India’s ministry of earth sciences has devised a strategy to get a share of the action. India recently became a member of the Arctic Council, a high table of eight countries, including big players such as the US, Canada, Norway, Russia, and Sweden. In May, India and China got permanent observer status in the council.

“We will strengthen our Arctic labs. Right now, we don’t keep them running round the year, but only for eight months. Now, we are thinking of keeping it working for 12 months. We may subsequently add one more station,” MoES secretary Shailesh Nayak told dna while detailing how India would improve its Arctic programme in the next two-three years.

Scientific studies have estimated the Arctic region would have ice-free summers within the next 10-15 years, opening opportunities such as vast, untapped oil and gas reserves, unexploited marine living resources and shorter commercial shipping routes. According to estimates, the region holds 13% of the world’s undiscovered oil reserves and 30% of undiscovered gas deposits.

But to exploit these opportunities, scientists say, countries first need to understand how the region would change when the ice melts.

When one commits a mistake, pardon is the best recourse. But when it is a deliberate and calculated act of omission with full knowledge of the consequences then the people of this Planet need to pause and question the direction of progress.  Through this article, the flip-flops of the government and the confusion prevailing in the world is highlighted. Progress can only be attained through progressive thought and moral conviction. Sadly we are progressing no more.

Dear colleagues,

On behalf of the consultation team, sharing the latest report by TEEB (The Economics of Ecosystems & Biodiversity).

Environmental Sustainability Post 2015 Consultation team.

Commissioned by the TEEB for Business Coalition, the report “Natural Capital at Risk: The Top 100 Externalities of Business” identifies the world’s largest natural capital risks and opportunities for business and their investors. Authored by Trucost, the report quantifies environmental externalities such as damages from climate change, pollution, land conversion and depletion of natural resources, across business sectors and at a regional level. It demonstrates that the profits of high impact business sectors would be wiped out if the costs of environmental damage and unsustainable natural resource use are accounted for. This report highlights the urgent need for businesses to manage natural capital assets and reduce liabilities. Businesses and investors can take account of natural capital impacts in decision making to manage risk and gain competitive advantage.

 Headline findings are:

  • The primary production (agriculture, forestry, fisheries, mining, oil and gas exploration, utilities) and primary processing (cement, steel, pulp and paper, petrochemicals) sectors analyzed are estimated to have externality costs totaling US$7.3 trillion, which equates to 13% of global economic output in 2009. The value of the Top 100 externalities is estimated at US$4.7 trillion or 65% of the total primary sector impacts identified.
  • The majority of environmental externality costs are from greenhouse gas emissions (38%) followed by water use (25%); land use (24%); air pollution (7%), land and water pollution (5%) and waste (1%).

 Highest impact externalities are:

  • Coal-fired power in Eastern Asia and Northern America rank 1 and 3, respectively estimated at US$ 453 billion per annum and US$ 317 billion. These consist of the damage impacts of greenhouse gas emissions, and the health costs and other damage due to air pollution. In both instances, these social costs exceeded the production value of the sector.
  • The other highest impact sectors are agriculture, in areas of water scarcity, and where the level of production and therefore land use is also high. Cattle ranching in South America, at an estimated US$ 354 billion ranks second. Wheat and rice production in Southern Asia rank fourth and fifth respectively.

The report assessed more than 100 environmental impacts using the Trucost environmental model which condenses them into six Environmental Key Performance Indicators (eKPIs) to cover the categories: water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use.! These eKPIs were then quantified by region across over 500 business sectors.

Hope this stimulates further discussion.

Best regards,

Environmental Sustainability Post 2015 Consultation team.

The melting ice in the Arctic Ocean means that more ships are plying the northern sea route in the summer months than ever before. In 2012, over 46 vessels sailed the route, compared to 34 in 2011 and only four in 2010. Reports said Chinese scientists aboard a Ukrainian-built icebreaker, the Xuelong or Snow Dragon, completed the country’s first trans-Arctic ship voyage from Shanghai to Iceland.

Ocean Pollution: Global Shipping and the Cruise Industry(click to read)

16 ships create as much pollution as all the cars in the world: As ships get bigger, the pollution is getting worse. The most staggering statistic of all is that just 16 of the world’s largest ships can produce as much lung-clogging sulphur pollution as all the world’s cars.Because of their colossal engines, each as heavy as a small ship, these super-vessels use as much fuel as small power stations. But, unlike power stations or cars, they can burn the cheapest, filthiest, high-sulphur fuel: the thick residues left behind in refineries after the lighter liquids have been taken. The stuff nobody on land is allowed to use….There are now an estimated 100,000 ships on the seas, and the fleet is growing fast as goods are ferried in vast quantities from Asian industrial powerhouses to consumers in Europe and North America. (read more).

India Steps Up Climate Change Efforts (August 24, 2013): As international climate negotiations progress this week in Bangkok, Thailand, India has shown signs of more proactive engagement on climate change issues both internationally and at home.While the Indian government continues to emphasize poverty alleviation and economic development as the country’s highest priorities, recent stances on domestic emission reductions indicate that India is taking considerable steps to encourage more constructive global climate talks. India joins a growing contingent of developing countries that “are making very significant efforts to show what they are doing to address climate change and indicate what more they are willing to do,” according to U.N. climate chief Yvo de Boer.Until recently, India had repeatedly rejected calls to quantify its targets for reducing greenhouse gas emissions on the grounds that this would jeopardize national poverty alleviation goals.”India cannot and will not take emission reduction targets because poverty eradication and social and economic development are first and over-riding priorities,” Environment Minister Jairam Ramesh said in June. But two weeks ago, in a surprising reversal, India agreed to quantify its efforts to mitigate climate change. Ramesh said India would reduce emissions by “a broadly indicative number,” although the reductions would still not be bound by international law. At the Major Economies Forum on Energy and Climate in Italy in July, India joined 16 other countries in declaring that the increase in global average temperature above pre-industrial levels should not exceed 2 degrees Celsius. This goal remains somewhat controversial, however, as there is still no clear agreement on how countries will share the burden for reducing global emissions. (read more)

The Copenhagen Accord – Calls for “an assessment of the implementation of this Accord to be completed by 2015… This would include consideration of strengthening the long-term goal”, for example to limit temperature rises to 1.5 degrees.

Statement by UNFCCC Executive Secretary on crossing of 400 ppm CO2 threshold(Bonn, 13 May 2013)
Reacting to the fact that the concentration of heat trapping carbon dioxide in the atmosphere last week passed the 400 parts per million mark at Mauna Loa, Hawaii, the Executive
Secretary of the UN Framework Convention on Climate Change Christiana Figueres on Monday called for a greatly stepped up response to climate change by all parts of society: “With 400 ppm CO2 in the atmosphere, we have crossed an historic threshold and entered a new danger zone. The world must wake up and take note of what this means for human security, human welfare and economic development. In the face of clear and present danger, we need a policy response which truly rises to the challenge. We still have a chance to stave off the worst effects of climate change, but this will require a greatly stepped up response across all three central pillars of action: action by the international community, by government at all levels, and by business and finance.”
While India’s CSR Law is a positive step in the right direction, unless the World wakes up to it and adds its share, the effort would be futile.
Excellence can not be achieved in isolation neither as a person nor as a Nation.
Just as an excellent dinning requires 56 dishes to accomplish with (chappan bhog) and 16 adornments are required to exemplify beauty (solah singar) of a woman – such will be the need for this planet attain its former pristine self. We need contribution from all sectors of business & industry of all Nations, in perfect synchronization to attain this feat.

 

 

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Rio+20 – the Green Initiative.


The statement from Paul Simpson, CDP’s Chief Executive Officer reads;

….. as we approach the Rio+20 Earth Summit, which will focus heavily on how to account for the way businesses use the planet’s natural capital. Investors and corporations are becoming increasingly aware of the extent to which their value chains are influenced by natural resource constraints which lead to increasing price volatility and risk of business interruption. CDP has pioneered a global disclosure system that helps businesses understand and value the current and future impacts from a changing climate and natural resource scarcity, as the world seeks to move towards a sustainable economy.

Forests provide essential ecosystem services that underpin our well being and economic prosperity and their destruction contributes around 15% of global carbon emissions. The issues of energy, climate change, water and forests should not be considered in isolation as all are inextricably linked. Having this information in one place will encourage and facilitate joined up thinking on the subject.

Making climate finance an effective driver of sustainable development, is now the most important subject that needs a through discussion, it was observed at the side events in the run up to Rio+20 Summit – on the 13th June that, Climate finance could become a powerful driver of sustainable development. By supporting mitigation, adaptation and capacity building, it can help build the governmental, social, economic and physical infrastructures needed to achieve poverty reduction and green economy growth. However, without concerted efforts to strengthen the governance of climate financing, these goals will remain elusive.

Presently climate money is channelled through a complex network of public and private institutions, where decision-making can be opaque and unaccountable, and independent oversight absent or under-funded. This heightens the risk of policy capture, mismanagement or corruption; all serious impediments to the Rio+20 agenda. Fiduciary standards such as those espoused by the GEF represent an important attempt to safeguard climate financing against abuse. Transparency, accountability and ethics are fundamental. But what are the challenges to implementing and enforcing these safeguards? And what are the best practice scenarios we can learn from?

The Rio+20 conference comes at a critical time in the development of climate finance governance. This year the global Green Climate Fund will enter into operation, once key decisions are taken over its governance structures. In 2012, OECD countries will also have to deliver on outstanding fast-track climate finance commitments, meaning billions of US dollars should enter circulation before December. Given the potential volumes involved and the relatively untested nature of its institutional framework, climate finance must be treated as a new and emerging challenge’, distinct from development aid. The Rio+20 outcome document currently under negotiation is missing this link.

World leaders have a chance at Rio+20 to stop subsidizing fossil fuels to the tune of nearly $1 trillion and make an important dent in reducing global warming.

English: CSR approaches CSR framework

English: CSR approaches CSR framework (Photo credit: Wikipedia)

The above statements which I have gathered together, shows that there is a lot of movement towards actually having a GEF which can make the desired positive change towards climate change. But what is most important is to have CSR mandatory, in India we are having a lot of buzz around the Government proposal of making CSR mandatory with both FICCI and CII opposing it. Before we understand in depth the reason for this opposition, let us put on record that nearly 16% of the top 100 listed companies in India are already having an  CSR policy in place.

Now how many from the 16% are actually into People -Planet -Profit the 3 bottom line, which should make the baseline of any CSR is not known.

Authenticity in Corporate Social Responsibility

Authenticity in Corporate Social Responsibility (Photo credit: Geoff Livingston)

Corporate will do anything in which they see value. So when we speak of  CSR, and CDP would be seen as such; we must be able to actually gauge which corporate is actually  utilizing Community resources, and giving back to the People and Planet over and above what it must. Because more often than not, the mandatory obligation such as rehabilitating the project affected people, say from a mining site or a hydro-power project is passed on as CSR.  So the danger lies in the CDP being used for market study of a corporate to understand its future business plans and passed on as CSR.

Another, danger is that we are already seeing a lot of commitment  based  on absent funds, especially in relation to solutions which have a direct bearing to climate change. There are Governments which in one hand declaring a financial crisis and on the other hand committing Millions for Climate change mitigation. How are both possible ? At Rio+20 we must keep our hearing sharp to understand fact from fiction.

Having said that, we all know that Peoples are interested in mitigation and adaptation to climate change. And this may be somewhat possible even without “money” as we understand the term. My suggestion would be that policy makers around the World can sit down and list product and process which they have in excess and find a system to barter that advantage with other Nations who have a deficit of the same. Thus some of the commitments which otherwise would have required money and man-power can be overcome. The idea is to look at “profit” from all-together different perspective and thus give a new meaning to the “triple bottom line”.

 

 

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