First Regional Conclave on Corporate Social Responsibility (CSR) organised

The first Regional Conclave on Corporate Social Responsibility (CSR) is being organised by the CSR Hub in collaboration with Cochin Shipyard at Cochin in India on January 16, 2012. It is being chaired by Secretary, Department of Public Enterprises (DPE) D.R.S. Chaudhary. This Conclave is the first of a series of Regional Conclaves being organised with Central Public Sector Enterprises (CPSEs) located in each region, in the next couple of months.

The Regional Conclaves on CSR aim to engage various stakeholders in an interactive discussion on further evolving CSR activities in a synergetic manner for inclusive growth and development of the society. All CPSEs will be required to participate in these conclaves to highlight the CSR activities being undertaken by them, share their views and experiences and give suggestions on making the CSR guidelines more clear, robust, effective and in tune with the trends and best practices in the fields.

A host of other issues are also slated for discussions in the regional workshops. Constitution of regional groups of CPSEs and formulation of a strategy for evolving a rapid response mechanism in case of emergencies and disasters is one such issue likely to come up for discussion. A Core Committee comprising of Director, CSR Hub and the CSR Heads of nine CPSEs, like, ONGC, GAIL, NTPC, BHEL, CIL, NMDC, OIL, Goa Shipyard and the Cochin Shipyard has been constituted to assist DPE in compiling and coalescing the suggestions that will crystallize from the discussions of the Regional Workshops.

The Secretary, DPE has also written to the Chief Secretary of every State to ensure active participation of the States in the Conclave. The State Governments play a vital role as stakeholders in CSR activities and also as facilitators in their selection, planning and successful implementation. An important issue on which the views of the State Governments are eagerly solicited is the evolving of a transparent and effective consultative mechanism between CPSEs and State Government/District Administrations for identifying developmental activities to be undertaken under CSR by the public sector.

CSR is an integral component of good governance. Although many CPSEs have done commendable work in CSR, some CPSEs have been found wanting in the desired level of initiative in this regard. Director, CSR Hub has informed the DPE that so far only 4 CPSEs have registered their CSR activities with the Hub. Even those CPSEs which have done considerable work in CSR have not registered their activities. The CSR guidelines of DPE clearly stipulate that all CSR/activity undertaken by a CPSE are to be registered with the Hub so as to be considered part of rating the performance of the CPSE for their annual MoU evaluation. The DPE has informed the CPSEs that it would not be in a position to give credit to any CSR activity not registered at the Hub, and as advised, all CPSEs to register and update their activities accordingly.

Voluntarily India has reduced 108 million metric tones of CO2 equivalent over a period of one year, earned more than $ 200 Mn through CER

India is richer by $ 200 Mn by way of earning Certified Emission Reductions (CER) under the Clean Development Mechanism (CDM) over a period of one year.  As many as 342 projects have been approved with host country approval accounting for 10887923.6 CER during the period of July 13, 2010 to July 13, 2011. Calculating average price of 13 euros per CER, India has earned $ 204.5 Mn and reduced 108 million metric tones of CO2 equivalent during this period.
 

Out of 342 approved projects, 249 projects are from energy industries which include both renewable and non-renewable sources.  Energy Demand category accounts for 19 projects while 18 projects have been approved from manufacturing industries. Waste handling and disposal accounts for eight approved projects while metal production and transport sectors account for one and two projects respectively.
 

Certified Emission Reductions (CERs) are a type of emissions unit (or carbon credits) issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified by a DOE under the rules of the Kyoto Protocol. CERs can be used by member countries in order to comply with their emission limitation targets or by operators of installations covered by the European Union Emission Trading Scheme (EU ETS) in order to comply with their obligations to surrender EU Allowances, CERs or Emission Reduction Units (ERUs) for the CO2 emissions of their installations. CERs can be held by governmental and private entities on electronic accounts with the UN.
 

Out of 342 projects, private projects are sharing the majority. As many as 330 projects have been approved which are basically private projects totaling to 9670957.6 CER. Nine projects have been approved, proposals for which have been floated by various state or local governments of India while only three central government projects have been registered and approved under the manufacturing industries.

As on date, the National CDM Authority has accorded Host Country Approval to 2004 projects amounting to 654407145.99 CER by 2012. Though India does not have emission reduction target under the Kyoto Protocol, however, approved CDM projects have the potential to reduced 650 million metric tonnes of CO2 equivalent by year 2012.
 

Meanwhile, Analysis by Bloomberg New Energy Finance shows that June saw the highest ever volume of carbon allowances (EUAs) traded in the European emissions market. Volumes on the Intercontinental Exchange (ICE), which accounts for around 91 per cent of the EU emissions market, reached 654Mt CO2e for June and 78Mt on a single day on June 23 of this year. This beats the previous highs of 584Mt in March 2011 and 53Mt on March 16 this year.
 

These high volumes came about as the market reacted to a combination of influences, including concerns about an oversupply of emission allowances, falling oil prices, the European Commission's proposed energy efficiency package and the precarious state of Greece's economy. This caused to the price of the Dec-11 EUA contract to plummet 22 per cent in five days from €15.65/t on June 17 to €12.26/t on June 24.
Overall the second quarter of 2011 saw volumes of carbon emission rights traded throughout the world decline slightly, by three per cent. The value of the market however increased to €26.4bn, up six per cent from the first quarter of 2011. This rise in market value was driven by higher carbon prices in the European Union emission trading system (EU ETS) in April, May and early June compared to the first quarter of 2011.
 

On average, Dec-11 EUA and CER prices increased by eight per cent and seven per cent respectively in the second quarter compared with Q1. The firm prices were driven by Germany's decision to phase out nuclear power and the expectation that European power companies will need to start buying more allowances to compensate for the lack of nuclear power and the removal of free allocations in 2013 when Phase III of the scheme begins.
 

The main cause of the slight decline in traded volumes in Q2 was the dwindling interest in the market for primary Certified Emission Reduction (CER) credits issued under the Clean Development Mechanism of the Kyoto Protocol. With the lack of progress towards a new global climate agreement, transactions of CERs and Assigned Amount Units fell by 5 per cent in Q2 compared with Q1.

Bloomberg New Energy Finance believes that overall the carbon market in 2011 will trade at record levels of around €106bn – an increase of 27 per cent on 2010’s revised figure, driven by a boost in demand for allowances from utilities in the EU ETS.

Relief for India Inc - Government of India unlikely to make CSR mandatory

In what could be termed as a relief for India Inc, a top Government of India official on June 20 said the government did not wish to make corporate social responsibility (CSR) spend mandatory, but would instead come out with ‘flexible', ‘directional' guidelines, reports PTI.

“There is no way the government wants to mandate it. If we make it mandatory there can be thousand and one ways to bypass it,” Corporate Affairs Secretary D. K. Mittal said at a meeting organised by the Bombay Chamber of Commerce and Industry on CSR, here in Mumbai.

The government would come out with ‘forward looking' CSR spend guidelines, he said, adding, “It will be only directional and not mandatory. We want it to be flexible. But once the new norms are in, firms will have to disclose their CSR spends or non-spending.”

“Like elsewhere, we want the new Companies Bill to include the CSR code and we want corporates to mandatorily disclose in their annual reports the codes which they adhere to or do not adhere to,” Mr. Mittal said.

To the question what difference guidelines would make if CSR was not going to be made mandatory, he said the new Bill would make the whole process more transparent. The new Companies Bill would be tabled in the monsoon session of the Parliament scheduled to commence from August 1, 2011. The 2 per cent compulsory CSR spend proposal, mooted by Mr. Deora's predecessor Salman Khurshid, had sparked off an intense debate, with majority of corporates favouring voluntary CSR spend. 

At the same event, Chief Election Commissioner of India S Y Qureshi talked about CSR and highlighted the “double standards” of the corporates who were “generous only when it comes to political donations, because there is a lot to be gained from that.” He also said corporate India has no right to complain about governance deficit or political corruption “when you don’t even bother to get out of your homes on a polling day."

With the conformation from the top government officials, the year long discussions whether to make CSR mandatory or not has been put on rest for ever. Earlier in several occasions Government of India has advocated strongly to make CSR mandatory and published Voluntary Guidelines for CSR during late 2009.

Though the former minister Salman Khurshid advocated strongly for minimum two per cent spending for the cause of Environment or Sustainable Development for the society, the present minister may not be falling on the same line. The reason could be pressure from the big corporates on the present minister who may have succumbed under the repeated requests or threats and allowed companies to pollute environment. Whether Team Anna listening?

Investment in climate change adaptation big business opportunity

A majority of corporate leaders around the world feel that investing in areas related to climate change adaptation offered a good business opportunity.

Businesses worldwide are beginning to see the risks and economic impacts of more frequent and intense storms, water scarcity, declining agricultural productivity and poor health, reports UNI, a news agency from India.

Climate adaptation offers competitive advantages to businesses worldwide, says a new report, Adapting for a Green Economy: Companies, Communities and Climate Change, jointly released by the UN Global Compact, the UN Environment Programme (UNEP), Oxfam and the World Resources Institute.

In response to a survey of global businesses, 86 per cent described responding to climate risks or investing in adaptation as a business opportunity.

Drawing on the results of a 2010 survey among companies engaged in Caring for Climate, the joint climate action platform of the UN Global Compact and UNEP, the study makes the business case for private sector adaptation to climate change in ways that build the resilience of vulnerable communities in developing countries.

''Business can only thrive in stable and enabling environments," says Georg Kell, Executive Director of the UN Global Compact.''Climate adaptation offers a pathway to help communities that are already feeling the devastating impacts of climate change.

At the same time, it creates a wealth of new opportunities for the private sector'' The study suggests actions that companies and policy makers can pursue to catalyze and scale up private sector engagement.

Confirming the notion that the climate threats many communities face are also business risks, 83 per cent of companies surveyed responded that climate change impacts pose a risk to their products and service.

''Businesses are facing increasing challenges from the rise in extreme weather events, such as droughts, heat waves and floods,'' said Manish Bapna, Managing Director, World Resources Institute.

In this changing environment, companies that move first to address the risks and develop innovative strategies to adapt to climate change are likely to be the winners and gain a competitive advantage moving forward.

The study recommends, among others, that businesses integrate climate adaptation into core strategic planning and build a portfolio of climate-resilient goods and services. Addressing policy makers, the authors call for stronger policy and finance commitments to adaptation, financial and risk-reduction incentives to stimulate the market, and for new forms of public-private partnerships.

Communities around the world are already dealing with the impacts of climate change. Since they depend on community members as suppliers, customers and employees, and need to count on local services and infrastructure to be able to operate efficiently, the well-being of communities on the frontlines of climate change and the viability of companies are intricately intertwined, said Raymond C Offenheiser, President of Oxfam America.

''There are multiple reasons why the world urgently needs a transition to a low-carbon, resource efficient Green Economy, including climate change and adapting to its impacts. This report underlines that climate-proofing is not just a responsibility of governments, but should be at the centre of more and more companies' business models and forward-looking corporate strategies,'' said Achim Steiner, UN Under-Secretary-General and UNEP Executive Directorhe added.

''We live in a world where extreme weather events on one day can move food and fuel prices the next, impacting vulnerable and poor communities and a company's supply chain. We also live in a world where infrastructure established decades ago will become increasingly at risk to events such as storm surges and high winds, that in turn threaten the viability of the business-as-usual models, he said. (Source: UNIIndia.Com)