Are the Corporates Working towards our Common Future?

Factly

By Mrittika Nandy       7 August 2018

The neo-liberal development model essentially refers to liberalization, privatization, and globalization of the earth’s resources for the more significant benefit of the people. The emergence of big corporates and their ambition for the optimization of individual profits has not only divided the world between the rich and poor but has also led to an imbalance between development and environmental sustainability. Innumerable surveys and studies are conducted across the globe only to conclude that ‘Mother Earth’ is a gradually becoming a dangerous place to reside due to unsustainable human-induced activities. Given this context, governments of many countries have stood up firmly to ensure that the ongoing developmental practices remain in optimal harmony with environmental sustainability as well as human security. Hence, the idea that environmental and social security is not only the responsibility of government but demands active participation from the corporate and business world. No wonder why we end up applauding Earth Hours, commercial banks adopting Ecovillages, Mobile operating companies inaugurating E- rickshaws and other Green projects in mere name calling of collective responsibility for our collective future.

This paper is an attempt to examine the role of business houses and their social responsibility measures concerning growing environmental concerns. A case study of a global giant like Coca-Cola accused of polluting water resources in Kerala became a lesson for Government to amend Company Acts and focus on Sustainable Development. Towards the end, some challenges that are highly responsible for initiation of host policies by the Government for safeguarding the environment.

It was United Nation’s Millennium Development Goals (MDG’s) campaign encourages public and private partnerships for promoting gender equality, education and environment sustainability (Moellendorf 2011). The central objective of MDG’s is safeguarding the rights of every individual on the planet with regards to health, education, shelter, and security. To achieve these goals by 2015, the contribution of Corporate Social Responsibility (CSR) was highlighted in the UN Global Compact Initiative’ 2002. For a country like India, CSR becomes a tool that promises maximum participation of business entrepreneurs towards natural ecosystem and enhancing the quality of life while secretly indulging in violating legal, environmental standards. There are many instances when giant corporates like Coco Cola, Union Carbide-Dow Chemicals, Birla, TATA, and Reliance claimed to address issues like health, education and environment sustainability and developed a culture of social welfare towards the planet and its people. At times the close nexus between the Governments and business houses and their persistence violence on environment and communities dependent on nature are overlooked. The evolution of Companies Acts till now has allowed the global private enterprises to evade laws and enjoy the protection of Governments about ongoing Development discourse or ‘Shining India’ campaigns.

Sustainable Development is concerned about the development of the society where the costs of development are not transferred to future generations. It tries to balance environmental protection and human economic development. The five E‟s of sustainability are Economy, Ecology, Equity, Education, and Evaluation. India’s discourse on sustainable development has been marked by acute poverty as well as high inequality in the distribution of goods and services. Fifty years back, Prime Minister Indira Gandhi stressed at the UN Conference on Human Environment, 1972 that poverty is inextricably linked to environmental issues in developing countries and one cannot be solved without solving the other. Since livelihood at the bottom of the pyramid depends on natural resources, improving natural resource management practices is key to poverty elimination and improving living conditions of the poor is central in improving environmental conditions. It’s imperative for business giants to realize that CSR can be a zero-sum game unless they look at the cause and consequences of scarcity and its relation to their operation.

The Case Study Of Coco-Cola Company In Kerala:

Coca-Cola was accused of causing water shortages in the community of Plachimada, Kerala’ 2000. Besides, Coca-Cola was accused of water pollution by discharging wastewater into fields and rivers surrounding Coca-Cola’s plants in the same community. Groundwater and soil were polluted to the extent that Indian public health authorities saw the need to post signs around wells and hand pumps advising the community that the water was unfit for human consumption (Pankaj Dodh 2013)
. In March 2010, a state government panel recommended fining Coca-Cola’s Indian subsidiary a total of $47 million because of the damage caused to the water and soil in Kerala. Community members affected by the water pollution put a select committee in charge of looking into claims. The lengthy legal procedures against the Indian government that Coca-Cola had to face were not the only consequence of the conflict. The brand suffered a significant loss of consumer trust and reputational damage in India and abroad. The Indian population viewed Coca-Cola as a corporate villain who cared more about profits than public health.

Interestingly, Coca-Cola still denies most of the allegations, the reputational damage experienced during the controversy in India pushed Coca-Cola to take damage-control measures. The Company issued a statement consisted mainly of providing information supporting its ethical practices and water management of its operations in India. It also created the Coca-Cola India Foundation,’Anandana’, which works with local communities and NGOs to address local water problems. It appears that the controversy in India was a learning experience for the company and Government and that it motivated the companies to adopt a more proactive CSR policy on a global scale that focuses on water sustainability policies and practices.

In contemporary scenarios, the amended CSR guidelines of 2013 consider sustainable development and triple bottom line based growth as the fundamental objective. It states that CSR would address the problems of climate change, disaster management, and environmental degradation. It encourages the generation of scientific evidence to strengthen future guideline through the formation of an institutional structure (CSR hub), new governance architecture, compulsory baseline surveys, periodic and online reporting. India needs to find ways of financing sustainable development. Though the new law Asserts that its mandatory for companies to contribute to 2% of their profits for CSR activities. Assessment reports and Surveys conclude that most of these companies don’t have a structured and comprehensive plan in place for dealing with environmental concerns.

Companies argue that education is seen as the key driver to bring in sustainable development in India. This includes literacy, primary and fundamental training as well as education on different aspects of sustainable development. Community education is required on practices that conserve resources. There was little participatory planning when it came to CSR projects. Also, managers who are entrusted with these responsibilities of implementing CSR projects have little knowledge about water conservation and community participation – as they are non-technical. These are a few challenges that have resulted in the continuous formulation of a host of policies related to SD, Climate Change and CSR in the last 3-4 years in India (Kumar 2014)
.

Therefore, Sustainable Development for India will require a multidisciplinary approach, spanning departments and regions and considering a long-term impact. By roping in non-state players in the governance of sustainable development, the Indian government has taken an important albeit controversial step. This will lead to growth in pockets of industrial clusters. Such progress, after overcoming initial procedural and implementation bottlenecks can rejuvenate livelihoods, and create prosperity only if there is a concerted effort in planning, implementation, and evaluation. The new policy, though a good start, lacks an evidence-based, bottom-up approach for the moment. India needs to build evidence sensing and participatory mechanisms as well as intra and extra organizational capacity building to make CSR more robust and useful in achieving its goal of sustainable development.

References:

Moellendorf, Darrel. “A Right to Sustainable Development .” The Monist (Oxford University Press), 2011.

Pankaj Dodh, Sarbjeet Singh, and Ravita. “Corporate Social Responsibility and Sustainable Development in India.” Global Journal of Management and Business Studies (Research India), 2013.

Kumar, Leela. “The Impact of Corporate Social Responsibility on Sustainable Development.” (Social Science Research Network) 2014.

Ray, Linking Corporate Social Responsibility with Sustainable Development: New policies and emerging evidence from India, 2013

Bhumika Muchhala, Mitu Sengupta, A Déjà Vu Agenda or a Development Agenda, EPW, 2014

Ramaswamy Yer, Environment, and Development- Some Thoughts on the New Government, EPW, 2014

R Manjula and L. P. Ramalingam, Sustainable Development in Respect of Authentic Corporate Social Responsibility, Proceedings of the Second International Conference on Global Business, Economics, Finance and Social Sciences, 2014

Wilis Jenkins, Spirit Sustainability Theory, Yale Divinity School, 2010
S K Gupta and B K Chaturvedi, Strategies for Sustainable Development in India, 2010

Richard A. Matthew and Anne Hammill, Sustainable Development and Climate Change, International Affairs, Royal Institute of International Affairs, 2009

Posts Carousel

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

SAJ on Facebook

SAJ Socials

   

Top Authors