CORPORATE ENVIRONMENTAL RESPONSIBILITY IN SMEs :

A GUJARAT MODEL FOR SUSTAINABLE DEVELOPMENT

________________________________________________________________
Dr. Shamal Pradhan,

Asso. Prof. Faculty of Commerce,

The M.S. University of Baroda.

pradhansa@hotmail.com

09898248603

Abstract

The concept of sustainable development has been highlighted as a major focus in the corporate world
today. It enables individuals and companies to meet their current needs without hampering the
environment for the future generations to fulfil their needs. Hence companies have now developed a
greater sense of responsibility with a greater focus on environmental sustainability, which not only
increases the image of the company and the confidence of the investors, but has also become a
business imperative. for a sustainable all round development, it is essential to address to the
organizations environmental responsibility which the organization based on trust, both in the
individuals and in the company capacity and aims at the development of each one through a mission
statement where each employee is a contributor and the government is a facilitator.

Key words : Environmental Responsibility, Sustainability, Human Resources

INTRODUCTION:

The concept of sustainable development has been highlighted as a major focus in the corporate world
today. It enables individuals and companies to meet their current needs without hampering the
environment for the future generations to fulfil their needs. Hence companies have now developed a
greater sense of responsibility with a greater focus on environmental sustainability, which not only
increases the image of the company and the confidence of the investors, but has also become a
business imperative. Amongst all the functional departments operating in the organization, the HR
function has become one of the important drivers of environmental sustainability. Since the human
resources of the organisation are the conceptualisers, framers and practioner of the Green philosophy,
the HR managers now have a major role to play in designing efficient strategies which align with the
companys values and culture, investors expectations, meeting government rules and regulations, and
most importantly, initiate environmental friendly practices and awareness among employees. The
organisational approach strengthens towards the adoption of these practices with the support of
Governments policy.

Green corporate environmental responsibility is the use of organisational policies to promote the
sustainable use of resources within organizations and, more generally promotes the causes of
environment sustainability. This paper focuses on role that Government plays in translating green
policy into practice.

1.1 Sustainability:

Sustainability is defined as opportunity for businesses to provide long lasting solutions that will help
enhance the socio-economic landscape while continuing to create jobs and economic wealth well into
the future. Green business practices were defined as those that addressed environmental stewardship
and social responsibility. The term Sustainability, Sustainability development, corporate sustainability
and Corporate social Responsibility Corporate Environmental Responsibility are frequently
interchangeable. The term Sustainability has been defined as the ability to meet the needs of the
present without compromising the ability of future generations to meet their needs. As regulatory
pressures and societal demands for greater environmental and social responsibility have increased,
sustainability has become a key focus for many organizations. A sustainable organization can be
defined as an enterprise that simultaneously contributes economic, social and environmental benefits
known as the triple bottom line to society while also ensuring its own long-term sustainability
as an organization. Sustainability is seen by many as increasingly essential to creating shareholder
value, as investors and employees look to organizations to be good corporate citizens. There is an
emerging business case that corporate performance, under the right conditions, can be enhanced in
firms focused on sustainability. For example, a 2003 meta-analysis of research studies suggests that
corporate virtue in the form of social and environmental responsibility is likely to pay off financially.

1.2 HR and Sustainability:

Organizations are increasingly concerned with sustainability and corporate social responsibility. The
HR function is uniquely positioned to assist in both developing and implementing sustainability
strategy. The HR function can serve as a partner in determining what is needed or what is possible in
formulating corporate values and sustainability strategy. The Human resource department of a
company has the capability to play a significant role in the creation of their companys sustainability
culture (Harmon, Fairfield and Wirtenberg 2010). The role of HR in creating sustainable business is
two- pronged. As a part of business strategy, HR will have to embrace a more sustainable approach to
managing its people. HR will have to learn to manage the whole gamut of issues ranging from
employee wellness, healthy, and safety workplace diversity. The HR is likely to be the only
department that is resourcefully trained to change the attitudes and behaviours of the executives,
managers, and employees by modifying their many Human Resource systems. In many organizations
the HR department is the Custodian of the culture. Configuring HR Practices to the principles of
sustainability need not necessarily mean changing the HR function. It means that HR People will have
view all HR decisions through the prism of shareholders viewpoint.

Examples of Sustainable HRM practices include:

1) Assisting employees in identifying ways to recycle products that can be used for further reuse

2) Encouraging employees, through training and compensation to find ways to reduce the use of
environmental damaging materials.

3) Emphasizing long term employment security to avoid disruption for employees.

There are few steps for creating the Sustainable HR practices in the organizations the steps are shown
as below:

1.2.1 Evaluate- It is important to evaluate whether the companys corporate culture, strategic intent
and underlying values support the sustainability goals. The culture and underlying values will have to
support each other in order to create a Green HRM function. It needs to be understood whether the
firm involved in any community services to balance the lack of sustainability in products or services.
The job description and the corporate website of the company must support the green agenda.

1.2.2 Eliminate- The HR has to support green movement by cutting cost which will help in
eliminating the waste and HR will have to introduce the concept of using the recycled paper, back to
back printing, promote online recruitment throughout the organisation.

1.2.3 Illuminate- The HR will have to develop a consistent and authentic employment brand that will
go a long way in helping the company find, retain and repel talents for sustainable Green practices.
On the other hand the HR will have to boost the employees to use eco-friendly products so that the
brand is established.

1.2.4 Implement- For an enduring success of Green movement at all the level, the HR will have to
implement the sustainable strategies by painting every phase of the employee life cycle with green,
starting from recruitment to compensation. They will have to roll out live virtual interview or video
conferencing for recruitment which reduces the travel cost as well use of paper. Some of the other
measures would include buying the paper which is made of post consumer recycled stuff which is
high in quality, implementing the strategy of rewarding the employees for using the eco friendly
initiatives within the organization, increase the types of environmentally friendly green initiatives that
companies are utilizing involving their workforce and HR practices which are embedded in HR
mission, integrate the pillars of sustainable development between Employees, Investors, Providers,
Clients and Government as HR function is a balancing function and it monitors the relationships and
interactions between these stakeholders.
Therefore for a sustainable all round development, it is essential to address to the organizations
environmental responsibility which the organization based on trust, both in the individuals and in the
company capacity and aims at the development of each one through a mission statement where each
employee is a contributor and the government is a facilitator.

The objectives for Going Green

Increase employee engagement

Attract and retain top talents

Improve operational efficiency

Drive profitability through energy, water and new materials savings

Brand the business with differentiation

Address the expectations from your stakeholders

Monitor reputational risk

Reduce pollution, waste and CO2 emission

ROLE OF GOVERNMENT AS A GREEN CONTRIBUTOR

Industrial development has been at the core of Gujarat Government's developmental agenda for last
several years. Gujarat houses potentially polluting industries like chemicals, pharmaceuticals, cement,
petrochemical and textiles. Ensuring that these industries follows environmental norms is indeed a
challenge . The approach the industries needs to be more as a friendly facilitator rather than as a
police. Due to such an approach it has been possible in convincing the industries to follow green
practices in their production processes.

In the last several years, the Government has ensured that industries remain fully compliant with its
green policies while allowing them to grow. The end result of this mutual cooperation was that while
the industrialisation has grown by about 30% in the last few years but the level of pollution has come
down by about 40% on an average across all industrial segments. As observed by the experts the lack
of technology and lack of trained manpower were genuine concerns that industries had been facing in
implementing Green practices. This is where the role of HR department is of paramount importance.
The Government has collaborated in several areas with the Medium and Small Industries for attaining
Green objectives.

Sustainable development ensures that while we use natural resources for our developmental needs, we
are also duty-bound to preserve them and pass the same on to the next generation. This concept called
the intergenerational equity has been at the core of the Governments developmental agenda and the
Governments policies were based on the concept of sustainable development. It is also important to
note that, in the last few years, Government hugely promoted the concept of "utilisation of waste"
which ensures that the waste of one industry can be used either as a raw material or as a fuel for
another industry. For example, there has been introduction of new technology in place to use the
waste of the pharmaceutical sector as a fuel for the cement industry. This is an example how to ensure
the sustainable development. With the concrete efforts of the Government, waste management has
now become a well accepted practice in Gujarat.

The efforts were made by Government to convince entrepreneurs that improvement in their
production processes would not only make them environmentally compliant but would eventually
improve their yields and also their bottom lines. Now industries in Gujarat themselves have realised
the benefits of adopting clean production technologies. So whatever success Gujarat has achieved on
this front is due to the involvement of every stakeholder.

A brief introduction of the Green Scheme

With the reference to the Green practices in Gujarat the Scheme for assistance to encouraging
Green practices and environment audit to MSMEs. It has been in force since 11 th June 2006.
Eligible units are those MSMEs which are engaged in manufacturing and who intend to encourage
green practices in their units. The corporate environmental responsibility of these units can be spelled
out through the expected activities recommended for eligibility. The units are recommended to use
clean, efficient and innovative pollution control equipments in its units. There will be periodic
environmental audits. The units will be encouraged for environment management system and for
setting up environment management cell. It is recommended to purchase new equipments and systems
related to safety and occupational health. It is also recommended for installation of solar system
leading to energy saving.

The following quantum of assistance shall be provided:

1. Use of Clean, Efficient and Innovative pollution Control Equipments in Industries- Upto

25%of cost of equipments or maximum Rs.2.5 lakh per Unit

2. Periodic Environmental audits- Upto 50% of fees of audit services or maximum Rs.25000

per audit.

3. Encouraging Environment Management System, setting up of Environment Management

Cell- Upto 25%of cost of equipments or maximum Rs.5 lakh per Plant once in a life time.

4. Purchase of new equipments/systems related to safety, occupational health for a cluster

of industries with a minimum of 10 industries in a cluster- Upto 25%of cost of equipments

or maximum Rs.25 lakh per cluster. The assistance under the scheme will be provided to
 industrial association.

5. Installation of Solar system leading to at least 5% energy saving- Upto 25% of cost of

system, Rs.2.5 per Plant.

Other conditions include:

The unit will have to apply to concerned circle prior to the implementation of the project in prescribed
format for assistance along with documents as specified in check list, within one year from the date of
issue of quality certificate. On receipt of application with all details, the circle inspector will carry out
inspection for verification of document and eligible expenditure. The inspection will be completed
within 15 working days. The concerned officer will scrutinize the inspection report and will
sanction/reject the application within 10 days. After issuance of sanction letter, payment will be made
within 10 days, subject to availability of grant.

CONCLUSION

The emerging concept of Green HRM has important implications both for organizational performance
and for the HR function. The organisation needs to focuses on the involvement of HR in green
programmes and sustainability. The governmental efforts indicate that it is involved in engaging the
employees for implementing the Green programmes with the help of organsations. Green initiatives
have created a sense of morale and loyalty among the employees towards the organization, which has
also helped in employee recruitment and retention. When companies are able to reduce their cost and
increase their profitability via green HRM and sustainability initiatives, the organizations are inclined
to focus more on these aspects. The future of Green HRM appears promising in near future with the
involvement of employees, stakeholders and management on one hand and a healthy support system
provided by the government on other. We can assume that by 2020 India will become one of the key
players in Green initiatives with a focus on preserving Indian culture and heritage in which the
Gujarat model will play a pivotal role.

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www.gec.gujarat.gov.in

www.greengujarat.net/

www.greengujarat.org/

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