Strong green hand needed to check India Inc: CSE

On World Environment Day, Sunita Narain, director, Centre For Science and Environment (CSE) tells CNBC-TV18 that with progress, industry has shoved environment to the sidelines according to the findings of a CSE report.

Below is an edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.

Q: You believe that environment picture look much better in 2005 and that’s when Indian industry was actually getting on board with being environmentally and in managing the environment. Why has the picture deteriorated in 2012?

A: In 2005, we rated the cement sector, which is an equally polluting, growth and a sunshine sector. According to our assessment the cement sector has actually shown remarkable improvement in environmental performance and we believe that environment has therefore somehow got mainstreamed into Indian industry.
 
Q: Why do you believe that it's not the case in 2012? Do you believe that industry should be incentivised for going green?

A: Absolutely not. In steel sector, CII's demand should be outright rejected by the government. Here is a steel sector, which is actually profitable. The companies which we have rated poorly are making good money because they have low cost of low materials, energy and yet they have terrible compliance record.

We are showing that they are not even complying with the minimum national standards as far as environment is concerned. According to our study three companies that we have rated higher are still average, are those companies higher which had to pay huge amounts for raw material as they don’t have captive mines and huge amounts for energy. 

Therefore, their gains on environment are incidental as they had to invest in efficiency just for the sheer sake of economics.

Q: You mean that the government should not follow the carrot and the stick approach. It should drop the carrot altogether and wheel the stick?

A: Correct. As per our study, the industry is doing what it does for the environment, and which is incidental for economic reasons. The reason for deterioration from 2005-2012 is due to weak regulatory system. A visit to some steel companies showed that there was no monitoring, vigilance, scrutiny and policy drivers in all cases.

Q: Is it fair to extrapolate from the experience that you have had with the steel and the iron industry to say that everybody whether it's the auto industry or FMCG companies is doing a bad job of managing the environment. Can you extrapolate this for everybody in business?

A: Firstly, we are talking about the iron and steel sector. The entire nation which believes that the iron and steel sector is engaged in green production is not true and we are standing behind our study.

But, for rest of the sectors, we are saying two things and that applies universally.  There is no reason for us to believe that there is a correlation between the information that companies are putting out and their actual performance as there is no data in the public domain which is looked by regulators.

It is a fair assessment which companies must understand today. It's easy to talk about being green without being able to prove that you are green. To prove that one is green one need a regulatory support.