Sustainable industrialisation

Former finance minister Manmohan Singh releases the rating of caustic chlorine sector in 2003

CSE started the green rating project to rate the environmental performance of major industrial firms by developing the industrial rating methodology.  Despite the initial challenges of conceptualisation, CSE was successful in improvising and developing an extremely robust rating methodology under the Green Rating Project. The Green Rating project was thus launched in May 1997 by Dr. Manmohan Singh, the then finance minister of India. Paper and pulp industry was taken up as a test case for study and development of a transparent and credible rating methodology followed by automobile industry, Caustic chlorine industry and cement industry.

The pulp and paper sector rating was considered to be a pioneering work done by an NGO in developing world and it received tremendous response from all sections of the society. The ratings were also presented to the President of India, who appreciated the efforts taken by CSE to bring the industry in the forefront of the environmental movement. The industry response to the rating programme has been so good that the International Finance Corporation held the GRP as a model alternative governance mechanism for industrial performance.

Former President of India K R Narayanan releases the second rating of the pulp and paper sector in 2004

The programme was also instrumental in having an impact on the regulatory systems. The Central Pollution Control Board (CPCB) took-up the issue of mercury pollution and wrote to the Ministry of Environment and Forest (MEF), recommending the phasing-out of the Mercury Cell plants by 2005. CPCB also set up a team to revise its standards on mercury emissions from Chlor-alkali sector. Question on mercury pollution was raised in parliament and the chlor-alkali industry accepted its fault in not addressing the mercury pollution issue in time in its association publication.

M S Swaminathan releases the rating of cement sector in 2005

The impact of Green Rating was visible in all the sectors it rated so far. In the second rating of pulp and paper sector, the paper companies agreed to provide all information, including the economic and trade information, and agreed for a time-table to conduct the rating. The JK Papers Ltd developed an environmental reporting program based on GRP rating to monitor its day-to-day performance. In the automobile sector, Hindustan Motors and Hero Honda started addressing their environmental issues as per CSE recommendations. Hyundai Motors, in an unprecedented move, publicly announced that from now on it would produce same standard cars in India as its European plants. Ford India, published its very first annual environment report and have committed to improve their rating next time.

CSE was pleasantly surprised to note the impact of GRP rating on the stock market as shown by a study undertaken by noted economist, Mr Shreekant Gupta. GRP recommendations have paved the way for significant investments in process and pollution control technology. Water consumption, which was as high as 250 tons per tonne of paper produced, gone down by 16% and as many as 25% of companies had stopped using elemental chlorine for bleaching.  Significant innovation has been done by companies at the grassroots level to promote farm forestry. The contribution of farm forestry to the wood supply to the pulp and paper mills has surpassed the contribution from forests. In general, there is a sense of seriousness within the industry to improve its environment performance.

It is interesting to note that the ratings awarded by GRP often used by the companies to get loans from banks such as, International Finance Corporation (IFC). These companies mention of the credibility of participating in the GRP and its ratings.