Tag: Environmental law

INTRODUCTION

The terms ‘environmental, social, and governance’ are referred to as ESG. Sustainability is viewed holistically by ESG, who believe that it encompasses more than just environmental concerns. The ideal way to define ESG is as a framework for stakeholders to understand how an organization is handling opportunities and risks connected to environmental, social, and governance criteria. Although the word ‘ESG’ is frequently used in relation to investing, other parties including the investment community, clients, partners, and staff are considered stakeholders. They’re all becoming more and more curious about how sustainably an organization operates.

PRINCIPAL POINTS

• ESG is a framework that aids stakeholders in understanding how a company handles opportunities and risks related to sustainability issues.
• ESG has developed from earlier movements that prioritized corporate generosity, pollution reduction, and issues of health and safety.
• ESG has altered many capital allocation and investment decisions.

ESG

1. Environmental: The environmental impact(s) and risk management procedures of an organization are referred to as environmental criteria. These include the firm’s overall resilience to physical climate threats, stewardship over natural resources, and direct and indirect greenhouse gas emissions (like climate change, flooding, and fires).
2. Social: The connections an organization has with its stakeholders are referred to as the social pillar. An organization’s impact on the communities in which it operates and on supply chain partners, particularly those in developing economies where environmental and labour standards may be less stringent, are other examples of factors that a firm may be measured against. These factors include metrics for human capital management (such as fair wages and employee engagement metrics).
3. Governance: Governance describes the direction and management of a business. ESG analysts will work to gain a deeper understanding of how shareholder rights are perceived, how incentives for leadership are related to stakeholder expectations, and what kinds of internal controls are in place to encourage leadership accountability and transparency.

SOCIAL ASPECT OF ESG

The social benefits of ESG go beyond providing access to goods and services for various social groups. It also extends beyond offering work to everyone, regardless of gender, colour, religion, or other characteristics. Despite their importance, these things do not entirely define what it means to be socially responsible.

However, the social impact extends beyond the immediate environment. Additionally, it covers how the organization treats and cares for its personnel. this covers things like paid maternity leave, paid sick leave, paid time off, and pay parity, among other things. All of these factors have an impact on the workers, their families, and their social interactions.

WHY IS ESG IMPORTANT IN TODAY’S WORLD?

We can all agree that having an ESG policy at a company is a good thing. However, it’s crucial to keep in mind that while these developments are positive, they aren’t yet complete and shouldn’t be fully anticipated from such a young movement. While we should support these initiatives, we shouldn’t expect them to be miracles; rather, they should be the beginning of miracles. These initiatives indicate strides in the right direction. People today are becoming more conscious of how their activities impact everyone and everything in their environment. It’s time to take matters into our own hands and take action if we want a different future for everyone—including ourselves, our children, the earth, and all living things.

ESG’s IMPORTANCE IN THE BUSINESS?

There are several reasons which show that ESG is important to a business. It is an important factor in company performance and is the best indicator of environmental, social, and governance success.

• It might enhance a business’s standing and image, which might draw in new investors.
• By introducing new legislation, governments all across the world have the power to influence the triple bottom line.
• By requiring innovation from businesses, it creates a variety of fresh options.
• It benefits the environment, which benefits your grandchildren and the future generations of your family.

WHAT ARE ESG FUNDS?

ESG funds are essentially funds where money is invested in the bonds and stocks of businesses that do well on metrics including the environment, the social sector, and corporate governance. It made investments in businesses that use environmentally friendly practices. Here, the company’s sustainability is evaluated in light of ESG considerations. It will only cover sovereign bonds from nations with high sustainability ratings when it comes to bonds.

IMPORTANCE OF THE FUNDS

• First of all, if a company is sustainable, it demonstrates a greater level of social and financial responsibility. It is crucial because only investor pressure will force firms to act responsibly toward the community.
• This demonstrates how important ESG funds are to the community. As the government focuses more on renewable energy and environmental challenges, it is significant from the investor’s perspective. Additionally, it is anticipated that in the future, companies with significant environmental pollution levels will be subject to the tax.
• More ecologically conscious, healthful, and natural products are becoming more popular among consumers, who are also changing their lifestyles. Companies must make decisions accordingly as a result of the government’s stricter governance regulations.

TOP ESG FUNDS IN INDIA

1. SBI Magnum Equity ESG Fund – This is the ESG segment’s oldest available fund. This fund has been around for at least 8 years. It debuted on January 1st, 2013. Its fund expense ratio is 1.29%, which is greater than that of other funds in this category. This fund has given an annual return of 15.84% since it was founded.
2. ICICI Prudential ESG Fund- This fund was officially launched on January 22, 2020. It has been around for almost 1 year and 8 months. On average, it has given a return of about 39.35%. It has generated a return of about 60.52% over the past year. Avenue Supermarts Ltd., Wipro Ltd., Bajaj Finance Ltd., Tata Consultancy Services Ltd., and Nestle Ltd. have received the majority of their investments. The expense ratio for this product is 0.48%, which is lower than what other thematic ESG funds charge.
3. Quantum India ESG Equity Fund- It is a medium-sized fund with 1920 crores of rupees in assets under management. On September 21st of last year, the fund was established. The expense ratio it charges, 0.6%, is comparable to that of other ESG thematic funds in this market. Compared to its competitors in this market, this fund has a lower exposure to the financial and technological sectors, investing its money in industries including FMCG, chemicals, healthcare, and financials. Regarding the returns, since its debut, it has been able to produce returns of 42.59% annually. The portfolio allocation for this fund is split 95.9% into equities, 0.02% into debt, and 4.08% into other alternatives.

WHAT IMPACT DOES ESG HAVE ON THE ECONOMY?

ESG is resulting in a more sustainable society and an improved environment. It is helping to lower carbon emissions across major economies, reduce deforestation and water waste through better irrigation practices, improve energy efficiency within companies, and create a circular economy. Through its influence on companies, ESG is increasing corporate transparency and accountability. It is empowering consumers to make more sustainable decisions about the products they buy and the companies they support.

WHY FIRMS IN INDIA SHOULD FOCUS ON ESG?

India is seeing an increased focus on ESG. According to a recent report by IT industry group Nasscom and Boston Consulting Group, global companies’ growing efforts in enhancing their environmental, social, and governance goals (ESG) will boost revenue for Indian technology and services companies. Furthermore, several outside factors contributed to the adoption of ESG initiatives by digital companies. Several sizable multinational corporations are requiring that vendors adopt specific ESG objectives to compete for their business. Investment in ESG is a business necessity for organizations. Start-ups are being pushed to focus more on incorporating these into their overall strategy by investors’ requests for them to establish an ESG strategy.

While the larger businesses already had well-defined objectives and an ESG roadmap in place, it would work with the smaller businesses to integrate these into their strategic priorities, begin the process of internal adoption, and develop customer-facing solutions. It was crucial to comprehend the techniques that, given the company’s size and business aims, would apply to it.

Indian enterprises are being forced to reconsider their strategy as a result of the uncertain state of the Indian economic environment and the amplified effects of many environmental and societal disruptions. ESG is developing as a concept to produce long-term value for all stakeholders. The COVID-19 pandemic has highlighted the value of ESG as a fundamental strategy for long-term corporate resilience. Businesses are considering moving beyond non-financial reporting and beginning to report using an integrated profit and loss approach, which aims to correlate or monetize the favourable and unfavourable effects of business operations and products through a variety of capitals, thereby assisting in the creation of long-term value.

---

REFERENCES

1. What is ESG and why is it important, available at https://www.esgthereport.com/what-is-esg-and-why-is-it-impor

This article is written by Aditi Jangid, a 1^st year law student pursuing her bachelor’s degree from Delhi Metropolitan Education (Affiliated to GGSIPU).

Introduction

The protection of the environment is immensely vital for the survival of mankind. It helps maintain the ecological balance and preservation of the environment. Two terms are often used synonymously, i.e. environment and ecology. Ernest Haeckel, who is known as the father of Ecology, has defined ecology pollutants as a reciprocal relationship between organisms and their surroundings. The term ‘eco-system’ is derived from the word ecology and it implies, “an organic community of plants and animals viewed within the physical environment or habitat.” According to Justice P. N. Bhagwati, the former Chief Justice of India, the term ‘Environment’ refers to “all the conditions within and around an organism, which affect its behaviour, growth and development, or life processes, directly or indirectly.”

What is an environmental crime?

An environmental crime is any illegal activity that breaches national and international environmental law. The unlawful exploitation of the planet’s natural resources is a threat to the survival of all organisms on Earth. India has a very rich animal and plant heritage. There are 13,000 species of flowering plants, 65,000 species of fauna, more than 2000 varieties of fishes, 200 species of birds and 340 kinds of mammals.

Environmental Crime is also known as Green Crime or Green Collar Crime. It is a life and death issue all over the world. The crimes against the environment are connected with the unlawful exploitation of wild fauna and flora, pollution, waste disposal and its trade.

What is environmental pollution?

The term “pollution” is derived from the word “pollute” which means to make unclear or dirty. The release of substances and energy as waste products of human activities results in changes usually harmful to the environment is called pollution. According to Section 2(c) Of the Environment Protection Act, 1986, when Pollutants substances which mark their presence in the natural environment may be present in solid, liquid or gaseous form, defined as environmental pollution.

Environmental Pollution And Crime

Natural pollution is caused due to natural forces such as tsunamis, soil erosion, fire causing forest destruction, cyclone, acid rain, global warming, greenhouse emissions etc. Air Pollution, Water Pollution, land Pollution, noise Pollution, and radioactive pollution are also called aerial pollution, food pollution, thermal power plant pollution, sea pollution and
pollution caused by solid wastes, and acid rain pollutants are kinds of artificial pollution caused by human activities and this pollution is an example of environmental crime. Wildlife crime, illegal mining, dumping into oceans and other water bodies, illegal fishing, illegal logging, groundwater contamination, burning garbage, improperly handling
pesticides and chemicals, and oil spills are the most common environmental crimes. In the current world context Environmental crime is one of the paramount concerns of India as well as all over the world.

• Wildlife Crime: The term wildlife not only includes terrestrial and aquatic animals living in the forest but it includes all the living organisms and microorganisms living in their natural habitat. Illegal hunting and killing of animals are called poaching. Laos, Thailand and Myanmar, are the golden triangle of wildlife evil action and also a hub for illicit wildlife business. China is the largest importer of illegal animal products. Animals are captured alive and traded into zoos. Uganda is the home to hunting majestic elephants. Zimbabwe, Uganda and Kenya are the biggest countries in the world having poaching problems. Pangolin is the most hunted mammal in India and the world’s most trafficked mammal. Illegal trade of Indian star tortoise, rhino horns, tiger and leopard skins, and tusks of elephants.

•Dumping into water bodies: Water pollution has many reasons which include the discharge of industrial effluents and drainage of sewage. In India, rivers like Ganga, Gomti, Yamuna and Kaveri have become polluted and unfit for drinking purposes. The practise of dumping dead bodies in rivers is one of them in India. Hundreds of corpses have been found floating in the river or buried in the sand of river banks. Villagers in India are usually dependent on the river for drinking, irrigation and giving water to their animals which has become a slow torturous process. Wastes from shipping fuel and oil, off-shore drilling rigs, toxic substances like cyanide, acetylene, acids and alkali present in industrial liquid effluents, and inorganic substances like chloride and nitrogen, and dyes which are harmful to make the water unsafe and harmful for human health. Atomic reactors contain different kinds of radioactive substances which are very harmful to organisms.

•Illegal Logging: Forests are the lungs of the environment and help the process of transpiration and condensation. Trees help to purify the air by releasing oxygen through the process of photosynthesis. Forests provide wood, timber, fuel, medical herbs etc which have a great trade value for industries. The uncontrolled logging to get wood for furniture or other good, and the trade of timber and ivory for financial gain is the most serious cause of environmental crime. There are several movements to protect forests. Chipko Andolan and APPIKO Andolan are the famous ones. Chipko Andolan was launched by Shri Sunder Lal Bahuguna, a noted environmentalist in the early 1970s in protest against the indiscriminate cutting of trees and deforestation.

Protection of Environment – Legal Framework

The former Prime Minister of India Late Smt. Indira Gandhi, the credit goes to her who spread awareness about the preservation and conservation of the environment. She was inspired by the Stockholm Conference (1972) on Environment in which she had represented India. The two new constitutional provisions were inserted in the Constitution of India by the 42nd Amendment Act 1976. Article 48-A imposes a constitutional obligation on the State and the Courts to protect and improve the environment and Article 51-A(g) imposes a duty upon the citizens to preserve the environment.
The major acts passed for the protection and control of environmental crime are as follows:

The Water Prevention and Control of Pollution Act, 1974, The Air Prevention and Control of Pollution Act 1981, The Forest Conservation Act 1980, The Environment Protection Act, 1986, The Wildlife Protection act 1972, The Biological Diversity Act 2002, Batteries and handling rules 2001, recycled plastics manufacture and uses rules 1999, municipal solid waste management and handling rules 2000.

Some other statutory laws also contain provisions relating to the prevention and control of the environment. They are:

1. The Indian Penal Code 1860 (chapter- XIV Nuisance, Sections 268 – 278 in Section 290) provides punishment.
2. The Code of Criminal Procedure, 1973 ( chapter X, Part B- sections 133 – 143 and part C -section 144).
3. Atomic Energy Act 1962
4. Insecticides Act 1968
5. Factories Act 1948
6. Ancient Monuments and Archaeological Sites and Remains Act,1958
7. Public Liability Insurance at 1991
8. The Prevention of Food Adulteration Act 1954.
9. Indian Easement Act 1882.

Landmark Judgements

•Narmada Bachao Andolan v. Union of India (2000) 10, SCC 664 (767)
The Supreme Court has declared the right to have access to drinking water as a part of the right to life and human rights as enshrined in Article 21 of the constitution of India.

•M.C. Mehta v. Union of India, (1988) 1 SCC 471

The River Ganga Pollution Case. To prevent the river Ganga from being polluted in Kanpur due to the industrial discharge of effluents and sludge into the river the Supreme Court issued directions to the Municipal Corporation labour. Increase and widening of sewers, construction of a sufficient number of public urinals, preventing throwing of dead bodies, installation of treatment plants in factories, prevention of waste accumulated at dairies and generating awareness about the importance of cleanliness and a pollution-free environment for public health.

• Indian Handicrafts Emporium v. Union of India AIR 2003 SC 3240.

The Supreme Court held that trading in ivory is totally banned under chapter V-A and any person who has obtained a certificate from the chief wildlife warden under section 49-C (3) may keep possession of such property but cannot display it on any commercial premises.

•Samir Mehta v. Union of India 2014 SCC OnLine NGT 927, 17-04-2014 – Marine pollution case due to the ship sinking.
National Green Tribunal held that ship sinking accident has led to marine pollution. Therefore, environmental compensation of Rs. 100 crores were imposed. It is one of the biggest compensation ever made by a private entity to the Government.

Conclusion

Industrial and technological development lead to environmental-related problems in developed countries whereas undeveloped countries have problems because of poverty and over-population. The balance between Environmental Protection and development activities could only be maintained by the principle of sustainable development. The objective of sustainable development seeks to maintain and protection of biodiversity and enhancement of the quality of life. Thus, Development and environment, both are interdependent and therefore, there cannot be development without the protection of the environment, nor can there be conservation of the environment without development. The Environment Minister, Prakash Jawdekar on 5th February 2015, inaugurated the sustainable development summit in Delhi. He said that India is carried out to improve the lives of future generations and urged all the nations to work together to save the earth from disastrous consequences. If we want to save the earth, then come forward and contribute to protecting the environment for ourselves and the upcoming generations also.

“Ecology and human consciousness cannot be separated. Only because human
beings have become insensitive, we have to talk today about saving the world…”

This article is written by Ashmita Dhumas who has completed her B.A.LL.B from Agra College and currently doing a
diploma in Corporate Law from Enhelion.