The standard OHSAS 18001 (2007) was issued first in 1999 and revised in 2007. The revision is mostly to emphasise the "Health" aspect of OH & S and align with ISO-14001. The standard, again, is based on PDCA. The standard helps the organization to improve its Occupational Health & Safety performance in a systematic way.
Occupational Health and Safety issues can arise from various causes like: (a) moving (e.g. circular, linear or angular) machine parts, (b) use of transportation mechanisms like lifts, tackles etc., (c) use of electricity, (d) use of chemical substances (e.g. toxic, inflammable, corrosives, explosives etc), (e) plant layout, (f) Light levels, (g) sound levels, (h) ergonomics, (j) falling objects, (k) working at heights, (l) radiation (e.g. ultraviolet, nuclear), (m) working in hot areas, (n) working with compressed gases etc.
Legal requirements related to OH & S are available in (a) Factories Act (and the Maharashtra Factories Rules, (b) Petroleum Act (and Petroleum Rules), (c) Explosives Act (and Explosives Rules), (d) Gas Cylinders Rules, (e) Static and Mobile Pressure Vessel Rules etc.
Once significant hazards and legal requirements are identified programmes, procedures, training etc., can be initiated to improve the OH & S performance. Checking and Acting Phases are similar to ISO-14001.
The OHSAS 18001 Management System established by an organization can be certified by external certification agencies (similar to ISO-9001 and ISO-14001)
SA 8000 focusses on (a) Child Labour (Child Labour is defined in India as those whose age is less than 14 years) (b) Forced Labour, (c) Collective Bargaining, (d) Occupational Health and Safety, (e) working hours and holidays, (f) wages etc.
Organizations can establish a SA 8000 management system and get it certified by external certification agencies.
AA 1000 (one of the best documents on the subject for learners) and ISO - 26000 (draft guideline) -these documents will be useful reading materials.
OECD Guidelines for the Multinational Enterprises provides guidelines to businesses originating from OECD countries while conducting business in the developing world.
Legal requirements related to OH & S are available in (a) Factories Act (and the Maharashtra Factories Rules, (b) Petroleum Act (and Petroleum Rules), (c) Explosives Act (and Explosives Rules), (d) Gas Cylinders Rules, (e) Static and Mobile Pressure Vessel Rules etc.
Once significant hazards and legal requirements are identified programmes, procedures, training etc., can be initiated to improve the OH & S performance. Checking and Acting Phases are similar to ISO-14001.
The OHSAS 18001 Management System established by an organization can be certified by external certification agencies (similar to ISO-9001 and ISO-14001)
SA 8000 focusses on (a) Child Labour (Child Labour is defined in India as those whose age is less than 14 years) (b) Forced Labour, (c) Collective Bargaining, (d) Occupational Health and Safety, (e) working hours and holidays, (f) wages etc.
Organizations can establish a SA 8000 management system and get it certified by external certification agencies.
AA 1000 (one of the best documents on the subject for learners) and ISO - 26000 (draft guideline) -these documents will be useful reading materials.
OECD Guidelines for the Multinational Enterprises provides guidelines to businesses originating from OECD countries while conducting business in the developing world.
EICC (Electronics Industry Code of Conduct) has been endorsed by companies like HP, Panosonic, Sony, Philips etc. Since the code is applicable to the suppliers of these giant electronics companies, it is imperative that it is applicable to them as well. The EICC code elaborates the minimum requirements in five dimensions, viz., (1) Labour, (2) Health & Safety, (3) Environmental, (4) Management Systems and (5) Ethics. Suppliers to the electronics industry are assessed based on the sub-clauses of these five main clauses and generally they cease to be the suppliers if they exhibit any major non-conformance over a long period. Certain issues like Child Labour, Forced Labour, Extended working hours, discrimination, bribery, corruption are strict NOs for these major companies; any non-conformance in these areas warrant an immediate cessation of business with the supplier.
Global Compact is an initiative of the United Nations for the business and industry with ten principles:
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour Standards
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
We studied all the above principles under different headings throughout the present lectures. I explained to you as to what is the meaning of the "Precautionary Principle" - i.e. extreme caution is required in introducing new substances, technologies or activities that may affect the environment and Health & Safety of people, when decisions are taken with limited scientific data; precautionary principle is mostly applied when chemical and radio-active substances are involved. This also needs to be applied when questions about the eco-system stability arise due to activities or projects. At the same time, lack of scientific knowledge should not come in the way of preventing pollution.
We then moved to the third part of the syllabus - regarding the results of implementing Sustainability in organizations and the evaluation of organizations by stakeholders for their sustainability performance. The first topic taken up was Sustainability Reporting as per GRI (Global Reporting Initiative) G-3 guideline (i.e. the third revision of the GRI reporting guideline).
The following trends are responsible partly for organizations going for publicly reporting their sustainability performance:(1) Expanding Globalization (2)Search for new forms of global governance, (3) Reforms of Corporate governance, (4) Global role of emerging economies (BRICA), (5) Rising visibility and expectations for organizations, (6) Measurement of Progress toward Sustainability, (7) Governments’ interest in Sustainability Reporting, (8) Financial Markets’ interest in Sustainability Reporting, (9) Emergence of next generation accounting etc.
Like the Financial Accounting, Environmental Accounting also has two major disciplines, viz, environmental financial accounting and environmental management accounting. Environmental Financial Accounting deals with accounting for and reporting on environmental transactions and events that affect, or will likely to affect, the financial position of the business. It ensures that environmental costs and liabilities are accounted for by following relevant accounting standards or, in their absence, generally accepted accounting practices and meaningful disclosure of the environmental performance of the business is provided to the stakeholders.
Global Compact is an initiative of the United Nations for the business and industry with ten principles:
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour Standards
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
We studied all the above principles under different headings throughout the present lectures. I explained to you as to what is the meaning of the "Precautionary Principle" - i.e. extreme caution is required in introducing new substances, technologies or activities that may affect the environment and Health & Safety of people, when decisions are taken with limited scientific data; precautionary principle is mostly applied when chemical and radio-active substances are involved. This also needs to be applied when questions about the eco-system stability arise due to activities or projects. At the same time, lack of scientific knowledge should not come in the way of preventing pollution.
We then moved to the third part of the syllabus - regarding the results of implementing Sustainability in organizations and the evaluation of organizations by stakeholders for their sustainability performance. The first topic taken up was Sustainability Reporting as per GRI (Global Reporting Initiative) G-3 guideline (i.e. the third revision of the GRI reporting guideline).
The following trends are responsible partly for organizations going for publicly reporting their sustainability performance:(1) Expanding Globalization (2)Search for new forms of global governance, (3) Reforms of Corporate governance, (4) Global role of emerging economies (BRICA), (5) Rising visibility and expectations for organizations, (6) Measurement of Progress toward Sustainability, (7) Governments’ interest in Sustainability Reporting, (8) Financial Markets’ interest in Sustainability Reporting, (9) Emergence of next generation accounting etc.
Like the Financial Accounting, Environmental Accounting also has two major disciplines, viz, environmental financial accounting and environmental management accounting. Environmental Financial Accounting deals with accounting for and reporting on environmental transactions and events that affect, or will likely to affect, the financial position of the business. It ensures that environmental costs and liabilities are accounted for by following relevant accounting standards or, in their absence, generally accepted accounting practices and meaningful disclosure of the environmental performance of the business is provided to the stakeholders.
Environmental Management accounting deals with Identification, Collection, Estimation, Analysis, Use, reporting of material & energy flow information, environmental & other cost information for internal purposes. It ensures that appropriate management accounting procedures are, where necessary, developed, and used, for instance, to cost out pollution controls, to compare alternative materials that can be used in manufacturing, and to investigate recycling alternatives etc.
We discussed about the usefulness of environmental accounting in decision making using two examples, one on energy consumption ($/unit and GJ/unit or Kg of CO2 per unit) and another on waste generation (value in $ or % of cost of material or cost of disposal of hazardous waste generated). We discussed how environmental accounting information in combination with the financial data can help managers to take appropriate decisions.
Environmental Accounting helps the organization to: (1)encourage defensive and prudent operations and waste reduction, (2 improve manufacturing, waste disposal and shipping practices, (3) negotiate and settle disputes with insurance carriers, (4) influence regulators and public policy makers, (5) determine suitable levels of financial resources, (6) reassess corporate strategy and management practices (think green), (7) articulate comprehensive risk management programme, (8) improve public citizenship, (9) identify hidden risks in take-overs and acquisitions etc.
Environmental reporting is the disclosure by an entity of environmentally related data (verified or not) on environmental risks, impacts, policies, strategies, targets, costs, liabilities, or performance to those who have an interest in such information as an aid to enabling / enriching their relationship with the reporting entity. Compare this with the objective of the Financial reporting: "to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions". Environmental (Sustainability) reporting has the objective of enabling/enriching RELATIONSHIP with ALL STAKEHOLDERS, not for taking economic decisions alone. Hence such reports should be prepared to REACH all types of stakehodlers - local, internationa, educated, not so well educated, NGOs, Government etc. The structure of the Sustainability Report therefore is expected to be different from that of a Financial Report. Normally the Sustainability report has 33 % text, 33 % pictures/photos and 33 % tables and graphs to appeal to majority of the stakeholders.
GRI G-3 provides a framework for such a report. Important subjects to note are: (a) Report content - dealing with materiality, Stakeholder Inclusiveness, sustainability context & completeness, (b) Quality - dealing with balance, comparability, accuracy, timeliness, clarity and reliability and (c)boundary setting. Three different kinds of disclosures (strategy and profile, management approach and performance indicators) of the organization should appear in the report. Indicators are of two types - Core Indicators and Additional indicators.
Core Indicators are those Indicators identified in the GRI Guidelines to be of interest to most stakeholders and assumed to be material unless deemed otherwise on the basis of the GRI Reporting Principles (e.g. EC1- Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retainedearnings, and payments to capital providers and governments; EN1 - Materials used by weight or volume; EN19 - Emissions of ozone-depleting substances by weightEC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.; LA1- Total workforce by employment type,employment contract, and region; HR4 Total number of incidents of discrimination and actions taken etc.)
Additional Indicators are those Indicators identified in the GRI Guidelines that represent emerging practice or address topics that may be material to some organizations but not generally for a majority (e.g.EC5- Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation; EC9 - Understanding and describing significant indirect economic impacts, including the extent of impacts; EN5- Energy saved due to conservation and efficiency improvements; EN18 - Initiatives to reduce greenhouse gas emissions and reductions achieved; EN30 - Total environmental protection expenditures and investments by type; LA3 - Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations;SO6 - Total value of financial and in-kind contributions to political parties, politicians,and related institutions by country etc.). We also referred to ISO-14031 for more environmental indicators.
The GRI reports are classified as A, B or C and if verified by a third party A+, B+, C+. A, B & C refer to beginner, between beginner and the advanced and the advanced reporters. (+) is an indication of the verification by an independent third party verifiers.
We discussed about the usefulness of environmental accounting in decision making using two examples, one on energy consumption ($/unit and GJ/unit or Kg of CO2 per unit) and another on waste generation (value in $ or % of cost of material or cost of disposal of hazardous waste generated). We discussed how environmental accounting information in combination with the financial data can help managers to take appropriate decisions.
Environmental Accounting helps the organization to: (1)encourage defensive and prudent operations and waste reduction, (2 improve manufacturing, waste disposal and shipping practices, (3) negotiate and settle disputes with insurance carriers, (4) influence regulators and public policy makers, (5) determine suitable levels of financial resources, (6) reassess corporate strategy and management practices (think green), (7) articulate comprehensive risk management programme, (8) improve public citizenship, (9) identify hidden risks in take-overs and acquisitions etc.
Environmental reporting is the disclosure by an entity of environmentally related data (verified or not) on environmental risks, impacts, policies, strategies, targets, costs, liabilities, or performance to those who have an interest in such information as an aid to enabling / enriching their relationship with the reporting entity. Compare this with the objective of the Financial reporting: "to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions". Environmental (Sustainability) reporting has the objective of enabling/enriching RELATIONSHIP with ALL STAKEHOLDERS, not for taking economic decisions alone. Hence such reports should be prepared to REACH all types of stakehodlers - local, internationa, educated, not so well educated, NGOs, Government etc. The structure of the Sustainability Report therefore is expected to be different from that of a Financial Report. Normally the Sustainability report has 33 % text, 33 % pictures/photos and 33 % tables and graphs to appeal to majority of the stakeholders.
GRI G-3 provides a framework for such a report. Important subjects to note are: (a) Report content - dealing with materiality, Stakeholder Inclusiveness, sustainability context & completeness, (b) Quality - dealing with balance, comparability, accuracy, timeliness, clarity and reliability and (c)boundary setting. Three different kinds of disclosures (strategy and profile, management approach and performance indicators) of the organization should appear in the report. Indicators are of two types - Core Indicators and Additional indicators.
Core Indicators are those Indicators identified in the GRI Guidelines to be of interest to most stakeholders and assumed to be material unless deemed otherwise on the basis of the GRI Reporting Principles (e.g. EC1- Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retainedearnings, and payments to capital providers and governments; EN1 - Materials used by weight or volume; EN19 - Emissions of ozone-depleting substances by weightEC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.; LA1- Total workforce by employment type,employment contract, and region; HR4 Total number of incidents of discrimination and actions taken etc.)
Additional Indicators are those Indicators identified in the GRI Guidelines that represent emerging practice or address topics that may be material to some organizations but not generally for a majority (e.g.EC5- Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation; EC9 - Understanding and describing significant indirect economic impacts, including the extent of impacts; EN5- Energy saved due to conservation and efficiency improvements; EN18 - Initiatives to reduce greenhouse gas emissions and reductions achieved; EN30 - Total environmental protection expenditures and investments by type; LA3 - Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations;SO6 - Total value of financial and in-kind contributions to political parties, politicians,and related institutions by country etc.). We also referred to ISO-14031 for more environmental indicators.
The GRI reports are classified as A, B or C and if verified by a third party A+, B+, C+. A, B & C refer to beginner, between beginner and the advanced and the advanced reporters. (+) is an indication of the verification by an independent third party verifiers.
Dow Jones Sustainability Index:
The index is based on the stock values of the top 20 % of the Dow Jones Index companies which have been assessed as the best in their sector in terms of their performance in economic, environmental and social dimensions.
The assessment is based on how the companies address opportunities and risks in all the three dimensions, especially through startegy, management and industry specific initiatives. For example, under the economic dimension the following criteria are assessed: (a) Strategic Planning (opportunity), (b) Organizational Development (opportunity) and (c) Corporate Governance (risk). Similarly in the environmental dimension the following are assessed: (a) environmental charter, (b) environment, health & safety reporting, (c) environmental profit and loss accounting, (d) eco-design, (e) eco-efficient products (a -e Opportunities), (f) environmental policy, (g) responsible person for environmental issues, (h) environmental management system, (i) environmental performance, (j) hazardous substances, (h) environmental liabilities (f-h risks). In the social dimension the sub-criteria are: (a) stakeholder involvement, (b)social reporting, (c) employee benefit, (d) employee satisfaction, (e) remuneration systems, (f) community programmes (a - f opportunities), (g)social policy, (h) responsible person for social issues, (i) conflict resolution, (j) equal rights and non-discrimination, (k) occupational health& safety standardr, (l) Lay-offs and Freedom of Association, (m)standards for suppliers and (n) personnel training in developing countries.
The assessment is carried out based on the information received through (1) the filled questionnaire specific to each industry group circuated by the SAM group (www.sam-group.com, (2) company documentation (e.g. Sustainability Report, Annual Financial Report etc.), (3) publicly available information (e.g. from media, reports etc.) and (4) personal contact with the companies.
The above methodology aims to produce an investable index (DJS Index) in which all the component stocks are easily tradable.
For a company, the assessment provides two important inputs: one, it enables the company to benchmark itself in the three dimensions of sustainability with others in the sector and the other is that it enables shareholders to make their choices regarding trading in the company's stocks.
We then discussed one example, Philips Electronics, of the DJSI evaluation of a sector leader. The information (scores) in each element and each sub-element is provided, along with the average score in each (sub)element as well as the best scores in these elements. Also given is the information on the next best company and its overall scores compared to the leader. Information on companies which will be dropped from the DJSI next year is also given in the same report.
Next we discussed about the neighbourhood programmes; it is normally found that after the Johnesburgh conference, most of the corporate bodies have neighbourhood programmes in the area of Education, Health and Environment. There are quite a few corporate programmes on education, including educating the physically challenged and the poor, sholarships for higher education, education of the girl child, building of dispensaries and hospitals, providing clean drinking water to the village, conducting health camps, cataract operations, tree plantation etc. In order to effectively implementing these programmes in the society Corporates usually take the help from non-governmental organizations (NGOs) operating in the target areas. Many NGOs have now become partners to the Corporate bodies in improving the lives of people in the rural/ poor areas.
There are two types of NGOs; one the international NGO, like the World Wildlife Fund (WWF) and the other is a locally establsihed NGO, like for example, CRY, Helpage India etc. India is the country with the maximum number of NGOs (not for profit) running to about a million. Then we discussed about the types of NGOs based on their activity - there are NGOs which work on policy matters (e.g. PRAYAS), some take up specific causes and are actively involved in achieving their goal (e.g. Narmada Bachao Andolan) and some others are involved in developmental activities (e.g. Amarseva Sangam). There are NGOs who work in specific areas, like environmental areas, health areas, social areas, education areas etc. We briefly noted the following environmental NGOs active in India: Centre for Science and Environment (CSE, New Delhi), Greenpeace, Toxic Links, Kalpaviruksh (Pune); NGOs like Development Alternatives have slowly moved towards becoming social enterprises, between corporates and NGOs. They have programmes which earn profit to sustain the organization; but they work in areas (e.g. rural and appropriate technology) where corporates do not venture. We also talked about DHAN Foundation and PRADHAN, both NGOs with focus on improving the lives of rural poor - they are partially funded by aid agencies and partly by their own activities. See, for example, www.indianngos.com and www.karmayog.org for more details of Indian NGOs.
With this class we have completed studying all the subjects mentioned under the CSR syllabus, except the reading of all the mentioned papers. Those who are interested should read all the papers mentioned in the syllabus.
All the best to you in your examination and beyond.
