Editorials/Opinions Analysis For UPSC 29 May 2023
Contents
- Remember the ‘S’ in ESG
- India’s megaport threatens the world’s largest turtles
Remember the ‘S’ in ESG
Context:
Corporations must take action to improve income inequality given the significant influence they have over global assets.
Relevance:
GS-1: Salient features of Indian Society, Diversity of India, Effects of globalization on Indian society.
Mains Question
How can businesses, within the framework of ESG (Environment, Society, and Governance), contribute to social peace and address numerous issues including employee diversity, the elimination of discrimination, employee safety and health, ethical sourcing, and good community relations? (250 words)
Introduction
- Companies frequently give the ‘E’ for environment top priority when discussing ESG (Environment, Society, and Governance), demonstrating their efforts to address environmental issues.
- Considering the rising inequality and discrimination present globally, including in India, it is crucial to address the societal dimension. Companies frequently overlook the ‘S’ for society, assuming that corporate social responsibility and board gender diversity fulfil their societal obligations. Serious repercussions can result from disregarding society issues.
- It is impossible to emphasise the significance of the “S” in ESG and how it affects long-term corporate success.
- In the ever-changing corporate environment, social harmony is essential to preserving the viability and development of organisations.
Addressing Societal Concerns Is Getting More Important
- As the world’s wealth grows, income and wealth disparity worsens, causing problems for all nations. For instance, inequality has significantly increased in India.
- The largest corporations today wield significant economic power, affecting numerous individuals through direct and indirect employment and global supply chains, whereas governments and civil society traditionally bore the responsibility of addressing these issues while corporations concentrated on their core operations.
- They have an impact on society at large and on how policies are made. Neglecting ESG concerns threatens the long-term viability of corporations, whether they are associated with climate change, income inequality, or societal unrest brought on by injustices.
- Therefore, it is essential for businesses to see ESG as essential to their own sustainability and not just as a need for investors.
- The employee dimension and the letter “S” in ESG
- The ‘S’ component of the ESG framework refers to how businesses affect both their immediate and larger social settings.
- It covers a wide range of topics, including diversity among employees, the elimination of prejudice, worker safety and health, supply chain well-being, ethical sourcing, data and privacy protection, and the social effect of products.
- The employee dimension is a key focus, as it recognises that fostering social harmony requires equal opportunities and the reduction of discriminatory practises. It also addresses land use and its effects on ethnic communities, upholds animal rights, and fosters positive relations with local communities.
India’s Corporate Social Responsibility (CSR)
- Corporate Social Responsibility (CSR) is a commitment made over time by companies to incorporate social and environmental issues into their daily operations.
- Before the Companies Act of 2013, CSR in India was primarily associated with philanthropy. And in keeping with Indian tradition, it was held that every firm has a moral obligation to actively participate in meeting social commitments, subject to the company’s financial stability.
- The Companies Act of 1956 was replaced on August 29, 2013, by the Companies Act of 2013. The New Act includes a new part, part 135 – a clause on Corporate Social Responsibility (“CSR”) duties for firms listed in India – and makes significant changes to company formation, management, and governance.
- Under the 2013 Companies Act, India became the first nation to enact legislation requiring companies to engage in CSR activities and report CSR initiatives.
Indian Corporations’ Actions
- The top 1000 corporations are required by SEBI (Securities and Exchange Board of India) to disclose ESG-related data using the Business Responsibility and Sustainability Reporting Framework.
- However, businesses have the chance to go above and beyond the requirements for disclosure and establish standards that others can voluntarily follow.
- Businesses can acquire recognition and develop competitive advantages by freely providing more information.
- The following are some voluntary disclosures about employees that Indian corporations may want to consider making:
- Businesses can remark on their plans to narrow this gap over time in addition to publishing the ratio of pay between the highest-paid and lowest-paid workers.
- They may also provide comparable ratios for persons in their supplier chain and contract workers.
- Owners of owner-managed firms might determine a ratio that takes dividends and salary into account in order to prevent distortions in cases where dividends are favoured for tax-related reasons.
- Businesses must declare the number of permanent and temporary workers, broken down by gender and handicap.
- Corporates might include other factors in their staff composition declaration, such as the state of origin, mother language, background (rural vs. urban), religion, and socioeconomic status (SC/ST).
- They can attempt to make the composition better in accordance with local or national demographics.
- Employee composition changes, such as new hires and departures, can be disclosed taking into account the factors specified in (b) in addition to gender and disability.
- It is already obliged to publish gender pay disparities. Companies can go one step further and look at pay variations across the parameters listed in (b).
- Employers must receive human rights training from their employers. Beyond this obligation, businesses can offer training on morality, honesty, and the fundamental values of the Constitution.
- They can make public their efforts to act as good corporate citizens.
Conclusion
- Social harmony is a necessary condition for organisations to be successful over the long run. Companies need to understand that the ‘S’ in ESG is not just a checkbox to be checked, but rather a vital component that affects their survival and success.
- Companies may help build a more equal and inclusive society while also earning a competitive edge by freely sharing employee-related information and taking proactive measures to address societal issues.The ‘S’ in ESG needs to be embraced, and social welfare needs to be given equal weight with environmental and governance concerns.
India’s megaport threatens the world’s largest turtles
Context
- The largest turtles on Earth, leatherback turtles, call Great Nicobar Island, a lonely archipelago near India’s southernmost point, home.
- The approval of a massive infrastructure project by the Indian government, however, poses a serious threat to this pristine ecosystem and its critically endangered turtle population.
- The development of an international container port on the island may make it difficult for the turtles to reach their nesting sites, thereby accelerating the decline in their population.
Relevance:
GS Paper -3: Conservation, Environmental Pollution, and Degradation, Environmental Impact Assessment.
Mains Question
Discuss the ecological importance of leatherback turtles and the issues they face in terms of conservation, emphasising the steps necessary to safeguard both their population and their environment.
Giant Leatherback Turtle
- Of the seven kinds of sea turtles, the Giant Leatherback turtle (Dermochelys) is the biggest. The Giant Leatherback turtle is found in all oceans, with the exception of the Arctic and the Antarctic, and is nesting along the Indian coast, unlike the other four species (Olive Ridley, Green, Hawksbill, and Leatherback turtles).
- Indonesia, Sri Lanka, and the Andaman and Nicobar Islands are the only places in the Indian Ocean where it nests.Because it is the sole species still existing in its genus and family, Dermochelyidae, the Giant Leatherback turtle is special.
- The absence of a bony shell, which distinguishes it from other contemporary sea turtles, is one of its distinguishing characteristics. This species is included in Schedule I of India’s Wildlife Protection Act, 1972, giving it the greatest level of legal protection in the nation.
- IUCN classification: Vulnerable
Great Nicobar Island is Important as a Leatherback Turtle Nesting Site:
- Leatherback turtles, which can grow to be up to two metres long and 700 kilogrammes in weight, use Great Nicobar Island as a place to lay their eggs.
- Galathea Bay, the location of the proposed port, is home to a subpopulation of critically endangered leatherback turtles. Given that the turtles migrate annually from temperate coastal waters in Australia and Africa to nest on the island, Galathea Bay serves as a vital habitat for the turtles’ survival.
- Great Nicobar Island has a pristine ecosystem and is home to indigenous Shompen and Nicobarese people who have coexisted with the ecosystem for generations. The island is about 1,000 square kilometres in size and is home to a vast diversity of plant and animal species.
Threat of the Port
- A mega-transshipment port, an international airport, a power plant, and a new township are all part of the development’s proposed growth, which poses a threat.
- The port’s development and operation are anticipated to make it difficult for leatherback turtles to reach their breeding grounds.
- Environmental harm: o By building breakwaters to shield the port from waves, 90% less of Galathea Bay will be accessible.
- Coastal habitats such mangroves, coral reefs, sandy and rocky beaches, coastal forests, and estuaries will be altered by dredging and construction activities.
- Nearly a million trees may need to be cut down as part of the project, endangering the habitat of numerous rare and endemic species.
- Infraction of the biodiversity offset principle: o The project’s approval is based on a proposal to offset the environmental harm by planting trees in an ecological zone separate from the project site.
- The “like for like” principle, which tries to maintain biodiversity through ecologically equal offsets, is broken by this.
- The lack of compensation for the harm to turtle nesting undermines the premise even more in the plan.
Issues and Looking Forward:
- Insufficient Impact Assessment: o Critical impact assessment studies were not completed before approvals were given, which raised questions about the project’s prospective outcomes.
- The restrictions placed on the project do not call for a halt to construction in the event that Indigenous communities or the environment are harmed.
- Adhering to Environmental Standards: o Strict environmental standards should be followed in every significant development project that will have an impact on severely endangered species.
- Biodiversity offsets should adhere to generally recognised standards, and if harm cannot be sufficiently mitigated, the project shouldn’t move further.
Conclusion:
- The existence of leatherback turtles, the largest turtles on Earth, is seriously threatened by the development of a mega port on Great Nicobar Island.
- It is essential for environmental standards to be upheld, ensuring that biodiversity offsets align with international principles and preventing irreversible harm to this unique and fragile ecosystem. This project not only threatens a critically endangered species, but also runs the risk of causing irreparable damage to a pristine ecosystem and the livelihoods of indigenous communities.
