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Both public and private firms are now screened, evaluated, and compared to peers by corporate
customers and mainstream investment firms on environmental performance, as well as broader
aspects of sustainability.

Sustainability programs are being increasingly linked to the attraction and retention of financial,
human, customer, and public capital. Firms who do not engage in environmental governance face
reputational risk and scrutiny about the quality of the firm’s overall corporate governance.

Shareholder’s Interests

The past several years have seen the creation, rapid expansion and strategic alignment of
hundreds of influential shareholders who are connecting sustainability performance to
corporate governance. These groups are actively comparing and contrasting the sustainability
performance of thousands of companies to make their investment decisions. They are also
actively calling for greater transparency of corporate sustainability performance and quantified
environmental data.

Environmental Reporting Trends

Thousands of companies are responding to the increasing demand for environmental

transparency by publishing corporate social responsibility (CSR) reports, sustainability reports,
environmental reports, enhancing their websites and/or through their annual financial reports.
This disclosure includes regulated information, as well as non-regulated information such as
energy usage, recycling programs and carbon emissions. The result is an ever increasing
amount of environmental performance data that is available in the public domain. The availability
and use of this type of performance data requires companies to insure that consistent
information is being reported through all external communication channels. It also requires an
understanding of the research and decision-making process of the investment community, as
well as the research resources being used by the investment community.

NEED FOR THE STUDY:

 Considering the environmental degradation and many environmental disasters taking place due to
industrialization, it is high time for the corporates to improve the processes so as to contribute
towards environmental sustainability. Hence, the various aspects that are leading towards
environmental protection are needed to be studied.

OBJECTIVES:

To understand how companies can contribute towards environmental sustainability.

LIMITATIONS OF THE STUDY:

Limited access to the data, reliability of data and time constraint.

RESEARCH DESIGN:

This study is an exploratory research and the data is collected from various secondary sources
and the analysis is being made to meet the objectives of the study.

REVIEW OF LITERATURE:

While poverty, weak institutions, and corruption can hinder environmental laws, some critics
point to a very different impediment Globalization, they believe, has spurred pressure from
international business to lower environmental standards. Vandana Shiva, for instance, argues that the
movement of water rights from small farmers to corporations leads to over-exploitation and misuse of
water, since those who deplete water resources do not have to suffer the consequences of water
scarcity. Similarly, Coca Cola has faced charges that its operations have led to local groundwater
shortages.

Critics see a conflict between local rights and international business, or even more broadly
competing theoretical conceptions of sustainable development and market liberalism. Clearly,
corporations have done much to harm the environment, yet increasingly they are working toward
"green" solutions, partly through a feeling of moral obligation and even more through self-interest.

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Corporations, as well as local practices, can be both part of the problem and part of the solution.
Integrating these various levels is a function of social expectations and of governance.
Many critics of India's current environmental policy advocate local solutions, often arguing
that strong local governances and practices will tackle justice and environmental issues
simultaneously. Yet, in a globalized world such solutions can only be partial. Global technology
sharing, for instance, is crucial, but localities will often resist new technology. The paradox is that
economic growth should provide a growing population with an improved standard of living, yet
environmental stress needs to simultaneously lessen. Social expectations regarding quality of life are
certainly important, yet, given India's dilemma, these must be implemented in concert with
technological change.

As Dennis Anderson explains, the technologies are available to reduce and sometimes
eliminate pollution at costs that are small in relation to output. Wind and solar power, bio fuels, and
rain catching are just a few of these. Identifying the government agencies responsible for encouraging
(or mandating) these technologies are part of the governance riddle. Tax policy, for instance, could
end its subsidy of oil and coal and encourage the use of renewable energy.

If India's growing economy still produces less pollution-and certainly fewer global warming
emissions-than either China or the United States, its increasing population makes it an object of
special global concern. Still, technology, good governance, and social practices offer at least the
possibility of an escape from the seeming trap of growing population, growing expectations, and
environmental degradation.

Tim Dyson, Robert Cassen, and Leela Visaria in their article say, "even if the population grows
to 1.5 billion people India can become a more prosperous country, with less poverty and better health
and education, and a better conserved environment". Of course, stabilizing the population at or below
1.5 billion is itself a challenge. And, finding the right balance between a modernist ethos of growth
and technological change and an ethic of sustainability, which itself might draw on India's Hindu
belief in moderation, will not be easy.

Yet great challenges may bring great opportunities; if India can achieve the right mixture to help
itself, it might also act as a leader in a new world facing unprecedented environmental threats. As
Flavin and Gardner argue, "China, India, and the United States have a special responsibility to avoid a
new round of self-defeating great power competition and instead cooperate on creating a better
future". Even though it’s the prime responsibility of the government, the industries play a vital role in
contributing towards environment.
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POLLUTION AND CLIMATE CHANGE - CAN WE SAVE THE ENVIRONMENT
THROUGH CORPORATE GOVERNANCE?

Pollution has reached its peak right from fresh water lakes to the layers surrounding our
atmosphere. It is quite high time to realize the importance of it before it bursts out. The importance of
Environment stability has been read and now it is the right time for implementation to achieve the
impossible.

During the last several years, climate change has emerged as a top-tier concern for companies,
investors and governments. The validity of the science supporting climate change is no longer
debated. The atmosphere is warming, and human activity— principally the burning of fossil fuels is a
primary cause.

Global temperatures: 2005 was the warmest year on record, according to NASA’s Goddard
Institute. Nine of the last 10 years have been the warmest since modern records began in 1861.
Warming has accelerated in recent decades and has boosted Earth’s average temperature by nearly 1
degree Fahrenheit since 1976. The warming trend is especially severe in the Arctic, where the rate of
warming has been twice as fast and 20 percent of the summer polar ice cap has been lost since the
1970s. If these trends continue, global average temperatures could increase by 3 to 10 degrees F by
the end of the century, and the summer polar ice cap could disappear entirely. The melting of glacial
ice could raise sea levels by three feet or more, submerging low-lying regions.

Cause of the Warming: Carbon dioxide in the atmosphere has risen from 280 parts per million
since the start of the Industrial Revolution in 1750 to nearly 380 ppm today— its highest level in at
least 420,000 years. If fossil fuels continue as the dominant energy source, and their carbon emissions
are not contained, atmospheric CO2 is expected to surpass 550 ppm by the middle of the century and
possibly reach 1,000 ppm by the end of the century—almost four times pre-industrial levels. Because
carbon dioxide and other greenhouse gases linger in the atmosphere long after they’ve been
produced, and because the ocean has already absorbed heat that will gradually transfer into the air,
the Earth, even if all emissions stop now, will see additional warming in the decades ahead. One
additional degree F of warming is expected just from today’s levels of carbon dioxide. That would
raise the Earth’s temperature to its highest level since the end of the last Ice Age some 9,000 years
ago.

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 However, because the current rate of warming equals 3 degrees F per century and is accelerating,
present generations are almost assured of experiencing higher global temperatures than at any time in
human history. If temperatures were to climb another 5 degrees F, an outcome squarely in the middle
of the projected temperature range for the 21st century, then future generations could inherit an Earth
as warm as it has been since the end of the dinosaur era some 65 million years ago.

Extreme weather events: A record 26 tropical storms and hurricanes formed in the Atlantic Ocean
in 2005, including three ‘Category 5’ storms that made U.S. landfall. Hurricane Katrina caused a
record $135 billion in property damage along the Gulf Coast. Seven of the nine costliest Atlantic
hurricanes have struck since 2004. Disasters in 2005 also included the highest rainfalls ever recorded
in India and record high temperatures in drought-stricken southern Africa and Australia. A
forthcoming report from the Inter-governmental Panel on Climate Change attributes such weather
anomalies to rising concentrations of greenhouse gases in the atmosphere. It also warns that the
Earth’s temperature could rise well above previously forecast levels.

Rising costs of natural disasters: The cost of natural disasters exceeded $225 billion in 2005, up
from the previous record of $118 billion in 2004, according to reinsurance giant Swiss Re. A 2005
Ceres report reveals a 15-fold increase in insured losses globally from catastrophic weather events in
the past three decades—losses that have far out-stripped increases in premiums, inflation and
population growth. Swiss Re’s chief claims strategist now says that, “Global warming has accelerated
from a problem that might affect our grandchildren, to one that could significantly disturb the social
and economic conditions of our lifetime.”

After viewing the impacts and its negative shade, many Fortune companies have come up
together to formulate some corporate policies to overshadow the existing problem and make this
Earth a better place to live in. Thus, we get to know that corporate can contribute towards
environmental protection. Unless and until there are polices and stringent guidelines that are
formulated the existing problem can become even worse than before.

WORLD GOVERNMENTS TOWARDS ENVIRONMENTAL SUSTAINABILITY

There is a critical need to enhance corporate governance in the region, given the situation of the
Global Environmental Status. Government needs to immediately look at adapting best global
practices that helps to stabilize the Environment. Major world governments have started looking at it
seriously to safeguard their countries from being destroyed. Let us look at some of the world
countries which used Corporate Governance to stabilize the environment.
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 Major world countries have contributed huge amounts towards stabilization of changing climate
conditions. USA has requested contributions of $635 million to the Climate Investment Funds and
$175 million for the Global Environment Facility are critical to that endeavor.  By contributing $400
million of these funds to the Clean Technology Fund (CTF), they are facilitating the development of
country-led clean energy investment plans that can attract private financing and create new models
for energy investments in developing countries.  The CTF has already mobilized nearly $44 billion
dollars in planned investments for clean energy, energy efficiency and sustainable transport in just
over one year of operations on a funding base of $4.3 billion.  Specifically, CTF projects will help
produce nearly a gig watt of clean energy through a network of solar power stations across five
countries in the deserts of Northern Africa.  They have also helped foster private-sector led, large-
scale development of wind energy in the Oaxaca region of central Mexico.

The Global Environment Facility (GEF) has supported more than 2,000 projects in 165 countries
to improve the environment since its inception in 1991. Through its sustainable urban transit
portfolio, the GEF has helped to avoid global emissions of nearly 60 million tons of CO2, equivalent
to the annual emissions of Denmark.  In Mexico City alone, GEF investments in a clean rapid transit
bus system has delivered a 50 kilometer bus system that runs through the city's main transport arteries
and has led to a reduction of 80,000 tons of carbon dioxide a year.  Of the $70 million Treasury is
requesting for debt reduction activities; $20 million would be for its activities under the Tropical
Forest Conservation Act, a U.S. government effort that allows eligible countries with significant
tropical forests to be relieved of certain official debt owed to the U.S. while generating funds in local
currency to support conservation activities.

Indian Governance towards Environment:

According to the World Bank, India has a strong environment policy and legislative framework
and well-established institutions at the National and State level. Furthermore, democratic countries
with strong public participation are often considered best at identifying and reacting to environmental
problems. And, India's growing prosperity is leading to an increase in public demand for better
environmental quality from the growing and increasingly assertive urban middle class, as
demonstrated by drastic measures to improve air quality in Delhi, which now has the largest
compressed natural gas-driven public bus fleet in the world.
Despite the advantages of a functional democracy in the sense of holding regular elections,
India lacks other widespread mechanisms for public participation. Poverty is one encumbrance to
having a large, vocal public effectively able to make its needs known; combined with this is a lack of

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 technological infrastructure. Moreover, barriers of distance, language, literacy, and connectivity - all
the factors of particular relevance to India due to the remoteness of many habitations, multiple
languages, and significant illiterate population - can also prevent full participation. In addition,
corruption is seen as strongly hindering the implementation of environmental policies. According to
one commentator, "Indian democracy permits great freedom of activity and association, and the
pursuit of different ideas and interests. But rules and laws in this democracy are violated, or
manipulated, perhaps as often as they are obeyed".

Thus, the tension is growing between increased demands for environmental protection and lack
of implementation. The World Bank sees a growing dissatisfaction with the state of environmental
management in India by an increasingly vocal, active and impatient 'green' constituency. Some
successes notwithstanding, the situation on the ground is considered inadequate by a broad variety of
stakeholders. Much of the problem is credited to weak implementation of laws and regulations.

One crucial instrument of environmental policy is Environmental Impact Assessment (EIA)

which analyzes the likely impact of various actions on the environment. EIAs originated in the United
States in 1969 and have become one of the most
successful legal mechanisms for protecting the
environment globally. At the heart of EIA is public
participation, the belief that local people know best their
own needs and understand the impact of environmental
degradation upon their lives. With its democratic
traditions, India would seem well poised to enact EIA.
Yet, local participation is limited; furthermore, like China,
India's short-term economic growth often depends on
A leak of methyl isocyanate (MIC) gas
ineffective local enforcement of environmental laws. In
at the Union Carbide Pesticide
practice, economic growth is often seen as trumping
Factory at Bhopal, Madhya Pradesh,
environmental concerns.
caused one of the worst industrial
disasters in history, spurring stronger
Still, India has some strong basic laws in place
environmental laws
protecting the environment. Following the Bhopal disaster of
1984, when more than 2,000 people died and tens of thousands were injured by the accidental release of
poisonous gas from a pesticide plant, the country enacted new environmental laws. In 1986, the
Environmental (Protection) Act aimed at protecting and improving the quality of the environment and
preventing, controlling and abating environmental pollution. In 1994, the Ministry of Environment and
Forests (MoEF), India's main environmental agency, enacted EIA to strengthen environmental
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protection. Initially, protection was weak, failing to cover numerous activities such as deforestation
and waste disposal and lacking in public participation. The law has been amended, however, to
strengthen these areas.

Complicating matters is that India has often proved unable to enforce environmental policy
through government institutions, leading to litigation as a primary means of enforcement. In 1985, the
Indian Supreme Court ordered the closing of limestone quarries that were harming the water supply,
setting a strong precedent. Consequently, in most countries, the courts have been viewed as a last
resort in resolving environmental conflicts. In India, however, it has often become the first resort
because of the perceived inabilities or lack of political will of the regulatory agencies to enforce
environmental laws and regulations. Another alternative used in India is informal regulation in which
social pressures, such as negative media coverage or direct community action, enforce local
environmental goals. Mechanisms of informal regulation include demands for compensation by
community groups, social isolation of the polluting firm's employees, the threat of physical violence,
and efforts to monitor and publicize the firm's emissions/discharges. Such tactics, while they may
catch some of the worst offenders when it comes to local pollution, are obviously piecemeal. They do
not offer a substitute for an effectively policed governance regime.

EMPIRICAL ANALYSIS:

ENVIRONMENT CONSIDERATION-INDUSTRY WISE RANKING BASED ON

POLICES TAKEN BY COMPANIES

After narrowing down to the importance of Corporate Governance that plays a major role in
Environment Stabilization it is important to know the industries and the sector wise contamination
that has been happening from past. It makes great sense to understand the individual companies in the
sectors that are contributing towards pollution and actions taken by them to think about the
environment.

A scoring system used in the report-Corporate Governance and the Climate change: Making the
connection, is intended as a detailed benchmarking tool for institutional investors and corporations
ready to take action on climate change. It is not a simplistic ranking of “best and worst” companies.
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The scoring system measures the degree to which companies perceive risks and opportunities posed
by climate change and the governance actions they are taking in response. No two companies are
alike and their possible response options to climate change vary. Because the choices, challenges,
risks and opportunities that companies face in addressing climate change are not identical, they
should be judged individually, within their industry groups, and against the overall survey sample. Of
particular interest to investors should be companies that rank high or low in relation to their industry
peers.

The scoring system used in the report rewards companies that have taken the following types of
actions:

• Public disclosure: The analysis in the report is largely dependent on information companies have
placed in the public domain for use by investors and other interested stakeholders. Companies with
more information available on their governance responses to climate change—as presented in
securities filings, sustainability reports, corporate websites, CEO presentations and responses to third-
party questionnaires (like the Carbon Disclosure Project)—generally score better.

• Policy advocacy: The report credits companies that have spoken publicly about the need for a
government regulatory framework to address climate change. Though companies express universal
support for market-based actions taken on a voluntary basis to control GHG emissions, these
measures have done little to slow the rising emissions. In addition, the absence of U.S. government
control targets has added to investor uncertainty and complicated corporate strategic planning.
Accordingly, the scoring system rewards companies that support national regulatory action on
climate change and are explicit in their own governance responses. It credits CEOs who have
assumed advocacy roles in their industries, as well as boards of directors and executive committees

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that have strived to incorporate climate policy considerations into their strategic planning and
decision-making.

• Early action: The report’s scoring system reserves the most credit for companies that have taken
early actions to address climate change and control GHG emissions. The Framework Convention on
Climate Change (ratified by the U.S. Congress in 1992) set 1990 as a baseline year to reduce GHG
emissions. Consistent with the science backing the need for GHG reductions, the scoring system
awards the most points to companies that have achieved actual reductions below their 1990 levels.
Whether these early movers reap long-term financial benefits from their actions will depend partly on
how they are treated by regulators and the capital markets. In any case, the report assumes that
companies with more experience preparing for carbon emission constraints stand to gain the greatest
competitive advantages.

• Long-term planning: The report rewards companies that take a long-term view of their
enterprises and capital investment decisions. As described earlier, climate change presents a
“governance gap” in decision-making, whereby the warming effects of greenhouse gases in the
atmosphere far outlast the tenure of corporate executives and the payback periods of their
investments. Accordingly, the scoring system rewards companies that project their GHG emissions
well into the future and that seek to reduce their carbon emission “footprints” over the life cycle of
the products they sell. The scoring system also recognizes that because some products and capital
equipment are more durable and carbon-intensive than others, some companies and industry groups
have greater opportunities to address climate change in a long-term planning context.

The various industries that are considered are

Oil and gas: Petroleum fuels and natural gas are the largest sources of carbon dioxide (CO2)
emissions in America, accounting for 58 percent of the nation’s total CO2 emissions. (Petroleum’s
share is 42 percent; natural gas is 16 percent).

Electric power: Electricity is the nation’s second largest source of CO2 emissions, accounting for 39
percent of total CO2 emissions. Fossil fuel inputs for electricity are coal (51 percent of the fuel mix),
natural gas (13 percent) and oil (3 percent). Nuclear power and renewable energy sources make up
the balance of the electricity supply.

Coal: Coal is the nation’s third largest source of CO2 emissions (excluding coal for electricity).
Direct use of coal accounts for 11 percent of industrial CO2 emissions and 3 percent of the nation’s
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total CO2 emissions. Coal for electricity accounts for another 33 percent of the nation’s CO2
emissions. When including coal for electricity, coal accounts for 36 percent of nation’s CO2
emissions, second only to petroleum.

Metals and mining: This industry sector includes primary metals (such as steel, aluminum and
copper), nonmetallic mineral products (such as concrete, lime and gypsum) and fabricated metal
products (such as steel and iron foundries). This industry is among the nation’s most energy- and
carbon-intensive in terms of CO2 emissions per dollar of shipment. The aluminum industry is a major
emitter of greenhouse gases, particularly perfluorocarbons (PFCs), gases that have a global warming
intensity over 6,000-times that of CO2.

Chemicals: This industry sector includes basic chemicals (such as acids, salts and organic
chemicals), chemical products (such as synthetic fibers, plastics materials and pigments) and finished
chemical products (such as paints, fertilizers and explosives). Overall, the chemical industry is the
second largest industrial user of energy, after petroleum refining.

Paper and wood products: This industry sector includes pulp and paper mills, paperboard
containers and products, logging, sawmills and structured wood products. Overall, the forest products
industry is the third largest industrial consumer of energy. It is especially vulnerable to the physical
effects of climate change.

Food Products: This industry sector includes meat and dairy products, grain and sugar products, and
fats and oils. Overall, the food industry consumes as much energy as the nonmetallic minerals
industry and twice as much energy as the wood products and transportation equipment industries. It is
also especially vulnerable to physical effects of climate change.

Industrial equipment: This industry sector includes power generation, motors and generators,
appliances and lighting. Although the industry is not a large consumer of energy in manufacturing, its
products are large users of petroleum and electricity.

Motor vehicles: This industry sector includes passenger cars and trucks. Although this industry is not
a large consumer of energy in manufacturing, its products are the largest consumers of petroleum,
accounting for 20 percent of the nation’s total CO2 emissions.

Air Transport: This industry sector includes freight and passenger airlines. The airline industry
accounts for 13 percent of transportation emissions and more than 4 percent of the nation’s total CO2
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emissions. Along with motor vehicles, aircraft are among the nation’s fastest growing sources of
emissions. In 1999, transportation emissions surpassed industrial emissions as the nation’s largest
source of CO2 emissions.

So, taking measures to stop environmental degradation is the responsibility of these industries.

AVERAGE INDUSTRY SCORES:

To arrive at these figures, scores of 100 companies from different industries were calculated
individually. Then, the average score of all the companies that fall under one industry is considered
as the industry score.

HIGH SCORING INDUSTRIES

Chemical Industry (Average score: 51.9 points)

Among the 10 industries evaluated, the chemical sector had the highest overall scores and tied with
two other industries for the highest Management and Strategies scores. Chemical companies also
scored strongly on Board Oversight.

 Top Strategies scores: Chemical companies are focused on new products that promote energy
efficiency and growing demand for climate-friendly technologies. For example, DuPont is developing
next generation refrigerants with low or no global warming potential and is leading an effort to build
the world’s first pilot-scale “bio-refinery,” using the entire corn plant to produce ethanol. Air

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Products and Praxair are both involved in developing hydrogen and carbon sequestration
technologies.

 High Board and Management scores: Most chemical companies have good management
and/or board governance systems in place for addressing climate change. These high scores are partly
the result of the industry’s experience with the 1987 Montreal Protocol, which required a phase-out
of chemicals that deplete the Earth’s ozone layer. DuPont’s board has been overseeing climate
change activities since 1994.

 High Emissions accounting scores: As a leading industrial energy consumer, many chemical
companies have invested in more efficient energy systems and other changes in manufacturing
processes that have reduced GHG emissions considerably. While half-dozen companies have set
GHG “intensity” reduction targets, DuPont and Bayer have set targets for 2010 to reduce overall
emissions by 65 percent and 50 percent, respectively, relative to 1990 levels. Several companies
conduct life-cycle assessments that measure product end-use GHG emissions.

Electric Utility Industry (Average score: 48.5 points)

The electric utility sector had the highest average Disclosure score of the 10 industries examined, as
well as the second-highest Emissions Accounting score and the second highest average score.

 Top Disclosure scores: Accounting for nearly two-fifths of the nation’s CO2 emissions, electric
utilities face considerable risks from climate change regulations. Six of the 19 companies profiled
have published climate risk reports. Nine have expressed varying degrees of support for mandatory
curbs on CO2 emissions.

 High Emissions accounting scores: Power companies have been required since 1990 to monitor
and report CO2 emissions. Many companies have also taken advantage of the 1992 Energy Policy
Act to register CO2 emissions savings under the Section 1605(b) program.

 Above-average Strategies scores: High-scoring companies are pursuing low- and no-carbon
energy options—renewable, natural gas and clean coal—to generate electricity. Noteworthy
examples include the FPL Group, the nation’s largest wind power generator, AEP and Cinergy,
which are moving forward with plans to build commercial-scale integrated gasification combined
cycle (IGCC) power plants, and Edison International which is partnering with BP to build the
nation’s first hydrogen fueled power plant, with most of the CO2 being captured and stored
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underground. Lower scoring utilities remain committed to traditional forms of coal-fired generation
and are less focused on demand-side management programs.

Auto Industry (Average score: 47.9 points)

Auto companies had the highest average Board score, and tied with the chemical industry for the
highest average Management score. The also had the third highest Disclosure score.

 Top Board and Management scores: Automakers recognize that policies to address climate
change pose risks to the industry, which remains dependent on petroleum and is one of the fastest
growing sources of CO2 emissions. Many companies have task forces to coordinate board and
executive level actions, and include climate change in strategic planning. Ford recently issued the
industry’s first stand-alone report examining the business impacts of the climate issue.
 High Emissions accounting scores: Auto companies have developed reliable and consistent
systems to measure emissions from their operations. GM has been tracking its GHG emissions since
1990 and has been a leader in setting targets and recording savings from its global facilities.
However, GM, Ford and other auto companies have backed away from estimating carbon emission
footprints resulting from the operation of their products, which is a far greater source of emissions.
 Above-average Strategies scores: Japanese automakers have long held the lead in developing
fuel-saving technologies. Honda’s product line has the highest fleet fuel economy average, while
Toyota has established itself as the leader in gasoline-electric hybrids. Ford is developing multiple
advanced fuel technologies and has two hybrid models on the market. GM has spent more than $1
billion on fuel cell research and recently expanded its offerings of flexible fuel vehicles that run on
E85 ethanol. European automakers lead in diesel engine technology, which offers fuel economy
advantages over gasoline-powered engines.

MIDDLE SCORING INDUSTRIES

Industrial Equipment Industry (Average score: 42.3 points)

Industrial equipment companies tied with chemical companies for the highest average Strategies
score, but had weak Board scores.
 Top Strategies scores: Industrial equipment manufacturers are in a strong position to reduce
GHG emissions with technologies that are energy efficient and use alternative energy sources. The
highest scores were posted by General Electric, ABB and United Technologies, which are major
providers of efficient power plants and distributed energy systems.

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 Above-average Management scores: Environmental and sustainable development issues are
becoming a higher management priority at these companies, since most of the products they produce
are very energy intensive and a major source of emissions.
 Below-average Board scores occurred because equipment manufacturers serve many
“smokestack industries” that until recently has placed little emphasis on reducing GHG emissions.
Limited board action may reflect the Involvement of these other industries as board members and
primary customers.

Metals and Mining Industry (Average score: 42.2 points)

This industry had above-average overall scores, led by aluminum producers Alcan and Alcoa.
U.S. steel Companies had among the lowest average industry scores.

 Above-average board and Management scores: Metals and mining companies face a
constant sustainable development challenge of producing affordably priced products as
natural resources are depleted. Alcan created an executive-level team in 2001 to incorporate
energy efficiency and GHG reduction goals throughout the company.
 Above-average Emissions accounting and Strategies scores: Changes in manufacturing
processes, more efficient energy use and expanded resource recovery programs have enabled
many companies to reduce GHG emissions considerably, including a 25 percent reduction at
Alcoa facilities since 1990.
 High scores for Aluminum producers: Aluminum producers believe that aluminum use in
transportation and recycling of primary aluminum can have substantial positive impacts in
reducing GHG emissions. Alcoa has set a goal to make 50 percent of its products from
recycled aluminum by 2020. Alcan and Alcoa believe the aluminum industry can become
carbon neutral by 2020.

Forest Products Industry (Average score: 37.6 points)

Forest product companies had relatively strong Board, Management and Strategies scores, but
weak Disclosure scores.
 Above-average Strategies scores: Forest product companies manage vast terrestrial carbon
‘sinks’ through the forests they grow, putting them in an advantageous position if they can manage
their resources sustainably. Biomass energy, which is carbon neutral, is the primary power source for
most of these forest products companies. International Paper was the first company in this industry to
join the Chicago Climate Exchange, a voluntary GHG trading market.

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 Average Board and Management Scores: Company leadership has focused on energy
efficiency and fuel-switching to reduce GHG emissions, but less attention has been devoted to
climate-related product opportunities and physical risks.
 Below-average Disclosure scores: Forest product companies face comparatively high risks from
the physical effects of climate change, such as increases in wildfires, windstorms and pest
infiltrations, as well as migration of tree species away from forests they own or manage. Company
disclosure on these potential risks is very weak

Oil and Gas Industry (Average score: 34.8 points)

Oil and gas companies had the widest disparity of responses, with European companies showing
strong leadership and many U.S. companies lagging behind, especially U.S. oil refiners and natural
gas distributors.

 Wide variations on Board, Management and Emissions accounting scores: The three highest
scoring companies—BP, Royal Dutch Shell and Statoil—distinguish themselves with strong Board
and Management involvement on climate issues. BP and Royal Dutch Shell are the only two
companies that have set long-term GHG reduction goals and measure emissions from customer use of
products. Statoil stands out for emitting only 40 kilograms of CO2 per unit of production, Compared
to the industry average of 130 kilograms, and for its efforts (along with BP and Shell) to demonstrate
carbon sequestration to enhance oil recovery.
 Wide variations on Strategies scores: BP and Royal Dutch Shell have made major financial
commitments to alternative energy sources, such as solar, wind and hydrogen. Among U.S. firms,
Chevron is investing over $100 million a year in low-carbon technologies, while ExxonMobil has
dismissed wind and solar power as being “inconsequential.”
 Low scores for U.S. natural gas producers: Natural gas-focused firms such as Burlington
Resources, El Paso and Williams have done little to examine the climate issue. Such companies stand
to benefit from CO2 regulations that favor clean-burning, lower-carbon domestic energy sources.

LOW SCORING INDUSTRIES

Coal Industry (Average score: 21.4 points)

 Well-below average scores in four of five governance areas: Coal is the most carbon-intensive
fuel source, accounting for 36% of the nation’s CO2 emissions (including coal burned to generate
electricity). The coal industry arguably has more at stake in addressing climate change than any other
industry. Yet many companies’ governance responses have been limited or nonexistent.

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 Near-average Disclosure score: As with domestic natural gas suppliers, domestic coal
producers have a narrow geographic focus and one main delivery option. Unlike gas producers,
however, coal companies stand to lose much more as a result of carbon emission constraints. Most
companies acknowledge that GHG regulations could adversely affect power-sector demand for coal,
but otherwise choose to downplay or ignore the issue.
 Well-below Strategies score: The primary strategy being pursued (especially by larger coal
companies) is support of research on technologies to gasify coal and store carbon dioxide emissions
underground. Companies pursue this research in conjunction with government energy agencies and
electric utilities. However, carbon sequestration technologies have yet to be proven technologically
and commercially. Coal-bed methane recovery is another important, but more limited, commercial
option.

Food Products Industry (Average score: 17.6 points)

 Lowest Disclosure score: Although several leading food products companies acknowledge the
threat posed by climate change to food-based raw materials and water resources, few have articulated
a strategy to address this threat. Leading companies like Unilever are at least focused on the issue.
 Low Emissions accounting score: While food products are not GHG-intensive, food processing
is relatively energy intensive. Many food products companies have taken steps to make their
operations more energy efficient. Leading companies like Unilever and Nestle have also focused on
GHG emissions from product packaging and refrigeration systems.
 Low Strategies score: Some food products companies like ADM and Bunge develop feedstocks
for ethanol-based transportation fuels. Biomass fuels could be a boon to the agricultural industry,
However, CO2 benefits will come mainly from cellulosic sources (like grasses) that are nearly carbon
neutral, rather than corn-based ethanol, which provides about a 20 percent savings in GHG
 Emissions relative to gasoline.

Air Transport (Average score: 16.6 points)

 Lowest average score in four of five governance areas: Aircraft are among the world’s fastest
growing sources of CO2 emissions, expected to reach 5 percent of global CO2 emissions by 2020.
Emissions improvements are largely outside of the companies’ control, however, and depend on
advances in engine and airframe design, and improvements in airport and air traffic management
systems.
 Low Management scores: Airline profitability is largely dependent on managing fuel costs,
giving these companies a built-in incentive to improve the fuel efficiency of their operations. This

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suggests that many companies have an indirect focus on reducing GHG emissions that may not be
reflected in these scores.
 Higher scores for freight carriers: Freight carriers have large ground delivery fleets, with GHG
management options available through logistics and fuel alternatives. Passenger carriers are more
dependent on GHG reductions available through logistical changes in government-controlled air
traffic management systems.

As we have already seen the Sector Wise split up of the industries, we now take a glance at some
of the Environment Management polices followed by the Fortune Companies and their Corporate
Governance towards Environment Stability.

FORTUNE COMPANIES ENVIRONMENT MANAGEMENT POLICES

OIL AND GAS:

British Petroleum: Incorporates Environment management systems into group-wide operating

management system that helps it to set priorities for operations based on assessment of the key risks,
including those related to environmental and social performance. BP believes this integration will
promote greater efficiency and consistency across the business.

BP has dedicated environmental processes for major projects and those that seek access to
sensitive areas, including internationally designated protected areas. It takes an integrated approach to
identify potential environmental and social impacts in new projects and acquisitions. Intended to
improve its consistency and effectiveness in mitigating such issues, this environmental and social
group-defined practice also applies to projects that require access to sensitive areas, including
internationally designated protected areas. A screening process aims to make sure it takes all
necessary environmental precautions before entering a sensitive area.

BP's remediation specialists work to identify, manage and reduce its current environmental
liabilities, including those likely to arise in the future. Its position is that remediation activities should
be risk-based and apply sound scientific and economic principles. Remediation principles, guidance
and methodologies are emerging in which a more holistic approach to the treatment of soil and
groundwater contamination is taken. Sustainable remediation, for example, would consider broader
issues such as safety or the greenhouse gas emissions arising from remediation activity itself. They
are involved in the development of these concepts with a view towards reducing its future liability.

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 They are currently using the approaches which not only are designed to achieve its clean-up
goals but also have a wider environmental and social benefit. For example, at a 24 acre parcel of land
in Wood River, Illinois, the location of a former refinery, they have planted specially selected species
of trees and plants which draw more water through their roots and therefore help reduce water levels
in an area prone to flooding. They have also used prairie grasses and wildflowers to pull
hydrocarbons from the soil and break them down. Since 2004, its remediation management experts
have reduced the group’s soil and groundwater contamination liabilities by more than $700 million
dollars to $1.7 billion. Its ultimate goal is to reduce environmental liability to the lowest possible
level, a benefit for BP and the wider community.

Statoil: Follows that emission of greenhouse gases (GHG) is a major challenge, and believe that
coordinated and powerful effort by governments, businesses and individuals is required to combat
climate change. Statoil’s objectives are to quantify potential harm to coastal waters as the basis for
introducing remedial measures, such as reducing the range and volume of chemicals used in oil and
gas processing plants and introducing more environmentally acceptable substitutes. Statoil’s evolving
methodology is currently being tested with the highly complex discharge from its Mongstad refinery
north of Bergen, which consists of industrial effluent from storage tanks (ballast water) and
hydrocarbon processing plants (process water).

ELECTRIC POWER:

AEP: AEP has been instrumental in decreasing the content of the regulated emissions from its power
plants. At the same time, the company has continued to make affordable, reliable electric power
available to meet the growing demand for electricity. This has been made possible with investments
in technology and through innovative public policies.

Apart from this AEP collaborates with many different types of organizations to advance its
environmental activities and learn about new and advanced options for protecting and preserving our
natural resources. Partnerships range from supporting academic research and leading policy advocacy
to forging multilateral coalitions and committing to innovative business relationships. These
relationships support the company's belief that collaboration is key to successful initiatives to protect
the environment. This shows the strong corporate ethics and governance of its part towards a safer
environment.

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Cinergy: Cinergy Corp recently announced that it has selected the first series of projects in its
voluntary program of reducing greenhouse gas emissions by five percent below 2000 levels between
2010 and 2012. Fourteen projects totalling nearly $3 million have been selected for 2004 and will
provide reductions and offsets of approximately 360,000 tons annually of carbon dioxide, the most
common greenhouse gas.

Cinergy announced its voluntary greenhouse gas reduction program in September 2003. It
committed $21 million between 2004 and 2010 on projects to reduce or offset its greenhouse gas
emissions. These expenditures will allow exploration of the alternative options for reducing carbon
dioxide and other greenhouse gas emissions on its electric generating, transmission and distribution
systems, as well as its natural gas transmission system.

In collaboration with the national environmental organization, Environmental Defense, it

developed the 2004 projects. They are three renewable energy projects, an energy conservation
project in concert with a Cinergy customer, a carbon sequestration project, the purchase of five
hybrid gasoline/electric energy vehicles, a research project to analyze greenhouse gas emissions
limitations and related technology.

In keeping with Cinergy's plan to spend at least two-thirds of the $21 million dollars for on-
system projects, more than 75 percent of the 2004 money was allocated to projects that will directly
reduce Cinergy's carbon dioxide emissions. Included are seven heat rate improvement projects at the
company's generating stations. The projects are designed to reduce coal consumption by 142,000 tons
annually, thus reducing carbon dioxide emissions and other pollutants. The company is also installing
new software at its hydroelectric facility at Markland Dam in Indiana to increase its efficiency.

Renewable energy projects include donation of a photovoltaic system for the Cincinnati Zoo's
new education center, as well a photovoltaic array at PSI Energy's customer service center in
Bloomington, Ind. A wind turbine is being installed at the Wolcott rest area on Interstate 65 in
Indiana. Cinergy Solutions Inc. is working with the Oldenburg Academy in Oldenburg, Ind. on an
energy retrofit program. Cinergy will fund the lighting retrofit of the high school to replace fixtures
that are 30 to 40 years old, upgrading the quality of the lighting while reducing energy consumption
and cost. In the carbon sequestration area, Cinergy is funding the purchase of trees for a 300-acre
reforestation project being managed by the Nature Conservancy in Harrison County, Ind. The project
will sequester approximately 75,000 tons of carbon dioxide annually.

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 Cinergy is purchasing five Toyota Prius hybrid vehicles for its corporate fleet. These vehicles
have near-zero tailpipe and evaporative emissions. The Prius is the first car equipped with a new
high-voltage/high-power hybrid drive power train. The five Prius vehicles will emit an estimated
37,140 pounds less carbon dioxide annually than five standard vehicles in Cinergy's corporate fleet.
To create additional tools for analyzing future climate change policies, Cinergy is funding research
by the Electric Power Research Institute to explore and analyze critical factors in creating effective,
efficient greenhouse gas emissions limitations and technology policies.

COAL:

Rio Tinto: Being one of the leaders in manufacture of Coal Rio Tinto has been contributing its
corporate governance systems towards Environment stewardship. It has wide variety of technology
operations and service ecosystems reducing pollution from energy, land, water. A project with a
Health, Safety and Environment function is developing a project entitled Natural Capital. This will
investigate the business case and methodologies around designing and implementing ecosystem
service offsets and investments in non operational, land based assets. When comes to air pollution,
Rio tinto has been following the guidelines in decreasing the air pollution caused from SOx, COx.
Therefore their air quality objectives have been to improve performance, achieve industry leading
practices and engage and influence on air issues.

Rio Tinto's land management practices are governed by the land use stewardship standard.
Through the implementation of the standard, the sites must develop management plans, programmes
and procedures to ensure sustainable stewardship of land they own, lease or manage. The land use
stewardship standard is significant as it applies primarily to land that is not used directly for mining,
processing or ancillary activities.

While addressing land management issues they consider the biodiversity values, the capabilities
of the land holdings and immediate surroundings, including ecological services that the land provides
or sustains; and Social and cultural heritage values. These are the community values associated with
access to land for resources or amenity, and the cultural and spiritual values of specific sites,
landscapes and geographical features (eg water bodies) as well as plant or animal species.

In addition to their Environment and Land access policies, it has a number of environmental

standards to ensure it operates consistently worldwide and that its operations meet both internal and
external expectations. Rio Tinto's land use stewardship standard is supported by a number of
strategies, such as the biodiversity strategy, and aligned with closure, communities and cultural
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heritage management. Integrating land stewardship and risk assessment into project decision making
helps ensure an early and proper understanding of both the risks and opportunities for land
management.

Collaborating with conservation organisations, such as the biodiversity partners or local groups,
either through desk top studies or site visits, can help identify any issues and opportunities that affect
project design or land management. It belongs to international and national policy development
forums on land matters, and also participates in multi-lateral initiatives with organisations such as the
International Union for Conservation of Nature (IUCN), United Nations Environment Programme
and the Convention on Biological Diversity. As a member of the International Council on Mining and
Metals, it helps to develop industry policies and practices on protected areas and long term access to
land.

The operations need to improve their water management continually, in order to be good
neighbours, reduce operational constraints, and demonstrate why Rio Tinto should be the developer
of choice for new ore bodies. Operations that reduce their demand through efficiency, technology and
the use of lower quality and recycled water are more likely to have a competitive, economic and
reputational advantage. 

They use water at every stage of its business; for exploration, mining, processing, smelting and
refining. They need water to process and mine ore, produce metal and power, cool equipment,
manage waste tailings, suppress dust, for washing and drinking, and to supply communities. While
the minerals and metals industry is a small user of water on a global and national scale, it can be the
largest user at a local level.

They use water from different sources and of different qualities, such as groundwater (water
sourced from aquifers), surface water (water sourced from rivers, lakes, rain and snow), sea water or
water from dams that they build on site. In addition, some of its water is recycled - some sites are
able to recycle up to 70 per cent - and some is sourced from external recycling and treatment plants.
At many sites, it replaces high quality (potable) water with poorer quality water to help conserve
local water supplies.

METALS AND MANUFACTURING:

Alcoa: With the overcoming environmental concerns and it being in the metal industry Alcoa has
taken up the recycling job to save the environment.
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Nippon steel: Nippon Steel’s technical strength in the field of environment and energy is already the
highest in the world.
In order to extract one ton of iron by the blast furnace method, which uses coke to reduce the
natural resource of iron ore, about two tons of carbon dioxide is emitted. In FY 2007, Japanese steel
industry produced about 121.5 million tons of crude steel, which accounts for about 14% of Japan’s
total greenhouse gas emissions. Since the oil crisis in the 1970s, the Japanese steel industry—an
“energy intensive industry”—has been proactively working on energy conservation by eliminating
and connecting certain manufacturing processes. Since the 1980s, energy conservation through waste
heat utilization has been promoted, such as power generation by waste heat recovery and use of waste
heat for preheating. From FY 1971 to 1989, the total investment in energy conservation and
environmental preservation amounted to about three trillion yen, achieving energy savings of 20%.
Nippon Steel Engineering Co., Ltd. provides a variety of global environmentally friendly total
solutions in the fields of waste disposal and recycling. The core role of these solutions is played by
the “direct melting and recycling system (shaft furnace-type gasification and melting furnace).” This
system has been highly praised for its reliable operation for nearly 30 years since its introduction in
1979, and thus, it has received 36 orders in Japan and overseas. This system is capable of treating a
wide range of waste, such as burnable garbage, non-burnable garbage, sludge, and incineration ash all
together, and steel slag and metals are all recycled into resources, which are then reborn as asphalt
aggregate, secondary concrete products and so forth. The energy being generated during the treatment
process is also utilized for power generation and other effective purposes, and complete preventive
measures have been taken against dioxins. In this way, from many aspects, it has been minimizing the
amount of final disposal and environmental load. Needles to say Nippon has shown one of the finest
governance towards environment.

CHEMICALS:

DuPont: DuPont Secure Environmental Treatment (SET) is the world's largest commercial and
industrial wastewater treatment facility. A wide range of aqueous wastes are accepted for treatment.
SET also offers an array of pre-treatment options for the removal or neutralization of targeted waste
stream constituents, as well as for the recycling of valuable organic components of process waste
streams.  The facility can handle up to 40 million gallons of wastewater every day- quickly, safely,
and cost-effectively.  

BASF: BASF has achieved a lot in recent decades with end-of-pipe environmental technologies.
Examples include filters to reduce emissions and the more than 50 wastewater treatment plants. It
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operates worldwide. Many of the environmental protection measures, however, are at a much earlier
stage of the production process during the development of products and processes.

Innovation-integrated environmental protection: Environmental protection plays a central role when

BASF researchers develop new products: A high-quality product must be environmentally
compatible if it is to be accepted by the customers. Economic efficiency and environmental
protection are therefore closely interlinked when it develops innovative processes. BASF's specialists
are valued as partners in promoting environmentally friendly technologies in emerging economies.
 
Production-integrated environmental protection: Along with the desired end products, chemical
processes usually also generate by-products. It pays to reduce or recycle these. Right from the plant
planning stage it therefore pay special attention to ensure that any by-products are avoided or
optimally recycled. Wherever it can, it also improves existing processes, and not only their own but
those of the customers, too. For example, it developed an optimized recycling procedure for N-
dimethylacetamide (DMAC), which their customers use as a solvent in the production of spandex
fibres. The new procedure makes it possible to recover DMAC in a high quality and at the same time
minimizes solvent losses.

Waste management: At BASF, there is an appropriate disposal of waste. Their fundamental principles
are “avoid, reduce, and recycle.” Residual waste is only disposed of when all other possibilities are
exhausted. Sewage sludge from the BASF wastewater treatment facility at the Ludwigshafen site, for
example, is used to generate electricity and heating. In addition, since the beginning of 2008, the
sludge has been enriched by the addition of substitute fuels for thermal recovery. Worldwide,
BASF’s production, including all former Ciba sites, generated 1.69 million metric tons of waste in
2009 (2008: 1.77 million metric tons). Oil and gas exploration accounted for 0.19 million metric tons
of this waste. Around 42% of their waste was recycled or subjected to thermal recovery (2008: 43%);
and aims to continue to increase this rate. The residual waste was disposed of by underground storage
(14%), through incineration (44%) and by landfill (42%). According to the customary international
categories, 554,500 metric tons of the waste disposed of was classified as hazardous and 413,800
metric tons as non-hazardous.
 
Safeguarding energy supplies for production sites: Because of the Energy Verbund system, BASF
group saves up to 1.5 million metric tons of oil equivalents per year, equal to a 3.4 million ton annual
reduction in CO2 emissions. At Ludwigshafen alone, BASF saves about €200 million per year
through the energy Verbund. More than 50% of the steam consumption covered here by use of waste
heat and incineration of deposits from production. The Verbund is one of their prime strengths in
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ensuring the efficient use of resources. It therefore offers us a crucial competitive advantage, while
also having a positive impact on the environment.
 
It increasingly uses combined heat and power (CHP) plants to generate both heat and steam.
Such cogeneration plants are an extremely effective means of supplying energy and, with an overall
fuel efficiency of almost 90 percent, are the front-runners among energy conversion methods suitable
for use on an industrial scale. BASF currently operates 16 cogeneration plants worldwide. Partner
companies at BASF sites operate another seven gas turbine plants with steam cogeneration, mainly to
supply BASF. Their new CHP power plant in Ludwigshafen started operations in June 2005. The
new plant reduces CO2 emissions by more than 500,000 metric tons per year.
 
Resource conservation: It replaces fossil raw materials with renewable raw materials wherever it
makes technological, economic and environmental sense to do so. In 2009, BASF’s total electricity
requirements amounted to 14.2 million MWhel. In addition, a total of 50.7 million metric tons of
steam was distributed via steam networks. This electricity and steam is generated in central BASF
power plants. In 2009, it used 34.0 million MWh of fossil and residual fuels worldwide to generate
this electricity and steam. The amount of primary fuels used (29.6 million MWh) corresponds to 63%
of the total of primary fuel used in the BASF Group. 9.4 million MWhel of electrical power and 23.8
million metric tons of steam was generated. It used cogeneration as the primary source of energy
supply for their sites. Compared with conventional generation of electricity and steam, this saved
approximately 11 million MWh of fossil fuels in 2009.

PAPER AND WOOD PRODUCTS:

Weyerhaeuser: It is Weyerhaeuser's core policy to be responsible for environment protection for the
business that they do. They practice sustainable forestry, set and meet goals to reduce pollution,
conserve natural resources and energy, and continually improve the environmental performance.
Their Business activities are conducted to:
 Employ environmental management systems to achieve company expectations.
 Manage the environmental impacts of their business activities and products, including innovative
and advanced technology solutions.
 Promote environmental laws, policies and regulations that are based on sound science and that
incorporate incentive-based approaches to improve environmental performance.
 Adopt company standards to protect the environment.

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 Manage forest lands for the sustainable production of wood while protecting water quality; fish
and wildlife habitat; soil productivity; and cultural, historical and aesthetic values.
 Audit compliance with environmental laws, policies, regulations and company requirements.
 Resolve noncompliance conditions promptly, including curtailing operations when necessary to
protect human health and the environment.
 Track and publicly report on the environmental performance.

FOOD PRODUCTS:

Unilever: Unilever mainly aims at sustainable agricultural sourcing, climate change, water,
packaging and eco-friendly manufacturing. They made these Guidelines on 11 indicators including
water, energy, pesticide use, biodiversity, social capital and animal welfare. An external advisory
board and expert agronomists helped them to develop the guidelines.

They have also been engaging with the growers and third-party suppliers on implementing these
guidelines. The guidelines are incorporated into their contracts with growers and define soil
preparation, fertilisation regimes, harvesting and other activities for the key crops. Current best
practice is mainly based on integrated farming principles, and involves appropriate use of fertilisers
and pesticides to optimise yield while minimising environmental impacts.

It has now turned the guidelines into the Unilever Sustainable Agriculture Code. Published in
April 2010, the code sets out the expectations of their agricultural suppliers. They will be asking the
suppliers, and the farmers who supply them, to adopt sustainable practices on their farms. They
expect that their suppliers of agricultural raw materials will commit to this sustainability journey and
to demonstrate that they adopt minimum standards and improve performance over time.

Their aim is to ensure continued access to the key agricultural raw materials, and ultimately to
develop market mechanisms that allow consumers and retailers to influence the sourcing of raw
materials through their buying habits. Ultimately, their long-term aim is to buy all the agricultural
raw materials from sustainable sources. But this poses a huge challenge for those involved in
agriculture: farmers, scientists, suppliers, experts, governments and businesses.

Improving farming methods: Since 1999, Unilever has been carrying out research into sustainable
agriculture on the arable farmland around its research centre at Colworth, Bedfordshire and other
pilot projects around the world. Researchers have been investigating a range of techniques to reduce
the environmental impact of farming, while maintaining yield and profits for farmers. These
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techniques and good agricultural practices are now encoded in the Unilever Sustainable Agriculture
Code.

Programmes: Unilever's work on sustainable agriculture started with a focus on five key crops – palm
oil, peas, spinach, tea and tomatoes. While some of the programmes continue today, they are
extending work into other crops and ingredients where the suppliers work directly with growers, for
example fruit and vegetables, gherkins, dairy, eggs and vegetable oils.

Through their Lead Agriculture Programmes, they are investigating ways of farming that protect
the environment and maximise social and economic benefits. They are working closely with local
growers and planters, research institutes, industry and farmers' associations, local government, NGOs
and sometimes community groups. Progress is measured using their 11 sustainable agriculture
indicators. Sustainable agriculture protocols for all their key crops have been published as Good
Agricultural Practice Guidelines (GAP Guidelines). In 2004, they started engaging with the growers
in the use of these guidelines, in co-operation with other partners. This has led to several changes and
improvements and it published the Unilever Sustainable Agriculture Code in April 2010,
incorporating the findings from this engagement.

INDUSTRIAL EQUIPMENT:

GE: GE places a huge emphasis on the development of innovative solutions for today’s global
concerns. It has long pioneered innovative solutions to environmental challenges and delivers
valuable products and services to customers while generating profitable growth for the company.
GE has cost-efficient technology available today that can help mitigate the environmental impact of
coal.  GE IGCC advanced coal technology can produce electricity with lower emissions than
conventional coal plants; for example, GE’s partnership with Duke energy, to build a (630 MW)
IGCC advanced coal technology plant in Edwardsport, IN, will produce more than 10 times the
energy produced by the current four generating units on the site while lowering emissions of sulfur
dioxide, particulates, mercury and CO2.

GHG Emissions and Energy Efficiency: Since launching ‘ecomagination’ in 2005, GE has been
committed to reducing its GHG emissions 1% by 2012, reducing the intensity of GE’s GHG
emissions 30% by 2008 and improving energy efficiency 30% by the end of 2012 (all compared to
2004). GE is on track to reach its internal commitment with GHG emissions from operations and in
2007 they have been reduced by about 9% from the 2004 baseline. GHG and energy intensity have
been reduced by 35% and 34%, respectively, compared to 2004.
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ECo2 Awards: One way that GE recognizes the dedication of its employees to the company’s
efforts is through the eCO2 awards and certification program. This program recognizes the sites that
achieve at least a 5% absolute GHG reduction independent of changes in production levels.

GE Remediation: GE takes part in a large number of remediation projects to clear hazardous

pollution in accordance with relevant laws.

TRANSPORTATION SECTOR:

Toyota: Toyota has an environmental action plan calling for, among other things, reducing total
energy use by 15 percent by 2005. Management at the Buffalo plant decided to do better, aiming for
19 percent. The plant achieved its 2005 environmental goals late last year. Among the requirements is
the zero landfill plans. The plant had already managed to avoid sending any hazardous waste to
landfills. The next logical step is to not send any waste to landfills. Some Toyota plants in Japan had
already met that goal, so it was attainable. The process required investment, as well as revision of the
manufacturing process. Zero landfill makes sense financially in several ways.

The Buffalo plant more or less breaks even on its zero landfill program. For some materials,
recycling is more expensive than using a landfill. Toyota’s plant at Buffalo is ISO 14001-certified,
meaning it meets a voluntary international standard for environmental protection. The certification
process requires that the plant have a formal environmental policy, a system designed to track the
plant’s environmental performance and established mechanisms for continuous improvement.

Toyota is requiring that all its suppliers achieve ISO 14001 certification by the end of this year.
Toyota sub-contracts much of its manufacturing processes. So its suppliers handle much of the waste
product.Toyota’s Policies for Global Environmental Protection Initiatives was established in 1992.
The “Toyota Earth Charter,” was revised in 2000. Toyota’s Eco-project is designed to promote these
policies so to the entire company, and to apply the concept of “Totally Clean” to every stage of a
car’s life cycle, from development and production to use and disposal.

In 1998, Center for Resource Solutions awarded Toyota a “green e” for the use of sustainable
electricity by its California operations and in 1999, the United Nations Environmental Programme
awarded Toyota their Global 500 Award, the first such award received by an automaker. In addition
to its green manufacturing process, Toyota also mass produces hybrid gasoline-electric vehicles.

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AIR TRANSPORT AND AEROSPACE INDUSTRY:

British Airways: British Airways took fresh steps today to intensify its work in limiting aviation’s
impact on climate change. The airline unveiled a new carbon offset scheme, and backing for
deforestation prevention in Brazil and research into the effects of aircraft’s non-carbon emissions.
The upgraded offset scheme uses UN certified emissions reductions to help finance clean energy
projects in developing countries. British Airways is also working to establish robust scientific
understanding of the non-CO2 effects of aviation by 2012.

Aerospace Industry: The aerospace industry recognizes the growing impact air travel has on the
environment and is seeking to address this as best, and as quickly, as it can. In recent years, there has
been growing, international concern about the impact some industries have on the environment. The
public is acutely aware that the production of man-made emissions affects the planet and recently
aviation has been targeted as a main contributor to this global issue. The general perception seems to
be that while other industries may have a lot to do to become ‘greener,’ they are at least addressing
the issue. The irony is that while the public believes aviation is a major contributor to the acceleration
of global warming, it has in fact already established clear, environmental targets to reduce its global
environmental footprint. A powerful example of this commitment is the commercial aviation sector’s
decision to become carbon neutral by 2050.

Bombardier: Headquartered in Montreal, Bombardier is a world-leading manufacturer of innovative

transportation solutions – from commercial aircraft and business jets to rail transportation equipment,
systems and services – and as such is uniquely positioned to appreciate the vastly different
perceptions held by the public when considering these two modes of travel.

Over the last decades, there have been significant advances in aviation technology. Today’s aircraft
are 50 per cent more fuel-efficient and 30 decibels quieter than their predecessors were 40 years ago.
They also fly three times farther on the same amount of fuel than they did 30 years ago.

Although the industry only contributes two per cent of the world’s greenhouse gas emissions, it is
perceived as more harmful to the environment than the road transport and electricity-generation
industries that respectively account for 18 per cent and 35 per cent of worldwide carbon emissions.
This negative perception places greater pressure on governments to impose further regulations on the
industry. There is no doubt that regulations, surcharges, cap-and-trade schemes can be the catalyst for
significant behavioral change from industries, but the money collected through these systems is not
generally reinvested into fixing the fundamental problems.

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 Europe is moving steadily ahead with the Emissions Trading Scheme (ETS) for it wants the
aviation industry to take responsibility for the emissions it contributes to the atmosphere. IATA talks
about a 25 per cent reduction in fuel consumption and CO2 emissions, an 80 per cent reduction in
NOx emissions and a 50 per cent reduction in noise emissions by 2020.

Even though the world companies have been contributing towards the environment there are
many Indian companies that are seriously giving the thought for the environment in their own style.

INDIAN INDUSTRIES- CORPORATE ENVIRONMENT STABILITY

Maruti Suzuki India Ltd. and NTPC Ltd, the two best governed companies were presented the
"ICSI National Award for Excellence in Corporate Governance 2009" at Mumbai by Vilasrao
Deshmukh, Union Minister for Heavy Industries & Public Enterprises in the presence of Justice R.C.
Lahoti, Former Chief Justice of India and Chairman of the Jury for the Award.

Infosys Technologies expects to consume 100 tonnes of paper less this year as it has made the
printed copy of its 2009-10 annual report lean by providing only the statutory details to shareholders
in the hard copy, while putting out additional details on its Web site.

Wipro aims to reduce the greenhouse gas emissions to 2.5 tonnes per employee by 2015 from a
baseline measure of 4.45 tonnes per employee in 2007-08.

Ballarpur Industries plans to join Business Call to Action with an intention to promote economic
and environment sustainability of 5,000 low income pulpwood tree growers in Orissa and Andhra
Pradesh.

Dr.Reddy’s labs Green chemistry- The design of chemical products and processes that reduce or
eliminate the use and generation of hazardous substance. This ensures not only environment friendly
products and processes, but also contributes to the health and safety of employees involved in
manufacturing.
Apart from this the measures taken by Reddy labs are :
 5% reduction in specific Green House Gases (GHG) emissions over 2007-08
 Reduction of 18.7% in total hazardous waste over 2007-08.
 Safe disposal of organic residue to cement industry.

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FINDINGS AND FUTURE DIRECTIONS FOR A BETTER SUSTAINABILITY

All these major companies have been successful in contributing towards improving the economic
conditions of the globe by implementing the policies through strong and sincere initiatives and
excellent corporate Governance Standards. From this we get to know that, through some efforts,
corporate are able to contribute much towards the environmental sustainability. They could reduce so
many hazardous emissions, waste disposal, and conserve the resources. Each industry, at every stage
can control the damage that it is making to the environment. They are the problem creators and
problem solvers as well. In each industry there are environmental degraders and contributors who are
contributing for environmental sustainability. Though the industries were ranked, considering few
companies, in high performing industries too we can find companies not making efforts to stop
environmental degradation and in low performing industries we can see companies like RIO PINTO
and UNILEVER putting efforts to reduce the environmental degraders. The important factor is
feeling the responsibility towards society and environment and investments towards these policies.
For this company must understand what damage it is causing to the environment and thereby develop
a strategic plan. Management must execute this plan for being successful in contributing towards
environmental sustainability. For all this, the company must have a broad oversight. Hence, finance
contributes some role- if not a leading role- in many activities that led to the environment stability.
So, financing these initiatives helps them to contribute much to the sustainability.

The focus here is on the internalizing effects of the environmental trends noted above,
particularly in terms of their impact on the corporate governance administration. Trends in corporate
environmental responsibility and corporate environmental management systems have already made
an impact on corporate governance. First, by the imposition of environmental liability directly upon
company directors, senior management personnel and even (corporate) shareholders and, secondly, as
part of proposed changes to corporate management structures designed to reflect environmental
values, which necessarily cover the vital role of directors in setting an example for the rest of the
company.

It is significant, however, that the legal scope of directors’ duties under domestic company
laws has not been explicitly expanded to include established environmental concerns. The principal
benefits and costs that can derive from the inclusion of environmental interests within corporate
governance law are as follows:

1. There will be greater scope for shareholder action to ensure directors’ accountability.
However, if shareholders do not take the responsibility to act, then it may prove difficult

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 to hold company directors accountable for their actions or omissions, even when these are
clearly not within the company’s or even shareholders’ interests.
2. The need to prepare environmental and social audit reports on the company’s impact on
the environment and society will increase company directors’ reporting burdens. On the
other hand, the company thereby obtains a better picture of its overall social and
environmental impacts and is this able to take steps to reduce these impacts, often to its
own economic and public relations benefit.
3. The scope and extent of company directors’ fiduciary duties will be increased but
uncertain due to the inclusion of environmental considerations within the corporate
governance matrix.

The provision for taking the responsibility for environmental damage is currently limited in its
application under customary international law and not included within the scope of many
international environmental treaties. An alternative trend is for states to introduce civil liability
regimes requiring corporate entities operating within their territorial jurisdictions to contribute
directly towards the establishment of either an international compensation fund for environmental
damage, or compulsory insurance schemas for such damage. However, even this trend is presently
limited to environmental damage arising from ultra-hazardous activities such as the maritime
transport of crude oil and the operation of nuclear power plants.

Environmental sustainability can be achieved by legally including progressive change within the
company management culture in order to provide for the explicit incorporation of environmental
concerns within their decision-making process. The introduction of compulsory corporate
environmental performance audits and reporting duties are alternative tools for ensuring
consideration of environmental concerns at the highest corporate management level. Extending the
scope of directorial fiduciary duties to include environmental concerns may also achieve this
objective. Attending to these concerns then forms the part of the company directors’ duties to the
company, rather than being a question of compliance with external legal requirements.

GUIDELINES FOR CORPORATES:

1. Companies must assess the deepening financial connections between climate change and their
businesses. Companies with significant greenhouse gas emissions or high-energy use need to assess
their exposure from new regulations and develop strategies for mitigating those risks. Companies
vulnerable to the direct physical risks also need to take stock of their assets and supply chains. All of
these assessments must be evaluated and managed at the highest corporate levels, including by CEOs
and boards of directors.

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2. Companies must develop and implement action plans to manage climate risks and seize new
market opportunities. These plans should include new corporate policies and procedures for reducing
and mitigating risk, setting absolute GHG reduction targets and energy efficiency goals, and
developing or purchasing new clean energy technologies. Companies should also participate in
climate policy dialogues that will reduce financial risks and enhance competitiveness opportunities.

3. Companies must share and discuss their climate strategies with investors, analysts and other
stakeholders. Companies should disclose their assessments and implementation plans in annual
financial reports and corporate responsibility reports. Further, they should engage with shareholders,
Wall Street analysts and public interest groups to obtain feedback in developing effective, proactive
responses to climate change.

4. Most important, corporate leaders must overcome a tendency towards short-term thinking to
implement these climate strategies successfully by emphasizing long term financial results and
building long-term shareholder value. The gap between corporate decision-makers and the lasting
effects of their decisions must be narrowed.

COMMON THEMES OF LEADERSHIP COMPANIES:

While climate change should be a governance focus of all companies and major industry
groups, the risks and opportunities presented by this issue are not distributed evenly. Some
companies and industries by virtue of the types and amount of energy they use or produce will be
better positioned to respond than others. Likewise, some companies and industries by virtue of the
types and location of their businesses and physical assets will be more vulnerable to changing
climatic conditions. Among leadership companies, however, three common governance practices
should serve as a model for all firms, regardless of the risk-reward ratio that climatic change presents
to their particular circumstances. At these leading firms,
• Boards of directors and senior executives should work together to address climate change and other
sustainability issues. A key challenge for all firms is ensuring that boards are adequately prepared and
empowered to focus on GHG reduction and climate mitigation strategies.
• CEOs embrace climate change as a near-term priority. True leaders should speak out on climate
policy, risks and opportunities, rather than leaving the issue to their successors.
• Management teams should pursue practical solutions to climate change. Rather than waiting for
breakthrough technologies, management teams are working to find cost-effective, near-term ways to
reduce GHG emissions, starting with energy conservation and more efficient production processes.
At the same time, many of these companies should lay the building blocks toward a carbon-neutral
economy, with projects focused on carbon sequestration and infrastructure for hydrogen fuels.

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 CONCLUSION:

Thus, we get to know that by developing a strategic plan and management implementing the plan
by having a broad oversight, corporates can contribute towards environmental protection and
sustainability. To develop a strategic plan, first they need to identify how they are damaging the
environment. These must be aligned with the legal and director’s liabilities for effective initiative and
improvement processes. Once this is done, corporates contributing towards environmental
sustainability will be definitive. For the global environmental sustainability, each company, under
each industry, at each stage must feel the responsibility and take the initiative and necessary actions
to make the world a better place to live in.

REFERENCES

 Corporate Governance by Fernando

 Corporate Governance and The Climate Change: Making The Connection by Douglas G. Cogan
 Sustainability and Environmental Issues for Indian Industries by Mandir Parasnis
 The Role of Finance in Environmental Sustainability Efforts-Report by CFO Research Services
 Environmental Sustainability-An Evaluation of World Bank Group Support
 Company websites and annual reports.

ANNEXURE:

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