Accounting standard on environmental reporting | New accounting standard on environmental reporting

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The government will make it mandatory for companies to report measures taken to prevent environmental damage as it steps up drive to encourage cleaner production methods .
The ministry of corporate affairs is revising the guidelines on corporate social responsibility (CSR) issued last year to add detailed norms on environmental sustainability. The fresh norms relate to efforts to prevent wasteful use of natural resources and ensure scientific treatment of industrial waste.
The existing guidelines, while urging companies to be environmentally conscious, left it for them to take steps. It failed to provide a clear framework for compliance, leading to companies not taking adequate steps.
“The idea is to make companies responsible for the environmental impact of their products and activities,” said a senior official in the ministry of corporate affairs. The rule will come into force by the end of the current fiscal year, he said.
A comprehensive accounting standard on environmental reporting is being worked out by the Institute of Chartered Accountants of India to guide companies in the process. Though the norms are voluntary, they will require companies to report their performance in this regard in the form of disclosures in their annual reports. “The review will put in place an implementation format whereby the work can be effectively monitored,” said another official, who is privy to the review process.
Environmental reporting in India is at a nascent stage, even though its importance has gained significance world-wide.
“While the move to ask a company to report on its environmental sustainability measures is welcome, it could effectively mean that a company would have to comply or explain steps taken,” said an official with industry body Confederation of Indian Industry .
Indian companies have taken sustainability measures as part of their business goals, he said, requesting anonymity. Some big companies such as ITC, for instance, devote significant resources to sustainable development. The company has a sustainability committee to help integrate social and environmental objectives with business strategies and set goals in contributing to climate change mitigation
 
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