The first two months of 2024 has seen a flurry of activity on environment related orders and notifications in India. Rather than a chronological summary, we chose an order based on our own understanding of magnitude of impact that each of these could have on sustainable development.
- Climate meets money: The Reserve Bank of India’s ‘Draft Disclosure framework on Climate-related Financial Risks, 2024’ lays out climate related disclosure requirements for regulated entities, i.e. scheduled commercial banks, urban cooperative banks, all-India financial institutions and NBFCs. Foreign banks are also mandated with respect to their Indian operations. Largely based on the TCFD framework, and intended for better management of climate-related risks, these standards are applicable from FY 2026 onwards in phases
- The future is scrap: While EPRs for batteries, waste oil and tyres came into force in the last couple or years, the ‘Draft End-of-Life Vehicles (Management) Rules, 2024’, brings auto manufactures and importers under the EPR ambit. Intended to formalize the disposal and material recovery from ELVs, the order sets out EPR targets from FY 2026 on the basis of ‘steel recovery’. Sound implementation of this order can significantly reduce steel scrap imports and bring much needed pollution control in disposal and material recovery in the auto industry.
- Watch your green claim: With a sudden burst of sustainability disclosures, how can greenwashing rules not be in place 🙂 The ‘Guidelines for the Prevention and Regulation of Greenwashing, 2024.’ under the Consumer Protection Act, 2019 defines greenwashing and lays out guidelines for product sellers and service providers. With ‘green’ labels and claims staring at us from garbage bags to laptop bags, the much needed guideline is expected to bring in some sanity.
- More audits, better outcomes? The Draft Environment Audit Notification lays out rules and guidelines for environmental audit of the projects, activities and processes that are mandated to obtain government environmental clearances and/or approvals under air, water and other environment related regulations. The guideline is quite detailed on procedural terms but has also stated that it is a voluntary mechanism. It is not clear yet as to who would undertake these audits in addition to the mandatory requirements as prescribed by in consents / other rules. And will more audits lead to better outcomes?
- Green credit moves forward? The green credit rules that came in 2023 got its first sub-rule in the form of assessment of green credits with respect to tree plantations. Intended to encourage increase of green cover on degraded land, this rule has defined green credit as ‘one green credit per tree’, subject to a minimum density of 1100 trees / ha. The fungibility of green credits is a big question that is not clear. Will a green credit in future, say from improved effluent treatment, be equal to a plantation credit? The notification does indicate ways in which this green credit could be used, but we have wait and see how well it moves forward.
The first four are open to comments. We are hopeful that the new government that comes to power in June / July 2024 will finalize these drafts swiftly, and take the environment agenda forward!