Contributed by Soumya Chakrabarti and Sara

Introduction

The awareness related to sustainable development is increasing on a day-to-day basis, thereby making the businesses or corporate world, incorporate measures which make our conduct more environmentally friendly to meet our Sustainable Development Goals “(SDG)” by 2030. To meet our sustainable development goals and ensure the optimal nourishment of the environment we need a robust Environmental, Social, and Governance “(ESG)” movement in the field of Corporate Governance.

The ‘E’ in the ESG policy marks a significant element by providing handling of environmental matters, including but not limited to the carbon footprint, resource utilization, pollution, and overall ecological sustainability. Lakshadweep is one such place in which there is a need for an ESG policy as it is India’s famous pristine beauty, an archipelago of 36 islands in the Arabian Sea, which is known for its scenic beauty with exotic beaches, lagoons and India’s making it India’s only coral islands. Recently, on 4January 2024, India’s Prime Minister Narendra Modi shared pictures of his visit to Lakshadweep Island. After seeing those pictures- people started comparing between Lakshadweep and Maldives. This resulted in the emergence of the Chalo Lakshadweep Campaign. In recent times, the tourism sector in these islands is increasing, paving the way for Indian Hotels Company Limited “(IHCL)”, India’s largest hospitality company, to make two Taj-branded resorts on the islands of Suheli and Kadmat in Lakshadweep. Therefore, the objective of both IHCL and the Indian government should be to appraise environmentally conscientious practices and undertake initiatives to alleviate any adverse effects on the exquisite environment.

In this context, this paper examines IHCL’s initiatives within the framework of India’s environmental protection legislation, focusing on how they integrate sustainable practices into their operations and how well they adhere to regulations. By analyzing IHCL’s approach in Lakshadweep, this paper offers insights into the challenges and opportunities for sustainable development in the hospitality industry.

IHCL’s Commitment To Sustainable Development: New Taj Resorts In Lakshadweep And Achievements In CSR And ESG Policies

On 10 January 2023, the Indian Hotel Companies Limited announced the signing of two Taj branded resorts in Lakshadweep, with a slated completion date of 2026. They will focus on sustainable development while preserving its ecosystem in the unexplored territory of India. IHCL has a Corporate Social Responsibility Policy “(CSR)” obligation as per Section 135 of the Companies Act 2013. Their CSR policy has the theme of ‘Building Sustainable Livelihoods’ and they spend 2% of the average net profits of the Company made during the three immediately preceding financial years. Additionally, IHCL has a Sustainability (ESG) Policy which focuses on environmental stewardship, social impact, and transparent & ethical business conduct. Its sustainable policy shows IHCL’s commitment towards Sustainable Development Goals. IHCL has published its Sustainability Report of FY 2020-21 where they have reported that they have increased the use of renewable energy threefold in the past 5 years. Through this report they have shown their commitment towards the United Nations Global Compact and supported the Goal 12 (responsible consumption and production) of the Sustainable Development Goals. In this report they have shared that 47 of their hotels have achieved an Earth Check Platinum certification in the year 2020-21.

The Business Responsibility And Sustainability Report Of IHCL

In 2021, Securities and Exchange Board of India amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and replaced the Business Responsibility Report with the Business Responsibility and Sustainability Report “(BRSR)” which is a very comprehensive framework which provides Environmental, Societal and Governance “(ESG)” disclosures for the top 1000 listed companies by market capitalization from FY 2022-23. IHCL has also disclosed its BRSR of FY2022-23 as per Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

The BRSR of IHCL has provided a comprehensive data disclosure where it has shown its commitment towards ESG norms. It has established various procedures to ensure sustainable practices are integrated in their supply chain. Also, the company has a unified warehouse and distribution management system for hotels. This system has helped to reduce the Company’s carbon footprint of its supply chain. Apart from these IHCL is committed towards its legacy of “Giving Back to Society” by supporting heritage tourist sites and nurturing the environment.

In this report the total amount of construction and demolition waste has increased to 1525.72mt in FY2022-23 from 261.79mt in FY2021-22. They have generated twice the amount of waste from construction and demolition in one financial year. Their plastic waste has also increased from 73.28mt in FY 2021-22 to 173.26mt in FY2022-23. Additionally, this report shows that they have recycled 4275.46mt of waste generated in FY2022-23, while in FY2021-22 they have recycled 2530.01mt of waste. Also, in this report they have provided details of the adaptive measures taken by them for the adverse impact caused to the environment. For example- introduction of a “Glass Water Bottling” plant, no use of CFC refrigerant, returnable glass bottles, wooden amenities, etc. The myriad reports ranging from the CSR policy, the Sustainable (ESG) Policy, the Sustainable Report of FY2020-21, and the BRSR of FY2022-23 released by IHCL, show its commitment towards environment regulations and norms in India.

Environmental Protection Legislation in India: Coastal Regulations and Environmental Impact Assessment

In order to preserve and protect the environment, the Environmental (Protection) Act 1986 was enacted by the Parliament of India. Under the Environmental (Protection) Act 1986, the Ministry of Environment Forest, and Climate Change has issued notifications to protect the environment. Notification 2011 was issued to protect the environment of coastal regions. Recently, the Coastal Regulation Zone Notification of 2011 has replaced the previous 1991 notification. It restricts construction activities in the “No Development Zone” area which is within 200 metres from the “High Tide Line”. There are certain exceptions available to this restriction like for certain uses pertaining to agriculture, horticulture, garden pastures, parks, playfields, etc. Additionally, the development of vacant plots available between 200 to 500 metres from the “High Tide Line”, require permission from the Ministry of Environment Forest, and Climate Change. Apart from these restrictions there are other restrictions too under this notification.

The Environmental Impact Assessment “(EIA)” is designed to proactively identify and address potential environmental issues in the early stages of planning. Introduced in 1978-79, the Environmental Clearance Process underwent a comprehensive review in 2005, resulting in a revised notification on 14 September 2006, replacing the 1994 EIA Notification. The Ministry of Environment Forest, and Climate Change mandates certain projects to obtain prior environmental clearance, making EIA mandatory for 29 categories of developmental activities with investments exceeding Rs. 50 crores under the Environmental (Protection) Act 1986. Coastal States/UTs must formulate Coastal Zone Management Plans “(CZMPs)” following the CRZ Notification 1991, seeking approval from the Ministry. Revised CZMPs/clarifications have been submitted by the State of Goa and UTs of Daman & Diu, Lakshadweep, and Andaman & Nicobar Islands. Therefore, the projects being undertaken in Lakshadweep by IHCL, must adhere to these environmental regulations.

Conclusion

Although Lakshadweep is the smallest Union Territory in India, it carries great significance in terms of geo-politics aspects. Increased tourism in Lakshadweep will help in the overall development of the island, however, we cannot forget the fragile nature of islands. Thus, we conclude that the resorts, hotels, infrastructure, etc., of islands must be such that it follows the ‘E’ of the ESG policy to bring about sustainable development. IHCL follows a CSR policy, focusing on “Building Sustainable Livelihoods” and aligns with ESG norms through its Sustainability Policy. Despite increased waste, IHCL stays committed to environmental mitigation. We remain hopeful that IHCL will diligently adhere to India’s regulatory framework, which includes compliance with the Coastal Regulation Zone Notification 2011 which restricts coastal construction, and the EIA process, revised in 2006, mandates environmental clearance for certain developmental activities. These regulations play a vital role in the functioning of ESG policy indirectly in important coastal regions like Lakshadweep which require more in-depth analysis when it comes to their beaches, community, resources, etc. IHCL should regulate the construction and demolition waste and increase the use of the renewable energy sources. We hope that the scenic beauty and the coastal environment remain intact even after the construction of two Taj resorts; and IHCL follows all the environmental regulations in the Lakshadweep Island.