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Green check on balance sheets

New Delhi, June 2: Under pressure from the green lobby, the department of company affairs (DCA) has made it compulsory for companies to attach a statement on measures taken on the environmental front to their balance sheets.

The environmental audit follows large number of court cases involving corporate giants, who have, in some way or the other, polluted the environment. It is learnt that detailed guidelines are to follow from the government to ensure that companies are not polluting the environment in the process of carrying out various activities pertaining to their businesses.

The provisions pertaining to the protection of environment has been inserted in clause 217 of the Companies Act. Earlier, the clause, among other things, required the company to furnish details pertaining to the conservation of energy and technology absorption.

Both multinational and domestic firms in India have been embroiled in litigation and accusations by non-government organisations on the issue of environmental damages being caused by them.

Both the MNC cola majors — Coke and Pepsi — have been involved in court cases where they were accused of defacing rock surfaces on the hills for advertising. In Kerala, Coke was accused of causing environmental pollution, in the course of processes involved in its production units. Clause 217 also requires other reports to be placed with the balance sheet like the state of the company’s affairs, the amount it proposes to carry to any reserves in the balance sheet, and the dividend amount it proposes to pay out.

However, several firms have been active, especially of late, in adopting environmental friendly measures of their own volition.

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