Why Do Indian Businesses Need to Take Air Pollution Seriously?

Air pollution has become a critical issue in many developing countries lately. The issue has received a lot of media attention, especially since it is responsible for premature deaths and other health issues. However, what hasn’t been highlighted much is that air pollution has economic consequences too. The delay of goods and passenger trains, flights and freight during winter in Delhi due to haze is a straightforward example of how air pollution is affecting our economy. In India, air pollution was responsible for the equivalent of USD 505,103 million welfare losses in the year 2013, which is about 7.69 percent of the GDP that includes a USD 55,390 million equivalent of total forgone labor output. Unlike other risk factors, like traffic crashes, natural disasters, or terrorist attacks, the impact of air pollution is not visible to everyone, and therefore sometimes faces ignorance from the public. Of course, controlling air pollution may not always be within an individual’s capacity and would require action from various stakeholders and policymakers. However, as people or entities, we still have opportunities to ensure cleaner air and save thousands of lives.

Businesses in India are the second largest contributors to PM2.5, after biomass burning. It is the common perception amongst the business community that considerations for air pollution within business decisions are not good for business. However, this is not true. Air pollution is neither good for health nor the economy, and there are several reasons why businesses need to consider air pollution as a serious problem for their productivity.

Unhealthy Employees, Poor Productivity

Employees are the backbone of any business. Air pollution is harmful for health, responsible for the various diseases, like lower respiratory infections, strokes, cancers, asthma attacks, coughs, and chronic obstructive pulmonary diseases, It is evident from studies that higher ambient air pollution has a significant association with the number of times an employee takes time off work owing to illness, which directly affects the productivity of the business. Air pollution is also affects the recruitment process of businesses; many talented employees do not want to work in cities with higher air pollution. A study conducted by Bain & Company and the American Chamber of Commerce in 2015 for Chinese cities, found that 53 percent of American businesses operating in Chinese cities have experienced difficulty in recruiting senior talent, with the majority blaming air pollution. As pointed out by a recent story in the Hindustan Times, India is also started experiencing the same issue. To attract senior talent to work in polluted cities; some companies now offer compensation packages. In 2014, Panasonic was the first company to offer such compensation to employees sent to high air polluted cities in China. Another important reason to consider air pollution as a serious issue for business is the progression of stricter norms on pollution.

What Can Businesses Do?

In order to improve air quality, there are different solutions for businesses. Some interventions appear small, but have potentially large benefits and co-benefits. For example, encouraging employees to use public transport or ride share, rather than private transport. As per our estimation by using Census of India 2011 data, every year India’s formal workforce travels 140 million kilometers by cars and two-wheelers. Shifting a mere 10 percent of these vehicular kilometers traveled to public transport would significantly reduce air pollution.

Capacity building and employee awareness programs are other more natural strategies that business can adopt to fight air pollution. Many employees are not aware of how air pollution is affecting their health and how a small change in their behavior, like the choice of transport cooking fuels can help protect the environment. Additionally, there is little knowledge amongst many employees on air pollution, and the knowledge that exists is largely superficial. Providing training on a regular basis or recruiting already trained employees, like those with advanced degrees and specialization in environmental engineering and science would be a helpful step towards cleaner air.

Several Indian businesses are working directly or indirectly to mitigate air pollution problems. Some are doing it knowingly and some unknowingly. While some interventions are business-led, there are others that are mandated by government authorities. Since air pollution has now become a priority environmental problem in India, and there would be a chance that regulatory agencies come up with more stringent norms for businesses. Future norms might include businesses with minimal direct emissions, for example, financial firms, since these types of businesses are also responsible for air pollution via several direct and indirect sources.

Addressing the Data Gap

When a business introduces an energy-efficient technology, it results in multiple benefits that include a reduction in air pollution. However, this process is often undocumented, or not shared. If businesses are doing something good to keep our environment safe, then they must share this with others to encourage them. The sharing of data by businesses about the technology used in the industry also helps scientific communities and policymakers to understand the contribution of businesses for air pollution.

In India, there are substantial data gaps in the industrial sectors, and most of the air pollution emissions studies for industries are based on crude assumptions. There is a possibility that emissions rates from certain business activities have been reducing over time, and might not be visible to the scientific communities and policymakers due to data constraints.

Business can also calculate the life cycle air pollution footprint of their products to assess the opportunity for reducing air pollution. This process will help to identify the process change, technology improvement, and material substitutions to make their product more sustainable.

Some businesses have already made commitments towards improving air quality. Last year, heads of India’s prominent corporate groups, including Godrej & Boyce Manufacturing Co Ltd., Arvind Ltd, Kirloskar Brothers Limited, Dalmia Bharat, KPIT Technologies, Tata Motors, Mahindra Lifespaces and others, joined a high-level CEO roundtable, committing to Clean Air for All principles, to shape actions that can be undertaken by the private sector towards supporting India’s ambient air quality goals. However, more needs to be done. Increasing health problems, employee productivity and talent attraction must be of great concern to all businesses. They must recognise the problems associated with air pollution and act in ways so as to ensure cleaner air quality for all.