@Arun Jaitley- Just one Amendment to the Companies Act will save 1000s of trees every year

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Shri Arun Jaitley,                                                                                Hon'ble Minister, Corporate Affairs, Govt. of India,                        Shastri Bhavan, New Delhi.

Sir, you have been known to take bold and proactive steps. Please pass a law that makes it compulsory for companies NOT to print Annual Reports, Auditors' Report, Notices, etc as part of your Ministry's green initiative. This will save paper and save trees. This will in turn increase India's forest cover, prevent soil erosion, re-charge ground water table, etc. It will save huge cost in energy as well as postage.

Channelize the money saved

Money thus saved by companies could be put to purposeful use.

  1. A sizeable percentage of this must certainly go for environment-related work such as afforestation, regeneration of degraded forests, research and awareness programmes, funding green businesses
  2. could be used for CSR especially those meant to nurture forest-dependent and riverine communities and 
  3. Some part could be contributed to fund important Government projects such as Skill India, Swach Bharat, education, Yoga, sanitation, agriculture, tribal welfare, renewable energy.

What is in it for the shareholders?

1. Incentive to shareholders for registering their e-mail IDs:  Sir, should you deem fit, you could advise companies to give about 25% to 50% of the cost of printing per copy as a one-time incentive to their shareholders for registering their e-mail IDs.

2. Companies could place on record how the savings were channelized:

  • Environment related – by the company per se and funding  for key governmental initiative
  • CSR  - in areas other than environment

​3. Would be wonderful if Govt of India could

  • congratulate shareholders for assisting in carrying out a green compliance initiative
  • GoI could acknowledge projects carried out through such funding and highlight it in the media – social, electronic, and print​.

Such steps would recognize shareholders’ as partners of and stakeholders in transforming India.

Shraddhanjali to Late Sri Anil Madhav Dave

Such a law when put into practice, would also be an apt Shraddhanjali to the committed environmentalist, Late Sri Anil Madhav Dave, Minister of Environment, Govt.of India, who passed away recently.

Sir, we urge you, therefore, to amend Sections 53 and 219(1) of Companies Act, 1956, for a stronger paperless compliance.

Background to this request

It is sad and shocking to note the amount of paper used to send notices, annual reports, budgets and auditor reports. The Ministry of Corporate Affairs in 2011 had taken some healthy steps to reduce cost of posting and speedy delivery of documents by permitting service of documents through electronic mode under section 53 of the Companies Act, 1956 in place of  service of document under certificate of posting. 

Similarly, to reduce the consumption of papers and speedy secure delivery, service of copies of Annual reports, Balance Sheets and Auditors Report etc.to the members of the company as required under section 219 of the Companies Act, 1956 has been allowed to be served through electronic mode by capturing their e-mail addresses available with the depositories or by obtaining directly from the shareholders.​

But this is not enough

As several shareholders might not have submitted their e-mail addresses, the companies are mandated to print and send by post their annual reports, auditors report, etc.

Some of these reports consist of more than a hundred pages. All companies put together, the total copies printed run into several lakhs, may be even crores of copies.

This means, that a massive amount of paper is used to print these reports, not to speak of the amount of papers used to proof read them.

An amendment to Sections 53 and 219(1) of Companies Act, 1956, for a stronger paperless compliance would be an extremely important green initiative on the part of the Corporate Affairs Ministry.

What about those shareholders who have not submitted their e-mail ID?

The Government can give companies sufficient time - say 6 months, to update their shareholders' database. The companies can post letters to shareholders asking them to submit their e-mail ID (they should be advised to create an  e-mail ID, if they do not have one). In the same letter, shareholders could be informed that henceforth Annual Reports, etc. will be e-mailed and also uploaded online and they could read/ download it at their convenience. When such reports are uploaded, an SMS could be sent to the shareholders' cell numbers, informing them of the same.

What about those who read keenly but can go through only the  physical copies?

Relatively speaking, such numbers are few; fewer still those who read the report in its entirety. While some are interested only in the story/ project reports, there are those who are keen only about the financial statements. For such shareholders, their concerned relatives/ friends could provide them with necessary printouts. Such printouts might run into a few thousands of pages but we save the crores. Hopefully in time, the requirement for printouts will reduce and stop altogether when people, for the sake of saving trees will

  • upgrade their skills to become tech savvy and
  • appreciate that our survival depends on the environment and trees are a huge part of this.

Sir, may you lead India into yet another significant transformation.

Thank you.

Sincerely,

Sujatha Nayak



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