What is GRAP IV? How should corporates comply?

Mastering Compliance: Proven Strategies to Effectively Implement GRAP IV in Our Organization

Curated by:  CK Saikumar
Date: 20- Dec-2024

Before we venture in to complying with GRAP IV, first let us understand this acronym. GRAP stands for Graded Response Action Plan, a plan to combat air pollution and toxicity. This plan was more specific to Delhi- NCR region, not that other cities and towns are exempted from this plan. As mentioned earlier, this plan revolves around Air Quality Index (AQI).

The plan includes actions to be taken at different levels of air quality, from poor to severe plus (hazardous): (Source: https://www.airnow.gov/aqi/aqi-basics)

 

• Green – 0 to 50 – Good.
• Yellow – 51 – 100 – Moderate.
• Orange – 101 -150 – Unhealthy for sensitive Groups.
• Red – 151 -200 - Unhealthy.
• Purple – 201- 300 – Very unhealthy.
• Maroon – 301 and higher - Hazardous.

 

                                                                                                               (PC: Times of India) 

 

Actions are taken at least three days before the air quality index (AQI) reaches the projected levels. Some examples of restrictions that may be implemented include:

i) Banning diesel-run medium and heavy goods vehicles.

ii) Banning non-essential construction and demolition activities.


That said, India’s capital city faces this disastrous situation year on year and somehow the perpetrators go unscathed. Each year, Supreme Court has to intervene to put things in perspective. This year it had gone out of hands of the Supreme Court too. Very recently, Supreme Court (Economic Times – 23/11/2024, page 3) expressed its disappointment with enforcement of ban on entry of diesel trucks into NCR. Both Justice Abhay Oka and Justice Augustine G Masih were annoyed stating they will appoint 13 members of the Bar as vigilantes at the entry points to Delhi- NCR.

 

These two eminent judges were not annoyed for no reason. The Delhi AQI ubiquitously averaged between 260 in the afternoon of Diwali day (31 st October 2024) to 550 (between 6pm and 12am Nov 1). Again, on November 18 th it rose to 494. Apart from the reason of bursting crackers on this much awaited festival of the year to increased automobile pollution to debris dust from construction to no rain month with adverse weather conditions, to low wind and importantly the most horrendous the activity of agricultural stubble burning from neighbouring states who pay no heed to environment safety.

 

                                                                                                (PC: The Indian Express).

Well, the above statements are for just a reference to GRAP IV, but we, as corporate leaders, can do something to prevent this environmental disaster from happening year after year.

How do we do it from Corporate perspective?

In today’s dynamic regulatory environment, organizations must navigate a complex landscape of compliance. One such framework gaining prominence is the Generally Recognized Accounting Practice (GRAP) – specifically, GRAP IV. As organizations strive for transparency, accountability, and efficiency, mastering compliance with GRAP IV is also essential.

Let us help ourselves in understanding the urgency for GRAP IV compliance and its implementation within our organization. Following point by point approach will help corporates to seamless integrate GRAP VI implementation in their everyday operations.

 

• The successful implementation of GRAP IV begins with educating our team. Organize workshops and training sessions to ensure that all employees including senior management and Board members, understand the principles and requirements of GRAP IV. This will create a solid foundation and foster a culture of compliance throughout the organization. I am afraid top leadership teams of Delhi organisations failed to commit, and their apathy was also one of the root-cause for this disaster. (Why only blame corporate honchos, what about babus and cohorts of politician’s total disregard to this diabolical issue. FYI, there are two governments function from our capital city).
  

 

• Fostering a compliance culture is a must and cannot be overlooked. Deterioration of air quality is critical therefore it is everybody’s responsibility. Continuous abysmal air quality is going to cost lives, and we will be held responsible eventually. So, every resident, be it individual and corporate of that city has to own it up. It is time we did it as collective compliance.

 

• Every organisation must, as part of their Key Performance Indicators (KPI), include a transparent and honest declaration of the amount of their contribution towards deterioration of air quality or greenhouse gas (GHG). It would be even better, if they also admit the controls that are in place to reduce them with target date. This would also mandate a commitment from each managers to contribute in reducing the obnoxious health hazard.

 

• Another approach is to reduce usage of staff vehicles. Car-pooling or usage of electric vehicles can be encouraged by corporates. It is imperative for Delhi -NCR to shift rapidly to EVs. Somehow, the local government at tandem with federal government (if that is possible, given the constant and never-ending stand-offs!!!), should work closely in policy formation and support replacing all dilapidated public transport vehicles with new EV buses. Companies operating out of Delhi or its satellite towns must ensure that they do not engage diesel operated Medium Goods and Heavy Goods vehicles for transporting their staffs.

 

• Conduct Regular Audits on GRAP IV compliance is another facet of compliance. All corporate must create a taskforce within their compliance team demarcated for conducting regular internal audits on GRAP IV compliance, that will help identify gaps and areas for improvement. They provide an opportunity to review policies and procedures against GRAP IV standards. Additionally, they act as true source of reporting ESG related information in the financial statements transparently and factually.

 

• Engage and educate by partnering with company’s stakeholders especially suppliers and other supply chain members. Regularly communicate with stakeholders about our compliance measures. This could be through meetings, reports, or newsletters. Engaging with stakeholders ensures that everyone has a shared understanding of the organization’s commitment to compliance with GRAP IV.

 

• Businesses engaging in educational activities may pivot to online education (AKONTZ engages only in online management accounting course for CIMA) instead of physical classes. This saves them from travel and exposure to inhalation of toxic and malicious air.

 

• In continuation to the above guidelines for students, the same may be applied to offices and businesses also. Most functions can be made work-from-home (WfH) which will save travel and safeguard health. In worst case scenario, only key staffs should be asked to attend office, that too, once or twice a week. Rest can work remotely. This should be applied across all offices, be it private or Government.

 

• We will keep abreast with any regulatory changes. GRAP IV is not going to go away like COVID 19 (still exists in different mutations). It will continue to linger till the climatic condition change totally which is now a pipedream or alternatively a complete ban on burning solid waste, biomass and agriculture residue is envisaged. While the onerous task of monitoring and punishing is judiciary’s and administrations, we will stick to our initiative of reducing and controlling our contribution to the overall plight. We will keep our organisations informed of any regulatory changes or advisories.

 

• There is no harm in seeking external professional guidance. If our organization lacks expertise in GRAP IV, consider hiring external consultants or auditors. These professionals can provide valuable insights and guidance based on their experience with similar implementations.

 

In conclusion mastering compliance with GRAP IV is not merely about meeting regulatory requirements; it's about fostering a culture of transparency and accountability within our organization.

By investing in training, developing comprehensive policies, engaging stakeholders, seeking timely help and guidance from third party, our organization can navigate the complexities of GRAP IV successfully. Ultimately, this leads to improved trust with stakeholders and a more robust organizational reputation. Certified Management Accountant online course covers topics such as environment safety and anti-pollution at length.

 

Remember, effective implementation is not a one-time effort but an ongoing commitment to environment safety and healthy living.

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