Invented by the Tata Energy Research Institute, the indicator will also help benchmark environment performance of corporates on a sectoral basis. A voluntary indicator, the rating will help corporates identify their key strengths and weaknesses and get themselves assessed against their rivals.

"Green ratings are being used in many developing countries like Indonesia, Phillipines and Brazil, where ratings are used as pressure mechanism as well as valuable inputs for raising their levels of adherence to environmental standards," sources said.

The Ministry of Environment and Forests has also asked for alternative assessment models to complement state agencies' efforts. Given the lack of infrastructure andthe increasing pressure of financial institutions to meet environment norms, Tata research institute's eco-rating may surface as the best alternative, analysts say.

This apart, the institute is also working on an effective link between the popular quality ratings like the ISO and the environment-adherence indicator. In the offing is a linkage between the eco-rating and the ISO 14001 certification. The rating will complement the ISO 14001 in two ways, according to the institute.

First, ISO 14001 focuses on management systems that requires an commitment towards `continual improvement'. However, the absence of tangible measurable indicators in the certification criteria give rise to skepticism about its ground-level efficacy.

The eco-ratings, however, provides a ready framework for assessing the actual performance level and the trend over a period of time.

Second, the eco-rating will complement ISO 14001 as it entails a gradient of performance levels. Corporates which have not succeeded in gettingcertifications can work towards a voluntary assessment under the scheme.

Certified corporates can use the indicator to monitor their performances over a period of time.

An added advantage of the voluntary eco-rating is that corporates may not make the assessment public. This will also ensure that the corporate which is being rated will participate in all key issues related to environmental adherence. Although the concept is yet to catch on, the Reserve Bank and the Indian Bank Association are likely to demand rating before granting working-capital approvals.