Sustainability today is no more a concept. It is a framework that provides direction to the Governance and influences the business strategy.
The need for sustainable development is no longer debated, what is argued, however, is how this should be achieved.
In India, we do see an awakening and evidence of the paradigm shift towards sustainability. It is important however that we understand this progression, identify the barriers and come up with strategies to overcome them.
The Bombay Chamber of Commerce and Industries (BCCI) and my organization Environmental Management Centre LLP (EMC) came up with a project to understand the “pulse” on Sustainability by connecting with some of the top leaders in the Indian business.
Interviews were conducted of Chief Sustainability Officers and their Teams representing 20 leading Corporates in India. Objectives of the Survey were
- To assess the understanding of the concept of ‘sustainability’ in businesses
- To understand to what extent Sustainability is mainstreamed into the business processes
- To learn about the Sustainability initiatives being undertaken and share best practices
- To understand the driving forces and future trends
I am presenting below some of the key findings of this survey. The full report ‘Business & Sustainability’ Survey 2017′ can be downloaded at BCCI’s website
Sustainability means different things to different people. Common phrases used to define sustainability included responsible growth, value-add through sustainability, conserving natural resources through inclusive growth, produce more with less, “profit, people and planet”. Not commonly used phrases include “less problems and more solutions”, “making sustainable living commonplace”, “sustainability means relationships” and lastly, “sustainability means newly articulated but ancient wisdom”
Top focus areas majority of the organizations studied were Energy, Water and Green House Gas (GHG) Emissions. Many have implemented renewable energy solutions to reduce their dependency on conventional or fossil fuel based sources of energy. All organizations surveyed mentioned initiatives on recycling of waste water. Being a common good, organizations have embarked on community engagement and taken initiatives to conserve and share this valuable and increasingly scarce resource.
All organizations are going beyond compliance and have taken initiatives to ensure that resources are used cautiously and more efficiently. Next or in many cases equal priority has been environmental management, health and safety (EHS). This is because risks of non-compliance on EHS are high. For some, sustainability program has evolved from the solid foundation built on EHS systems and processes.
We found that only few organizations have begun looking at Sustainability across their supply chains. There are few leaders who have put in place policies and requirements to bring up the standards of their vendors and suppliers. Organizations however recognize that it is a risk to ignore the supply chain since any slip up on this front will mar the company image and hurt the brand. As a result, these companies are renaming departments to include supply chain management, setting up procurement conditions asking for management systems (like ISO 14001 and OHSAS 18001) and forming supplier forums to support smaller companies. These requirements and facilitation is expected to raise the bar and help to monitor risks as well as improvements. Some organizations have stipulated business codes of conduct on infringement of laws like child labor and human rights and have developed guidelines which the vendors are required to sign and adhere to.
We expected that Innovation would be everywhere among the organizations we spoke with. Businesses believe that innovation promises to reduce dependence as well as improve productivity and providing new market opportunities. Many suggested that Innovation and Sustainability are closely linked. Leading organizations are teaming up with academia and investing in research, startups and such efforts, to develop new technologies. A sizable amount of investment is spent on R&D for such innovation which is expected to save money as well as lessen the adverse impact on society and environment. Some organizations are highlighting such innovations on the canvas of their corporate philosophy on Sustainability. However, resources for upscaling the innovation are not always available. There is also a low appetite from stakeholders –less encouragement from the Government, not enough of a push from the consumer and low interest from employees.
Largely the focus of all CSR activity is aimed at the benefit of the community. Most initiatives are in the areas of Education, Health & Sanitation, Skill Development and creation of Livelihoods. In line with the organization’s business, some offer to support the community with their needs for example a cement manufacturing company provides low cost housing to the community. Areas for implementing CSR projects are usually around the location of the organization’s projects or manufacturing facilities and units. Community transformation is the main objective of all CSR initiatives. Often the employees of the organization are roped in through volunteering programs to provide community service in the form of teaching, managing health programs and making donations. We found that sometimes compliances to CSR forms part of the KPI for the Managing Director of the business. CSR expenditures often exceed the 2% PAT requirement as per the companies act. Many businesses have been offering community support services even before the mandate and continue to do so without the pressure of the requirement. Large organizations find their CSR directives being derived out of the vision and mission of the Group as a whole. Of course, all business do not fail to take advantage of any opportunities that come up by way of doing CSR. It’s almost standard practice to do so.
Employee engagement and training of employees is believed to be an essential step in the organization’s roadmap to achieving targets, increasing shareholder value and growing the bottom-line. Raising awareness of the human resource on Sustainability and ensuring their meaningful engagement with the associated initiatives is critical. The general feeling is that the business will not be able to conduct sustainability initiatives without the involvement, constant support and understanding of its employees.
Businesses always look for Compliance, Competitiveness, Continuity and Collaboration i.e. the 4Cs. These 4Cs pave the path towards Sustainability.
No organization wishes to downscale or shut down operations. Business honchos lead with best practices while Governments keep pace with regulations and imperatives. Governments also encourage businesses to take up targets that are aligned to national targets on global issues of climate change. With the conversation around sustainability reaching a stage where actions speak louder than words, more and more organizations wish to demonstrate their commitment to the public and the world including their stakeholders.
There are many pressures other than social and environmental perspectives. Maintaining a balance is a huge challenge. How does a business ensure that they continue to operate when the business does not perform well financially? Here is where many resort to innovation in doing business. Sustainability is often the unintended result of this effort rather than the goal. This goal is to be financially viable. So it is ‘Smart Sustainability’ that the business is looking for.
For many, running the business within the constraints of externalities such as globalization, resource constraints and political stability was itself a challenge. Given these complexities, the process of communicating, convincing and committing to Sustainability has become a daunting task.
We therefore still need more evidence to prove that Sustainability is not just ethos or a responsibility but that it is material and can be monetized. This realization will send ripples across the supply chains influencing small and medium enterprises.
Certainly, the doctrine on Sustainability is not going to be limited to large corporates and multinationals. We will also see many organizations investing in Sustainability to spur innovation – there will be an increase in innovative technologies and materials which will improve products and processes. Employees will hold greater value for management who will invest more in aligning them to their organization’s sustainability goals. The Human Resource Managers may position sustainability related awareness and training as a Primer or core of Induction Program.
Sustainability is now seen as an opportunity – to cut costs, to increase revenue, to innovate, to look good and to stand apart. Sustainability will be the business strategy to be Future Ready. And here, the 4Cs of Sustainability will guide.
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