Decarbonisation, e-mobility solutions, solar projects, and more: A look at how companies are prioritising ESG concerns
Today’s generation must be provided with practical skills that will enable them to continue learning even after they leave schools, colleges, and universities to find a sustainable livelihood and live sustainably, said Prof Manoj K Arora, Vice Chancellor, BML Munjal University at its recent Leadership Summit 2022 on Global Sustainability & the Corporation. Featuring policy makers, leaders, and entrepreneurs, the two-day summit deep dived into the need for sustainability in businesses. Even as India looks at becoming a net zero emission country by 2070, it won’t be inaccurate to say that business enterprises must be a part of the solution to our question of sustainability.
But navigating this transition – from a traditional to sustainable model – raises tough questions. What does a sustainable model look like? How does this change the job landscape in India? Most companies’ struggle with incorporating the ‘Triple Bottom Line’ of people, planet, and profit holds them back from becoming a sustainable, future-ready organisation.
Here are the highlights from Day 1
Flagging off the summit, Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise insisted that every great business leader needs to persevere to make the world a better place. “There's no simple answer to sustainable development. But we have to remember that as a race, we can’t compromise the needs of the future generations,” she said. Invoking the recent example of the pandemic, Shobana said that it made people more aware of their health and of those around them. Today, every single corporation is thinking more about their employees’ health. She went on to share her version of the 3Ps for business sustainability, which she had increased to five – care of people, being planet-friendly, inclusive prosperity, peace, and leveraging partnerships.
Sustainability and business performance
A recent IPCC report noted that India could face irreversible impacts of the climate crisis. Decarbonising the economy and daily lives is the only way to avoid the harsh impacts of climate change. The panel deep dived into the challenges businesses face in their sustainability journey and how they are trying to overcome them. Speaking about their efforts of decarbonisation, Mohit Bhargava, CEO - Renewable Energy Division, NTPC said, “Decarbonisation will largely happen due to our focus on renewable energy. We have a large coal-base capacity which we want to transition to a capacity that is less and less carbon intensive,” adding that the team is also working towards reducing water consumption in power plants.
Daimler India aims to move towards carbon neutral mobility by 2039. “In India, we planned to be carbon neutral by 2025. More than 75 percent of the energy we buy is sustainable. We've also linked the compensation of senior executives to sustainable goals,” said Satyakam Arya, CEO and MD, Daimler India Commercial Vehicles.
With a compelling vision to be the future of mobility, Mike Clarke, COO and CHRO, Hero MotoCorp highlighted how the company is investing in sustainable processes.
Kishore Jayaraman, President, Rolls-Royce, India, and South Asia revealed that they identified electrical and digital as the two pillars which will be the future. He said, “We started analysing data in all our processes and that evolved as we realised the future won’t be fossil fuels. We had to think differently and that’s how the electrical journey began for us.”
But the walk towards sustainability isn’t without challenges. The challenge in emerging economies, according to Srivatsan Iyer, Global CEO, Hero Future Energies, is the balance between economic growth and sustainability. “I believe that these challenges will be worked out as the world realises there’s no alternative,” he added. The panel also discussed how challenges could be turned into opportunities. The utilisation of ash from power plants is one such opportunity. Mohit mentioned that apart from using it in cement to build, ash has various other uses.
Developing organisational capabilities to meet sustainability goals
The ecological imbalance presents a crisis of unimaginable magnitude as the panel noted that the pressure towards being sustainable is now reaching a tipping point. One obvious solution to this crisis is how businesses use technology. “We have been developing fuel efficient mobility solutions. We have been the first to promote models with PS-6 regulations,” said Apurva Gupta, Chief Sustainability Officer, Hero MotoCorp.
Setting internal processes and targets is another way of mitigating challenges. Businesses today have a huge responsibility towards environmental preservation. Thakur Pherwani, Global Head - Sustainability, Dr Reddy’s Laboratories said that his team is in the process of deciding ESG goals which will pan out in various phases, such as short-term, medium-term, and long-term. “In the current context of the pandemic, digitalisation, stakeholder engagement is helping us build ESG strategies and framework for the organisation,” he said.
For Dorf Ketal Chemicals, the focus has been on resource efficiency besides chemical safety. Their focus areas include innovation for more efficient products, environmental sustainability, and REACH Registration (Evaluation, Authorisation and Restriction of Chemicals, operational efficiency and reducing carbon footprint), said Jeewan Mahadik, Senior VP, Global HSE, Dorf Ketal Chemicals.
But these efforts are as critical as changing the mindset of the team. Jeewan said that institutes should teach their students about sustainability, so that when they join a workplace, they are already aware about the importance of the matter. Influencing employees is an essential part of changing mindsets at Mindtree. The team encourages their employees to use solar panels, composting machines, and recycle water, shared Paneesh Rao, Global Head - Sustainability, Mindtree.
Learning and development for sustainability
Businesses can’t just measure performance in terms of maximising profits but also on the metrics of their environmental as well as social performance. ESG is set to be one of the most important factors influencing corporate behaviour. And as per reports, HR professionals are the key drivers for implementing sustainable business practices. Echoing the same, Dr C Jayakumar, CHRO, L&T Group, said, “Sustainability is about making informed, inclusive decisions. It impacts HR in terms of policy, procedure, and improving parameters.”
But for many, the responsibility of incorporating sustainability within an organisation lies with the management along with HR. Rajorshi Ganguli, President and Global HR Head, Alkem Laboratories, feels that the management decides the organisation's behaviour. “What kind of performance are you rewarding? How do people see you on the fairness scale? Accordingly, employees start emulating. Change can’t happen after putting a bunch of people in a training room,” he stated.
Reetu Raina, CHRO, Quickheal India, felt that it is critical to understand why the need for sustainability has risen before we make rules. She shared, “Sustainability arises because of disbalance.” With short-term goals, today’s businesses are moving from an industrial era to the knowledge era, “but we still had the old rules of the game to manage businesses. The context changed with the knowledge economy and that’s when it started creating disbalance,” she said.
Even as we discuss the role of HR and management, it is essential to remember that they need to be on the same page as the employee to make any change. The panel noted that the good news is the awareness today’s workforce comes with. Unlike the previous generation, we are looking at a young workforce that is aware and interested in making a difference. Lt Sandhya Suri, Head HR and Communication, Tesla Power USA, summed up the panel discussion stating that mindfulness is key. “Mentoring is an ongoing process, learning needs to be from both ends,” she added.
Here are the highlights from Day 2
Sunil Kant Munjal, Chancellor of BML Munjal University and Chairman of Hero Group conveyed an insightful message on the second day of the summit. He said, “Awareness about sustainability around the globe has been rising. Corporations need to ensure that they provide economic energy, jobs, economic activity and growth. Along with this, it is critical that organisations handle the sustainability crisis we see ourselves in right now.”
Balance between sustainability and entrepreneurship
With the vision of Atmanirbhar Bharat, a new wave of entrepreneurs are gearing up to tackle the problem of sustainability. Speaking about his organisation, Anmol Jaggi, CEO and Co-founder, Blu-Smart Mobility revealed that they got into electric vehicles a few years back. “Technology is going to disrupt the cost curve on lithium. That is going to lead to a mass adoption,” he said. Echoing similar sentiments, Utkarsh Singh, CEO and Co-founder, BatX Energies, said that lithium is the core of electric mobility. He said, “How can we create a circular supply chain so that lithium can be used repeatedly? That's what our team is working on.”
While we can’t deny the need for decarbonisation, many feel that it is unfair to expect developing countries like India to be on par with developed countries in their attempt to reduce emissions. Manish Dabkara, CEO and MD, EKI Energy helps organisations become carbon neutral. He noted that funds and resources are the biggest hindrances in our journey, even as we chase the target of zero carbon emissions by 2070.
The summit routinely posed the question of how sustainability can be achieved hand in hand with profit. While many struggle with the answer, Nimish Jain, CEO, Airtouch Solar India had an interesting example to share. Citing the example of smaller cities in Rajasthan such as Jaisalmer and Jodhpur, he shared how employment and quality of life have improved, thanks to the increasing number of solar projects.
Sustainability: A necessity or luxury
The panel noted that while private and non-government organisations are facing the pressure of achieving sustainable goals, it is perceived as an additional cost to the organisation - almost a luxury. In view of this, how can the state help? Appurva Appan, Senior Associate (Mobility), World Business Council for Sustainable Development said “Apart from technology, we need market mechanisms driven by the market and regulated by the government,” listing three technologies that will play a key role in the quest for sustainability – renewable energy, electric mobility, and use of green hydrogen.
Policies need to have incentives, said Dr Prateek Sharma, Vice Chancellor, TERI School of Advanced Studies, so that innovations can be put into action. Sharing how reducing emissions can lead to profits, he said, “A lot of energy is wasted in transportation of raw materials to manufacturing units. It is important for industries to realise they are not just cutting transport costs, but also reducing emissions.”
The panel also explored investor interest in the sector. According to YourStory Media Research data, a total of $67.29 million was pumped across 18 deals in 2020 in energy, waste management, and cleantech startups. Observing a rise in impact investment, Avisha Gupta, Partner, L&L Partners revealed that cleantech innovation witnessed the most interest. While tech is the first driver towards any change, Avisha said that consumer awareness and national regulations that keep pace with changing needs are game changers too.
All in all, various factors need to come together for businesses to find a solution towards sustainability. Atul Bagai, Head of Country Office, UN Environment Programme echoed that stating, “Government, state, and corporate will need to go hand in hand to bring about change.”
Role of CSR
“No matter how complex global problems seem, it is we ourselves who have given rise to them. They cannot be beyond our power to resolve.” The final panel began with these powerful lines, before learning from the panellists how their organisations are contributing to the environment through robust CSR activities. As per a TeamLease EdTech survey, a significant percentage of companies in India plan to increase their corporate social responsibility funding towards skilling and education in 2022.
Abhejit Agarwal, Head - Sustainability and CSR, Axis Bank said that corporates today need to look at CSR how they would look at their businesses - very impact-driven and well governed. “CSR and sustainability are intertwined. Companies need to think long-term when it comes to CSR,” he added.
Echoing similar sentiments, Kanika Pal, South Asia Head, Hindustan Unilever Ltd (HUL), said that sustainability and CSR are bucketed together in India. “HUL doesn’t have a CSR or sustainability department because it is a part of our day to day decisions,” she said.
Ravi Pahuja, COO, Raman Kant Munjal Foundation added that profit and purpose have to go hand in hand. “The companies that fulfil their CSR goals are most likely to become leaders and be rewarded,” he said.
But is CSR the only option to drive sustainability? The panellists believe that it again goes back to the mindset. Arun Nagpal, MD, Mrida Group stated that sustainability is truly about changing mindsets. And the thought was one that Ambika Prasad Nanda, Head CSR Odisha, Tata Steel also echoed. He said, “You don't have to read big books or undergo training. You just need to be responsible, speak the truth, and share resources.”
Summing up the 2-day event, Akshay Munjal, President, BMU said, “Education will take us closer to sustainability.”