Business

Driving resilience and profitability through sustainability

Updated : November 20, 2020 05:11 PM IST

The pandemic has bequeathed upon us several lessons that underscore the criticality of sustainability.

The COVID-19 crisis has not only threatened lives and livelihoods but also throttled the world’s social and economic structure and reminded us just how vulnerable we are in the face of nature’s fury. We have now realised that it takes just one black swan event to bring the economy to a grinding halt. The pandemic has bequeathed upon us several lessons that underscore the criticality of sustainability. Ground reality shows that responsible organisations with sustainability embedded over the years within the core of their business strategy have been able to cope better and somewhat blunt the brutal force of adversity with greater stoicism.

While the world of business is no stranger to the concept of sustainability, the question is whether enough is being done in greening our world, building resilience and mitigating the climate risks that lie ahead.

The growing disconnect

Today, sustainability is the hallmark of almost every large business and a key area of interest amongst stakeholders. With focused attention on sustainability goals, many organisations have an array of green certifications and milestone achievements to their credit. Their initiatives are credible, quantified and showcased in annual sustainability reports. Notwithstanding their active contributions, we as a planet are nowhere close to achieving the target of limiting global warming to below 1.5˚C, implying that there is a stark disconnect somewhere.

A quick diagnosis reveals two glaring issues. Firstly, it is an innate human trait of not endeavouring to make changes for the better unless the situation is dire. The current physical shock of the pandemic and recent power outage in Maharashtra are sobering reminders for the business ecosystem to improve its sustainable mindshare and ability to tackle portentous events. Today, it is largely the pandemic that is commanding our attention, but soon enough, it could be the repercussions of climate change, the perils of which can well be 10 times as severe.

Secondly, the situation calls for systemic and policy changes, which need to happen at scale. For example, there is a discrepancy between national and state-level policies when it comes to something like renewable energy. Also, policies keep changing every few years, the uncertainty then deterring private investment. Policies should be uniform, consistent and clear, and supportive of private initiatives.

Other challenges

The ongoing crisis has highlighted the need to revisit our antiquated labour laws. Policies that support temporary and liquid labour need to be framed to give the business the boost it needs. Water, an indispensable resource, needs to find its place (and price) going forward. There is a need for a true water pricing framework for agricultural and industrial consumption. The definition of ‘green’ needs to be articulated and standardised for industries to benchmark, measure and quantify the greening of their products and processes.

Industry forums and central-level campaigns need to push on raising consciousness and inducing consumer acceptance for green solutions that come at a premium. The country is also having to deal with huge Transmission & Distribution (T&D) losses when it comes to distributing energy. The Electric Vehicles (EVs) market is not supported by the current infrastructure, in turn dissuading consumers from migrating to greener modes of commute.

The solution

Apart from top-level policy and systemic changes, it is now time to honour and pursue the targets that have already been set for ourselves. A Public-Private Partnership (PPP) model can be explored, especially in the power sector—renewable energy space and energy efficiency adoption, but there has to be parity, consistency and a singular policy across states. The situation calls for incentivising green initiatives at least, if not punishing “brown” performers. There has to be consistency and persistence in policies, tariffs, documentation and processes. Businesses should be judged by transparent, open, global standards of sustainability. It needs to be pursued with a genuine intent of bringing about a palpable change, even it means taking ambitious, stretched targets rather than aiming for a low ceiling.

The pandemic has upended our operating assumptions in profound and unexpected ways while casting a long shadow of uncertainty over the future. Businesses have had to deal with situations that have never been explored before—such as remote working and labour shortages. Yet, businesses have had to make this model work for themselves, given no other choice. On the supply chain side, several organisations got together to share logistics pathways, which they wouldn’t have done otherwise. These have made corporates realise that merit lies in taking bold steps towards thinking of a different way of doing things—as long as it improves efficiency and is sustainable.

To illustrate, with increased automation, the displaced workforce can be upskilled for jobs of the future. With remote working being the changed normal, 70-80 percent of unnecessary commute can be avoided, resulting in a substantial reduction in carbon emission. Important international conferences can be held online, saving tons of fuel and the environment. All these points in the direction of looking at more efficient ways of working and conducting business. In fact, in the long term, sustainability automatically leads to profitability.

Growth and sustainability go hand-in-hand

Social and environmental sustainability leads to long-term profitability. To illustrate, if a business engages in zero-discharge manufacturing, then its investment in the process would automatically result in water-saving, and improved profitability over time. Also, an organisation that invests in lower carbon pathways would save later in carbon sequestration or offsets. The cost of adaptation is often much lesser than the cost of mitigation. So, there is no longer a trade-off between going green and growing business, and sustainability has become a simple, viable and desirable strategy.

The decision of Microsoft founder Bill Gates, to allocate a significant sum of his wealth to solving some of the world's most intractable problems, is an example of work benefiting social good. At Godrej Industries, sustainability is not treated as a competition. The business roots for collaboration in matters of sustainability. Through its Greener India initiative, it aspires to achieve zero waste to landfill, carbon neutrality, a positive water balance, 30 percent reduction in specific energy consumption, and increased utilisation of renewable energy resources.

Conclusion

As businesses scramble towards initiating the Great Reset, it’s not merely about having a ‘responsible halo’ around a business; it’s about being realistic, grounded and sincere in matters of sustainability. The good news is that almost 80-90 percent of sustainable behaviours can be achieved at very low cost. It’s time to be honest and walk the talk—to honour the larger commitment of mitigating climate change. The more sustainable a business becomes, the better prepared it is to face crises that are lurking in the shadows.

—The author of the article Ramnath Vaidyanathan is General Manager and Head—Environmental Sustainability, Godrej Group. The views expressed are personal

Driving resilience and profitability through sustainability

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