Green Business for the future
We are all aware of the fact that in today’s day and age climate change is escalating quicker than expected, and pollution levels have risen significantly. Present and future generations' health and well-being, as well as their potential to flourish economically, are all in jeopardy. Appropriate solutions are needed now more than ever to ensure a cleaner and more sustainable future. The need of the hour is to acknowledge the fact that the earth’s resources are finite, as population and economic activities expand at a rapid rate, so does the pressure on earth’s natural resources that remain static in supply. The concept of sustainability comes in at this very juncture, and can no more be a matter of choice but a way of life applicable in every sector of development and economic advancements.
Climate change has resulted in a triple threat situation, which can cause serious damage in terms of, firstly, nature and loss of biodiversity through severe land degradation. Degradation of land can lead to massive loss in economic output especially for a country like India, majority of whose citizens take to agriculture as a means of livelihood. Second, threat from pollution. And finally threat from mismanaged waste disposal.
Taking the same into cognisance, businesses worldwide have realised that concerns relating to climate change can have detrimental impacts on their profitability. Hence, sustainability is increasingly being accepted as the way forward for businesses worldwide. Over the last decade, a rapid increase in these climate-related natural disasters has drawn the attention of a number of CEOs and eco-entrepreneurs, who are recognising these alarming patterns and making the required adjustments to help India meet its lofty sustainability goals.
Environmental sustainability will have a long-term influence on businesses in a variety of ways, including:
- Attracting newer customers: In today’s day and age consumers are becoming increasingly enlightened and aware of the environmental ramifications of unsustainable business practices and models. Hence, more and more customers are demanding industries to improve the environmental performance of their products. Consequently, the number of environmentally conscious clients is steadily rising. Green marketing may help a company's reputation soar, resulting in a positive brand image and a perceptible impact. Businesses that make an attempt to become environmentally conscious will have a better chance of establishing a market presence, which will likely result in new clients, client loyalty, and cost savings.
- Reduction of costs and creating a balance between sustainability and profit: Companies are experiencing significant cost savings through environmental sustainability-related operational improvements, in addition to the financial gains that result from greater competitive advantage and innovation.
How can businesses undertake this transformation into being sustainable?
The very first step for businesses would be to acknowledge the earth’s limited stock of renewable and non-renewable resources. It is crucial for businesses to reflect on their balance sheets and gauge whether their immediate profit is causing long term damage to the environment. Post this the next step would be to set for themselves scientifically backed targets for nature, climate and pollution. This would involve taking up a time bound framework to make their operations “net-zero” by adoption of circular models to effectively reuse and recycle resources. Many significant Indian firms have already made climate commitments based on scientific evidence. Over 95 emission reduction objectives have been committed by 57 Indian industries. Others have established goals for renewable energy and energy efficiency. The UN Global Compact has 400 Indian enterprises as signatories, which is a voluntary pledge by corporations to embrace universal sustainability principles. Finally, suppliers and trading partners also have to be subjected to a similar level of accountability. This would ensure a more holistic change as even if a company's internal operations are spotless, it may be outsourcing environmental damage.
India has a unique opportunity to contribute significantly to the United Nation’s vision of inclusive and sustainable industrial development (ISID) by virtue of its vast size of industries. Some Indian companies that are transforming their businesses to establish a more sustainable practices throughout their supply chain are mentioned below:
- The Tata Group has been proactively implementing principles of circular economy through resource efficiency using their "closing the loop" efforts such as sustainable packaging, waste-to-fertilizer production, and unlocking the value of industrial by-products such as fly ash and road construction.
- E-Choupal, a landmark initiative by ITC, has been successful in creating an efficient supply chain, tackling issues like fragmented farms, involvement of multiple intermediaries and weak infrastructure.
- The 'Greener India' project of the Godrej Group ensures that environmental sustainability is a critical component of their whole value chain. They have successfully reduced specific GHG emissions by 51 per cent, and renewable energy accounts for more than half of their energy usage.
- By manufacturing electric cars (EVs) and aligning with India's objective of large-scale adoption of EVs in the personal and commercial segments by 2030, Mahindra Group has been a vital actor in revolutionising mobility.
Apart from these businesses it is encouraging to know that there are several young entrepreneurs who are taking the idea of sustainability forward, focusing on creating eco-business models and actively introducing a mind-set of “sustainability first”. This is being realised through a new generation of environmentally-conscious products and services. An example of the same can be EverLoop by SAP that enables the circular economy by linking stakeholders across the waste value chain. They enable organisations to meet zero-waste goals by digitising the waste value chain, making it more transparent and traceable for both businesses and e-waste recyclers.
In addition to big conglomerates like SAP, over the past few years numerous enterprises are investing in green ventures in India. Several clean-tech startups in the fields of plastic, tech-enabled recycling, bio-fuel and energy efficiency have witnessed an increase in funding.
India's SMEs have evolved into an important engine of the economy over a course of time. According to the Confederation of Indian Industry (CII), India's 42.5 million SMEs employ over 40 per cent of the country's workforce and generate roughly 30 per cent of GDP. This is perhaps why India's government sees MSMEs (micro, small, and medium companies) as the most important drivers of the country's Sustainable Development Goals (SDG). Initiatives like “Zero Defect, Zero Effect” are all playing a crucial role in creating a dynamic ecosystem of multiple drivers ensuring sustainability. These efforts are assisting in the creation of a dynamic ecosystem of multiple sustainability drivers, enabling major enterprises to take a strong stance on energy efficiency, green buildings, and waste management, thereby advancing their sustainable enterprise journey.
India today has the potential to set a global example on how to achieve economic growth while being environmentally conscious. Apart from its growing focus on sustainable enterprises, resources available in India like world class innovation centres, research firms, incubators, auditors, social scientists and analysts can make a substantial contribution to the country's long-term sustainability and assist in creating a greater global influence.
This blog has been authored by Ishita Sirsikar.