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“Industries focus more on how they spend their profit rather than how they can make that profit.”
In conversation with Sustainability Outlook, Ms. Vikas Goswami, Head, Good & Green (CSR & Environmental Sustainability), Godrej Industries Ltd. shares her thoughts on sustainability in Indian Industries – its challenges and potential way forward.
What are the key drivers for resource sustainability for Indian industries?
How industries use their resources is extremely important - how they consume their energy, water and other required input materials such that the waste footprint gets reduced; the carbon footprint is reduced, etc. The concept behind all these concerns is all about being resource sustainable. No matter how expensive the input resource is -- the environmental costs or a part of the total costs may never be internalized. Hence, focus on resources sustainably has a simple driver: lesser the resource use for production, the more profitable the industry will be and more sustainably the resources will get deployed. The impact on the bottom-line is almost immediate.
Could you elaborate on the sustainability goals for the Godrej Group?
By 2020, Godrej aspires to create a more employable Indian workforce, build a greener India and innovate for good and green products.
By 2020, the Godrej Group aspires to train 1 million rural and urban youth in skills that enhance their earning potential through employability projects. Secondly, we aim to achieve zero waste to landfill, carbon neutrality, a positive water balance, 30% reduction in specific energy consumption and increase utilization of renewable energy sources through the Greener India projects. Further, we aim to generate a third of our portfolio revenues from ‘good’ and/or ‘green’ products and services. The senior management is committed and drives the sustainability agenda for achieving these targets. Godrej currently has 70+ production units across the country and each productive unit follows these targets.
What are the key emerging areas which will see greater focus by Godrej in the near term?
In the near term, Life cycle analysis and sustainability assessments of certain products are some of the emerging areas Godrej is currently looking into, other than its stated commitments.
What is the scope of the group’s sustainability commitment – does it also include stakeholders beyond the group’s employees?
Yes the group’s sustainability commitment extends to its suppliers as well. Last year we came up with a Suppliers Chain Sustainability policy. The Suppliers Chain sustainability policy includes all the basic tenants of sustainability- right from what you buy, how you buy it, transparency issues to human rights and child labour concerns. This is applicable to not just our tier-1 suppliers, but to all the suppliers. To begin with, we are looking at the top 100 suppliers who are our biggest volume players.
We are hand-holding our suppliers such that they are able to better understand the policy and take steps for its implementation. Just coming up with guidelines and policies is not enough and thus we are trying to see how we can help our suppliers take this agenda a step forward.
What are some of the key challenges faced by industries while pursuing sustainability goals?
One of the biggest challenges that industries face while pursuing their sustainability objectives is to bring all the internal teams at the same level of understanding regarding the nuances of sustainability and enabling them to take action. Another challenge is creating efficient management information systems. Real time measurement and recording of accurate data is a big impediment to taking sustainability linked actions.
What is your outlook for Indian industry in continuing its march towards sustainability?
For ensuring continuous action linked to sustainability, it’s essential to build the business case for it. The unfortunate part is that CSR which should have actually implied sustainability has now become synonymous with ‘charity’. Anything one does outside the industry’s four walls is considered as CSR, but if something is done to improve the internal manufacturing – it is not considered as CSR. Eventually this leads to industries focusing more on how they spend their profit rather than how they make that profit.
In today’s date, the management teams within certain industries do understand sustainability and are able to articulate its importance. In terms of policies issued by the Indian government in this sphere , Business Responsibility Reporting guidelines have indeed made a difference in the sense that people have atleast started looking at and thinking of sustainability as an important need today. Resource sustainability makes a lot of sense for not just a company, but also for a nation and for the planet. Any company which is not looking at resource sustainability is indeed missing a big opportunity.