Indian Corporates Putting Planet First
Putting Planet First – There is no doubting that industrialization has created new opportunities, but it has also created problems such as rapidly rising global temperatures, natural disasters, harsh weather, biodiversity loss, disease transmission, and growing inequality. According to data broken down by industry, the energy sector alone accounts for a staggering 56% of all emissions, followed by the manufacturing and construction sectors. 13% of it is accounted for by transportation.
The good news is that corporates around the world are increasingly aware of ESG problems and pursuing objectives other than maximizing profits and minimizdoubting risks. Additionally, Indian businesses are now exhibiting similar trend. Similar to their international rivals, they are likewise considering the ESG framework. In contrast to much-discussed CSR, which only seeks to hold a business accountable for its actions, the latter, which stands for Environment, Social, and Governance, is a concept that makes the business measurable and quantifiable through a set of defined standards. So how are Indian businesses doing in terms of sustainability?
Only one-fifth of the 586 companies studied published a thorough sustainability report in fiscal 2021. While the FMCG and hotel sectors saw a lot of disclosures, the cement, finance, and auto OEM industries also offered some cause for optimism. Nearly half of the companies examined in the cement sector declared their clinker ratios, whereas two-thirds of the companies examined in the auto sector have EVs in their portfolio.
Related Articles
Corporates Putting Planet First
Only 20% of the total organizations covered, or 464 businesses, were classified as “strong,” “leadership,” or “below average.” The remaining 80% were classified as “weak,” “below average,” or “adequate.” Entrepreneur India contacted some of these businesses, from the IT industry to the pharmaceutical industry to the cement industry (who were identified in the leadership and strong matrix of the Crisil Sustainability Yearbook 2022), to learn more about how they are maximizing the environmental, social, and governance (ESG) impact of their organizations.
INFOSYS
The Dow Jones Sustainability Index, which evaluates the ESG performance of businesses globally, includes this IT behemoth in addition to making it to the Crisil’s ESG rankings for the second year in a row. The corporation began taking climate action in 2008 and achieved carbon neutrality in 2020, 30 years before the deadline specified by the Paris Agreement. By 2030, it seeks to recycle 100 percent of spent water, send zero waste to landfills, and reduce absolute Scope 1 and 2 greenhouse gas emissions by 75 percent and Scope 3 emissions by 30 percent.
Future social responsibilities of the corporation call for increased employment of women. According to Bose Koorliyil Varghese, Director of Infosys’ Green Initiatives “By 2030, we want 45% of the workforce to be made up of women. Additionally, we aspire to empower over 80 million people with tech-for-good initiatives, provide over 10 million individuals with access to digital skills, energize local communities through flexible work options, and promote best-in-class employee wellbeing. A diverse and empowered board that promotes compliance, integrity, and transparency is one of our governance goals.”
MARICO
Numerous initiatives are being implemented in the FMCG industry, including a decrease in lamination-based paper packaging, a ban on single-use plastics, the use of recyclable packaging materials, and water conservation.
The goal of Marico’s water stewardship initiative, “Jalashay,” is to annually restore more water for the community than it utilizes for its own activities. Through this, 263 crore litres of water conservation capacities have been effectively built throughout India to date, which is more than three times the amount of water the company used for its operations in FY22. According to Saugata Gupta, MD and CEO of Marico, “We plan to construct 412 crore litres of total water harvesting capacity across India by FY25.”
DR. REDDY’S LABS
In 2010, the world’s largest pharmaceutical company set its first six ESG objectives for the coming ten years. Three objectives—water consumption, waste reduction, and ending the production of hazardous waste—had been entirely achieved by 2020, as had three others—water neutrality, energy consumption, and renewable energy. It joined the Science-based Targets initiative (SBTi) for lowering the carbon footprint, becoming the first pharmaceutical company in India and the third in Asia. It is the only Indian pharmaceutical firm to be listed on the Bloomberg Gender-Equality Index and has received recognition from the S&P Corporate Sustainability Assessment, the Dow Jones Sustainability Index, Frost & Sullivan TERI, and other organizations. One hundred percent renewable energy, carbon neutral direct emissions (Scope 1 & 2), and a decrease of 12.5% in indirect carbon emissions are also part of its ESG goals by 2030.
For external patients, it seeks to serve over 1.5 billion patients by 2030 by doubling current reach and aiming for 25% of new launches to be first to market by 2027. Internally, it seeks to contribute to a world where at least 35% of senior leadership positions are held by women. On the governance front, it is concentrating on growing stakeholder trust.
“We have updated our objectives for the upcoming ten years this year. According to G.V. Prasad, Co-Chairman & Managing Director, Dr. Reddy’s, commitment to ESG today requires a shift in perspective. The emphasis must shift from doing “less bad” to “maximum good,” from being incremental to being bold, and from merely focusing on mandatory corporate social responsibility to making sustainability core to business and strategy.
MINDTREE
The IT company achieves high ESG goals and has received numerous accolades for doing so. Its campuses all serve as zero discharge sites. It carries out the WOW initiative, a programme that disposes of recyclable material in a scientific manner and sends it for recycling. The 3R strategy (Reduce, reuse, recycle) makes sure that there is less freshwater usage. At its Bengaluru site, rainwater collection and the installation of recharging pits enabled it cut back on private water imports by 12.370 KL in FY22. It has made a commitment to spend money on green new construction at each of its facilities, as well as an increase in EVs and a sizable data command centre.
WHY ESG IS MORE IMPORTANT TO BUSINESSES NOW THAN EVER
In contrast to past times when it was viewed as purely a public relations strategy, attention to ESG concerns is quickly becoming essential to the long-term competitive performance of firms. The meaning of ESG has changed throughout time, according to Prasad. ESG must now go beyond checking off the compliance box. In addition, organizations must work to create positive returns for all stakeholders, consider the long-term value of the company and society, and collaborate with the appropriate groups to bring about systemic change. All of these actions must be taken internally by organizations.
says Tyagi “Governmental shortcomings have been utilized by activists as a campaign and proxy war instrument for years. Businesses that aggressively address ESG concerns can both set the standard for the sector and safeguard themselves from activist intervention.”
