‘Corporates need to build sustainability ecosystem’
Hyderabad: Sustainability is not a trend. ‘Doing good’ impacts ability to ‘do well’. It is the fusion of a growing economy, inclusive society and a thriving environmental ecosystem. When aligned, it enhances value for every stakeholder. However, it is still early days for the sustainability ecosystem in India. Most policymakers view it from the prism […]
Hyderabad: Sustainability is not a trend. ‘Doing good’ impacts ability to ‘do well’. It is the fusion of a growing economy, inclusive society and a thriving environmental ecosystem. When aligned, it enhances value for every stakeholder. However, it is still early days for the sustainability ecosystem in India. Most policymakers view it from the prism of cost vs benefit. Most imagine it is ‘far in the future’. Dr Vikas Singh, president, Crux Management Services shares with Y V Phani Raj where India and its corporates stand in terms of sustainability.
Late entrants
Business has largely been associated with creating value for shareholders, even if it came at the cost of other stakeholders. The corporate sector addresses sustainability narrowly. Its focus has been on compliance and other regulatory related issues such as waste management, pollution, and energy efficiency etc. Most others equate sustainability with traditional CSR programmes. However and especially in the last few years, we are beginning to see more responsible organisations, focusing equally both on environment and the economy. Organisations are only beginning to realise that investment in sustainability pays off financially. Companies are reducing packaging or even using recycled material to reduce the overall cost. However, businesses need to move beyond reducing costs.
Sustainability pays back
The corporate ecosystem needs to understand, focus on what they do but equally are mindful of the influence and impact they have on the entire sustainability ecosystem. They need to think long-term. Several large corporates and some well-meaning entities appreciate that the organisational future depends as much upon the economic, as social, and ecological contexts in which they operate. Some are nudging their partners, pushing several others into the sustainability compliance mode. Some others are voicing and solving societal issues, investing in environmental causes. It is being discussed in the boardroom, debated both on the shop floor, and in the market.
Aligning strategy
Corporates must work on aligning business strategy and sustainability to gain competitive advantage. Both the market and market cap are influenced by sustainability. It is going mainstream and must ‘permanently’ be on the board’s agenda. Most senior business leaders believe sustainability enhances competitive advantage and they will ‘profit’ from an intensive adherence to the framework. There are challenges too. Successful sustainability agendas often demand significant organisational change and have steep learning curves.
Value for money
Consumers reward and feel responsible to purchase products that are good for the environment and society at a ‘price higher than value’. They believe that the brands must invest in ‘sustainability’ and take the cost of and ‘recover’ it by positive publicity and the ‘rub off’ effect. It is important for marketers to align sustainability with the consumer interest.
Tangible impact
Consumers hit back and demand tangible impact, shunning those that price beyond value. They seek transparency, evaluate organisations on honest intent and robust effort. Sustainability-focused organisations gain from better employee morale, enhanced loyalty, higher productivity, reduced absenteeism, better talent, and positive employee engagement. It manifests in a positive environment and cohesive culture. Stakeholders such as suppliers, customer’s financiers and investors pride themselves to associate with responsible and ethical organisations. This shows up as lowering operational cost, higher consumer retention, pricing power etc.
Building ecosystem
The larger economy does better with sustainably focused organisations. Sustainability has a large bearing on growth and holistic economic development. The corporate sector cannot do it alone. Government must lead, practice and provide. Sustainability is not a ‘feel good’, nor an expression of good intent. Policymakers need to create an enabling ecosystem and drive the change.
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