SUSTAINABILITY - THE ONLY WAY FORWARD

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SUSTAINABILITY- THE ONLY WAY FORWARD

• Presentation
• By
• CA. Anil Sharma

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Facets of governance

• Fulfilling responsibilities (what)
• Performance (how)

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Facets of governance What?

• Economic returns,
• Legal and regulatory compliance,
• Business continuity,
• And
• Protection of interest of all the stakeholders.

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Facets of governance How?

• Vision,
• Innovations and initiatives,
• Business policies and procedures,
• Business ethics and fairness,
• Transparency and disclosures,
• Accountability
• And
• Maintaining balance between economic and social
  goals.

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Sustainability defined

• The natural resources are not inexhaustible and
  the development process should be aimed to meet
  the needs of the present generation without
  compromising the ability of future generation to
  meet their own needs.
• Brundtland Commission of UN Report 1987.

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Sustainability defined

• Economic development, social development and
  environmental protections are inter-dependent and
  mutually reinforcing pillars of sustainable
  development.
• UN World Summit, 2005

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Key Current Sustainability Issues

• Climate change
• Water availability/quality
• Sustainable consumption
• Consumer preferences
• Human rights
• Workers rights
• Sustainability is not simply about green
  economy, it is about the whole economy.

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Goals of Sustainability

• Triple Bottom Line Approach
• People
• Planet
• Profit

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TBL Approach- People

• Fair and beneficial business practices towards
• labour
• community
• Region
• HUMAN CAPITAL

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TBL Approach- Planet

• Sustainable environmental policies
• Reduction of ecological footprint
• Conducting life cycle assessment
• No ecologically destructive practices
• NATURAL CAPITAL

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TBL Approach-Profit

• Economic value created by the organisation after
  deducting the cost of all inputs including the
  cost of the capital tied up.
• Real economic impact the organisation has on its
  economic environment.
• ECONOMIC CAPITAL

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Entrepreneur vs.Social entrepreneur

• ENTERPRENEUR
• Engine of growth
• Harnessing opportunities
• Innovation to fuel economic
• SOCIAL ENTERPRENEUR
• tapping inspiration and creativity
• Courage and fortitude
• Seize opportunities that challenge and forever
  change established but fundamentally inequitable
  systems.

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Social entrepreneurs

• Maria Montessori.
• Muhammad Yunus Grameen Bank.
• Green Hotel by ITC.
• E-Chopal by ITC.
• Waste management to power generation by A to Z
  Maintenance Co.
• Azure Power project at Awan in Amritsar.

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Standards for sustainability

• Good things to do vs. Things to do.
• Regulatory mechanism provided minimum benchmark.
• Corporate Social Responsibility or Corporate
  Social Requirement.
• CSR as mission rather than as a challenge.

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Emerging Corporate Leaders Driving Sustainability

• A Survey conducted by Globe Scan and
  SustainAbility in March 2009 on 1600 experts.
• A credible public commitment to sustainability
  grounded in the companys core values is cited as
  a key factor behind experts choice.

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Conclusions of the Survey

• Sustainability strategies appear to be driving
  the necessary change.
• Companies that integrate sustainability as a core
  value are also expected to follow through with
  more sustainable products and services.

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New sustainability era on the horizon

• Businesses will have to grapple with a new
  concept of value that
• moves beyond a focus purely on profit,
• incorporates non-financial metrics, putting a
  new onus on the ability to measure and
  communicate progress.
• Businesses will need to
• measure both positive and negative impacts of
  business on society,
• track and manage sustainabilitys impact on core
  business drivers and metrics and
• embed sustainability in individual performance
  frameworks for managers across their
  organizations.

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Sustainability- important for future success

• Survey conducted by Accenture in 2010.
• 766 UN Global Compact member CEOs plus more than
  50 civil society leaders were interviewed.
• Core issue was whether rising global competition,
  technological change and the most serious
  economic downturn in nearly a century has any
  impact on commitment to the principles of
  sustainability.

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Findings of the Survey

• 93 CEOs see sustainability as important to their
  companys future success.
• 72 of CEOs see education as the global
  development issue most critical to address for
  the future success of their business. Climate
  change is second with 66.
• 91 of CEOs report that their companies will
  employ new technologies to address sustainability
  issues over the next five years.
• 58 of CEOs identify consumers as the most
  important stakeholder group that will impact the
  wy they manage societal expectation,

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Findings of the Survey

• Broader set of issues are starting to appear on
  the corporate radar as of increasing concern
• - Resources scarcity (water in particular).
• Health
• partnerships and collaboration are a critical
  element to sustainability issues,
  multi-stakeholder partnerships to address
  development goals.

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Financing by Financial Institutions

• The Equator Principles
• A financial industry benchmark for determining,
  assessing and managing social and environmental
  risk in project financing.
• The Equator Principles Financial Institutions
  (EPFI) have adopted these principles in order to
  ensure that the projects finance are developed in
  manner that is socially responsible and reflect
  sound environmental management practices.

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The Equator Principles

• EPFIs will only provide loans to projects that
  conform to the following principles
• Review and Categorization
• Social and Environmental Assessment
• Applicable Social and Environmental Standards
• Action plan and Management System
• Consultation and Disclosure
• Grievance Mechanism
• Independent Review
• Covenants
• EPFI Reporting

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Performance Standards of IFC

• PSs define clients roles and responsibilities
  for managing their projects and the requirements
  for receiving and retaining IFC support
• PS1- Social and Environment Assessment
• PS2- Labour and working conditions
• PS3- Pollution Prevention and Abatement
• PS4- Community Health, Safety and Security
• PS5- Land Acquisition and involuntary
  Resettlement
• PS6- Biodiversity Conservation and Sustainable
  Natural Resource Management
• PS7- Indigenous People
• PS8- Cultural Heritage

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Green Consumer Behaviour

• National Geographics 2009 GREENDEX Survey to
  monitor consumer behaviour that have an impact on
  the environment.
• Consumers in 17 countries surveyed in 65 areas
  including
• Housing
• Transportation
• Food
• Household goods

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Findings of National Geographics 2009 GREENDEX
Survey

• Consumers recognise the connection between their
  actions and environment.
• Increase in green consumer behaviour worldwide.
• 3. Consumers in India and Brazil top the Index.

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Sustainability an opportunity rather than a
challenge

• Finding of Survey The Sustainability Survey
  Poll on Climate Change
• Tremendous growth opportunities in the areas of
  renewable energy and low carbon products and
  services.
• Ideal opportunity for businesses to carve out new
  sources of competitive advantage and market
  leadership.

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Sustainable Growth Strategy

• AIM
• to achieve top-line growth and bottom line
  results
• MEANS
• Durable corporate venture strategy,
• Improving processes,
• Continuous improvement culture and
• Radical innovations.

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Case Study- Tata Power

• Sustainability Commitment
• Displacement, rehabilitation and sustainable
  development.
• Project
• Community Engagement Strategy Development.
• Approach
• Research and analysis on current regulatory
  environment around land acquisition and
  settlement in India, civil society positioning
  and global corporate best practices
• Consultation with managers and key civil society
  stakeholders.
• Results
• Development of actionable steps and guidance
  structures.
• Decision to apply community engagement practices
  across all sites.

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Case Study- DU PONT

• Sustainability Commitment
• Commitment to achieve sustainable growth and top
  the Green companies list.
• Project
• Stakeholder engagement- testing the waters.
• Approach
• Understanding current priorities of the company
• Role of stakeholders in informing business
  decision making
• To decide priority of chemicals, agriculture,
  biotechnology and nanotechnology.
• Steps to be taken to embed stakeholders
  engagement in the business
• Results
• Confirmation that market is already moving
  against hazardous chemicals
• Opportunities in areas other than chemical with
  radically lower environmental footprints.

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Case Study- HUL

• Sustainability Commitment
• Meeting everyday needs for nutrition, hygiene and
  personal care with brands that help people feel
  good, look good and get more out of life.
• Project
• Identify and better understanding of expectations
  of stakeholders
• Identify issues that are material to stakeholders
• Benchmark its strategy.
• Approach
• Desk research on issued for FMCG sector
• Engagement of Internal management and external
  thought leaders.
• Reporting strategy
• Results
• Identified five key platforms Health and
  nutrition, Empowerment of marginalised community
  through vocational education, Water conservation
  and reducing greenhouse gas emissions.

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Sustainability- the only way forward

• Companies like any living organism, must become
  learning organisations that change and adopt to
  suit their changing environment.
• If you dont practice the change management that
  looks after the future, the future will not look
  after you.
• Bill Gates

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• THANK YOU.
• Contact me at
• anil54_at_gmail.com
• 098-113-20203