‘How is sustainability transforming the business landscape?’ – Prof. Shrinivas Shikaripurkar

Bush fires in Australia, Floods in China and India, and heatwaves in the US are all incidents that have occurred during 2023 alone, with one common theme binding them, which is that these are impacting a planet which is getting enveloped by a potential climate catastrophe owing to global warming & climate change.

As per the latest Intergovernmental Panel on Climate Change (IPCC) report, a temperature rise of 1.5 degrees Celsius will rise by the early 2030s if this situation continues. It will also lead to even more frequent and intense extreme weather events. Climate experts are warning that these events could soon become the “New Normal” for humans.

We live in an interdependent world wherein activities in one part of the planet can impact another, and this is where the concept of sustainability gains precedence.

But what exactly is the perfect definition of sustainability?

Oxford Dictionary defines Sustainability as ‘avoidance of the depletion of natural resources to maintain an ecological balance.’ In the business context, a sustainable or green business would be a company/firm/enterprise that generates a minimal negative impact or creates a net positive effect on local, regional & and global environments by striving to maintain a balance between the 3 key elements often referred to as the Triple Bottom Line (TBL). TBL elements refer to the 3Ps, namely People (Social), Planet (Environmental), and Profit (Economic).

Consider an example of Indian railways, one of the world’s largest workforce employers. In northeastern India, Indian railways pass through dense forest reserves with an elephant corridor. For several years, the elephants attempting to cross the railway tracks were the casualties of train accidents, thereby impacting people (safety of the rail employees and passengers alike), the planet (elephant fatalities and their dwindling numbers), and profit (rail delays and cancellations at that corridor). Indian Railways came out with an ingenious solution, which was also a frugal solution. They installed amplifiers and downloaded the sound of the buzzing of honeybees from the Web. These amplifiers were installed at important elephant crossing corridors and were sounded a few minutes before the passage of a train near the elephant corridor. Elephants get irritated by the sound of the honeybees buzzing, pause for a few moments, and move away from the site, avoiding the risk of a potential collision for a while. Research studies & subsequent surveys found that the elephant fatalities went to zero, the frequency of trains was increased & the safety of all the stakeholders, including that of the passengers & the employees, was secured, thereby ensuring a win-win scenario for a sustainability strategy.

Enterprises that follow sustainability tend to protect nature and consciously conserve natural resources. This enhances the business’s image in the eyes of customers and other stakeholders and improves the availability of resources for everyone.

According to Forbes, as of Q4 of 2022, sustainability goals are top for corporate initiatives in the coming 6 months. This is promising as organisations everywhere deal with a growing mountain of geopolitical conflicts, continued fallout from the pandemic, rising inflation, and a possible recession.

Technology has played a pivotal role in helping develop sustainable business practices. Research by PwC UK, commissioned by Microsoft, models the economic impact of AI’s application to manage the environment across four sectors – agriculture, water, energy and transport. AI levers could reduce worldwide greenhouse gas (GHG) emissions by 4% in 2030, equivalent to 2.4 Gt CO2e – equivalent to the 2030 annual emissions of Australia, Canada and Japan combined. At the same time as productivity improvements, AI could create 38.2 million net new jobs across the global economy, offering more skilled occupations as part of this transition.

Let us examine a few examples of how corporates are furthering the sustainability cause:-

• The steel industry is one of the most carbon-intensive & yet Schnitzer Steel Industries takes a sustainable approach by recycling steel and other metals – and then transforming this recycled scrap into finished products using electric arc furnaces powered by hydropower, making the metal deficient carbon.

• Cochin International Airport, India’s first airport built under a public-private partnership (PPP) model, has scripted another chapter in aviation history by becoming the first airport in the world to operate entirely on solar power. It comprises 46,150 solar panels across 45 acres of land near the air cargo complex. Now, Cochin Airport will have 50,000 to 60,000 units of electricity per day available to power all its operational functions, making it “absolutely power neutral”.

But the million-dollar question plaguing businesses today is, “How do businesses quantify and measure their impact creation in terms of sustainability and social responsibility?”. The solution to that question is ESG metrics.

ESG metrics are performance indicators of a business’s operations with environmental, social and governance issues to help determine its performance and potential risks.

Examples of ESG metrics include:

1. Carbon footprint reduction
2. Employee Health & safety
3. Established Business Ethics
4. Diverse Board of Directors
5. Diversity & inclusion.

Organisational leaders may integrate principles of these areas into company policies, reports and operations through analysing or benchmarking.

A sustainable business model can also be a successful business model. The World Economic Forum’s Future of Nature and Business Report found that prioritising nature is a $10 trillion business opportunity that could create 395 million new jobs by 2030. The future is green!