Green is good

Can businesses continue making profits if they prioritise environmental sustainability? Going by some of the high-profile business books published in India recently, the answer is: Yes.

Narotam Sekhsaria, chairman of Ambuja Cements, believes that “environmental consciousness” is good for the planet and for business. This mantra has had a “direct beneficial impact on the bottom line”, and helped him command a premium price for his cement. In his book, The Ambuja Story (2022), he remarks, “Even consumers feel happy about buying from companies that are eco-friendly and run their business ethically.”

Using a mineral called fluorspar from the discarded industrial waste of a nearby unit of the Gujarat Mineral Development Corporation, his factory managed to lower the melting temperature in the kiln. Mr Sekhsaria writes, “We were able to cut down fuel consumption by three per cent. Cutting down electricity consumption by even a unit at the plant led to a saving of rupees 20 lakh annually. And as our production grew, the savings multiplied.”

Cement factories are concerned about dust because it can cause equipment to malfunction, leading to production delays and reputational risk. Mr Sekhsaria invested in dust control equipment at a high cost. As a result, there were fewer breakdowns. This prolonged the life of the cement plant. The dust-free environment gave him the confidence to plant a rose garden.

Indra Nooyi, former chairperson and chief executive officer of PepsiCo, was hit by the realisation that “millennial women and men flooding into the workplace” would not choose the company unless it “turned the corner on health and the environment.” PepsiCo then cut down greenhouse gas emissions, adopted waterless bottle-washing techniques, incorporated higher levels of recycled plastic in soda bottles, and published detailed sustainability reports.

In her book, My Life in Full (2021), Ms Nooyi discusses her “Performance with Purpose” vision. She writes, “We needed to join the global effort to restore the health of the planet and couldn’t wait any longer for more evidence on global warming. We had to be very open-minded, seeking out and embracing completely new ideas for our business in these areas.”

Innovation helps companies figure out how to be profitable as well as environmentally responsible. Michael Dell, chairman and CEO of Dell Technologies, believes that they should do this because it is the right thing to do and not because a regulator might show up one day. He also champions the circular economy in his book, Play Nice But Win (2021).

Apparently, he gave his engineers a challenge that they loved. It was about finding ways to minimise the environmental impact of their products without increasing the cost for the company. He writes, “With every single thing that we build, we think about how we can make it so that it can be deconstructed and all the parts reused.” Dell has a jewellery designer who makes rings, necklaces, and earrings from the gold in their printed circuit boards.

He adds, “Materials are a key source of innovation: recycling plastics and other materials from old computers into new parts and identifying opportunities to use waste materials — like ocean-bound plastics — resources that can be brought back into the economy. Accelerating the shift to a circular economy benefits us, our suppliers, our customers, and the world.”

Harsh Mariwala, founder and chairman of Marico, is another corporate leader who is serious about sustainability. In his book, Harsh Realities (2021), he writes about a gradual shift from fossil fuels to renewable energy, and efforts such as redesigning network routes, upsizing vehicles, consolidating warehouses, and improving vehicle utilisation for fuel efficiency.

Since water availability is critical for the company, it has been helping with dam de-silting projects to create additional storage capacity for rainwater. It is also involved in creating check dams near its operating locations in order to improve water table levels and irrigation. Marico’s water consumption is being offset by building farm ponds for local communities.

Mukund Rajan and Col Rajeev Kumar, who used to work for the Tata Group, and have co-authored the book, Outlast: How ESG Can Benefit Your Business (2021), spotlight Marico’s performance on environmental, social and governance metrics. The company invests in safflower and coconut farmers through long-term contracts to reduce the risk of supply shocks. It also trains them to strengthen agricultural productivity and multiply their yields.

In her book, Watershed: How We Destroyed India’s Water and How We Can Save It (2021), Mridula Ramesh, executive director of Sundaram Textiles, advises businesses to include water in their core business strategy in addition to sustainability reports and corporate social responsibility spending. Hopefully, businesses, starting with water, will embrace resource optimisation on other fronts. Caring for the environment, and making key business decisions in keeping with that agenda, seems to have translated well into commercial success for many.