Indian companies are investing in sustainable product offerings, especially those in the export business, but firms in the B2B segment are realise a premium on environmentally friendly products, say industry players.
Kartik Bharat Ram, Joint Managing Director, SRF Limited, says getting a premium for sustainable products in the B2B segment will take another two years.
“Meanwhile, companies can look at the low-hanging fruit in sustainability by improving energy efficiency and going for renewable power procurement that can improve the bottom line. These can bring better margins without customers paying,” said Ram.
He was speaking at the Indian Chemical Council (ICC) conclave on 'Sustainable Chemical Manufacturing: Innovations, Integration, and Incentives.'
The meeting saw players from the chemical manufacturing industry brainstorm over sustainable products and frameworks for sustainable chemicals.
Industry players said that those in the export business have mandatory requirements from their customers in the West to put in place sustainable procurement and manufacturing systems.
“Sustainability products are more CEO level chat. Large European companies are asking their importers about ESG progress. It’s more about what you are doing by 2030 and they are happy working with you if you are constantly doing work on the ESG front," adds Ram.
The conclave also discussed measures that need to be adopted to make sustainable products saleable in Indian markets. Ravi Kapoor, Chairman, Sustainability Committee, ICC & Managing Director, Heubach Colour Pvt. Ltd., said the sustainability journey is more about a company doing the right thing and associating with the original equipment manufacturers to brief them about initiatives in this front.
The conclave explored the growing divide in sustainability expectations between B2B buyers and suppliers.
As per a recent survey, while 36% of buyers are ready to switch suppliers over unmet sustainability standards today—rising to 57% in three years—only half feel current supplier offerings meet their needs, despite 85% of suppliers embedding sustainability in their products.
The session highlighted the need for a new industrial sales model to bridge this gap and provides actionable strategies for suppliers to align with the evolving demands of sustainability-focused buyers.
Experts also called for creating awareness among sales and procurement teams about sustainable products.
Jenny Davis-Peccoud, Partner & Founder of the Global Sustainability & Responsibility Practice at Bain & Company, opined that companies need to segment products and customers on sustainability and then make connections according to the requirement.