Sustainability in an uncertain world

Less than eight decades ago, there were just two billion people living on earth. Since then, the number has more than tripled to 6.7 billion. Despite the explosion in population, if the world in general is more prosperous than it was in the early 20th century, it’s because advances in science and technology have worked wonderfully well to beat the Malthusian prophecy: that the number of mouths to feed will eventually outstrip food production in the world.

Yet, there’s no doubt that the same advances in technology that made rapid development possible have also created imbalances. Global climate, for example, is experiencing unprecedented changes; humans are depleting natural resources faster than ever before (hence, soaring commodity prices); and the divide between the rich and the poor is only widening. For example, the world’s 200 richest people are worth more than all the other people put together.

The challenge that people around the world face today is simple, and that is to continue living in a way that does not jeopardise future generations. That means ensuring that global warming does not accelerate, natural resources, including water, are not depleted, and the divide between the rich and the poor is not deepened.

Most importantly, corporations need to realise that sustainability is not a discrete activity to be pursued by a “department”. Rather, sustainability is strategy and unless it forms the very basis of all actions at a corporation, it will not succeed.

Globally, there are organisations such as GE and DuPont that have already made sustainability the driver of their strategy. To kick-start a debate in India Inc., Business Today and DuPont decided to launch a four-part round table on sustainability. The first round table in the series was held in New Delhi on August 21, and took up the broad theme of “Sustainability in an Uncertain World” to get the debate going.

The heavyweight panellists comprised Dhruv M. Sawhney, Chairman & Managing Director, Triveni Engineering & Industries; R.N. Mukhija, Member of the Board & President (Operations), Larsen & Toubro; Vivek Bharati, Executive Director (Agriculture & External Affairs), PepsiCo India; Balvinder Singh Kalsi, President & CEO, DuPont India; and Yashashree Gurjar, Head (Corporate Social Responsibility), Ballarpur Industries. The round table was moderated by BT’s R. Sridharan.]

After a welcome address by BT’s Publishing Director Aseem Kapoor and opening remarks by Homi Bhedwar, Director of DuPont’s Knowledge Center, L&T’s Mukhija set the ball rolling by pointing out that his company has created a unique model for execution of every project at L&T. “While working on projects, our mind has always been concerned about what we are giving back to the community. And not only that, we are also trying to find ways of transferring our value system to the complete supply chain of vendors, distributors and others who work with us,” said Mukhija, adding that in terms of technology and development, L&T has worked on various energy management solutions.

“Due to conscious efforts, we have achieved a 10 per cent reduction in our power consumption every year. Similarly, with water, we are moving towards zero-discharge of water from our units. And this is not merely because we want to reduce our costs but because we have a vision of achieving growth through sustainability.”

Stressing on the need for sustainability in today’s world, Triveni’s Sawhney tapped into his own company’s experience to drive home the business rationale for sustainability. “As far as the sugar industry is concerned, Triveni has done a number of things quite well. First, our sugar plants are zero-discharge units, and that means we actually recycle all our water requirements.

Secondly, everything in a sugar plant is sustainable; so we use all our byproduct such as molasses to get ethanol and bio-manure. We have sustainable solutions in all the three fields we operate in—sugarcane, power generation and waste-water treatment,” Sawhney revealed.

He also expressed his concern at the poor farm yield levels in the country. He said that there is a scope to improve farm yields up to 60-70 per cent. “Today, there is an enormous problem of food security because of low productivity. We need to pay attention to why we are not improving our yields. I think what is missing is basic training and development for our farmers. First, there is not even a single ITI for farmers. So, you are in the hands of government extension services, which is not the most efficient way of enhancing farm productivity.

Secondly, everybody knows that retail-led demand can spur farm productivity but there are not enough incentives for corporations to solve the problems. Companies like PepsiCo will want to buy produce from farmers and so they have an interest in raising their productivity, but the system is not being supportive enough to encourage them. I believe India can’t grow at 10 per cent without agricultural growth being sustainable at 3-4 per cent,” said Sawhney, adding that his corporate social responsibility is to put more money into cane development, not just because it is a sustainable thing to do, but also because it will ensure that his company has ample raw materials and happier suppliers and these will, in turn, enable Triveni to make more money over the long term.

Managing a company that is a major consumer of water, Sawhney made some interesting points about the water industry. “We have always publicised that water should be treated as a raw material and if you don’t think so, you will be in trouble one day,” he cautioned the audience.

He also mentioned that because of wrong pricing, water is not being treated as a valuable resource by industry and households. “At Triveni, our view is to treat the effluent through primary, secondary and tertiary treatment so that it can not only be used for drinking purposes but also in boilers,” he said.

Focus on agriculture

Giving the discussion a slightly different angle, Vivek Bharati of PepsiCo cited some interesting numbers from the 2007-08 Economic Survey. He pointed out that the contribution of technology in the growth of the agricultural sector over the last 10 years ending 2007 is zero. “According to the Economic Survey, the gap between potential yields and actual yields in foodgrains range as high as 100-200 per cent.

So, the government must add to its own extension services to incentivise corporations with a track record in farm extension to improve farm productivity,” Bharati argued, pointing out that PepsiCo works with around 30,000 farmers under its direct contract farming operations and shares its cutting-edge technology and best agronomic practices with them. “But even government authorities can leverage our skills in the interest of the country. We would welcome offers for publicprivate partnerships,” Bharati said.

Giving an example of the kind of work PepsiCo is doing in India to drive its sustainable growth, Bharati cited the US company’s experience of producing basmati rice in the country.

Traditionally, Bharati explained, rice is transplanted from nurseries to fields and a lot of water is used in ‘puddling’ it. “Our scientists discovered that through some modifications, we can do direct seeding of rice into fields and that this can minimise water usage by up to 35 per cent,” Bharati revealed.

According to him, paddy cultivation requires 7,500 kl/hectare but direct seeding of paddy saves 2,250 kl/hectare. Direct seeding as a technique is not new, but Bharati said PepsiCo was the first to attempt it in India. “This year, we are doing 1,000 acres of direct seeding of rice. People accuse industry of guzzling water because they don’t look at the overall numbers. Eighty per cent of the water is consumed by agriculture, whereas industry uses only 6-7 per cent; the rest is consumed by households. If you can attack agriculture and make it sustainable on water, you have tackled the water issue,” he pointed out.

Incidentally, direct seeding can also cut down greenhouse gas emissions, Bharati explained. “Rice is a huge emitter of methane—1 tonne of methane is equal to 21-22 tonnes of CO2. Various research papers show that direct seeding of rice reduces methane emission by as much as 43 per cent. So, by moving towards direct seeding, we can make a huge impact on global warming,” Bharati noted.

Technology as a solution

On his part, DuPont’s Kalsi touched upon some of the most critical challenges facing the global community in the 21st century. “Today, DuPont is in its third phase of sustainability programme, where we have taken a much more holistic approach as we have included both human safety as well as environment protection.

And it is now fully integrated into our business models,” he revealed. Kalsi contended that only science and technology can provide answers to the problems facing the world today. “In terms of DuPont’s role in sustainability, our overall mission itself is sustainable growth. And the way we define sustainable growth is creating shareholder and societal value while reducing our environmental footprint across the value chains that we operate in. We have a history of taking action on some of the most pressing needs of society and working at the front-end of it,” he said.

Explaining his vision for a sustainable future, Kalsi said: “In future, there is a need for products that are safe, less toxic, and use fewer raw materials such as energy and water. As an ingredient supplier company, we supply products to all major industries that, in turn, face significant challenges in terms of both safety and environment. So, it is our responsibility to put our science and technology innovations to work in favour of our customers.”

Giving an insight into the sustainability scenario at the Avantha Group, Yashashree Gurjar said that being a diversified group, Avantha had sustainability as the common thread running through all its businessses. For example, in the paper business (Ballarpur Industries), Avantha doesn’t deplete forests anymore to grow pulp wood; instead it uses degraded land owned by more than 17,000 small and marginal farmers.

“So, it’s a win-win situation for us as we are not only greening those barren lands but also getting abundant raw material, which is in extremely short supply,” Gurjar pointed out. “Although it’s an easy proposition for us to grow pulp wood on agricultural land, we have chosen to avoid it because it is something related to our country’s food security.”

The panellists summed up the discussion explaining that it’s the responsibility of leadership to demonstrate by either their vision or through actions that sustainability is not in conflict with business and it’s truly a win-win for everyone. The event concluded with a vote of thanks by BT’s Associate Publisher Ashish Chadha.