Month: November 2015

First the MDGs (Millenium Development Goals) and now the SDGs (Sustainable Development Goals)….all for a better tomorrow! In 2000, the Millennium Development Goalsset targets for the world, to reduce the proportion of poor and hungry by half and childhood mortality by two-thirds in fifteen years. Seeing the success of the MDGs, the UN and the world has decided on the Sustainable Development Goals for the next fifteen years. Copenhagen Consensus had asked the world’s top economists to highlight phenomenal, good, fair and poor targets, weighing up the social, environmental and economic benefits and costs. The United Nations Sustainable Development Goals were officially established in September, this year. Some of the objectives agreed upon by the 193 participating countries of the UN include eliminating poverty &hunger, promoting good health, education, gender equality, addressing climate change etc. Successfully meeting these goals requires a collaborative effort globally, and that’s where multinational companies come into play.

The Corporate Onus

Corporate Social Responsibility (CSR) is already a part of the Corporate culture globally. In India, the Companies Act 2013, has declared CSR activities mandatory for corporations with a net turnover of INR 1,000 crore or more, or a net profit of INR 5 crore or more. It is every corporate citizen’s duty to contribute to society and this is where an active CSR strategy sets some corporations apart from the rest. The establishment of the Companies Act has helped most corporations bring CSR processes into their DNA. The TATAs, Reliance and some of the big players were already practicing it and many others were probably forming their policies, when the Act came into being. The Act has provided an impetus to companies that were in the process and got others thinking, especially those who expect to fall in that bracket very soon. For these companies now is the time to get all their internal processes in place and introduce social responsibility towards all their stakeholders from employees to vendors to consumers. Instead of only monetary contributions, corporations are now taking on a more “hands-on” approach, using their resources to train youth in livelihood programs, employees volunteering to tutor children and some of them employing people with disabilities in their offices to name a few of the ways the corporations are engaging themselves. An important thing to note here is that it’s impossible for one company to be actively involved in all 17 sustainable development goals. Since some of the goals are industry specific, like healthcare, clean water, and sanitation, it makes sense for companies excelling in these particular sectors to focus on the CSR initiatives that tackle issues they’re equipped to handle. The need of the hour is synergy between the Global Goals set by the United Nations and also the activities mandated by the Companies Act in India. Once the companies have their processes in place and have produced a successful model of their CSR which has made a profound impact on people, their communities and their environment, they could then share this with the rest of the world to be replicated globally. References:

• http://www.forbes.com/sites/bobeccles/2015/10/20/un-sustainable-development-goals-good-for-business/
• http://www.theguardian.com/sustainable-business/2015/oct/12/united-nations-sdg-un-global-compact-sustainability-world-business-council
• https://sustainabledevelopment.un.org/

There are few things in this world which complement each other the way sustainability and CSR do. Organisations all over have the world have started to look at simple sustainability measures like waste management to drive home significant annual profits. According to a 2009 study by the Aberdeen group, organisations that can be categorised as ‘best-in-class’ are way ahead of their ‘average’ counterparts when it comes to cutting costs through sustainable measures. With companies following the triple-bottom line method of decision making, environmental sustainability is no longer considered to be a passing fad. Waste management, energy conservation, and reducing paper and water usage have helped organisations improve stakeholder engagement and build their reputation, without compromising on the profits they make. A well executed sustainability strategy helps build a business ecosystem on multiple levels. Let’s take a look at how your company can achieve significant ROIs through sustainability.

More Loyal Stakeholders

The 21st century consumer is extremely well informed. When it comes to making a choice between different brands, most people do a great deal of research before picking up a product. Your customers are acutely aware of environmental issues and the risk we face if we don’t address them. When you implement CSR strategies that focus on conserving the environment, you come across as a responsible organisation which isn’t just concerned about making money. As McGee Young says, they provide a meaningful way to connect with your customers.The chances of a customer buying your product or services improves substantially. Hence more sales results in higher ROI. Even employees are more inclined to work in a company which does a little bit more than just meeting environmental regulations. This results in higher employee retention, which reduces the amount of money you spend to recruit and train new employees. Increased bottom line translates to a higher ROI.

Extremely Low Initial Investment

You don’t need to pump in huge amounts of money to gain more from your sustainability programs. If they’re designed well enough, you could see a tremendous reduction in recurring expenditure along with a sizeable increase in return. For example, Staples has executed a number of sustainable projects that are directly tied to their operations. They replaced a lot of their existing products with those made out of at least 30% recycled content, completely phased out PVC from all their products, and started using paper made from 80% sugarcane waste in their offices. They’ve also reduced their energy usage by 15% square foot along with using green sources for 20% of their total power consumption. How much capital do you think they’ve spent on all this? Zero. Its not too difficult to see the higher ROI here.

Prepping For The Future

A lot of people are apprehensive about spending time and money on sustainability. Many are still unclear about the long-term results from a financial standpoint. Sustainable projects are essential to help your company adapt to the present and prepare for a future where traditional resources are most likely to be scarce and expensive. Setting up sustainable practices now will ensure that your organisation is capable of dealing with rising energy costs and unavailability of raw material in the future. For example, setting up biogas plants effectively eliminates almost all of your organic wastes, and can be used to produce fuel for generators which conventionally use fossil fuel like diesel or kerosene. Remember, to sustain your business, you need to sustain the environment around it. And the ROI is the Bonus.