The concept of sustainability has evolved due to environmental concerns, changing consumer expectations, and regulatory pressures.
In the modern business era, success is not just measured by profits but also by a company’s environmental impact. As climate change and resource scarcity concerns rise, more businesses are adopting sustainable practices, driven by consumer demand and the understanding that long-term success and sustainability are interconnected.
If we ask, ‘What is the primary goal of every professional, industrialist, producer, and seller?’ The most comprehensive answer is ‘Maximum Profits.’ However, how many consider that the relentless pursuit of profitability might be linked to the degradation of our planet’s health and sustainability?
Recent trends indicate a shift towards increased awareness and accountability in the business world, with long-term strategies now integrating sustainability with profitability. Companies are exploring new approaches guided by environmental sustainability mandates, not only in response to consumer demands but also to recognize the importance of maintaining the earth’s delicate balance for long-term success.
Innovation Driving Corporate Responsibility
The concept of sustainability has evolved due to environmental concerns, changing consumer expectations, and regulatory pressures. Companies are now redefining their focus and adopting new paradigms to balance profitability with environmental responsibility, making sustainability a key strategic requirement.Tata Group, one of India’s largest conglomerates,has been a frontrunner in sustainable business practices. Its various companies, including Tata Steel, Tata Power, and Tata Chemicals, have implemented initiatives to reduce carbon footprints, conserve water, and promote circular economy principles.
India’s ambitious goal of achieving 500 GW of non-fossil fuel-based installed capacity by 2030 is being met by innovation in renewable energy solutions and smart manufacturing processes, with around 170 GW of renewable energy capacity already reached in 2023.
Digital platforms and data analytics have enabled businesses to measure their environmental impact in real-time, enabling them to achieve sustainability targets and build trust with eco-friendly customers. Artificial intelligence and machine learning have led to predictive modelling, optimizing resource usage and minimizing waste. Companies like Reliance Industries and Mahindra Group are using AI and analytics to optimize operations and reduce waste. Tech Mahindra aims to achieve carbon neutrality by 2030 and net zero emissions by 2035 by increasing renewable energy in its energy mix.
According to a 2022 study by Harvard Business School, companies across industries are increasingly investing in decarbonization efforts to mitigate climate risks and capitalise on emerging opportunities. Thedata from Statista corroborates this trend, revealing that from 2022 to 2023, the annual global investments in clean energy sources and technology specifically relevant to the energy transition increased by 17 per cent. In 2022, the global investment in the low-carbon energy transition totalled 1.78 trillion U.S. dollars, signalling a seismic shift towards cleaner energy alternatives.
Tesla, a leading electric vehicle company, has gained recognition for its sustainable transportation solutions. However, it’s important to acknowledge that their production and supply chain processes may still have a significant environmental impact, necessitating a comprehensive decarbonisation approach.
Sustainability Disclosures
In an era defined by transparency and accountability, sustainability disclosures have emerged as a cornerstone of corporate governance. The research underscores the importance of transparent reporting in building stakeholder trust and fostering accountability. According to areport by the Governance & Accountability Institute, 86% of S&P 500 companies published sustainability reports in 2023, up from just 20% in 2011.
Companies like Unilever and Patagonia use sustainability disclosures to communicate their environmental and social impact to investors and stakeholders. Patagonia, known for its green commitment, is an example of transparent reporting by releasing an annual environmental and social responsibility report detailing its sustainability programs, successes, and challenges.
The Securities and Exchange Board of India (SEBI) in India has imposed stringent sustainability reporting requirements on top listed companies, promoting transparency and accountability. Companies like Tata Consultancy Services, Infosys, and Hindustan Unilever have been leading the way in embracing comprehensive sustainability disclosures, achieving carbon neutrality in 2020 and aiming for Net Zero by 2040. Infosys’ campuses are recognized as energy-efficient, while Hindustan Unilever aims for net zero emissions and 100% reusable, recyclable, or compostable plastic packaging by 2025.
Accounting for Climate Change
With climate change becoming a critical issue, businesses are forced to consider the financial implications of the matter. According to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI), climate change is perceived as the single biggest business risk for Indian companies in the next five years.
From carmaker Hyundai to skincare company Emami and PepsiCo bottling firm Varun Beverages, climate change—including unseasonal summer showers, irregular weather patterns, and varied rainfall—has begun to affect the bottom line of India Inc.
The Task Force on Climate-related Financial Disclosures (TCFD) provides a framework for companies to assess and report climate-related risks and opportunities, enabling investors to make informed decisions. SEBI’s Business Responsibility and Sustainability Reporting (BRSR) encourages Indian companies to disclose their climate-related risks and mitigation strategies.
The shift towards sustainable business practices is becoming a necessity for long-term success, as companies face environmental challenges. Indian corporations are recognizing this due to regulatory mandates, consumer preferences, and the interconnectedness between profitability and environmental stewardship. By integrating sustainability into core strategies, transparently measuring impact, and collaborating with stakeholders, businesses can create a future where economic growth coexists with environmental preservation and social responsibility.
Written by India Leadership Council (ILC) by The Times Group, an invite-only peer group initiative that brings together senior leaders from across India Inc. As a Membership based platform, access is reserved only for C-Suite Executives.
The community is now in its 7th year, and currently has 250+ Members across cities, all of whom collectively work towards the end goal of bringing ‘Change’ to the country’s business environment.