89: Driving stakeholder well being through sustainable development: Anirban Ghosh, Head for Center for Sustainability, Mahindra University

The Elephant in the Room

Shownotes:

India was ranked 121 out of 163 countries in the 2022 Global Index of SDGs. It has also been identified as a global hotspot by the IPCC in terms of geographical and socio-economic vulnerabilities. In 2023 India is expected to become the most populous country in the world. As a rapidly growing economy with decades of infrastructure growth ahead of it, India’s energy demand and emissions are projected to double if not triple by 2050. Then there is the all important commitment the country has made to reaching Net Zero by 2070 (It is not as bad as it looks). Achievable, not achievable - whatever the verdict, India’s impact on the world’s ability to meet the SDGs or NetZero is undeniable.

To discuss the role of the private sector in helping countries achieve the SDGs I recently spoke with Anirban Ghosh, Head for Centre of Sustainability at Mahindra University and previous Chief Sustainability Officer at the Mahindra group. In this freewheeling conversation we spoke about organisational purpose, stakeholder priorities 👇🏾👇🏾

👉🏾 The key drivers for the private sector to start planning for, embedding sustainability and adopting ESG reporting?

👉🏾 The priorities for the Mahindra group on Sustainability and ESG reporting

👉🏾 The World Bank’s Carbon Pricing Leadership Coalition and its ambition

👉🏾 The challenges to India achieving Net Zero by 2070 considering it is one of the largest emitters, its dependance on coal and lack of funding

👉🏾 The role of the private sector in achieving the 👆🏾👆🏾and Mahindra group’s strategy on Net Zero

👉🏾 Green and sustainable growth - can this be a reality for a developing country like India

👉🏾 Just Transition - can this be a reality? How can we ensure people on the margins are not left behind

👉🏾 Corporate Greenwashing - and how big a concern it should be. According to Anirban the private sector has just about started on it - there is worse to come

We also spoke about what he likes about his job and what keeps him awake at night.

If you want to know more, head to the episode 👇🏾👇🏾

Memorable passages from the podcast

👉🏾 Good afternoon to you.

👉🏾 Currently I'm the Head for Center for Sustainability at the Mahindra University. Till recently I was the Chief Sustainability Officer of the group. Did that job since about 2014. And now we are looking at leveraging the centre to make a greater impact on the sustainability ecosystem. Three things that influenced my career. I think there's only one, which is chance. There are these lovely lines from a song by John Lennon which says "life is what happens to you while you are busy making other plans". And it just seems to happen every once in a while.

👉🏾 The sustainability job is very interesting. You can kind of create your day for yourself. There are two or three broad things that one needs to do. Of course, I must also look at it from the lens of what it was a few years ago, to what it is now.

👉🏾 A few years ago, a lot of the time was to take your colleagues along on the journey. Help them understand how they could leverage sustainability to do their own work better. And as a result, get all the benefits that a organisation could get by practicing sustainability. That was probably the biggest thing that one had to do, and figure out ways of doing it, so that it seamlessly became part of the organisation.

👉🏾 To be able to do that, one had to figure out or keep track of what was expected of organisations in the sustainability space. Because in regular business the expectations are very simple and clear. In sustainability, I think every organisation has spent a lot of time trying to figure out, so what is it that I'm supposed to do, and what makes sense for me and what doesn't make sense for me. So that's another important part of the role.

👉🏾 A third thing that the chief sustainability officer must do is continuously build competence within the organisation. Because if you have to, let's say, do energy efficiency or transition to renewable energy or crack circular economy, there are new tricks that you have to teach your colleagues. Which means that there has to be a very strong capacity building program to expose colleagues to new concepts, new learning and new technologies, which they can then adopt in the work that they do.

👉🏾 And while doing all this, it's important to build culture within the organisation, so that sustainability becomes a regular part of everyone's life. Awareness increases. So we have a program called ‘Make sustainability personal’, through which we do lots of interventions across the year, and typically engage upwards of 10,000 people. 10,000 colleagues within the group in some activity or the other.

👉🏾 In this function, the extent of external engagement is very high. The primary purpose of external engagement for me was to learn, to get a sense of what needs to be done, what are the new things that are happening, who's doing it well, who can be a partner and so on.

👉🏾 Over time as the work has evolved, there is an element of sharing your story and building your brand. But that's evolving now and it's probably going to be a big thing going forward.

👉🏾 Businesses have always had to have purpose. The purpose may have evolved. Milton Friedman said this a long time ago, when financial security, economic well-being were things that the majority of the population was searching for. And business was a way of creating value. In most parts of the world we've come along way. And in the course of our journey as economic wellbeing has improved or increased, we have created society in a way in which there are many who are underprivileged and many who are super privileged. This is probably why we are talking about stakeholder wellbeing more than shareholder wellbeing.

👉🏾 And asking about the role of an organisation in ensuring stakeholder wellbeing. We're also asking the question because in the pursuit of economic wellbeing, we have actually led to the degradation of environmental wellbeing, shall we say, or the degradation of natural resources. In a sense we were maximising the P & L and making a mess of the balance sheet. The assets that we use, I mean, clean air, water, soil, minerals. I don't think they're in any better shape today than they were 200 years ago.

👉🏾 And there are second order, third order impacts of let's say polluted air. Things which we are only recognising today cause it has gone out of hand. Another reason why it's important to understand societal wellbeing in a holistic way. We've captured all of it in the sustainable development books.

👉🏾 And for an organisation to be seen as a responsible organisation, I think the things that it has to do and the scale that it has to do it in, has evolved a lot. And hence the conversation on purpose, with the implicit understanding that purpose goes beyond financial wellbeing and goes towards addressing the health of society and the health of the planet in a much broader way.

👉🏾 For a business, the key reason is business resilience. Whatever we've done, let's say our organisation is 75 years old, whatever has helped us, in this journey of 75 years, we will need to do a few other things or a few things differently if we want to be around for the next 75.

👉🏾 So what are these other things really? And the conversation is very clear, you cannot do business by polluting the environment, you cannot do business by having a negative effect on the natural sources, mineral resources and so on. Also, I mean there will be pressures on minerals not being available in their virgin form. Things that we didn't have to deal with so far.

👉🏾 We know that there is this big problem of carbon dioxide in the air leading to global warming and that leading to these weather events and many other dystopian situations that we are facing. And that we cannot allow this to get out of hand. I don't know if you've heard the number, I read it in an article, which is quite old now, but the numbers stayed with me. That 71% of all the emissions in the world are caused by a hundred corporations, which essentially means that if we have to solve the emission problem, we've got to get the corporations to do something.

👉🏾 And most of these corporations are in the power sector because 74% of all emissions happen because of the generation of, consumption of energy. So suppose we don't solve this problem, when suddenly there will be all sorts of regulations from the government, there will be mandates to do, things which are not happening as of now. Because there is still hope that we will all take action and we will all do the right thing and cut emissions. We're miserably failing because every year emissions are increasing. So when things get out of hand, there will suddenly be all sorts of regulations and mandates. If you take action today and you make remarkable progress in your business, when the mandates and regulations come, you will be far better prepared than the ones who have not take action.

👉🏾 It doesn't necessarily mean that you will be an island of calm when the world is going crazy from a weather perspective. That is not possible, but at least you'll not be buffeted by regulations and merits as much as those who would've not made the effort. So, whichever way you look at, whether it is about reducing cost, identifying new business opportunities, being ready for future regulations and mandates. Being able to cater to the new needs of consumers, which are evolving category by category today. Whichever way you look at it, sustainability is about business resilience and about making sure that the business continues to do well. And in the process making a very positive contribution to the environment, the planet, the society and so on.

👉🏾 You know, mother of all frameworks is a GRI framework. It has gradually evolved, it went from guidelines to standards and so on. But it continues to be the mother of all frameworks. All other frameworks, including the new ones that are getting made, are variants of GRI in some form or the other.

👉🏾 In the Mahindra group, there are a number of platforms, we disclose sustainability information, I think at last count we were addressing upwards of 1500 questions. And the funny thing is the same question gets asked in a slightly different way. So I can't even say that, okay, there are 300 common questions or something. But the way we looked at reporting, we've always looked at reporting like that is, it's a expression of stakeholders on what they want the organisation to do.

👉🏾 Now some businesses will have a few things which are more important, a few which are less important for their business, for their business resilience and for their impact on society and climate. And like you were saying, the prioritisation comes from - the end goal is I will do business in a way in which my business continues to be resilient and does have a negative, hopefully have a positive impact on environment and society. Our definition for sustainability has been to build enduring business while rejuvenating the environment and enabling stakeholders to rise. So we look at all disclosure and reporting questions as things to do, to operationalise this definition. Yes, there are too many questions to answer, but today the sectoral questions are evolving. As long as you have the goal in mind, you don't have to be buffeted by millions of frameworks.

👉🏾 Okay. So all of us have to reduce emission. Not everybody is going to do it voluntarily. And beyond the point, it'll take a bit of a push to get the sort of reductions that we need to get. Carbon price is a tool that can be used to shape behaviour, to shape adoption of technologies towards things which are cleaner, greener, and good for the planet.

👉🏾 So actually, it can come in multiple different forms. So every time there's a new technology, a good technology, like say electric vehicles. We tell the government, oh, you must give us some benefits for this and you must cut some taxes. So that the technology, which as of now is economically not as viable as existing technology, becomes attractive to the people who buy it. It is a form of a carbon price.

👉🏾 What are you doing? You are reducing the barrier for adoption of a clean technology. You could have also said, okay, I will put a greater tax on fossil fuels, serves the same purpose. So it comes in very many different forms and the primary purpose of carbon price is to increase the adoption of clean technologies and give us, give businesses and people a chance to switch faster than we would ordinarily do. New technologies have been evolving all the time, nobody puts incentives to accelerate the adoption of new technology. But in this case carbon price is a tool and it is being discussed because we have a time limit. We've got to keep temperature rise below 1.5, we have to do it by a certain date, and if you let new technologies get adopted in the regular pace, that will not happen.

👉🏾 Actually the challenges don't lie in the use of coal and things like that.

👉🏾 The challenges lie in the availability of alternatives. Let's look at it from an energy security lens. If we reach a stage where we can use renewable energy, nuclear power hydro power, and all of this to meet our energy needs, why would we even want to use coal?

👉🏾 So if you are to shift the conversation from why are we using coal or when are we gonna stop using coal, to how do we increase the availability of alternatives? That can take us away from coal and fossil fuel, it'll be a constructive conversation, we'd all enjoy being part of the journey. And similarly, how do we ensure that we move from fossil fuel powered devices, vehicles, and other things too clean energy powered devices. So that actually is the real journey that we're on. Along the way we'll get rid of coal, we'll get rid of fossil fuel and so on.

👉🏾 Today, you don't have a choice. I mean, this is how we've evolved as a society, when fossil fuels got discovered we were delighted, when thermal power happened we were delighted. When plastics happened it solved many of our problems. But now we are seeking alternative solutions to all of this. So we'll get rid of it only when we have an alternative solution.

Massive. So this will happen only through business, because one of the primary driver is new technologies. So where are the new technologies going to come from? Somebody has to make it marketable, commercialise it.

👉🏾 Even if the development were to happen in some government lab or research institution, it has to end up getting commercialised. Therefore, businesses play a critical. And every single solution that we talk of, is it LED lamps or BLDC fans or inverter air conditioners, electric vehicles, just name it, any one of them. You will need a business that'll have to commercialise the product, of the service.

👉🏾 In the group, we've committed to being net zero on Scope one and Scope two by 2040. We will get there. When we made the commitment, we knew we will get there and we are making good progress to get there. The challenge is scope three, which is the emissions from say, a vehicle in use or the emitted carbon from the material that we buy, because those are not things we can immediately solve ourselves.

👉🏾 Even if we go a hundred percent electric, we're dependent on the grid becoming a hundred percent renewable. So that's where all of us will have to come together. I think the conversation on Scope 3 has started. People have understood that it is really a very big problem and we are able to get there because we've almost tackled Scope 1 and Scope 2. People are actually comfortable that this can be addressed, but Scope 3 is another animal all together.

👉🏾 It is not as bleak. There will be issues in just transition. If nothing else, say, let's assume for a while that use of thermal power keeps reducing, which means we need less coal. There are people who are mining the coal, what will happen to their livelihood. It is easy to say that, okay, there will be an alternative, something else will come by, but there will be some effort required to make sure that we take people along from different areas of society.

👉🏾 Actually, the taxis you saw are, after one round of culling. There was a rule that said 15 year old taxis have to go. So you probably never saw a old premier taxi anymore. Because they're all gone. Now you've got a second round of culling that has become possible. Part of the reason why the taxis are the way they are is because of how their industry's shaped up with app based cabs and for radio based cabs and regular cabs and how they've chosen to price each other, each product and so on.

👉🏾 So that is not in the ambit of our conversation, so we won't get there. But I share your angst in terms of terrible cabs that we get to sit in. Couple of days ago I sat in a clean cab and it was clean enough for me to tell the driver, to ask him, have you just done up your taxi? It just looks remarkably clean.

👉🏾 So, back in the day when taxis and taxi drivers were often the hero of Hindi films, or at least a very important part of Hindi films, taxis actually used to be done up very nicely.

👉🏾 Yeah. Even the autos. I mean, you could step into an auto, there'd be music playing. The fellow would have decorated the vehicle in some very nice way.