Sustainability is not a buzzword, it’s our way of life. And why is it getting so much traction in business organisations is something which relates to the fact that all the stakeholders and not just shareholders are interconnected to the business. And one of the key stakeholders for any business is the society.
So, if there is such a close connection between the society and its future sustainability’s future implications, then I think it’s very important for organizations to realize that they have to play a proactive role in driving this agenda. The other thing is it’s a global issue and we see that there are more and more pressures brought in on business organizations to improve their adherence to this subject. And these could be from employees, especially younger employees.
Sustainability and Youth
So, when you go to a campus interview, one of the first questions raised by at the time of the interview is that what the organisation is doing in the area of sustainability because ultimately the youngsters will impact much more in their lives. There is pressure from board members also because it is getting traction. Even shareholders, especially foreign institutional investors, they go on asking for the organization’s track record in ESG.
There are advisories who also advise foreign institutional investors and they also track you and rate you on ESG. And then finally customers, you know, customers also are demanding more and more of you. What is the organization doing?
Marico and Sustainability
In Marico, we’ve been doing this for many, many years because we strongly believe that we are there for all the stakeholders. So, much before it started getting traction, we already achieved a lot in the past. This subject to get traction within the organization is very important that there is a high degree of alignment amongst all the employees and including the board.
Whoever is handling these issues, people who are very passionate about the subject and give exclusive responsibility to them so that there are no escape buttons at the end.
Ultimately, it has to translate into a yearly goal, three yearly goals, measure against the goals what the organisation has achieved and also review this in the board meetings which are normally quarterly. So, it’s very important to review this at the board level.
Sustainability Costs
I think there’s another perception that any initiative to improve in this area costs money and the financial payoffs may not be as attractive compared to some other investments which the organization may be doing. But I view it a little differently. In some cases, of course, the paybacks are low but the impact it can create in terms of improving the organization’s equity amongst all the stakeholders, its image at campuses or attracting board members or in capital markets or attracting new shareholders, even including customers, that’s not measured by most organizations.
I think that’s the invisible part which plays a very, very important role in terms of adding to the paybacks beyond financial paybacks.
I believe that the benefits far outweigh the costs and one has to do it with a firm conviction that this has to be done. And if that conviction is there amongst the promoters, amongst the top management team, then automatically, the first hurdle of no financial payback will get addressed. Overall, in terms of improving the organisation’s image, as well as in many cases, it will have some financial paybacks.
Sustainability Trends
First, there will be stringent disclosure norms and there will be transparency in reporting. So, as the stakeholders demand more clarity, regulatory bodies will are expected to bring in far more comprehensive and very verifiable ESG disclosures, ensuring accountability and fostering trust. The second is with climate impacts intensifying both public and private sector will invest in adaptive measures.
So, investments in this area are likely to increase and these include the development of climate resilient infrastructure, advanced water management solutions and initiatives to restore and protect biodiversity. And finally, we will see a surge in ESG investing.
Marico and Innovation
In the area of Marico Innovation Foundation, we have taken multiple initiatives. One is that we use a lot of plastics and every time I would speak at an event, there would be questions saying that what are you doing about the plastic which goes into the environment. So, considering this, we commissioned a study within the Institute of Science and Praxis Consulting, identifying ways to reduce, reuse and replace plastics.
And we identified 14 or 15 innovators who have been doing very good work in India in this area and we’ve been supporting them by providing accelerated scaling up opportunities. We have an in-house team and we also work with outside mentors who can help these organizations improve their overall scale up and add value to this area. In addition to that, we have signed up with a company based out of Hyderabad and we are prototyping a recycling project in Hyderabad which is based on very high speed machines which were identified in our study which I talked about earlier.
And this will go into production. It looks like a very attractive financial payback project. The key challenge is how do you collect the waste in the right manner and how do you process it and then can you actually link it to the brand.
For example, if I am able to sell the parachute bottles after the recycling is done and these machines are high-speed machines, they process plastics at the rate of six tons per hour and they are able to identify different brands based on the colour. It’s AI enabled and the output which comes out of the recycling machines is far better than any normal recycling machine. And if this prototype is successful, then we see opportunities for scaling it up not only in Hyderabad but also to rope in other corporates all over the country and make them interested in putting up facilities wherever they are present.
We also involve the other FMCG companies because if I’m able to show that this brand again I’m reusing the same plastics it has a positive impact on the customer also. So that’s one big initiative which is currently in the pipeline. We will get to know the impact of this within a year, year and a half.
And then we also do mentor many other organizations in this area. So we have worked with many organizations in terms of improving their effectiveness through external mentors and these would be in the area of improving air, water, land pollution. We work with an innovative organization which provides without filtration air purification technologies.
I myself have installed one at my house. We work with Indira Water which also solves the complex problem of water treatment in the industrial sewage segment with decentralized water treatment systems including those based on electro coagulation process. In the area of agriculture we work with many organizations to improve agricultural yields to reduce agricultural wastage.
And then we also work with technology in hard to recycle materials. So these are some of the initiatives which MIF has undertaken.
Passion & Purpose
My philosophy is in active giving you know. So whether it’s my personal philanthropy or it’s through the CSR part of Marico it’s active giving. It’s just not giving money as a donation to a hospital or school but actively participate because I think that’s what gives me pressure in terms of adding value and not just a financial commitment to any organization which goes into building an infrastructure or a school or a hospital.
And then the other thing which for making that happen you have to be passionate about that subject. So you have to choose a subject which you’re passionate about. And my third philosophy is that whatever I do I need to be a thought leader and a pioneer in that area.
And mental health we’ve done for last 10 years and much before mental health started getting traction in COVID. We also do a lot I do a lot of work in the area of entrepreneurship helping entrepreneurs learn from each other and scale. To me that’s active giving, that’s pioneering initiative and number three there are opportunities.
So there is hope that we can be perceived as a thought leader in all these three. I gave up my full-time operational role with Marico. I had enough time so I had to identify things which would keep me occupied.
So to that extent because I don’t have an operational role I have that extra time to devote to this.
Mantra for Next Generation
It’s very important in the next generation they are far more sensitive to the subject than all of us are at our ages because ultimately they will have to live in a world which can have a negative impact because of sustainability being taken lightly and the threat arising from there. So I find that the next generation is far more alive to this challenge to this threat and they would do it much more aggressively than all of us do it.
Union Budget 2025
In some cases if the financial benefits are not there can the government give some tax benefits in certain areas which improves incentives for say green manufacturing.
Whenever you adapt energy efficient technology, can you have a write-off? So any form of tax benefit will make it far more viable for businesses to address the financial paybacks.
The second is we believe that a lot of wastage is generated at household level and it has to be channelized in the right way to create a very strong circular economy which means that the wastage has to be reprocessed recycled and again sold back but for that again to happen it requires big investment the recycling projects.
Can the government again support the circular economy by giving some incentives so that so much of landfill which is lying you know each and every urban or even semi-urban areas of India can get address and it doesn’t increase actually starts reducing because of financially the recycling makes sense and it has a good payback and that can improve by the government giving incentives by government providing capital funds for recycling projects.
The third is the area of accelerated depreciation benefits for investments in renewable energy products such as solar and wind to encourage decarbonisation across industries. In terms of carbon market framework introduction of a robust carbon trading mechanism to reward companies actively reducing their carbon footprint will also help in driving this agenda.
And finally the small and medium-sized enterprises they are struggling to implement this agenda so can we do some targeted scheme for them so that they also adopt this and not just be big companies.
So I think these would this these would be my wish list for the budget for the next year.
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