Dr.Modak's presentation from the Orientation Session on Sustainability Reporting on 9th May 2013 at Bombay Chamber.

1. Prasad Modak
Business and
Sustainability
1Dr Prasad Modak

2. Growth, Business and
SustainAbility
Growth that meets economic, social, and
environmental needs without compromising the
future of any one of them.
WORLD RESOURCES INSTITUTE
2Dr Prasad Modak

3. TRIPLE BOTTOM-LINE
S O
C
I A
L
ENVIRONMENTAL
ECONOMIC
Financial, social, and
environmental effects
of firm's policies and
actions that determine
its viability as a
sustainable
organization.
http://www.businessdictionary.com/definition/triple-bottom-line.html
3Dr Prasad Modak

4. Green Growth, Social Inclusion
Low Carbon, Climate
Responsive
4Dr Prasad Modak

5. How Important is
Sustainability to Business?
5Dr Prasad Modak

6. FALLING IN LINE ….
Sixty Percent of the Fortune 500
companies within the next few years
expanded their strategic goals to reflect
Triple Bottom-Line issues
6Dr Prasad Modak

7. BUY IN FROM THE LEADERS
A survey by consulting firm Arthur D. Little:
83% of global business leaders believe they
can deliver significant business value by
implementing sustainable development
strategy and operations.
7Dr Prasad Modak

8. What are the
challenges
we face
? 8Dr Prasad Modak

9. Wasteful Use of Resources
• Phosphoric acid generates 500% waste gypsum
• One tonne of rock to produce one ounce of gold
• Five tonnes of wild fish to produce one tonne of farm
fish
• Energy resources - oil extraction is 35% efficient,
electricity production also 35%,
• Irrigation uses 80% of abstracted freshwater in the
world, but loses 65% of it before it reaches the farm.
9Dr Prasad Modak

10. POOR FLOW OF RESOURCES
INTO PRODUCTS
• Only 7% of resources end up in the product
• 80% of products are used only once
• Many products consume more resources during the
use phase than during manufacture
• Most product themselves become waste eventually
10Dr Prasad Modak

11. Ecological Footprint
Source: Donella Meadows
U.S./12.2 Acres
Netherlands/8 Acres
India/1 Acre
11Dr Prasad Modak

12. Commercial
buildings create
almost 20% of
Greenhouse gases
in the US.
12Dr Prasad Modak

13. Global Warming
13Dr Prasad Modak

14. New Paradigm on Business and Sustainability
14Dr Prasad Modak

15. “Our corporate reputation, specifically our emphasis on
environmental issues, has been vital to our ability to attract
and retain the best people. When environmental practices
become part of a corporation’s code of conduct, it attracts
customers to the company and employees to its jobs.”
Larry Babbio
Vice Chairman and President
VERIZON COMMUNICATIONS

16. “Sustainable development is not only becoming an
important public policy issue, it is becoming a
significant business opportunity.”
George D. Carpenter
Director
Corporate Sustainable Development
PROCTOR & GAMBLE

17. “With GSA purchasing more than $50 billion in goods and
services each year, it’s easy to see how significant the
impact that “greening” GSA can be. We’re a big buyer. We
know that when we say ‘this would be a good thing to do,’ it
matters to someone who is trying to make a profit.”
Dave Barram
GSA Administrator
PLANET GSA
(U.S. GENERAL SERVICES ADMINISTRATION)

18. Pressures for change
• Competition, Quality, Costs
• Resource constraint (water/energy)
• New regulations – Waste – Residues - Process –
Resources – Products – Rejects – Waste –Residues
• Public expectations -Social justice (ILO conventions)
• Transparency and Accountability
• Risks of reputation
18Dr Prasad Modak

19. RESOURCES
PRODUCTS
REJECTS WASTE
RESIDUE
PROCESS
ENVIRONMENTAL
REGULATIONS
BOD
SLUDGE
BLEACHING
WATER
USED PAPER
COATING
CHEMICALS
19Dr Prasad Modak

20. http://www.greensupplyline.com/showArticle.jhtml?printableArticle=true&articleId=192300815
Cost of Non Compliance
20Dr Prasad Modak

21. Three Examples of
Business in Textile Retail
Sector

22. Market leader in UK, but under pressure
Environmental code for clothing (1993)
Exploring EMS for major suppliers:not ISO
Global Sourcing Principles/ETI (1999)
Detailed supplier assessments on product and
production
Launched organic range (2000)
MARKS & SPENCER

23. Target of Clean Clothes Campaign
ISO14001 + Code of Conduct
SOCAM audited c.1,500 units in 1999
Child labour priority: TISSO
Narrower than other codes (eg collective bargaining), but
requires Oeko-Tex
C & A

24. Environmental Textile Standard (1992)
‘Future Collection’ range -- but only 1%
‘Ecological Suppliers’ scheme for hazards
Supplier training and auditing
Ethical code of conduct
Pilot SA8000 audits for suppliers
OTTO

25. Larger Impacts on Supply
Chains on Global Basis
Consortium Approach to Driving
Sustainability in Business

26. • Developed in Oct 2004 by companies engaged
in manufacturing of electronic products
• Participating industries included
– Celestica, Dell, Flextronics, HP
– IBM, Jabil, Sanmina SCI
– Solectron
Electronic Industry Code of
Conduct (EICC)
26Dr Prasad Modak

27. • The EICC outlines standards to ensure that working conditions in
the electronic industry supply chain are safe, that workers are
treated with respect and dignity, and that manufacturing processes
are environmentally responsible
• It includes
– Original Equipment Manufacturers (OEM’s)
– Electronic Manufacturing Services (EMS)
– Original Design Manufacturers (ODM) including contract
Labour
Scope of EICC
27Dr Prasad Modak

28. Section A: Labour
Section B: Health and Safety
Section C: Environment
Section D: Elements of an acceptable
system for conformity to code
Section E: Standards for Business ethics
The EICC Sections
28Dr Prasad Modak

29. • As a fundamental principle to this code, the
business and all of its activities must operate in full
compliance with the laws, rules and regulations of
respective countries.
• The code encourages it participants “To Go Beyond
Compliance”
Pushing Beyond Compliance
29Dr Prasad Modak

30. compliance
Supporting
Corporate
Objectives
Business development
and beyond
Economic Performance
EnvironmentalPerformance
Recent Trends – Going Beyond Compliance
30Dr Prasad Modak

31. The Upside
• Increased Sales and Market Share
• Strengthened Brand Positioning
• Enhanced corporate image and clout
• Increased ability to attract, motivate and
retain employees
• Decreased operating costs
• Increased appeal to investors and financial
analysts
31Dr Prasad Modak

32. Increased sales and Market share
Eco-lables have helped many industries to
widen and secure their markets (Century
Textiles in India, Misr Mahalla in Egypt)
The rural movement of HLL is an outstanding
example of how capacity building of the
community helped HLL to acquire a larger
market share of its products in the country.
32Dr Prasad Modak

33. Strengthened Brand Position
• It is estimated that more than 70% of the
Orchid Ecotel customers are repeat
customers because of commitment to
environment
• Companies with a public commitment to
ethics perform better on three out of four
financial measures than those without. These
companies also have 18.0% higher profits on
average.
33Dr Prasad Modak

34. Lowering of Costs – Increasing of
Profits
Case studies and More Case studies
• 100 Success Stories – Waste Minimization
Database of India
• 440 Case studies – International Cleaner
Production Information Clearinghouse
• TERI Awards, Green Governance Awards of
BNHS/ICICI , Vasundhara Awards in
Maharashtra
34Dr Prasad Modak

35. Example 1: Century Rayon
• Specific Water Consumption reduced form 90
litres/kg to 47 litres/kg
• Annual Savings of 7.8 million rupees
• Recycling of chlorinated water and reuse of
effluent water has translated into a annual
saving of 4.3 million rupees.
Ref: Case studies of Corporate Environmental Excellence, Cleaner
is Cheaper, Volume 3
Published by TERI
35Dr Prasad Modak

36. Example 2: Kanoria Chemicals
• Kanoria Chemicls and Industries Ltd has made water
conservation by recycling and reducing consumption
in its Ankleshwar Chemical Works Division, Gujrat
• The RO system implemented in 2003/04 has
managed to recover 530 cubic meter/day and reduce
fresh water consumption by 19% between 2001/02
and 2003/04
Ref: Case studies of Corporate Environmental Excellence,
Cleaner is Cheaper, Volume 3
Published by TERI 36Dr Prasad Modak

37. WASTE MINIMISATION CIRCLE (WMC)Waste Minimization Circles
RESULTS
(Economic Benefits from the Project)
(i) Number of WM options identified : 500+
(ii) Number of WM options implemented : 220+
(iii) Investment made by member units : > Rs. 10 Crores
(iv) Annual savings to member units : > Rs. 9.0 Crores
(v) Gross Payback period : <14 Months
Source : National Productivity Council
37Dr Prasad Modak

38. WASTE MINIMISATION CIRCLE (WMC)
Waste Minimization Circles
RESULTS
(Environmental Benefits from the Project)
Reduction in water consumption : 10-35%
Reduction in electricity consumption : 15-20%
Reduction in fossil fuel consumption : 10-20%
Reduction in raw material use : 10-20%
Reduction in waste water generation : 10-30%
Reduction in Air Emissions (GHG) : 5-10%
Reduction in solid waste generation : 5-20%
Yield improvement : 2-5%
Source : National Productivity Council
38Dr Prasad Modak

39. How is the Triple Bottom-Line
Changing Business?
39Dr Prasad Modak

40. Most important factor in forming opinion of a company
Survey: Altered Images
the 2001 state of corporate responsibility in India poll
40Dr Prasad Modak

41. THE TRIPLE BOTTOM-LINE
A Catalyst for Eco-Innovation
41Dr Prasad Modak

42. For many years community development goals were
philanthropic activities that were seen as separate from
business objectives, not fundamental to them; doing well
and doing good were seen as separate pursuits.
Cutting Edge innovation and Competitive advantage can
result from weaving social and Environmental
considerations into business strategy from the beginning.
And in that process we can develop the next generation of
ideas and markets and employees
- Carly Fiorina, Hewlett- Packard, 2003
42Dr Prasad Modak

43. Material Innovation by HP
• Elimination of the use of mercury in most of HP's
all-in-one products by replacing mercury-
containing scanner lamps with a new contact
imaging technology lamp.
• Products are thus less hazardous and compliant
• But this also makes the products easier to
recycle and adds to competitiveness of HP
43Dr Prasad Modak

44. Recognition and Branding
• Recognition for the HP Deskjet 6540 and
3740 printers as the 2004 Products of the
Year in the Best Green Computing Product
category for minimal environmental impact
and recycling by analog Zone.
http://www.hp.com/hpinfo/newsroom/press/2005/051101a.html44Dr Prasad Modak

45. THE TRIPLE BOTTOM-LINE
A Catalyst for Eco-Efficiency
45Dr Prasad Modak

46. ‘There is a difference between a good company and
a great company . A good company offers excellent
products and services. A great company also offers
excellent products and services but also strives to
make the world a better place.’
- William Clay Ford, Jr
Chairman of Board and CEO of Ford Motor
Company
46Dr Prasad Modak

47. Fords Escape Hybrid Taxi
The Escape Hybrid offers uncompromised
cargo and passenger volume, and has
proven very reliable and efficient. Some cabs
have accumulated more than 150,000 miles
of severe use with no major mechanical
problems, and taxi drivers are saving up to
$30 per shift on fuel.
http://www.ford.com/en/company/about/sustainability/2005-06/topicsMobility.htm
47Dr Prasad Modak

48. For cities, that fuel savings is the equivalent
of 32,000 pounds of CO2 emissions over a year,
or 100,000 miles. This savings could make hybrid- electric
technology well-suited to Mayor Wynn's goal of making
Austin the "Clean Energy Capitol of the World."
48Dr Prasad Modak

49. THE TRIPLE BOTTOM-LINE
A Catalyst for New Markets
49Dr Prasad Modak

50. International Market of Organic
Products
US$17.5 billion
US$ 8 billion
US$ 7 billion
US$ 2.2-2.4
billion
10-20 per cent
United Kingdom
(25-30 per cent)
• World market
• US market
• European market
• German market
• Annual growth
rate in major
markets
• Fastest growth
rate
50Dr Prasad Modak

51. THE TRIPLE BOTTOM-LINE
A Catalyst for Social Equity
51Dr Prasad Modak

52. Corporate
Social
Responsibility
Example: L&T
52Dr Prasad Modak

53. Increased ability to attract, motivate
and retain employees
The role of Tata Group of industries in
evolving a strategy for housing, healthcare,
and basic infrastructure would have proven a
costly proposition in the conceptual stage, but
after several years it proved to be a good
investment for boosting the company's growth
and productivity.
53Dr Prasad Modak

54. Tata Group… (continued)
"CSR is not another separate activity. It is an outcome of
business models that go beyond just financial viability.
Cost of helping communities to develop becomes the
cost of the business-like material or labor. Billions of
poor people have the potential to become part of the
market if helped. Before making the `poor' into a market,
business models must build sensitivities and capabilities
to reach the poor and underprivileged".
Anant Nadkarni, GM CSR Tata Group,
54Dr Prasad Modak

55. BNHS Green Governance Award
for Conservation of Fauna
Tata Chemicals Ltd. for outstanding
contribution in the protection of the
Whale Sharks in Gujarat State through
the participation of the local community.
55Dr Prasad Modak

56. Godrej & Boyce Mfg. Co. Ltd. for its
commitment to the global community to
protect the mangroves and promote
their conservation through extensive
environmental education campaign.
BNHS Award for Conservation
and Restoration of Habitat
56Dr Prasad Modak

57. Financing and Insurance
Community
Pushing Agenda on Sustainability
for Managing Lending Risks,
Guard Reputation and Get Value
Add

58. Increased appeal to investors and
financial analysts
• A recent survey by McKinsey &
Company confirmed that investors are
prepared to pay a premium of more
than 20.0% for shares in companies
that demonstrate good corporate
governance.
58Dr Prasad Modak

59. • Developed from the efforts of a small number of banks
working in project finance sector convened in London,
together with the World Bank Group's International
Finance Corporation (IFC) in October 2002
• To jointly seek ways to develop a common and
coherent set of environmental and social policies and
guidelines that could be applied globally and across all
industry sectors.
• This led to the drafting of the first set of Equator
Principles by these banks which were then launched in
Washington, DC on June 4 2003.
59Dr Prasad Modak

60. International funds of worth 12 trillion are
now under PRI by 70 signatory institutions

61. Environment today is where the
Internet was four years ago – on the
edge of a infinite paradigm shift.
62Dr Prasad Modak

62. Life Cycle Thinking is bring in new
models of G-B-C Consortiums
63Dr Prasad Modak

63. Sustainability is moving in Tiers

64. Indeed there is a Business
C$se for Sustainability
MAINSTREAMING
SUSTAINABILITY MAKES
A DIFFERENCE
65Dr Prasad Modak

65. Thank you for your attention
66Dr Prasad Modak

66. Prasad.modak@emcentre.com
www.emcentre.com
67Dr Prasad Modak