Uday Salunkhe - Enhancing Profits by Nurturing People and Planet


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This article talks about Enhancing Profits by Nurturing People and Planet. It has been co- authored by Dr. Uday Salunkhe, Director of the prestigious Welingkar Institute of Management and Research.

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Uday Salunkhe - Enhancing Profits by Nurturing People and Planet

  1. 1. ENHANCING PROFITS BY NURTURING PEOPLE AND PLANET NHRDN ANNUAL CONFERENCE- MUMBAI NHRDN RESEARCH COMMITTEE: Prof. Dr. Uday Salunkhe, Chairperson, (Group Director- We School)Mr. Vijayan Pankajakshan, co- chair (Director-HR-CHEP India Pvt. Ltd) Mr. Mohandas Nair (Educator) Mr. Vivek Sharma (Training Director, Max HealthCare) ACADEMIC PARTNER: WeSchool: Dr. Ketna L Mehta (Editor and Associate Dean, Research) Prof. Rimmi Joneja (Associate Dean, HR) Prof. Savitri Kulkarni (Associate Dean & Academic Head, HR) Prof Anuradha Mahesh (Associate Professor, Retail) Prof. Swar Kranti (Faculty, HR) Prof. Paridnya Soman (Faculty, Research) Prof. Rohan Athalye (Faculty, HR) Mr. Suyash Deshpande (Alumnus) Student Team Devanshi Vaishnav Merup Kapadia Anish Sohoni Neha Velani Anuja Misra Darpan Parsekar Neha Gupta Jyotsna Gujral Chintan Shah Adwait Atre 1
  2. 2. INDEXSERIALNUMBER TOPIC PAGE NUMBER 1 Preface 3 2 Abstract 9 3 Executive Summary 10 4 Triple Bottom Line- The Concept 12 5 TBL Reporting: Global Overview 13 6 Role of HR and Triple Bottom Line 14 7 GRI Reporting Framework 17 8 Globally Responsible Leadership Initiative 18 (GRLI) 9 CSR vs. TBL 20 10 TBL and Ethics 21 11 Literature on Sustainability 22 12 Profit, Planet, People 25 13 The Research 31 14 Methodology 31 15 Findings 32 16 Discussion 40 17 Conclusion 41 18 References 42 19 Appendix 45 2
  3. 3. PREFACE “A stool is stable only if it has three legs”.In Indian philosophy, the triad concept of Brahma (the creator), Vishnu (preserver) and Mahesh(destroyer) is the foundation of all life, and represents wholesomeness across generations andcenturies. The forces of land, wind, fire, water and have always been as an ecosystem in harmony.All of the above represent the eternal and timeless value of balance and alignment. It meansphenomena-living or otherwise- and systems search for that elusive perfect or optimum balance.The imbalance, over successive generations, was persisted due to the dominant modelof development through industrialization and the relentless search for economic profits and surpluses.The test of a first rate business organization was/is almost entirely attributed to the financial numbersthat it can deliver on the balance sheet and to the stock market.The dimension of people, to a lesser extent, and the planet to a ravaging extent, has been ignored. Wehave now come to a momentous period in our lives, when the planet and its people have raised theirloud voices - individually and collectively-against the inequities, misery and not so good outcomes oframpant single track industrialization.This ‘close to breakdown’ reality has been accelerated by the demise of the big and the small- in thelast many months. All ‘strategies of success’ and indicators of excellence have taken a knock on theirhead like never before. Seemingly, even working in the interest of the shareholders could not savemany Humpty’s from falling over in a big heap. 3
  4. 4. Beyond the economic disaster, is the rapid deterioration in faith of the ordinary citizen-anywhere inthe world- with his/her leaders, their employers and even the ‘so called regulators? In fact, the surgetowards rapid globalization and hence market dominance in any sphere of living, made manygovernance and regulator institutions defunct or toothless. The psyche of nations, societies, youngand old have been severely tested, coping with rapid and widespread job losses, compression indemand, scarcity of capital, weather and other natural catastrophes etc.Trust has been at an all time low. When trust break down, relationships do not get sustained andstrengthened. Sans trust between lenders and users, no value can be added. Trust is the onlysustainable lubricant for greater human to human and human to systems interfaces. This alone canlead to generation of greater and better value and raising the quality of outcomes for the eco systemof stakeholders.Business organizations in India and elsewhere have most often chosen- as a default mechanism- themodels of business success, leadership, from the West. Decades of education and training of thosewho are current business leaders and, now, the emerging business professionals have learnt how WallStreet is the supreme arbiter of success. This education, training has ingrained values/beliefs thatpropagate that it is smartness and intelligence that gets you ahead. Doing the right thing and doing itwell, relying on wisdom and core values have been ignored, derided and if followed, more in lipservice.We have come to an important point in history. What is the definition of success for a business? Issuccess a reflection in the mirror of economic well being? Is economic well being a super set of allother measures of success? There has never been a greater dichotomy in the list of the so called‘economically developed countries’, ‘the fast developing countries in economic terms’ and the list ofcountries in the Human Development Index (UN).The UN listing for 2009 is a wake up call thateconomic powerhouses do not necessarily lead to citizen wellbeing and better quality of life.India is ranked as low as 134 in a list of 182 countries. In fact, it seems to suggest that those countrieswith lower intensity of focus on rapid economic growth have turned in higher scores as far aswellbeing is concerned. For example, in the 2009 listing, the top five spots have been occupied byNorway, Australia, Iceland, Canada and Ireland.( In 2000, the top spots were occupied by Norway,Australia, Canada and Sweden. 4
  5. 5. Readers must be aware of Bhutan having developed a 13 attribute driven Happiness Index for itscitizens, and economic well being is only one of them.In 2007, India’s overall ranking in HDI was a dismal 114 out of 128 countries surveyed. In economicparticipation and opportunities for women, it is 122; in educational attainment it is 116 (41 per centof Indian women in the 15-49 age group have never been to school); in health and survival rate is 126(maternal mortality rate is 301 per 100,000 live births) with only Azerbaijan and Armenia lower.Only in political empowerment does it score higher at 21- million and more women elected toPanchayati Raj institutions.In India, the role played by industrial activity is central to facilitating large numbers of poor people tocross above the poverty line. Our dependence of large number of its citizens on agriculture cannotcarry one for ever – for three reasons. Firstly, due to advances in productivity, lesser hands arerequired to feed the country. Secondly, many of our citizens in villages hold very small tracts of land(not very amenable to automation) and thirdly, agriculture sector is highly vulnerable to lack of rain/too much of rain/ too little rain too late or too much rain too early.Hence, leaders who influence industrial activity today and into the future will play a very importantrole in shaping the development and progress indicators, towards releasing a large proportion of ourfellow citizens from the bondage of abject poverty.The political class has also begun to understand- in no uncertain terms- that good governance is thekey and differentiating factor for the voters to select a particular candidate or not. The message is thatdivisive and emotive subjects are not going to sway their rational thinking. Hence, it is not surprisingthat the language of the political class, in some quarters at least, is refocusing the agenda. We arehearing louder noises on arresting conspicuous consumption, limiting obscene levels of Executivecompensation, pressure to diversity the workforce in companies in a ‘real sense’- beyond quotas andother window dressing. The meta-environment, even beyond our national borders, are alsoreinforcing the above messages- in some cases, the reality in many of their countries is even starker.We opine, that, now is the time to focus thinking and thought leadership on how should businessesoperate into the future and what would the tomorrow’s company look like? What would be thecontours of its design? What will be given more importance than what is being given now? Would 5
  6. 6. relationships between employees and employers, suppliers and companies be increasingly based onmutually shared values based on trust?Would the means to the end become important? Would new means become more important tocurrent ends? Or would the means remain the same and the end would redefine? The list ofpossibilities and probabilities are long.In this context, we are proud and gratified to submit this report, as a contribution to the conferencetheme. The theme is based on the Triple Bottom Line concept, articulated first by John Elkington.We are fascinated by this frame for a number of reasons:a) The concept of three, to provide optimum balance -b) The realization that planet is as central to our well being, as is profit and peoplec) It emphasizes, in a dynamic sense, the interdependence of means and endsd) There are organizations that have/are utilizing this frame and have/are experienced/ experiencingbetter and wholesome results.e) It provides a new lens to aid reframing any of the roles in a Business- be it the Board, CEO or HRHead or for that matter any functional manager or even a shop-floor worker.We believe that if the Promoters, Board and the CEO redraft their vision/’mental models’ of success,it provides a new wave of ‘unexplored space’ for the organization, its people including the HRprofession. It is quite clear that the HR profession has come to an inflexion point, where it shouldplay a more a pivotal role in determining the future of the business or risk being marginalized andconfined to the peripheries.It is not that the above thought processes have come out of the blue. Many distinguished voices inIndia have alluded to the need for course corrections. However, these voices, hitherto have beenoutshouted by the louder voices. However, increasingly many more people are listening to these ‘lowshare of voice but strong signals’.For e.g., Business World magazine and FICCI have instituted an award, way back in 1999, forcompanies who have done ‘stellar work and to commend the spirit of using corporate resources, corecompetencies and funds for the benefit of people and the environment.’ 6
  7. 7. Our distinguished PM, Dr. Manmohan Singh articulating a 10 point social charter, way back , in May2007 said , “in a modern society , business must realize its social responsibility. The time has cometo ask what we can give back to India.’(BW, 26th may 2008). In 2008, the following quote appeared-‘Today- nimbler CEO’s and promoters assess the consequences of their decisions and actions onvarious stakeholders.’(BW, May 26th 2008).‘Social responsibility is a privilege- not a portal for publicity’ said Mr. Keshub Mahindra (Chairman-Mahindra & Mahindra) on why his Group maintains a deliberate low profile of its CSR activity(Business World).Even voices from outside of India have been alluding to a different configuration of thoughtleadership to shape businesses of tomorrow. e.g.: an article in the HBR talks of four justifications forCSR- moral obligation, sustainability, license to operate and the quest for enhanced reputation.(Harvard Business Review, 2006)The Centre for Tomorrow’s Company reports, “40% of businesses now believe that a companycannot succeed unless it has accountability wider than shareholders.’(‘Business Ethics- Facing up tothe issues’- published by The Economist)“Hubris , born of success: undisciplined pursuit of more, denial of risk and peril, grasping forsalvation with a quick big solution and capitulation to irrelevance and death- offer kind of autopsyfor an economy on a stretcher’. Says Jim Collins (Leadership Guru) (article- DNA newspaper)There is now increasing evidence-quantitative and qualitative – and from multi sources, that thosebusiness organizations which have focused on a more holistic and balanced approach have done wellover time –financially and otherwise. Hence, there is no doubt that holistic thinking would not lead tosuperior performance- irrespective of the ‘lens’ used.For example, Tom Peters and Waterman, in their ground breaking research, published in the bestseller, ‘In Search of Excellence” identified a set of companies, who have used excellence as theiroverarching theme. These companies had outperformed competition on almost all financial metrics.That list includes many well known names like: 3M, Boeing, Caterpillar, Walt Disney, Intel, Merck,J&J, Pepsi, IBM, Du Pont, Wal-Mart, McDonalds, and P&G. Most of these companies have 7
  8. 8. continued to remain relevant to date and still feature in similar lists- post 25 years of the aboveresearch.In Jim Collins and J Porass’s list of ‘Built to Last- 18 visionary companies- the common names fromthe Peter & Waterman list are 3M, Boeing, P&G, Wal-Mart, Merck, IBM and J&J. This study wasresearched competitor performance, in the comparator class and came to the conclusion that the ‘builtto last’ companies outperformed the competitor in all financial measurements- even though bothwere operating in the same business environment and had similar access to threats and opportunities.In Jim Collins’ earlier research- “Good to Great-‘more than 1435 companies, over a 40 year period,were researched and a list of 11 great companies developed. Many names in this list are not asfamiliar as global brands example: Abbot Laboratories, Fannie Mae, Kimberly Clark, Nucor, WellsFargo and Kroger.According to Covalence Research (headquartered in Geneva, Switzerland), for the first time, IBMreached the top position in its ethical ranking (quarter ending September 2009). It was followed byIntel and HSBC, among 541 multinationals within 18 sectors. IBM benefited from continuousimprovement over the last 3 years as well as from its recent green supply chain logisticsannouncements and new water-cooled supercomputer.Green initiatives, on the positive side, and working conditions and downsizing, on the negative,generated high volumes of news during the last quarter.The most active criteria during Q2 2009 have been: Environmental Impact of Production, SocialSponsorship, Downsizing, International Presence, Eco-Innovative Product, and Information toConsumers.In each of these dramatic, remarkable, good-to-great corporate transformations, we found the samething: There were no miracle moments. Instead, a down-to-earth, pragmatic, committed-to-excellence process -- a framework -- kept each company, its leaders, and its people on track for thelong haul.In each case, it was the triumph of the Flywheel Effect over the Doom Loop, the victory of steadfastdiscipline over the quick fix. And the real kicker: The comparison companies in our study -- firmswith virtually identical opportunities during the pivotal years -- did buy into the change myths 8
  9. 9. described above -- and failed to make the leap from good to great”.(extracts from “Good to Great ‘byJim Collins). ABSTRACTThis research attempts to study the correlation between financial profits and the planet and peoplepractices of companies which actively practice Triple Bottom Line (TBL) Accounting. It attempts toexamine the business sensibility of the sustainability philosophy and its relevance in the long-termfor organizations that are practicing it and/or would be practicing it in the near future. 9
  10. 10. ENHANCING PROFITS BY NURTURING PEOPLE AND PLANET A RESEARCH STUDY on TRIPLE BOTTOMLINE EXECUTIVE SUMMARY“The business of business is growth and profits or else it will die, but if only based on growth andprofits then also it will die, for it no longer has a reason for its existence.” -- AnonymousEmployees, shareholders, customers, suppliers, community, knowledge workers, team – all aredifferent words used to describe one entity –human being. In today’s’ scenario ‘being human’ ismore important than just a human being; not just towards one’s organization but also towards theenvironment and the society as a whole.Humans are social animals. A society is just not made of people, but the environment that we live in;and to thrive and lead a meaningful life, resources are essential. Resources can be classified as thosethat are attained from nature, resources that generate monetary benefits and human resources aroundus; all of which are interdependent.TBL is an acronym for Triple Bottom Line and is gradually becoming an integral part of our life. 10
  11. 11. TBL as we now know is an accounting practice and standard (John Elkington). TBL will soonbecome the raison detre (reason for existence) for companies.The objectives of the study were:* A perception study of TBL practices and their impact on profits in organization* To conduct a baseline study of sustainable best practices in organization* To identify role of CEO/HR Professionals in the TBL activities* To do an exploratory study of TBL practices in organizationThis research, under the backdrop of “Reinventing the economy of tomorrow” is a maiden attempt tounderstand the what, who and how of TBL, and the three Ps –Planet, People and Profits.This research study was carried out by WeSchool team and the research committee at NHRDnetwork. The aim has been to conduct a quantitative study of the TBL practices followed byorganizations and correlate a relationship between Profits and nurturing people and planet. 94companies were researched and the study found that many innovative people and planet practicesexist realizing that both actions and inactions have consequences.Companies from across all sectors were tapped for this study. The respondent group varied fromCEOs to HR Managers. The study concludes with some workman like practical solutions which canbe implemented by organizations to become sustainable rather than only profitable. In today’s timescorporates cannot narrowly focus on growth and profits for the well being of the organisation. Asustainable organisation is that which proactively nurtures into their vision, mission and core valuesin alignment with the planet and people.The journey led to the conclusion that TBL actually means – TO BE LOVED; to "cherish" and"safeguard" what we love, whether it is people, planet and profits. 11
  12. 12. INTRODUCTION TRIPLE BOTTOM LINE - THE CONCEPTSustainability, specializing in business strategy and sustainable development, introduced a termcalled the ‘‘Triple Bottom Line’’ (TBL). TBL is a framework for measuring and reporting corporateperformance against economic, social and environmental parameters.The TBL is used ‘‘... to capture the whole set of values, issues and processes that companies mustaddress in order to minimize any harm resulting from their activities and to create economic, socialand environmental value.’’The three communities of TBL are: 1. Community I: Profits- economic rationality-The three bottom lines are all reported but key issues and decisions are made when profits are treated as the lead dog. 2. Community II: People-social justice- Organizations are made by and for people, when people are shown dignity and respect, feel safe and have enough food in their bellies they will take care of the planet and turn the workplace into a profitable and sustainable enterprise. 3. Community III: Ecological rationality- All is for naught if the planet collapses due to global warming or severe resource depletion. As a consequence, planet is the lead dog, social justice follows, and then we must look to profits—without this, we are due short term wins but long term disaster.Viewing corporate performance using only economic measures is not regarded as sufficient.Stakeholders may be concerned about whether a company is following a socially responsible path 12
  13. 13. and may not want to invest in companies that employ child labour, purchase from companies thatoperate ‘‘sweat shops’’ for labour, or operate in countries that have questionable politicalsystems/poor human rights records. Similarly, stakeholders are concerned about whether a companyis acting in an environmentally friendly way. Global warming, the potential for ecological accidents,as well as the hysteria surrounding events such as’ mad cow disease,’’ have in recent years increasedsociety’s awareness and concern about the quality of the environment, especially the corporation’srole and responsibility in that regard. Thus, it is emphasized in TBL that corporate performance mustbe measured against not only economic but also social and environmental criteria. In addition, whiletraditional financial statements primarily focus on profitability and other financial performance, theeconomic dimension of TBL is intended to capture and present a comprehensive view of corporateeconomic interactions with all stakeholders including share-holders, customers, employees,governments, the community, and the general public. The scope of the economic interactions withand impacts of the corporation on the stakeholders go beyond those of the traditional financial reportsin that issues such as intangible assets gain more weight in TBL reporting.There is a growing awareness of the necessity for a company to disclose information about its socialand environmental performance. Many companies, particularly major multinationals, are workingtoward a balance between their financial/economic, environmental, and social performance, and arestarting to report in all three areas. For example, General Electric recently announced that it would beimplementing a major initiative to address environmental issues – particularly global warming andthe shortage of water resources. JP Morgan Chase, a leading commercial bank in the United States,announced that it would join a group of other banks to adopt the ‘‘Equator Principles’’ – a set ofguidelines for banks to follow when considering loaning money for development whenenvironmentally sensitive issues are involved. Nike published a report outlining working conditionsat hundreds of factories where its products are manufactured in an attempt to address criticism aboutworking conditions at the factories.TBL REPORTING: GLOBAL OVERVIEWWorld over, TBL reporting is also known as corporate responsibility or sustainability reporting(KPMG, 2005). 13
  14. 14. Adams et al. (1998) examined corporate social reporting practices for a sample of 150 annual reportsfrom six European countries. They split social disclosures into three categories: environmentalreporting, reporting on employee issues, and ethical reporting.Using content analysis and three measures (total number of items disclosed, the number of items forwhich either quantified or financial information is disclosed, and the length of the narrativedisclosures), their findings indicated that the amount and nature of social disclosure variedsignificantly across Europe. In particular, the German firms disclosed the most information across allthree categories. The UK firms were ranked either second or third behind the Swedish companieswith respect to environmental or employee disclosures. In addition, the Swedish firms tended todisclose more quantified information. The Netherlands had the lowest disclosure level in terms ofenvironmental information, and Switzerland disclosed the least across three measures of employeedisclosures. Lastly, the results show that firm size and industry membership are importantdeterminants of the level of social disclosures in all six European countries.Countries with a high social conscience and/or developed capital markets voluntarily disclosed moreenvironmental information. In particular, the United States, Canada, and the United Kingdom had thehighest disclosure level. Regarding the disclosure forms, the United Kingdom firms were major usersof short qualitative discussion (SQD, which is not in the footnotes and less than a page in the annualreport), Canadian firms were more likely to use extended qualitative discussion (EQD, which is notin footnotes but includes a page or more), and US firms were the major users of other disclosureforms such as footnote discussion or journal entries recorded in financial statements.Hackston and Milne (1996) investigate the social and environmental disclosure practices of a sampleof New Zealand firms. Their findings indicate that, consistent with prior research for US, UK, andAustralian firms, New Zealand firms made most social disclosures on human resources. Theenvironment and community issues also received significant attention. On an average, the amount ofsocial disclosure made by New Zealand firms was about three-quarters of an annual report page, andthe majority of the disclosure was declarative and good news in nature. Also, their results showedthat both firm size and industry membership were significantly associated with the amount ofdisclosure, while profitability was not. Craig and Diga (1998) analyzed annual report disclosurepractices in five Association of South East Asian Nations (ASEAN) countries:Singapore, Malaysia, the Philippines, Indonesia, and Thailand. Their results indicated that, overall,ASEAN companies appeared reluctant to disclose information that was perceived to be politically or 14
  15. 15. socially sensitive such as information regarding labour and employment activities, environmentalprograms, and government subsidies. They concluded that corporate reporting in ASEAN was‘‘oriented strongly towards the information needs of capital providers, rather than the needs of abroader set of stakeholders (including employees, government agencies, and the generalcommunity)’’ (p. 257).ROLE OF HR & TRIPLE BOTTOM LINELeaders recognize that business and markets don’t operate in isolation, but are influenced by andhave an influence on the environment, communities and society at large. These leaders see theircompanies as part of an “enterprise” – a rich, growing and continually evolving network ofinterdependent relationships. And they value the role that their organizations can and should play inenriching that enterprise. This is the essence of cross-enterprise leadership.Most recently, Professor Klassen examined the reverse supply chain practices of more than 100Canadian firms. Through a reverse supply chain, firms retrieve used products and materials fromcustomers to recover their value – through recycling, remanufacturing or reselling. The study resultsdemonstrate that when companies leverage their reverse supply chains in this way, they not onlyreduce the negative environmental impact of waste disposal, they also lower their production costs.In essence, “being green” saves money.Professor Tima Bansal, who has focused much of her 20 years of research on triple-bottom-lineissues, explored how corporate sustainability and social responsibility affected both a firm’sreputation and its profitability. Overall, she believes that “Business leaders who chose to ignorepressing social, economic and environmental issues did so at their own considerable peril - and theirorganizations.” This just isn’t simply a matter of staying in business or safeguarding corporatereputation. It’s about gaining competitive advantage and managing risk by being proactive andresponsible. Over the long run, she believes that “it is the pursuit of both societal and economic valuethat yields long term and stable profits” for companies.Taryn Vian, et al., provide a fascinating look at how Pfizer partners with global NGOs to create thePfizer Global Health Fellows, a voluntary initiative that links Pfizer employees with organizations inseveral parts of the world to do grass-root work on health problems such as HIV-AIDS. The positive 15
  16. 16. benefits for Pfizer employees are noted. This article emphasizes the fact that TBL projects areinherently collaborative and require creation of partnerships, networks, and alliances to maximizebenefits. Whether labour unions, NGOs, or supply chain partners, the organization must learn how towork with others to achieve shared ends.There are many proven examples that the TBL concept is viable and critically important fororganizations to understand and adopt. The linkages between initiatives and better performance arealready established. A clear effort-performance linkage is enhanced when HR assumes an activeleadership role in creating formal, sanctioned, and supported mechanisms, practices, and processes.Doing so requires conceptual clarity and sustained commitment by senior leadership.There is a key role for the HR function to play in Triple bottom line sustainability i.e. helpinggenerate dialogue, building consensus on the sustainability intent and building alignment capabilitiesto help realize that intent. Aligning sustainability with the business strategically is extremely crucialsince the objective of sustainability is to leverage inclusive stake-holder view to create value fororganization and broad global society. In the process, what is sustained is organization as aneconomic entity, corporate brand & global human welfare. Any sustainable framework utilised insuch circumstances acts like a strategically provocative frame to re-orient business growth bybroadening conceptions of context and capability. The primary role of leaders in such organizationsis to identify opportunities and build organizational commitment. In parallel, organizational valuesact as a compass to set strategic direction. HR’s dialogue with all stakeholders broaden strategicreference frame and enrol stakeholders in a new direction of an improved way of doing business.Implications for key HR processes: • Organization effectiveness/change management: HR needs to drive dialogue on triple bottom line sustainability among senior executives and levels of managers to build consensus on conception of sustainability. Secondly it must develop communication processes to link functional work of all divisions toward key sustainability intent. • Strategic human resource planning: Focussing HR strategy content to support business directions under sustainability intent. Substantively aligning human and organizational capital to the sustainability vision and the business strategies. 16
  17. 17. • Thirdly, developing HR staffing plans to support divestiture and acquisition of new businesses. • Talent management/staffing: Meaningfully integrating sustainability intent and objectives into recruitment and selection processes to seek fit and building commitment in new hires. Identifying critical talent families to support current sustainability intent objectives. Thirdly, building a pool of human capital (knowledge, skills) toward sustainability-framed strategies to help create new business opportunities from the inside out. • Training & Development: Developing leadership capacity toward sustainability alignment objectives—"role of leaders"—under relevant conception. Infusing development processes (mentoring, career development) with sustainability intent to give context to future capability building. Focus skill-building to support sustainability-framed business objectives.GRI REPORTING FRAMEWORKThe Global Reporting Initiative (GRI) is a voluntary, dynamic multi-stakeholder process to “developand disseminate globally applicable Sustainability Reporting Guidelines.”GRI provides a template of “sustainability report” for use by various organizations regardless ofsize, sector, location and experience in preparing sustainability reporting. It is important to note thatGRI does not prescribe standards example: Emission targets/similar targets for any single industry/sector.It is structured in such a way so as to serve as a toolkit for reporting company and external auditors tomeasure progress towards sustainable development viz. economic, environmental and socialperformance. In addition to “sustainability report”, GRI recommends organizations to adopt 11principles, which are already being used in many organizations; these include such “intangibleassets” as reputation, human capital, audibility and capacity to innovate.An outstanding feature of GRI among other CSR related guidelines and regulations, isa quantitative approach, wherever possible, for measurement of the organization’s direct and indirectimpacts (both positive and negative) and commitments. Quantification of a company’s sustainabilityis made possible through using various performance indicators: i. Economic, ii. Environmental and 17
  18. 18. iii. Social. Economic performance is measured through examining company’s indirect impacts oncustomers, employees, suppliers, public organizations, etc. In particular, the extent to which acommunity might benefit or lose from certain activities or the contribution to GDP is counted aseconomic externality. Environmental profile is weighted against such categories as products andservices, biodiversity, emissions and energy consumption. Social indicator covers such aspects ashuman rights, labour relations, diversity and security. This quantitative approach enables reportusers to assess the relationship of each organization to the economic, environmental and socialsystems within which it operates.The updated version of GRI Sustainability Reporting Guidelines known as G3 guidelines werepublished in March 2006. There is no organization governing GRI so far- it is a dynamic processdriven by various organizations. The Board of GRI includes 14 members from various stakeholdergroups. I includes various Working Groups which track and modify GRI reporting example:gathering inputs and feedbacks, developing recommendations on performance indicators, guideGRI members, etc. As of now more than 2000 companies are reporting using GRI guidelines. Somecompanies moved from just issuing sustainability reports to publishing a single annual reportincluding environmental and social information. Moreover, GRI became a sole reference point onsustainability reporting for organizations with global presence and impact, such as the OECD, the EUCouncil of Ministers, the European Commission, WTO and even stock exchanges. GRI is likely tobecome a “license to operate” for businesses across the globe in the foreseeable future.GLOBALLY RESPONSIBLE LEADERSHIP INITIATIVEBusiness and Business education for a better worldThe challenges facing humankind are large, undeniable and global. Economic, social, environmentalinequalities abound and are increasing. Businesses are among the most influential institutionsworldwide. They have a tremendous opportunity to shape a better world for existing and futuregenerations. Business schools and centers for leadership learning can play a pivotal role, alongsidebusiness, in developing the present and future leaders required to ensure that business is a force forgood.The Leadership ChallengesGlobally responsible leaders’ at all organizational levels face four key challenges. First, they shouldthink and act in a global context. Second, they should broaden their corporate purpose to reflect 18
  19. 19. accountability to society around the globe. Third, they should put ethics at the centre of theirthoughts, words and deeds. Fourth, they – and all business schools and centre for leadership learning– should transform their business education to give corporate global responsibility the centrality itdeserves.Re-defining the purpose of businessThe new global business context requires a definition of business that encompasses corporateaspirations, responsibilities and activities in realistic and contemporary terms that go beyond purelyfinancially focused explanations.Globally responsible leadershipThe leadership required now and in the future can be described as globally responsible leadership.This is the global exercise of ethical, values-based leadership in the pursuit of economic and societalprogress and sustainable development. It is based on a fundamental understanding of theinterconnectedness of the world and recognition of the need for economic and societal andenvironmental advancement. It also requires the vision and courage to place decision making andmanagement practice in a global context.Ethical principlesDecisions made by globally responsible leaders rely both on their awareness of principles andregulations and on the development of their inner dimension and their personal conscience. Thesecharacteristics can be informed and developed through dialogue and debate. Guiding principles thatestablish a starting point for globally responsible leadership include fairness; freedom; honesty;humanity; tolerance; transparency; responsibility and solidarity; and sustainability. These are notfixed ethical points but need to be constantly refined and developed.Transforming the businessKey action areas through which corporate global responsibility can be nurtured and developedinclude: • tuning into the societal and environmental business context; • overcoming key organizational, regulatory and societal barriers to change; • developing stakeholder engagement skills such as careful listening and the ability to engage in dialogue • transforming the culture of the firm by changing attitudes and behaviors; 19
  20. 20. • understanding the purpose of change; • designing change management processes; and, • rewarding globally responsible behavior through improved performance measures and systems.Transforming business educationAll learning institutions need to make corporate global responsibility their responsibility. Changecan be driven by inspiring, involving, influencing and interconnecting with internal and externalstakeholders. Globally responsible behavior must be internalized within the conduct and activities ofthe organization. Business education should also be broadened to reflect the global businessenvironment and the knowledge, skills and attributes required of the globally responsible businessleader. Corporate global responsibility issues need to be integrated across the business schoolcurriculum, not just in stand-alone courses.Curricula for both degree and executive programs need to be enriched by topics like: • analysis of political, social, intellectual, technological and environmental trends; • analysis of existing ethical codes and study of successful implementation of organizational ethical codes and principles; • the development of globally responsible leader-linked attributes and behaviors (such as integrity, empathy, compassion, dialogue and self-awareness); • cross cultural understanding and language skills; • social and environmental accounting and reporting; and, • Sustainable business practices.Last but not least, a range of innovative approaches to pedagogy and learning needs to be tested andutilized which engage more of the whole person in the learning experience.A call for engagementOur vision of the future is of a world where leaders contribute to the creation of economic andsocietal progress in a globally responsible and sustainable way. Our goal is to develop the current andfuture generation of globally responsible leaders through a global network of companies and learninginstitutions. Coordinated through the European Foundation for Management Development (EFMD)and with the support of the UN Global Compact, the Globally Responsible Leadership Initiative will 20
  21. 21. reach its goal by taking action throughout the world on issues of new business practices and learningapproaches, advocacy and concept development. Membership of the Initiative offers an opportunityto participate in creating a new generation of globally responsible business leaders and to be acatalyst for changed values and practices regarding corporate global responsibility.CSR vs. TBLCorporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship,responsible business, sustainable responsible business (SRB), or corporate social performance, is aform of corporate self-regulation integrated into a business model.Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business wouldmonitor and ensure its adherence to law, ethical standards, and international norms. Business wouldembrace responsibility for the impact of their activities on the environment, consumers, employees,communities, stakeholders and all other members of the public sphere. Furthermore, business wouldproactively promote the public interest by encouraging community growth and development, andvoluntarily eliminating practices that harm the public sphere, regardless of legality.Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and thehonoring of a triple bottom line: People, Planet, and Profit. Therefore CSR is a subset of TBL.The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strongbusiness case for CSR, in that corporations benefit in multiple ways by operating with a perspectivebroader and longer than their own immediate, short-term profits. Critics argue that CSR distractsfrom the fundamental economic role of businesses; others argue that it is nothing more thansuperficial window-dressing; others argue that it is an attempt to pre-empt the role of governments asa watchdog over powerful multinational corporations.TBL & ETHICSTBL benefits are unlikely to ensue in an environment where board members and Top Managementregard ethics as a soft issue on the periphery of their organization’s main business concerns. If boardsare to begin seeing the real significance and value of codes of conduct, a paradigm shift of sorts isrequired, a shift that eliminates the distinction between core business interests and ethical concerns.Only when business organizations begin to appreciate that ethical concerns are intimately interwoven 21
  22. 22. with all business decisions and actions will their codes of conduct become ‘living documents’. Theparallelism holds special reference to application of the triple bottom line measurement of businessand aligning with the GRI.An analysis of some of the objections that are typically raised against the employment of codes ofconduct will reveal how a failure to acknowledge the crucial interdependency of business and societyis instrumental in stripping codes of their potential significance and value. It will also demonstratehow fragmentation in the way that an organization manages its various business relationships, as wellas a lack of congruence between its code statements and actual business practice, diminish the abilityof its code to affect business decision-making. It will be argued that the success of codes of conductrelies on a social grammar that emphasizes interrelatedness, interdependency and integrity in allbusiness operations. In a business environment saturated with the logic of self-interest, individualismand fragmentation, codes will become essentially meaningless. What is needed to transform such aradically atomized and ruthlessly competitive environment is a change of mindset. Of course, it isnever a simple affair to alter the entrenched habits of the mind.The introduction of the triple bottom-line reporting in various parts of the world is a promisingindicator that business practitioners around the world are beginning to invest more in the restorationof a social grammar that articulates the proper role and position of business in society. Triple bottom-line reporting addresses some of the main issues and concerns around global codes of conduct. Itsmain thrust is to emphasize the importance of contextual relevance, stakeholder relationships andintegrity in all business operations. Three concepts that are central to triple bottom-line reportinginclude stake-holder engagement, organizational integrity and stakeholder activism which could beused to reconstruct a ‘social grammar’ that would place business in a more sustainable relationshipwith society.LITERATURE ON SUSTAINABILITYIn his book called Cannibals with Forks, John Elkington (Elkington, 1997) looks at sustainability asthe three forks: economic prosperity, environmental quality and social justice. He identified sevenrevolutions which are already beginning to transform the world of business and drive majorcorporations and leading economies towards these goals. 22
  23. 23. Revolution 1: Market - Revolution 1 will be driven by competition, largely through markets.Domestic and international will blend to bring out major economic challenges for products andservices that organizations will provide.Revolution 2: Values - Business will have to adjust from the transition from “hard” commercialvalues to “softer” triple bottom line values. Focus shall be more from changing the engineering ofmanufacture to attitudes and behavior of peopleRevolution 3: Transparency - Revolution 3 will be fueled by growing international transparencyand will accelerate. As a result, business will find its thinking, priorities and commitments andactivities under increasing scrutiny worldwide. The transparency revolution now will be “out ofcontrol”.Revolution 4: Life-cycle technology - Revolution 4 will be driven by and will be in turn driving thetransparency revolution. We are seeing a shift from companies focusing on the acceptability of theirproducts at the point of sale to their performance from cradle to the grave, i.e. from the extraction ofraw materials right through to recycling or disposal. 23
  24. 24. Revolution 5: Partnerships - Revolution 5 will dramatically accelerate the rate at which new formsof partnership springing up between companies, including leading campaigning groups.Revolution 6: Time - Revolution 6 will promote a profound shift in the way we understand andmanage time. An incident occurring at one point on the globe is reported almost instantaneouslyacross the globe. We find more and more happenings every minute of every day. The current time isbecoming “wider”. However, the sustainability agenda is pushing us in the other direction, towards“long” time, i.e. needing to think across decades, generations and in some instances, centuries.Revolution 7: Corporate Governance - Ultimately, whatever the drivers, the triple bottom lineagenda is the responsibility of the corporate board. Revolution 7 is being driven by each of the otherrevolutions. It was observed that better the system of corporate governance, the greater the chancethat we build towards genuinely sustainable capitalism.In their book on Triple Bottom Line, Savitz and Weber prefer the word sustainability to the wordresponsibility emphasizing that the latter speaks more about benefit to the society instead of benefitto the company. The need to be pragmatic and not just altruistic seems to be the need of the day(Jossey & Bass, 2006). The book also talks about how sustainability is only a transitory phase andgradually would lead to planet and people being seamlessly integrated in the company’s strategy. Theneed to measure the environmental and social factors quantitatively is also mentioned in the book(Chennel, 2006).Richard Stengel in the TIME magazine (Stengel, 2009) observes that in American companies andAmerican markets as its base. It looks at redefining sustainability by asking companies to respond tofinancial incentives and not do it because it is just a nice thing to do.From a consumer point of view, it divides Americans into 3 varieties – • Responsibles – Constitute 38 % of Americans. They are well off but not wealthy. They are concerned about the environment but more so about federal taxes for social causes. They are the youngest and the most diverse of the lot. • Toe-Dippers – The belief in the principles of responsible consuming but do not act on many of them. • Skeptics – They are the oldest of the lot and believe that the purpose of business is only to do business. 24
  25. 25. The article thus tries to convey that whether or not you are philanthropic, sustainable business is theway of the future as the markets and the consumers would also respond to it.PROFITThe word profit comes from Latin meaning ‘to make progresses. It is normally defined in two ways –accounting and economic profit. While the former is the difference between the price and the costs,the latter is the difference between the revenue and the opportunity costs.Optimum profit refers to just the right amount of profit a business can achieve. Any profit below itwould follow the theory of exploitation where in profits would be pocketed just by an elite section ofthe society and the creation of capital for a socio-economic augmentation would cease to happen.(Guevara, 1964)Thus, the need for sustainable profit not just as a philanthropic notion but as a way of sustaining thesocio-economic factors becomes critical. One school of thought states that sustainable business witha TBL-like investment will reduce the uncertainty. Another school of thought states that brand valuewill be associated with sustainability. Thus, just like brand value is included in the company’sevaluation, so can be done with sustainability. Another point of view is that with the increasingshortage of resources in the near future, sustainability and conservation will become financiallyviable. (Heskett, 2008)Profits thus seem to share some relationship to sustainable business practices. A point of view(Cullinane, 2008) stated that sustainability is a method of harvesting in a resource so that the resourceis not depleted and in the long-term helps sustain business. A recent McKinsey report listed that there are 250 reduction opportunities in 5 different categories of greenhouse gas abatement. Out of these, 50 % had negative cost associated with them. Negative costs can generate cash and thus a little alignment to sustainability can help one generate economic profits. 25
  26. 26. The article (Heskett, 2008) continually reinstates the fact that sustainability and maximum profits arenot mutually exclusive especially if the sustainability aspect is integrated right at the beginning in theway we do business.Moving to the concept of profitability, it is a relative index with profit as the numerator and assets asits denominator. A sustainable strategic path might increase the denominator in the short-term butwill increase the numerator in the long-term thus maintaining the balance between income andexpenditure. In some scenarios, a sustainable initiative can actually help reduce the denominatordirectly as one goes for more cost-effective assets. Let us understand 2 cases – that of Exxon Mobile with profits of $ 40 billion which are comparatively huge if compared to the company’s environmental record. On the other hand, Interface Inc., a truly visionary company when it comes to sustainable development is profitable but not quoted on the stock markets so often.Thus, with profitability as the common end goal, companies clearly have a choice of integratingsustainable growth. But the future will decide whether the choice remains.PLANET“Planet” also referred to as Natural Capital, deals with sustainable environmental practices. It is anextension of the economic notion of capital to environment and the products that emerge out of thenatural ecosystem.The term was most closely identified with Herman Daly, Robert Costanza, the Biosphere 2 project,and the Natural Capitalism economic model of Paul Hawken, Amory Lovins, and Hunter Lovins."Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typicallyconduct a life cycle assessment of products to determine what the true environmental cost is from thegrowth and harvesting of raw materials to manufacture to distribution to eventual disposal by the enduser.It is a well accepted fact that environmental sustainability is the more profitable course for a businessin the long run. Arguments that it costs more to be environmentally sound are often invalid when the 26
  27. 27. course of the business is analyzed over a period of time. Generally, sustainability reporting metricsare better quantified and standardized for environmental issues than for social ones. A number ofrespected reporting institutes and registries exist including the Global Reporting Initiative (GRI),CERES, Institute 4 Sustainability and others.A concept of Ecological footprint is essential when studying the Planet aspect of TBL. It is a measureof human demand on Earths ecosystem. The ecological footprint concept and methodology wasdeveloped by Mathis Wackernagel under Prof. William E.Rees at the University of British Columbia,Canada (1990-1994). Originally the concept was termed as “Appropriated carrying capacity”.Ecological footprint analysis compares human requirement with planets need to regenerate and thussupport resource demand. This is done by assessing the biologically productive Land and Marinearea that is required to produce resources that the population consumes and absorb the correspondingwaste generated as a result of the day to day technological operations.For example: manufacturing of a product will result in consumption of certain raw materials whichwould in turn result in generation of a finished product and waste. If the waste generated is toxic innature, it will have an adverse impact on the environment. Measuring this impact is the core essenceof ecological footprint and hence it has fast become a popular accounting standard in Planet aspect ofTBL.A Company which undertakes TBL accounting into consideration ensures that its operations benefitor at the most create no harm to the Planet. A TBL enterprise reduces its ecological footprint bycarefully measuring and managing its consumption of energy and reducing wastage and disposing itin safe and legal manner. To set the context a little more, the authors behind the EcologicalFootprints concept have come up with the notion of the “Earthshare”, which is the bio-productivearea of the world divided by its total population (it amounts to around 1.92 “area units” or ha,currently). Ideally, any institution attempting sustainability needs to manage its processes so that,over time, it can demonstrate that it is living well within the Earthshare, and thus living sustainably.When embarking on sustainability through Planet initiatives, Ecological Footprint offers aquantitative instrumental analysis of an Organization. Once this is done the enterprise needs to focuson human side of engaging people and accepting that there may be disparities in views about whatshould actually happen in practice. In this context, the use of facilitators to draw together the bestpossible solutions, no matter where they originate from within the organization is important (Kaner et 27
  28. 28. al., 1996, Shivakoti et al., 1997; Warburton, 1996) though it is accepted that this will need doing withboth wisdom and care (Cooke and Kothari, 2001).This is where the role of Human Resource professionals will play a crucial role in understanding theperceived challenges and institutional barriers However, perhaps the most important may be atpersonal, psychological level, where people are trying to understand Planet sustainability against analmost continual background of anti-sustainability rhetoric (e.g. see Jucker, 2002).PEOPLEGary Becker, the Noble prize winning economist quotes that in today’s modern industrializedeconomy, around 75-80 % of a person’s output comes from human capital as opposed to land ormachinery. The increased usage of the term ‘capital’ appended to human beings is indicative of notjust the importance but also the measurability of the ‘people factor’ in and around organizationstoday.In sectors like I.T. and Telecom, it is knowledge workers who are employed. In that case, humancapital remains not just a part of capital but also the critical component that forms the basis of allother forms of capital.In the I.T. sector, research (Mahalingam, 2001) classified human capital into five broad areas:domain expertise, technology, project management, initiative and leadership. This was a skill-baseddivision to measure the breadth of human capital. To measure the depth of experience, four levels ofexpertise were established: exposed experienced, expert and excellent (Mahalingam, 2001).He further hinted towards measurability indicating that be it a skill or experience, the capital valuecan be calculated by measuring the returns on it over a period of time.For example – measuring the revenue per person (for a job profile) Lev & Schwartz advocated the estimation of future earnings during the remaining life of the employee and then arriving at the present value by discounting the estimated earnings at the employees cost of capital. Many Indian companies like Infosys and BHEL use it to benchmark the efficiency of their human resources with other companies. 28
  29. 29. Capital can also be forecasted by valuing each relevant competency at a point of time. Every personpossessing some/all of these competencies forms the sum measure of the value perceived of thesecompetencies at that point of time.The human capital theory (Sakamota & Powers, 1995; Psacharopoulos & Woodhall, 1997) states thatformal education is highly instrumental and even necessary to improve the production capacity of apopulation. Economists (Psacharopoulos & Woodhall, 1997) also assert that human resources are theultimate wealth of nations and that they are active agencies which accumulate capital, exploit naturalresources, build social, economic and political organization, and carry forward national development.This clearly indicates that to enjoy long-term benefit, organizations would not just have to look atdeveloping the internal human capital (Mahalingam, 2001) but they would also have to look atbroader bases like human resource development of the nation and community education (Sakamota& Powers, 1995) for their own sustainability.The increased impetus on sustainability initiatives in the last few years is noteworthy. Organizationstoday are emphasizing societal values in their values, marketing strategies, structures and functions.(Karna et al., 2003). Kopperi (Kopperi, 1999) points out that people who work in business shouldconsider how their economical decisions affect other people, the environment and the society. Theconcept of societal marketing (Kotler & Keller, 2006) reiterates that companies will be differentiatedfrom their competitors based on how they preserve or enhance not just the customer’s but also thesociety’s wellbeing.Research (Oliveira, 2006) established a lot of areas of convergence where in societal marketing andstrategic marketing meet. • Both of them rise above being mere functions and are suggestive as a way of doing business. • Both are long-term in nature with the impetus on preparing the organization and its environment in regards to forthcoming events. • Both work in favor of stakeholders; a concept broader than customers. Stakeholders include the community and the society around the organization. 29
  30. 30. Aditya Birla Corporation has targeted rural and tribal areas for development with a focus on - healthcare, sustainable livelihood, education, infrastructure and espousing social causes. Each project has a 1 yr and 3 yr rolling plan. They have crossed 3700 villages and have reached to 7 million people annually.Rural marketing and rural entrepreneurship (Markley et al.) also opens up big avenues for mergingpeople practices into the strategy of a company. All of this is suggestive of a wider definition ofhuman capital and social sustainability which is not restricted to corporate social responsibility.Strategic initiatives harmonizing, developing and utilizing the human capital in and around theorganization ends up being mutually beneficiary for the organization. From being a voluntaryparticipatory mode, today sustainability initiatives demand continuous employee participation toavoid it fromthe worlds largest activity. E-Choupal, being a one-time rural digital infrastructure empowers 4 million farmers, Social and Farm Forestry programs that have cumulatively generated 40 million man-days of employment for poor tribals and marginal farmers, and Watershed Development programmes that irrigate nearly 44,000 hectares. The Company’s community engagement projects encompass Rural Supplementary Education reaching out to over 1,80,000 children, Women Empowerment programmes that have created over 20,000 rural women entrepreneurs and Integrated Livestock Development services provided to over 2,70,000 milch animals.Houdre (Houdre, 2009) has suggested four means of engaging the employees more in sustainabilityinitiatives. It starts from communicating to the employees the intent of the sustainability with ithaving a more strategic perspective. This is followed by the accountability part which speaks aboutassigning committees and process-owners to do the job. The third step talks about setting roadmapsand frequent measurability which would help one know where one’s heading. The fourth talks aboutrecognition to employees who actively are aligned to the sustainability strategy.A unique kind of ESOPs (Employee Social Options) was launched to enable Mahindra & Mahindraemployees to enroll themselves into social activities of their choice.From a Triple Bottom Line (TBL) point of view, it is clear that the people aspect of it has more todo with integrating societal growth and human capital development with strategy and making it away of doing things and not just random initiatives of philanthropy. 30
  31. 31. It would be interesting to look at the measurability of these people practices and examine theirlinkages with financial profits post their integration with the organization’s strategy. THE RESEARCHTitle – Enhancing profits by nurturing people and planet.HypothesisHo: Organizations perceive a relationship amongst people, planet and profit practices.Ha: Organizations do not perceive a relationship amongst people, planet and profit practices.Purpose – To find practical (application-oriented) ways of building sustainable Indian organizationsand societies.Deliverables:a) A perception study of Triple Bottom Line practices (people and planet) and their impact on profitsin organizationsb) To document, based on baseline study, sustainable best practices in organizations.c) To identify the role of CEO/Company Board/Parent Company/HR Professional in the TripleBottom Line activitiesd) To do an exploratory study of Triple Bottom Line practices in organizations. METHODOLOGYThe research methodology used in this study was survey research.The research instrument used was a questionnaire. The questionnaire developed was both web hostedand circulated in hard copy format among the respondents. Few face to face interviews were alsoconducted. The questionnaire format was quantitative which used Likert Scale and qualitative (open-ended) as well.The survey was web hosted on www.surveymonkey.com to ensure wide reach over largegeographically dispersed respondents and being as paper free as possible. 31
  32. 32. Respondent mix:This included all India NHRD databases of approximately 13,000 members, We School database,and the research team’s personal contacts.Mainly respondents above general manager level designation were approached in order to gauge theunderstanding and existence of strategic TBL amongst senior management members since strategicdecision making in businesses usually follows a top down approach.Almost all respondents are Indian companies. Rest are Indian subsidiaries of foreign multinationalcompanies. The sample size was 94 and 56.2 % of the questionnaires were fully complete. FINDINGS1. Respondent profile: Response Answer Options Percent CEO 6.4% President 6.4% MD 10.6% Head-HR 70.2% CXO 6.4% Other: includes Associate, analyst, Director, Dean, DGM, Manager, GM, Deputy CEO, VP.2. Key Initiatives taken in the last 5 years to increase profits, include:COST SRATEGIC MARKETING H.R/QUALITY OTHERSREDUCTION INITIATIVES/ INITIATIVES INNOVATIONSVideo Investment in Brand building downsizing Employing aconferencing technology exercise consultantOperational Research focus Expand into Focus on quality Automationefficiency different initiatives verticalsMove up the Improvement in End to end Reorganization M&Avalue chain SCM solutions of structureCost control Global delivery Strategic Talent factory Inv in technology models accounts and brand equityWar on waste Launching New markets Investing in 32
  33. 33. innovative talent solutionsManagement of Sustainability New products Organisationaloverheads driven business and services effectiveness and and strategic reorganization adoptionResource Strategic shift in Co promotion New leadershiprationalization biz model initiatives structure/teamProcess Process Greater customer Employeeimprovement reengineering focus and empowerment customer centricity Eco friendly Identification of Employee products and run customer pain connect, value on alternate fuels points, cascade, review eliminating loss skill sets for making clients, future, change hiving off management divisions, expand xxxxxxx, Q3C, into new freeze on geographical recruitment, markets succession planning, capacity building in people, international exposure.Sectors included in the survey: Logistics & Shipping, Hospitality, Telecom, Banking & Financialservices, Pharma, Manufacturing and heavy industry, Consulting, Information technology, Media &advertising, educational institutions, Telecom etc.3. Perceived definition of ‘people’ to respondents: Response Answer Options Percent Employee 62.8% Customer 41.5% Shareholders 36.2% Government 21.3% Community 43.6% Knowledge Resources (Professional bodies, 29.8% educational institutes etc) Others 18.1% Other (please specify): 33
  34. 34. What does the word "People" mean to your organization? Please select. 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Employee Community Others Shareholders4. Perceived definition of ‘planet’ to respondents: Response Answer Options Percent Energy resources 68.1% Air supply 34.0% Water resources 47.9% Noise 18.1% Flora & Fauna 41.5% Climatic conditions 50.0% Others 25.5% Other (please specify) 34
  35. 35. What does the word "PLANET" mean to your organization? Please select. 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Energy Air supply Water Noise Flora & Climatic Others resources resources Fauna conditions5. People & planet practices undertaken in organizations sampled:Popular people practices for employees like work life balance, succession planning, employeesatisfaction annual survey, leadership building, diversity measures, integrated online performancemanagement system coupled with reward management scheme, improved talent managementprograms, supplier selection & development ensuring that significant share of inputs sourced fromthose located close to the companys operation/unit.Employee engagement, community building practices in the vicinity of the organization. Groupmedical insurance, interest free loans for social upliftment, extra long maternity and paternity leave,flexi hours on request, company annual day get together for better interpersonal communication atwork.Popular planet practices included reduced energy and water consumption, effective wastemanagement, planting trees, streamlining with ISO 14000, UL, CSA, VDE, SEMKO, TUV and CEcertification norms, reducing physical travel as much as possible, partnering with NGO’s. EmployeeSocial Obligation Plans, using CFL bulbs, infra red sensors on all water taps, recycling paper andprinting only when necessary, OHSAS 18001 & SA 8000 certification & their maintenance, effectiveinteraction with SPCB & CPCB, incineration of global warming chemicals, monitoring and reducingeffluent discharge.6. List of people and planet practices that ARE PERCEIVED TO have had a significant impacton profits:PLANETCutting down energySustainable biz solutionsCommunity awareness 35
  36. 36. Tech for waste/water Cost rationalization Go green initiative Carbon footprints Waste management Recycling PEOPLE Investment in technology and development Leadership development CSR, non profit organization Employee welfare programme Customer workshop Employee engagement practices Supplier solution and development Incentives based compensation Rewarding innovative ideas Inclusive development 7. Perception of the importance given to various practices in their organizations: Not Somewhat Very RatingPractices Important N/A important important important AveragePractices in enhancing economic value generated & 1.3% 12.0% 34.7% 52.0% 0.0% 3.37equitable distribution amongst all stakeholders.Practices in integrating environmental impact while 5.3% 6.7% 26.7% 54.7% 6.7% 3.40designing products/services, including packaging.Practices in promoting organizational learningthrough R&D, improvement initiatives, involving 2.7% 9.3% 24.0% 62.7% 1.3% 3.49stakeholders for ideas and inputs, best practicesharing and benchmarking.Practices in Supplier selection & Developmentincluding ensuring significant share of inputs sourced 5.3% 14.7% 38.7% 34.7% 6.7% 3.10from those located close to the companysoperation/unit.Practices in providing infrastructural investments & 5.3% 20.0% 36.0% 30.7% 8.0% 3.00services, primarily for community/larger public good.Practices in contributing to charitable causes. 9.5% 16.2% 39.2% 29.7% 5.4% 2.94Practices in upgrading the learning of all stakeholders 4.1% 5.5% 24.7% 64.4% 1.4% 3.51through training, education, development.Workforce & customer community Diversity-race/religion/color/gender/nationality/disability/sexual 8.0% 9.3% 33.3% 46.7% 2.7% 3.22preferences/age/geographic origin/skills/differentideas, thinking, academic disciplines & perspectives.Human rights & labour law practices towards all 2.7% 6.7% 33.3% 53.3% 4.0% 3.43stakeholders.Practices on co-operative initiatives in Technology, 1.3% 9.3% 45.3% 42.7% 1.3% 3.31Operating standards, developing visions-scenarios.Practices on relations with legislators & regulators- 6.7% 21.3% 44.0% 24.0% 4.0% 2.89including political parties & government regulators.Practices related to stakeholder engagementincluding customer satisfaction measurement, 5.3% 5.3% 22.7% 60.0% 6.7% 3.47promoting customer retention & loyalty & customeradvocacy to recommend your brand/product 36
  37. 37. offerings. 8. Perception of the implementation of the above practices in their organizations: No Good Significant Benchmark Rating Answer Options progress start progress in industry Average Practices in enhancing economic value generated & 2.7% 53.3% 40.0% 4.0% 2.45 equitable distribution amongst all stakeholders. Practices in integrating environmental impact while 9.5% 41.9% 39.2% 9.5% 2.49 designing products/services, including packaging. Practices in promoting organizational learning through R&D, improvement initiatives, involving stakeholders for ideas 8.0% 33.3% 52.0% 6.7% 2.57 and inputs , best practice sharing and benchmarking. Practices in Supplier Selection& development, including ensuring significant share of inputs sourced from those 13.3% 54.7% 28.0% 4.0% 2.23 located close to the company’s operation/unit. Practices in providing infrastructural investments & 23.0% 33.8% 37.8% 5.4% 2.26 services, primarily, for community/larger public good. Practices in contributing to charitable causes. 14.9% 44.6% 33.8% 6.8% 2.32 Practices in upgrading the learning of your workforce( includes all stakeholders) through training, education and 5.3% 37.3% 49.3% 8.0% 2.60 development opportunities. Practices in valuing and benefiting from “Diversity” in workforce hiring and serving customer communities - variables including race/religion/color/gender/nationality/Disability/sexual 8.0% 54.7% 30.7% 6.7% 2.36 preferences/age/geographic origin/skill characteristics/difference in ideas, thinking, academic disciplines & perspectives. Practices towards Associates (includes suppliers, outsourcers, contractors) engagement, to ensure they 11.0% 42.5% 42.5% 4.1% 2.40 follow letter and spirit of the law, including labor laws and Human Rights. Practices on cooperative initiatives in Technology, 2.7% 54.0% 39.2% 4.1% 2.45 Operating standards, developing visions-scenarios. Practices on relations with legislators & regulators- including political parties & government regulators. The 20.0% 37.3% 33.3% 9.3% 2.32 organization works against corruption in all forms, including extortion and bribery. Practices related to stakeholder engagement-including customer satisfaction measurement, promoting customer 8.0% 34.7% 49.3% 8.0% 2.57 retention &loyalty & customer advocacy to recommend your brand/product offerings etc. 9. Perception of the importance given to various practices in their organizations: Not Somewhat Very RatingAnswer Options Important N/A important important important AveragePractices -Reducing noise created by 12.9% 11.4% 17.1% 25.7% 32.9% 2.83operations/manufacturing.Practices-reducing air emissions in 8.5% 12.7% 14.1% 33.8% 31.0% 3.06production/related processes.Practices-minimizing the quantity of key 4.3% 4.3% 36.2% 31.9% 23.2% 3.25input materials used and reduction of 37
  38. 38. waste in output.Practices -reuse/recycling –including 2.9% 12.9% 30.0% 40.0% 14.3% 3.25Percentage and major inputs used.Practices-reducing the consumption of keyenergy source in 2.9% 11.4% 22.9% 42.9% 20.0% 3.32manufacturing/operations.Practices-reducing the consumption of 4.3% 12.9% 28.6% 38.6% 15.7% 3.20water and the quantity of effluents.Practices-minimizing the contamination ofland, arising from operations of the 8.5% 9.9% 18.3% 33.8% 29.6% 3.10company and remedification.Practices -to protect/restore-endangeredimmediate environment- 7.0% 11.3% 25.4% 29.6% 26.8% 3.06Plant/Animal/Cultural/Historical.Practices-minimizing the transportation of 5.6% 18.3% 33.8% 23.9% 18.3% 2.93materials and goods.Practice on collecting back sold products-after its life- for reuse and/or 9.9% 21.1% 21.1% 19.7% 28.2% 2.71environmentally sound disposal.Practices – environment spending, 5.7% 5.7% 45.7% 28.6% 14.3% 3.13accounting. 10. Perception of the implementation of the above practices in their organizations: No Good Significant Benchmark Rating Answer Options progress start process in industry Average Practices -Reducing noise created by 35.3% 26.5% 32.4% 5.9% 2.09 operations/manufacturing. Practices-reducing air emissions in 30.9% 32.4% 32.4% 4.4% 2.10 production/related processes. Practices-minimizing the quantity of key input materials used and reduction of waste in 20.6% 33.8% 39.7% 5.9% 2.31 output. Practices -reuse/recycling –including 21.7% 43.5% 29.0% 5.8% 2.19 Percentage and major inputs used. Practices-reducing the consumption of key 22.4% 37.3% 32.8% 7.5% 2.25 energy source in manufacturing/operations. Practices-reducing the consumption of water 20.3% 37.7% 36.2% 5.8% 2.28 and the quantity of effluents. Practices-minimizing the contamination of land, arising from operations of the company 30.3% 33.3% 31.8% 4.5% 2.11 and remedification. Practices -to protect/restore-endangered immediate environment- 30.3% 39.4% 24.2% 6.1% 2.06 Plant/Animal/Cultural/Historical. Practices-minimizing the transportation of 29.4% 45.6% 20.6% 4.4% 2.00 materials and goods. Practice on collecting back sold products- after its life- for reuse and/or environmentally sound 36.2% 39.1% 21.7% 2.9% 1.91 disposal. Practices – environment spending, accounting. 23.2% 39.1% 33.3% 4.3% 2.19 38
  39. 39. 11. Does your organization evaluate Best Practices for people & planet initiatives in terms ofcost-benefit?Yes: 50% No: 50%12. Organizations experience with respect to evaluating Best Practices for people and planetinitiatives in terms of cost-benefit? Answer No Only adds No gain Highly Successful Options benefit to costs no loss successful People 2.9% 2.9% 38.2% initiatives 17.6% 8.0% Planet 2.9% 8.8% 17.6% 14.7% initiatives 38.2%No concrete figures of how implementing any of the benchmark practices have impacted the bottomline. The respondents mention few of the practices being imbibed by their organization to make adifference/from a CSR perspective however the absolute quantification of the same in terms of theirimpact on the company’s bottom line is not stated.13. Functional responsibility for TBL in respondent companies:HR FIN MKTG OPS OTHERS26% 9.25% 12.96% 9.25% 44%14. Designations as perceived by respondents handling TBL activities in their respectivecompanies:CEO FH VP MD ED DIR CFO GM CLO NA OTHERS9.25% 11.1% 12.96% 5.5% 3.7% 5.5% 1.8% 3.7% 1.8% 35% 9.69%FH: Functional headCLO: Chief legal officer15. Does your organization currently have any major Triple Bottom Line initiative in thepipeline?-Yes: 40.7%, No: 59.3%65.7% of these 40% feel some major TBL initiative would be implemented within the next 5 years.75.9% respondents believe that their organization does not have any reporting mechanism with anational or international body specifically for triple bottom line initiatives.Of the 24.1% respondents who do believe such reporting exists, they stated reporting of the likes ofTatas Business Excellence Model, Global Compact, Global Reporting Index, World EconomicForum, G3 Guidelines of USEPA. 39
  40. 40. 16. Does your company have any reporting mechanism with a national or international body,specifically for triple bottom line initiatives?Yes: 24.9 % No: 75.1 % DISCUSSIONTo begin, it is evidently clear that today companies do not just look at cost reduction when it comesto maintaining profitability. The impetus is clearly on income generation as the various initiativesfocus on making new business developments, marketing and HR interventions and qualityenhancements. Process improvements, recycling of products and a more holistic understanding ofbusiness seems to be the popular practices for profitability maintenance in these economic times. Thefindings reinstate that this is perhaps a good time to introspect on the way we function and integratechanges which bring in greater internal stability.The fact that the majority of the employees handling sustainability initiatives are HR indicates thatthe sustainability drive is still in the corporate social responsibility mould and a minority with the topmanagement is indicative of the fact that the perception of sustainability is still social and notstrategic. TBL would account for greater top management interest in the integration and eachfunction spearheading it in the implementation.Social responsibility is further reinstated in the perception of ‘people’ being viewed as employeesfollowed by community. With a move towards TBL, we can look at changing this perception tostakeholders being viewed as ‘people’. Perceptions of what ‘planet’ is are more inclusive. However,the nature of planet initiatives focused more on how to not waste resources and on going green.Greater effort should be taken on ‘doing things’ in a planet friendly way instead of it being restrictedto a waste reduction, planting trees. The same needs to be made more measurable by getting inquality systems and auditory measures. ‘People practices’ were well-implemented withdevelopmental activities being carried out for the employees as well as for the community. However,while this is done for employees with due diligence and measurability, we need to ask whether thesame is done for the community as a social initiative or as a strategic initiative to actually developand build human capital.People and planet practices in organizations were perceived high on a relative scale of importance.However, there were gaps seen almost everywhere when it came to the implementation part of it. The 40
  41. 41. gap between the perceived importance of certain people practices and their actual implementation is25.71 %. The gap between the perceived importance of planet practices and their actualimplementation is 30.54 %. This means there is a consistent perceived reduction in that which isideally perceived and that which is actually implemented though the intent of sustainability isgenuine. This is clearly indicative of a fact that the initiatives might have individual agreement butnot an organization-wide implementation. The second dimension to this agreement is the lack ofmeasurability which makes it difficult for people to capture the extent of implementation. This wasreinstated by the 50 % response to the cost-benefit analysis which is important from a TBLperspective. Out of the 50 % who do, around 48 % (average) felt that the proposition was actuallybeneficial while around 34 % were neutral in their comments. This is fairly good as in most cases;TBL initiatives are long-term and would take some time to actually manifest the benefits. The factthat only 40 % of the sample size have a TBL mechanism in place opens the window of opportunityfor other companies to check how aligned are they to doing business in line with sustainability. Ifthey are not, it is a good time to start reconsidering the strategy and getting a reporting mechanismslike GRI (Global Reporting Initiative) in place. The level of pro-activity and time will decidewhether companies imbibe sustainability as a smart strategic move or as a means for survival. CONCLUSIONThe research focused on the perceptual measures of people and planet practices and the impact theymake to profits. While there was a plethora of people and planet practices in organizations, the needto strategically align it to increase profits was missing. Besides this, the need to use global reportingmechanisms to give measurability to ones sustainability efforts also came out strongly.However, the perceptual relationship between profits, people and planet being positive pointstowards exploring TBL more seriously in Indian organizations. Further research can be undertakenthrough exploratory research on how organizations can take TBL forward not just as a philosophybut as a strategic implementation tool in line with their business and the Indian context. 41