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Making global goals local business india
- 1. Sustainable Development Goals Making Global Goals, Local Business - India
- 2. Table of Contents 1. Relevance of Sustainable Development Goals (SDGs) for India 2. Government of India’s approach towards adopting the SDGs 3. SDGs – a unique framework for creating business value 4. Business case for acting on the SDGs 5 Foreword Preface 3 4 13 21 5. Key enablers 26 8
- 3. Foreword In 2017 and 2018, India’s economy is expected to grow at over 7%, positioning us as one of the fastest growing economies in the world. However, growth alone is not sufficient in today’s world as the global development goals have added a new dimension to the growth agenda. The imperative now is to achieve growth in a manner that positively impacts the environment and society at large. Given this context, the 12th National Convention of the Global Compact Network India presents a very relevant theme – “Making Global Goals, Local Business – India”. This year marks the second year since the launch of Sustainable Development Goals (SDGs). Over the past two years, businesses have undertaken various measures to demystify the SDG framework and prioritize goals for their sustainability initiatives. As we move ahead with the transformation journey envisaged by the SDG framework, it is critical to identify mechanisms to scale-up the efforts to integrate development goals into the mainstream business agenda. In this context, I believe this study can be immensely helpful for businesses to understand the best practices that leading organizations are adopting to create business value while addressing India’s development needs. The report also highlights some of the existing gaps and challenges which different stakeholders need to collectively address as we move ahead with our transformation journey. I would like to thank Global Compact Network India and its knowledge partner, Accenture Strategy, for undertaking this critical study. I sincerely hope that it helps businesses and other key stakeholders to scale-up their efforts to drive India’s growth and holistic transformation. Dinesh K Sarraf (Chairman and Managing Director, Oil and Natural Gas Corporation Ltd. (ONGC). President, Global Compact Network India) 3
- 4. Preface The Global economy today is characterized by a rapidly evolving business context. Be it macro-economic developments such as BREXIT, or the emergence of a new wave of digital disruption, there are clear signs that the world we live in is changing rapidly. What has not changed is the continued need to address some of the largest development challenges faced by economies across the globe – i.e. issues such as poverty, hunger, inequality, and climate change, amongst several others. This changing macro-economic context provides an interesting back-drop against which businesses operate today. On one hand, there is a critical need to keep pace with trends such as digital disruption. On the other hand, there is a growing need to create shared value – i.e. achieve growth in a way that helps address world’s development challenges. In this dynamic business context, the 12th National Convention of the Global Compact Network India (GCNI) represents a unique platform for businesses to come together and reflect on the new era of opportunities and development challenges that lay ahead. Through this study we demystify the huge opportunity for businesses in India to view global goals as enablers of growth and differentiation. In conducting this study, we followed two principal strands of research. Firstly, we conducted extensive secondary research to understand India’s current scorecard on the SDGs and the role leading businesses are playing to address the development challenges. Secondly, we conducted a short survey with business leaders to capture their perspectives and priorities around addressing development goals while pursuing profitable growth targets. We sincerely thank all organizations that participated in the study. We hope that the insights captured in this study will be helpful for businesses as they look to scale-up their efforts around integrating development goals with the mainstream business agenda. Kamal Singh (Executive Director, UN Global Compact Network India) Vishvesh Prabhakar (Managing Director - Communications, Media, & Technology, and Sustainability Accenture Strategy, India) Sundeep Singh (Principal – Sustainability, Accenture Strategy, India) 4
- 5. Launched in 2015, the SDGs represent a set of 17 development goals that were formed with the objective of shaping the world’s development agenda for the period 2015 through 2030. Right from the beginning, the Government of India demonstrated a strong commitment to address the development goals by mapping India’s development needs against the 17 SDGs. A close look at each of the 17 SDGs in the Indian context highlights the enormous potential and relevance of the SDG framework in shaping India’s transformation agenda. “Today, much of India’s development agenda is mirrored in the Sustainable Development Goals.” - Narendra Modi, Prime Minister of India 5 1. Sustainable Development Goals for India Relevance of Potential to drive India’s transformation Improved quality of life Equitable growth Impact on environment Remarks At 224 million, India has 30% of its population living under the international US $1.90-a-day poverty line1 ~15% of India's total population is undernourished, representing one quarter of the world’s undernourished population ~44% of children in India under the age of 5 are underweight. As a comparison, it is only 0.7% in North America2 ~30% of India's population has access to 65% of hospital beds3 ~66% of children in India don’t receive vaccinations on time versus ~10% in the US4 The gender gap in pay-scales in India is ~67% (considerably higher than the global average of 40%)6 Women participation in the workforce is 27% versus 51% in OECD countries7 Only ~2% of government schools provide complete school education from Class 1 to Class 125 ~600 million people lack access to sanitation facilities ~21% communicable diseases in India linked to unsafe water8 Table 1: Relevance of SDG framework for India
- 6. 20% of India's population lacks access to electricity; fossil fuels represent 75% of India's primary energy mix9 Currently, 35-40% of food produced is wasted14 India uses 2-4 times more water to produce a unit of major food crop than China or Brazil15 33% of college graduates in India are unemployed, compared to 5.6% in the US10 India currently ranks 81st amongst 140 countries on the Global Competitive Index for Infrastructure11 India is the 2nd most unequal country with millionaires controlling 54% of the wealth12 Indian cities will need over US $800 billion in infrastructure investments over the next 20 years13 Experts suggest that India will face altering monsoon patterns, leading to unpredictable floods / droughts16 The Indian Ocean is home to 126 vulnerable species, 27 endangered species, and 8 critically endangered species17 Pre-mature deaths due to air pollution in India have increased by 50% between 1990 and 201518 As on 8th March 2017, a total of 24 million cases were pending in various courts in India with several thousands in waiting for over 10 years19 India ranks first in the world in "Operational Maturity" for Public Private Partnership (PPP) projects20 6 Relevance of the Sustainable Development Goals for India Potential to drive India’s transformation Improved quality of life Equitable growth Impact on environment Remarks
- 7. Mr. Tom Albanese (CEO, Vedanta Resources Plc and Vedanta Limited) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? Standardize our interventions with global causes in a more meaningful manner. Benchmark our plans in a holistic manner and track progress to demonstrate improvement. Have a larger & broader scope of intervention to be seen as a proactive and responsible player. What could be the impact potential from these priority opportunities? Clear correlation of our intervention with the global cause and need to promote sustainability. Seen as a responsible company with the bandwidth to contribute towards global challenges. Internal reference framework to define objectives and targets to focus on. What are the biggest challenges that need to be overcome to achieve this? Clear understanding and expectations from business contributing towards achievement of the SDGs. Collaboration of various role players in coming on-board with a common aim. Government policies and practices to incentivize businesses to give SDGs a strategic importance. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Prioritization of SDGs in alignment with business and sectoral requirements. Consolidation of existing activities contributing directly or indirectly towards achievement of SDGs. SDGs (Priority) action plan to fill in the gaps with respect to requirements and existing action. Please share your favourite initiative of effectively adopting the SDG agenda and impact created. Project “Nandghar”, construction of Aanganwadis (approximately 4,000) across the country. This project results in contribution to the following areas: Poverty alleviation Gender equality Clean water and sanitation Affordable and clean energy 7
- 8. In its part, the Government of India has launched a series of initiatives to create an ecosystem conducive to addressing the development challenges faced by the country. “Just as our vision behind Agenda 2030 is lofty, our goals are comprehensive. It gives priority to the problems that have endured through the past decades. And, it reflects our evolving understanding of the social, economic, and environmental linkages that define our lives. The sustainable development of one-sixth of humanity will be of great consequence to the world and our beautiful planet.” - Narendra Modi, Prime Minister of India 2. adopting SDGs Government of India’s approach towards Associated ministries Illustrative schemes Illustrative actions and targets Ministry of Rural Development Ministry of Skill Development & Entrepreneurship Pradhan Mantri Jan Dhan Yojna Pradhan Mantri Fasal Beema Yojana Skill India Program Mahatma Gandhi National Rural Employment Guarantee Act The Skill India Mission targets skilling more than 40 crore people in India by 2022 with the aim to combat challenges of poverty and unemployment21 Ministry of Agriculture & Farmer’s Welfare Ministry of Consumer Affairs, Food & Public Distribution Target Public Distribution System National Nutrition Mission National Food Security Mission The National Food Security Mission set a target of 25 million tonnes of additional food grain production in the 12th five-year plan22 Ministry of Health & Family Welfare Ministry of Drinking Water & Sanitation Pradhan Mantri Swasthya Suraksha Yojana National (Rural) Health Mission The Pradhan Mantri Surakshit Matritva Abhiyan The 2017 National Health Policy seeks to increase the government expenditure on health (as a % of GDP) from the existing 1.15% to 2.5 % by 202523 Ministry of Human Resource Development Ministry of Skill Development & Entrepreneurship Sarva Shiksha Abhiyan Beti Bachao, Beti Padhao Padhe Bharat, Badhe Bharat To bridge the internet skills gap, the government aims to spend INR 1,800 crore on the digital literacy mission (for 60 million people in rural areas)24 Ministry of Women & Child Development National Mission for Empowerment of Women Support to Training and Employment Programme for Women There is a target to actively support women empowerment (for e.g., a scheme offers up to 75% funding for projects promoting women employment)25 8 Table 2: Government of India’s efforts to combat development goals (illustrative, not intended to be exhaustive)
- 9. Ministry of Drinking Water & Sanitation Ministry of Water Resources, River Development & Ganga Rejuvenation National Rural Drinking Water Programme Swachh Bharat Mission The Swachh Bharat flagship program aims to construct more than 10 crore toilets by 2019 (out of which 2 crore toilets have been built so far)26 Ministry of New & Renewable Energy Ministry of Power Deen Dayal Upadhyaya Gram Jyoti Yojana Jawaharlal Nehru National Solar Mission India's solar power generation target is set for 100 GW by 2022. About 60% of this will be met through grid connected solar power projects.27,28 Ministry of Labour & Employment Ministry of Urban Development Deen Dayal Antyodaya Yojana National Policy on Skill Development The National Policy on Skill Development has set a target of skilling 500 million people by 202229 Ministry of Road Transport & Highways Ministry of Civil Aviation, Railways, Shipping My Gov Innovation India Infrastructure Project Development Fund Border Area Development Programme In the union budget for 2016-17, the government announced a total outlay for infrastructure development of over INR 2 lakh crore30 Ministry of Social Justice & Empowerment Ministry of Micro, Small & Medium Enterprises Niryat Bandhu Scheme Pradhan Mantri Mudra Yojana (PMMY) Multi Sectoral Development Programme for Minorities PMMY scheme seeks to provide loans of up to INR 10 lakhs for small enterprises (and has a lending target of over INR 2 lakh crore for 2017-18)31 Ministry of Housing & Urban Poverty Alleviation Ministry of Urban Development Urban Infrastructure Development Scheme Smart City Mission Pradhan Mantri Awaas Yojana The Government has earmarked INR 48,000 crores for its smart city mission and has already announced the first 60 planned smart cities32 Ministry of Environment & Forests & Climate Change Ministry of Consumer Affairs, Food & Public Distribution National Policy on Bio-Fuels National Clean India Fund Credit Linked Capital Subsidy Scheme The Ministry of Environment targets providing funding support for select projects (for e.g., a scheme funds 25% costs for projects setting up treatment/ disposal facilities on PPP basis)33 9 Government of India’s approach towards adopting SDGs Associated ministries Illustrative schemes Illustrative actions and targets
- 10. Ministry of Environment & Forests & Climate Change National Action Plan on Climate Change National Afforestation Programme National Mission for a Green India India ratified the Paris Agreement on climate change and pledged to reduce its carbon emission intensity by 33-35% (from 2005 levels) by 203034 Ministry of Fisheries & Agriculture Department of Animal Husbandry, Dairying & Fisheries National Coastal Zone Management Programme Blue Revolution: Integrated Development and Management of Fisheries The Ministry of Agriculture & Farmer’s Welfare launched the Blue Revolution with a target to increase fish production at a CAGR by 8% and reach 15 million tonnes by 202035 Ministry of Environment & Forests & Climate Change Ministry of Tribal Affairs National Biodiversity Action Plan Project Elephant National Afforestation Programme The Compensatory Afforestation Fund Bill aims to increase India’s forest cover from 21% of the total land to 33% of the total land36 Ministry of Law & Justice Ministry of Personnel, Public Grievances and Pensions Pradhan Mantri Gareeb Kalyan Yojana Black Money Disclosure Window Pragati Platform (Public Grievances Redressal System) For faster delivery of justice, GoI approved eCourts Phase-II project with a total cost of Rs. 1,670 crore over a period of 4 years37 Ministry of External Affairs Ministry of Finance Ministry of Corporate Affairs Digital India Mission BRICS SAARC Launched NGO Partnership System (NGO-PS) and NGO DARPAN portals to promote collaboration between key government ministries and NGOs38 These initiatives clearly demonstrate the Government’s commitment to combat the gigantic challenges posed by the SDGs. However, is this enough? The consensus (based on inputs received from diverse stakeholders) is that while the Government push is certainly helping create the right ecosystem, the overall success of addressing the SDGs would depend on complementary efforts of diverse stakeholders. This is where the businesses can play a critical role to help achieve desired pace and scale for India’s transformation journey through 2030. 10 Associated ministries Illustrative schemes Illustrative actions and targets Government of India’s approach towards adopting SDGs
- 11. Mr. Nilanjan Bhattacharya (Country Head & Head of Corporate and Institutional Banking – India, Westpac Banking Corporation) What are your top three priorities to integrate global goals into local businesses? Gender Equality: Embracing societal change. Supporting gender equality: Women in leadership target of 50% by 2017. Affordable and clean energy: Undertaking scenario analysis to understand the longer-term impacts of limiting global warming to below two degrees celsius above pre-industrial levels. $6.2 billion total committed exposure to CleanTech and environmental service sector. Reduced inequalities: We have introduced initiatives to help people with money and ways to make banking more accessible. Microfinance for businesses that weren’t able to access finance. New foundation program to back not-for-profit social enterprises. What could be the impact potential from these priority opportunities? Gender Equality: At 2016 women leadership target was 48%. Percentage of employees working flexibly increased from 63% (2014) to 74% (2016). Affordable and clean energy: Raised $500 million through Westpac Climate Bond issue and increased proportion of renewable energy financing from 45% to 59% in total electricity generation portfolio, since 2011. Reduced inequalities: 59,596 Participants in Financial Education. We’ve backed 1,000 businesses with microfinance and 2,900 employment pathways and jobs created by social enterprises supported by Westpac Foundation over two years. What are the biggest challenges that need to be overcome to achieve this? One of the biggest challenges for banks to pursue a rigorous SDG agenda in their dealing with clients is the inability to showcase this as a meaningful competitive advantage. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Map and assess points of alignment between SDGs and existing business and sustainability strategies. Identify SDGs where the business can influence positive progress. Monitor progress through internal performance metrics and relevant outcome metrics. Leadership Perspective 11
- 12. 12 Please share your favourite initiative of effectively adopting the SDG agenda and impact created. Internally – Westpac’s issuance of AUS $500 million climate bond in May 2016. This initiative is providing investors a high-grade fixed income investment, with funding allocated to seven wind energy facilities and five low carbon commercial properties. Westpac believes in the power of mobilizing capital markets (in this case, bond markets) to support the transition to a net zero emission economy. Externally – Unilever’s Lifebuoy soap improving hygiene in rural India. To help address health problems caused by poor hygiene in rural areas of India, Unilever introduced an 18 gram bar of Lifebuoy soap—enough for one person to wash their hands once a day for 10 weeks—for a price of two rupees. This affordable price point is combined with a public education and outreach campaign targeted within the eight Indian states where deaths from diarrhoea-related diseases are highest and soap sales are lowest. Leadership Perspective
- 13. “And yet, it is not too late to reshape agriculture and food systems to better feed the world and deliver sustainable development. No doubt, governments must play a critical role, but it is not their responsibility alone. It requires an unprecedented effort by all sectors in society, and business must be at the heart of this endeavour.” - Kofi Annan, Former UN Secretary-General, Chair of the Kofi Annan Foundation 3. SDGs - a unique framework for creating business value The time for businesses to embrace and leverage SDG framework is here and now. Based on a triennial CEO Sustainability study39 conducted by Accenture and UNGC in 2013: The subsequent edition of the study40 conducted in 2016 revealed that for the first time business leaders accepted the mandate for a radical change and view SDGs as a universal roadmap for action. In fact, the study found that around 87% of the CEOs surveyed believe that the SDGs provide an essential window of opportunity for businesses to rethink their approach to sustainable value creation. An overwhelming majority of CEOs (around 93%) believed that sustainability would be important to the future success of their business. Despite that, 67% of the leaders felt that business is not doing enough to address global sustainability challenges. 13 Our study highlights that that despite the diverse nature of development goals and underlying value creation opportunities, there is a common theme in terms of levers of value creation. High performing businesses typically realize value from the SDG-focused initiatives through four value creation levers – revenue growth, cost reduction, risk mitigation, and enhanced brand image. Given the diverse nature of development challenges, there are a myriad of ways in which businesses can leverage the SDGs to create business value. The key is to identify and prioritize goals which may be best aligned with the business activities and focus areas. Identifying natural alignment with the business focus may be the key.
- 14. “We can unlock growth by breaking the bias on gender, but only if our sustained actions create a snowball of change. We must move forward, not back.” -Lise Kingo, CEO and Executive Director, United Nations Global Compact For instance, an FMCG organization may be well positioned to impact the SDG related to ‘Good Health and Well-Being’ by providing access to hygiene products at affordable prices to rural India (thereby creating business value by getting access to a huge untapped market). Similarly, an organization operating in services industry may find it more meaningful to drive gender equality through equal growth opportunities for its women employees (thereby creating business value through a vibrant, balanced and more productive workforce). 14 Figure 1: Levers of value creation and illustrative underlying opportunities SDGs – a unique framework for creating business value Differentiate products / services from competition Broaden products and services portfolio via sustainable innovation Stimulate more usage and extend availability through new channels INCREASE REVENUE IMPROVE INTANGIBLES Attract and retain talent Improve consumer / customer trust and loyalty Foster positive and collaborative relationships with governments and regulators Enhance social value from positive media coverage Manage price volatility through adopting circular business models Protect “license to operate and grow” by engaging stakeholders Reduce regulatory and litigation risks LOWER RISK Reduce cost of production through more efficient material usage Reduce utility spend through energy efficiency Improve supply reliability and supplier productivity REDUCE COST INCREASEPOSITIVE LESS TANGIBLE/ LONGER TERM REDUCENEGATIVE MORE TANGIBLE/ SHORTER TERM
- 15. Mr. Roland Folger (MD and CEO, Mercedes-Benz India) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? Climate change. Quality education. Responsible consumption and production. What could be the impact potential from these priority opportunities? Addressing the climate change challenge would also open up new opportunities for society to grow and prosper. It would lead to the development of new innovative technologies. Business can play an important role in improving quality of education which in turn would reduce unemployment, ensure the talent pool and thereby drive the economic growth. The entire supply chain from suppliers to dealers can make a significant impact in promoting human rights, fair labour practices, environmental program and corruption policies. What are the biggest challenges that need to be overcome to achieve this? Out of date education which is not in conformity with needs of industry and business. Making sustainability as a priority in supply chain can face challenges due to varied scale, legal structure, and degree of importance given by the organizations involved. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Make Corporate Social Responsibility (CSR) a regular business agenda. Undertake projects which would have a long-term impact on society. Integrate the Sustainable Development Goals across the supply chain. Please share your favourite initiative of effectively adopting the SDG agenda and impact created. We collaborate with government/non-government vocational education institutes to create facilities and curriculum for skill development which would cope-up with fast changing technology. Every year students who pass out of the program are immediately employed in the Industry. 15
- 16. Mr. Lalit Kumar Gupta (MD and CEO, Essar Oil Limited) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? The top three priorities for Essar Oil Limited are education, health & livelihoods, thus correspondingly aligned and feeding into the achievements of the following SDGs in particular: SDG2, SDG 3, and SDG4. What could be the impact potential from these priority opportunities? The impact potential of education and health programs would be high in the medium and long-term and comprise of achieving enhanced learning levels, achieving 100% literacy and bringing down dropout rates in schools, improved health indicators and low incidence of epidemics. This would further reflect in improved livelihoods and improved lifestyle. The impact potential of Essar Oil Limited initiatives covers 9,000 households across 15 villages in in Jamnagar and Devbhumi Dwarka districts. What are the biggest challenges that need to be overcome to achieve this? The mismatch between the enormity of the social concerns and the budget availability. The priorities of CSR may not necessarily match with the immediate areas of concern by government functionaries. Convince the communities to own the programs to attain long-term sustainable impacts. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Designing the CSR programs based on the actual needs of the community and then integrating them with the SDGs. Chosen SDGs should be integrated with the mainstream business agenda and the core competency. Business should consider itself as an integral component and key player of the ecosystem. 16
- 17. Leadership Perspective 17 Please share your favourite initiative of effectively adopting the SDG agenda and impact created. Essar Foundation has designed a unique, innovative program called “Indradhanush - Shiksha Ke Saat Rang” to celebrate freedom of learning in Jamnagar district of Gujarat. The objectives of the program are to: Equip the teachers with skills and building their capacity in Activity Based Learning (ABL). Introduce the children to various activity-based and interactive mediums and models of learning. Provide hands-on experience to teachers and students in new teaching-learning techniques. In the past six years 9,000 students have been reached in the region and Essar Oil intends to implement the program for a long timeframe.
- 18. Transformational companies focus on creating ‘shared’ value. Based on the varying level of maturities (with respect to integrating business agendas with the development agenda), organizations can broadly be classified into four distinct categories. The framework presented below can help organizations identify the zone in which they currently operate and explore their aspirational position while progressing on their journey towards a high-performing business. 18 Figure 2: High performance framework for businesses Traditional Focus on corporate profit maximization; less or no focus on sustainability initiatives Lagging Struggle on business performance; not able to envisage benefits from adopting sustainability Transformational Stellar business outcomes; able to capture trapped business value through sustainability initiatives Niche Charity, philanthropy, or development sector focused organizations; do not necessarily subscribe to a profitability model Sustainability Leadership BusinessPerformance SDGs – a unique framework for creating business value
- 19. Transformational organizations view the global goals as a framework to differentiate themselves and create value in the form of one or more of the four key levers – revenue, cost, risk, and brand. Traditional organizations showcase great business performance in terms of high revenue growth, positive cash flows and high ROIs, but are unable to tap new markets or realize cost savings, which adopting the global goals would otherwise offer. Niche organizations may not necessarily have a business model inclined towards profitability. These could be non-profit organizations or social enterprises with developmental issues at the core. These organizations have a clear social mandate and may potentially rely on external sources of funding for the sustainability of their operations. Lagging organizations struggle with business performance and have a very weak commitment to sustainability. They may undertake traditional charity based ad-hoc initiatives but are not committed to drive sustainable growth and differentiation. In the next section, we turn our attention to some examples of transformational organizations that are already reaping business benefits from their SDG-focused initiatives. 19 SDGs – a unique framework for creating business value
- 20. Mr. Rana Kapoor (MD and CEO, YES BANK) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? Create enduring impact at bottom of pyramid through financial inclusion & leveraging Fintech. Invest in positive impact sectors including renewable energy, energy efficiency, water, climate-smart agriculture and smart cities, amongst others. Mobilize finance towards climate action through innovative financial instruments like green bonds, credit enhancements and blended finance to provide sustained economic returns. What could be the impact potential from these priority opportunities? FINTECH has the potential to exponentially increase the efficiency of distribution of financial services through mobile wallets and money transfer tools. There is a huge business opportunity in investing in positive impact sectors. Water, for instance, is currently an unorganized sector and it is expected that an investment of USD 1 (INR 65.37) would give an economic return between USD 3 – 4 (INR 196.10 – INR 261.47), indicating an RoI of up to 300%. What are the biggest challenges that need to be overcome to achieve this? Availability of finance. Access to finance. Affordability of finance. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Align core business strategy to mainstream SDGs implementation. Integrate environmental & social concerns in risk management framework to make it more holistic and ensure sustainable growth. Institutionalize internal capacity building of employees through training and development on E&S risks and opportunities. 20 Please share your favourite initiative of effectively adopting the SDG agenda and impact created. The most significant step has been the launch of Green Bonds, wherein YES BANK became the first Indian entity to issue green bonds raising INR 1,000 crores in February 2015. Benefits of YES BANK’s foray into the green bond market were multi-fold, resulting in both internal and external movement. Following YES BANK’s first issuance, others followed suite, and there have been a total of 14 issuances thus creating a market towards green financing.
- 21. Case study of high-performing businesses Organization Initiative Business impact Revenue Cost Risk Brand Afforestation program where ITC helps tribal and marginal farmers grow commercially viable pulpwood plantations. Generated over 100 million person-days of employment till date. Secure wood pulp supply Improved brand image Our study highlights several transformational players that are leveraging the SDG framework to create shared value – i.e. value for the businesses and communities. These examples illustrate the vast breadth of opportunity that lays ahead of corporate India, an opportunity that can only be realized through an integration of global goals with the mainstream business agenda. 4. SDGs The business case for acting on the ITC 21 DuPont is partnering across value chain – (with farmers and food companies) to apply science-based solutions to enhance nutrition, safety, and quality of food. Also helps reduce food waste across the value chain.41 Improved revenue potential through differentiated products and competitive advantage Improved brand image DuPont Through its ‘Blueprint for Change Program’ - reached 16 million Indians and diagnosed over 300,000 people for Diabetes and alerted almost 125,000 people at risk of becoming diabetic since 2002.42 Annual reach of diabetes patients growing at ~14% Perceived as a leader in diabetes care by patients and healthcare professionals Novo Nordisk Through the ‘Nand Ghar’ initiative, Vedanta works with the Ministry of Women and Child Development (MWCD) – aims at imparting education and vocational skills to 400,000 child and women beneficiaries by 2019.43 Improved brand image and positive relationships with the communities Vedanta Table 3: Examples of transformational players creating business value through the lens of SDGs
- 22. 22 Case study of high-performing businesses Organization Initiative Business impact Revenue Cost Risk Brand Project Shakti aims at empowering women in rural India. Women from rural regions are trained to operate as sales agents, which provides them with a source of livelihood.44 Access to new markets Steady last mile delivery mechanism Improved brand patronage Hindustan Unilever Single deep water aquifer in Neemarana for industrial and agricultural use posed risk. SAB Miller trained farmers and partnered with local agencies to reduce water consumption.45 Reduced costs by securing access to sustainable water supply Avoided conflict with local stakeholders SAB Miller Committed to using 100% renewable energy in its manufacturing operations by 2030. In 2015, 5% of total electricity used was sourced from renewables. Cost saving of over INR 16 Cr each year.46 Reduced costs from alternative energy sourcing Tata Motors Works closely with governments and local partners to impart training on sustainable livelihood and decent jobs. Until 2016, trained almost 100,000 individuals through this program.47 Improved brand image Potential to employ local workforce Aditya Birla World’s first airport to run 100% on solar power. Generates more electricity than needed, feeds excess units into the grid.48 Additional revenues from feeding electricity into grid Cost savings from reduced utility expenses Cochin International Airport Limited, Kochi The business case for acting on the SDGs
- 23. 23 Case study of high-performing businesses Organization Initiative Business impact Revenue Cost Risk Brand Focused on expansion in rural areas, building up on momentum gained through PM Jan Dhan Yojna. Engaged Indian Oil Corporation’s Kisan Seva Kendra to extend banking services to extremely remote areas.49 Increased revenues from new customer base Cost savings from using shared infrastructure Improved brand image State Bank of India A mission intended to make cities more efficient, liveable, and sustainable. Government to invest ~INR 500 Crores per shortlisted city over a span of 5 years.50 Additional revenues from PPP models, user charges, municipal bonds etc. Cost savings through efficient resource (utilities) and asset (infrastructure) utilization Government of India, Smart Cities Mission Nike Grind works with several companies to upcycle and repurpose Nike’s pre-and-post consumer waste. The waste materials from shoes are used to make sports turfs, running tracks, carpet inlays etc.51 New revenue streams from repurposing waste Reduced waste management costs Improve brand value Nike Grind YES BANK successfully issued India’s first green infrastructure bond in 2015, making India seventh largest green bond market globally.52 New revenue streams through differentiated green bonds portfolioYES BANK An initiative designed for marine biodiversity conservation; also aims to improve sustainable fishing, livelihood generation, and eco-tourism development.53 Broad based cost savings for the government from efficient conservation efforts Avoided risk of depleted fish stocks in the coastal region MoEF and UNDP - Sindhudurg Coast The business case for acting on the SDGs
- 24. 24 Case study of high-performing businesses Organization Initiative Business impact Revenue Cost Risk Brand Through their ‘Reviving the Green Revolution’ initiative, promoting agricultural diversification, water saving crops, improved soil health, and overall ecosystem conservation.54 Improved brand image Tata Trusts Focused efforts on improving organizational transparency and anti-corruption programs. Transparency International Index of 2014 ranked ONGC at 26th position among 124 of world’s largest publicly listed companies.55 Improved brand image Avoided ethics and compliance risksOil and Natural Gas Corporation Ltd. (ONGC) International Financial Corporation (IFC) collaborated with five top real estate developers in India to promote sustainable and affordable housing.56 New revenue streams through differentiated product portfolio Cost savings from efficient resource utilization Sustainable Housing Leadership Consortium The business case for acting on the SDGs
- 25. Please share your favourite initiative of effectively adopting the SDG agenda and impact created. Tata Chemicals Water Mission through Swach. Improving the lives of rural artisans through Okhai. Dharti ko Arpan (Tata Chemicals’ program to restore and conserve ecosystems). Mr. R Mukundan (Managing Director, Tata Chemicals) What are your top three priorities to integrate global goals into local businesses? Ensure availability and sustainable management of water and sanitation for all. Conserve and sustainably use the oceans, seas and marine resources. Inclusive and sustainable economic growth, full and productive employment, and decent work for all. What could be the impact potential from these priority opportunities? These opportunities will help not only to preserve precious natural resources, but also lead to sustainable and inclusive growth and positive impact on health and standard of living. What are the biggest challenges that need to be overcome to achieve this? The biggest challenges are: Awareness Sensitivity towards the cause Translating aspiration into action Therefore, huge effort will be required for appropriate communication and people’s participation. What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Lead by example - put a stake in the ground by taking up an audacious target around a cause and work towards it. Invest in terms of man-hours and thought leadership, not just monetary resources, to evangelize. Measure own progress and make an honest effort to deliver the change. Leadership Perspective 25
- 26. “We are trying to show that you can be successful as a business and at the same time show the financial community this should be one of the better drivers for their investments.” -Paul Polman, CEO, Unilever In today’s rapidly changing macro-economic environment, businesses are increasingly required to innovate operating models, access new markets, and identify potential avenues for growth and differentiation. In this dynamic and increasingly competitive world, businesses also confront a strategic choice with respect to the adoption of the SDG framework. The choice is simple - either to integrate SDGs as a part of the mainstream business agenda or pursue sustainability initiatives under the umbrella of a separate CSR function. This is a critical choice as it can have a significant impact on the medium-to long term fortunes of an organization. There is ample evidence that for an organization to emerge as a true high-performer, business leaders should embrace the SDG framework as a mainstream business agenda and the same should then percolate to different business divisions, all the way to individual employees in the form of their day-to-day responsibilities. For instance, the ‘Sustainable Living Plan’57 undertaken by Unilever, under the leadership of its CEO Paul Polman, demonstrates how sustainability vision defined by the leadership can pave for an organization to emerge as a high-performing business. In today’s age of digital disruption, technologies hold the key to drive transformation at scale and pace. In the global context, technologies such as Internet-of-Things (IoT), Drones, 3D printing and Robotics are increasingly being used to accelerate global transformation agenda. It is also interesting to note that several global organizations are beginning to experiment with digital technologies to develop innovative operating models. For instance, Amazon’s Prime Air initiative (which aims to leverage drones to deliver small packages) has the potential to deliver disruptive business benefits while helping drive efficient usage of resources. 5. Key enablers Having analyzed how businesses can integrate global goals and realize new business opportunities, we now turn our attention to the key enablers and critical success factors for this transformation. 26 Strategy and Purpose Digital Solutions
- 27. In the Indian context, digital technologies also hold enormous potential to help businesses in delivering transformative benefits. However, a key consideration would be businesses’ readiness to experiment with the traditional operating models and appetite for innovation. Leading companies gain advantage by realizing synergies in technologies, supply chain innovation, and customer bases.59 For instance, as a part of its Sustainable Living Plan, Unilever has set an internal goal to enhance the livelihood of women and smallholder farmers while simultaneously growing business by 2020. To achieve this, the organization has actively forged partnerships with players across the value chain – such as farmers, retailers, and consumers, in collaboration with a wide range of NGOs and private stakeholders.60 27 Impact Area Possible Technologies Potential Business Applications (i.e. SDGs such as Zero hunger, Quality education etc.) Precision agriculture, e-learning, smart security etc. Relief shipment, aerial surveillance – (e.g., Drones can potentially reduce medical supply delivery time from 15 hours to 15 mins) IoT, Big Data Drones (i.e. Reduced inequalities, Decent work and economic growth) Brain Computer Interface promotes equitable growth by helping people with disability to be independent and perform at par with everyone else58 Transparent transactions and elimination of intermediaries help distribute wealth equitably Robotics, Artificial intelligence Blockchain (i.e. SDGs such Life below water, Life on land, Climate change etc.) Smart traffic, sensor-based monitoring (e.g., Autonomous vehicles have the potential to reduce tailpipe emissions by 80%) Smart manufacturing (e.g., 3D printing can reduce global energy use by up to 2,584 billion kWhs by 2025) Autonomous vehicles, IoT 3D printing Table 4: Use of digital technologies to drive global transformation agenda (illustrative, non-exhaustive) Key enablers Stakeholder Collaboration & Partnerships Better quality of life Inclusive and equitable growth Protecting the environment
- 28. “The ambitious sustainable development goals require an equally ambitious financial system to mobilize the necessary finance.” -Rana Kapoor, MD and CEO, YES BANK While pursuing the ambitious transformation encompassed by the SDG framework, there is a critical need to be cognizant of the underlying risks and challenges. A transformation program of this scale would invariably entail multi-stakeholder engagements, complex long term projects, and significant infusion of funds. Given the sheer scale of these programs, there may be a tendency for inefficiencies and malpractices to creep into the execution agenda. In this context, it would be imperative to execute the entire transformation agenda with the highest ethical standards and enhanced transparency for all the stakeholders involved - consumers, corporates, investors, Government bodies, NGOs, citizens, amongst others. Interestingly, as per the Edelman’s Trust Barometer, in 2017, the trust in government institutions in India is at an all-time high61 . However, this year the trust in Indian CEOs has diminished by eight percentage points vis-à-vis the last year. This represents a potential opportunity for the businesses to undertake targeted initiatives to regain the citizen trust. One of the fundamental ways in which the SDGs differ from previous frameworks is that the SDGs require sustainable and diverse funding sources from the government and the private sector alike. The investments are needed to support all goals, including quality R&D for innovation, massive capital investments for infrastructure capacity expansion, testing and scaling of proven solutions, and financing of new techniques. By current estimates, India needs around INR 3.5 trillion to successfully meet the targets laid out in Agenda 203062 . This is another area where businesses have an opportunity to put a stake in the ground and become an integral part of India’s transformation journey. 28 Governance, Ethics, and Transparency Financing and Investments Key enablers
- 29. Dr. Raman Ramachandran (Head South Asia, Chairman & Managing Director – BASF India Limited) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? Safety – EHS Innovation Sustainability What could be the impact potential from these priority opportunities? Safety: Our strict adherence to safety standards establishes a benchmark for the Industry in general. Innovation: We have set up BASF Innovation campus in Mumbai in 2017 with an investment of Euro 50 million. The facility at full capacity would accommodate around 300 scientists and will engage in cutting edge research in the areas of crop protection, process development and polymer research. Sustainability: BASF’s accelerator range of products (products that have a significant sustainability contribution in the value chain) go a long way in addressing these sustainability challenges. What are the biggest challenges that need to be overcome to achieve this? Consistent enforcement of regulatory standards. Consistent and transparent implementation of IPR policy. An educational system that fosters innovation. Please share your favourite initiative of effectively adopting the SDG agenda and impact created. BASF’s accelerator range of products contribute 27.2% to BASF’s sales worldwide. Customers’ use of BASF’s climate protection products worldwide resulted in avoidance of 540 million metric tons of CO2 equivalents in 2016. 29 What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Resources, environment and climate: Find new alternative energy sources. Reducing the environmental footprint of buildings over their life cycle. Quality of life: Provide adequate supplies of clean, safe drinking water. Providing affordable housing. Food and nutrition: Providing sufficient volumes of nutritious food for the growing human population.
- 30. Mr. Manish Tandon (CEO, CSS Corp Pvt. Ltd) Leadership Perspective What are your top three priorities to integrate global goals into local businesses? Climate Action Responsible Consumption Quality Education What could be the impact potential from these priority opportunities? Energy efficiency, lowered energy consumption. Reduced consumption of natural resources, responsible end of life e-waste handling. Enhanced job skills & employability. What are the biggest challenges that need to be overcome to achieve this? How to measure and report impact? Identifying effective partners in implementation. Please share your favourite initiative of effectively adopting the SDG agenda and impact created. Climate Action (Sustainable Development Goal 13) - Usage of Light Emitting Diode (LED) bulbs instead of Compact Fluorescent Lamps (CFL) resulted in reduction of 15 tonnes of CO2 , 18,733 kWh of power consumption and elimination of handling mercury from disposed CFL. 30 What are your top three recommendations for the businesses to integrate SDGs into the mainstream business agenda? Reporting sustainability more prominently. Encouraging employees to accept & achieve sustainability goals. Identifying & integrating applicable SDGs with organization processes.
- 33. 33 Acknowledgements Study Leads Kamal Singh Vishvesh Prabhakar Lead Authors Sundeep Singh Jay Thakkar Pooja Kumar Sukanya Deshmukh The authors would like to thank the following people for their insights and assistance Ritesh Kapoor Pranshu Gupta Amanpreet Talwar For further information, please contact: Kamal Singh Executive Director UN Global Compact Network India kamal.singh@globalcompact.in Vishvesh Prabhakar Managing Director, Sustainability, Accenture Strategy, India vishvesh.prabhakar@accenture.com Sundeep Singh Principal, Sustainability, Accenture Strategy, India sundeep.singh@accenture.com
- 34. 34 About About Global Compact Network India Global Compact Network India (GCNI), formed in November 2000, was registered in 2003 as a non-profit society to function as the Indian Local Network of the UN Global Compact, New York. It is the first Local Network in the world to be established with full legal recognition. It, also as a country level platform for businesses, civil organizations, public and private sector, aids in aligning stakeholders’ responsible practices towards the Ten Universally Accepted Principles of UNGC in the areas of Human Rights, Labour, Environment and Anti – corruption, broad UN goals including Sustainable Development Goals and other key sister initiatives of the United Nations and its systems. At present, the India Network ranks among the top 10, out of more than 90 Local Networks in the world. It has also emerged as the largest corporate sustainability initiative in India and globally with a pan India membership of 230 leading business and non-business participants and 341 signatories, strengthening their commitment to the UN Global Compact Principles by becoming proud members of the Local Network in India. For more details, please visit www.globalcompact.in About Accenture Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 401,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. About Accenture Strategy Accenture Strategy operates at the intersection of business and technology. We bring together our capabilities in business, technology, operations, and function strategy to help our clients envision and executive industry-specific strategies that support enterprise wide transformation. Our focus on issues related to digital disruption, competitiveness, global operating models, talent and leadership help drive both efficiencies and growth. For more information, follow @AccentureStrat or visit www.accenture.com/strategy
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