Sustainability is a tool for innovation in identifying hidden needs and values which would become more relevant in the years to come, says Juan Costa – Former Minister with the Government of Spain, currently the Global leader of climate change and sustainability services at EY.
In this interview Juan talks to Livemint about the new corporate social responsibility (CSR) rules and how these can improve the overall sustainability initiatives of companies in India.
Do you feel that CSR rules will impact sustainability initiatives of companies?
There is bound to be an additional inflow of funds for CSR activities, which would certainly catalyze the social sector. The impact would be in the form of how the social sector works. With the private player stepping in more actively into the system, I would expect the efficiencies and impact to only grow. Sustainability initiatives of the companies cover their overall economic, environmental and social initiatives. So, with this compliance-oriented boost in the social sector performance, the overall sustainability initiatives would improve.
What do you feel about the sustainability initiatives of Indian companies?
India is very different from the rest of the world. On one hand, you have the young, more empowered, more aware, more ambitious set of citizens; on the other hand, there are challenges such as resource constraints, access to electricity, sanitation and employment. The key to sustainability for India would be to manage these needs and demands effectively and identify the opportunities. Clean water, improved sanitation, clean energy and employment generation are all opportunities for Indian companies—whether addressed as part of CSR or as part of sustainability initiatives.
What are the prominent trends?
India has witnessed a greater commitment from the top management. This is further catalyzed by the CSR rules. Promoters and board members have been actively taking part in driving sustainability programmes and initiatives. This is very critical in order to bring in long-term vision and approach for the organization. I see this as a result of growing interest of investment communities. The investors are now growing to recognize the value in sustainability—not as a risk aversion tool, but for value. Global partners of Indian firms have also started to view their supply chains in India critically, which is also impacting sustainability in India.
How are these different from those in the West?
India has a two-way relationship with the world when it comes to sustainability. On the one hand, it continues to learn from the world; on the other, it develops some of the most typical solutions for driving sustainability.
At times, it has been seen that sustainability reporting is treated as a means to satisfying demands from global stakeholders such as business customers and investors. I am sure as Indian companies mature further, it would present to the world more solutions as it has done in many other sectors.
What is the way forward?
I view sustainability as a tool for innovation in identifying hidden needs and values which would become more relevant in the years to come. Companies need to analyze which approach of sustainability suits them the most. There have been instances where companies have used sustainability as a tool for managing risk, while others use it to create value.
The top management needs to be clear as to how it intends to use sustainability.
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