To understand an Indian company’s perspective of responsible business, IRBF recently interviewed Anirban Ghosh, Chief Sustainability Officer (CSO) at Mahindra Group.
Recognised as one of the Top 100 CSR Professionals globally, Anirban has been enabling companies in the Mahindra Group to adopt a sustainable path. He has been working with the Group in Sales, Marketing, and Strategy since 1999.
In this conversation with IRBF, Anirban traces the evolution of business responsibility in India. He also gives us an insight into how the Mahindra Group is gearing up to combat climate change and inequality by developing scalable and innovative business solutions.
Q: You have been in the corporate sector for a long time. How has the concept of business responsibility and sustainability changed in the Indian private sector in the last decade?
Companies that follow responsible business practices have always espoused the cause of doing business in a manner that contributes to the society. Yet these efforts have largely been voluntary and not because of any law or compliance.
The idea of what constitutes responsible business is expanding. As a result, businesses need to identify problems which require action. This way of thinking is emerging because we are exploiting natural resources faster than they can be replenished. There is also the issue of rising inequality in society. Various aspects of responsible business today are broadly linked to these two issues – inequality and climate change.
The perception of what makes a business responsible has also changed. For a business to be seen as responsible, it has to go beyond mere compliance. For example, until recently a a company’s compliance with Central Pollution Control Board’s (CPCB) norms would be considered a measure of responsibility. Now it is no longer enough.
Despite complying, a company may still be contributing to polluting or ruining some kind of natural resource or the other. That is why the conversation moves forward beyond compliance to maybe ‘sending no waste to landfill’. Taking this position, we say that whatever we consider as waste today, we would rather look at it as a by-product which can be used for some productive means by the business and not just be sent to a recycler. This is one small example by which business responsibility has been redefined.
Q: How do you think the National Voluntary Guidelines (NVGs) and Business Responsibility Reporting (BRR) have impacted the understanding of business responsibility in India?
A very important purpose that the BRR has served is that it has brought the word sustainability to corporate board meetings and on the radar of senior executives. People started noticing and taking an interest in BRR because of the fact that it is a mandatory requirement set by SEBI.
To that extent, the BRRs served the purpose of bringing sustainability to the attention of a lot of people who matter. The next step of understanding sustainability deeper is now possible.
I won’t be surprised if BRR goes through some evolution from its current form now to enable organisations to move deeper into sustainability.
While there is awareness in corporations about sustainability, a lot of people thought if they were filling the BRR form and were able to tick yes and no, they were actually practicing sustainability. Having a second version of the BRR is a logical next step.
I think NVGs were a starting point for the business responsibility ecosystem. The BRR was a way in which it reached to a whole lot of relevant people and I suspect that the next version of BRR will dig a little deeper.
Q: How does your company perceive sustainability at various levels especially at the board level? Is sustainability perceived as a risk? Is it integrated in the growth strategy of the company?
If someone said sustainability is a risk, they would miss the cart for the horse. It is not sustainability that is a risk. It is one’s ability to deal with the new forms of risk that leads to sustainability.
If we ask the question – were corporations not trying to be sustainable before sustainability became a household word, people would say, yes of course they were. It is because at that point and time, corporations were trying to make efforts to be sustainable as per how sustainability was understood back then.
The new conversation on sustainability is happening because we have an issue with natural resources depleting faster than they can be replenished. This actually adds a new dimension to corporate sustainability. Inability to address this issue creates risks for businesses.
One glaring example is the issue of air pollution. There are many reasons for severe air pollution in Delhi. The first is our inability to deal with the issue of crop burning. The risks are clear – bad air, loss of investment, companies moving offices out of Delhi – all of it is very real. Another reason is emissions from vehicles, which then leads to the whole conversation on electric mobility. For corporations like ours where revenue from diesel driven vehicles is such a critical part, this is a massive risk. It is incumbent upon us to deal with this risk proactively.
The conversation on sustainability leads to recognising risks which we did not have to deal with before. These risks unless dealt with properly, could threaten the sustainability of companies.
Q: Governments across the UK, France and Germany have brought in supply chain transparency regulations such as the Modern Slavery Act, French Due Diligence and the German National Action Plan on Business & Human rights. Do these global regulations have any implications on Indian companies such as yours? Does this make a Sustainability Officer’s job easier or more difficult?
A company can easily implement sustainable practices within its boundaries but it is often difficult to implement the same for small and medium enterprises. In the supply chain, I think success will only come when small and medium enterprises, owners of which are businessmen in their own right, start taking up these issues. I suppose it is necessary for large businesses to facilitate this process.
There are several training programmes that we do at the Mahindra Group. Our engagement with our supply chain is quite deep because we spend a lot of time on the premises of our suppliers.
We also recognise given the size of our industry, the tier 1 suppliers are quite large themselves. They are getting serious about sustainability compliance. However, there are risks further down the supply chain.
We want to ensure supply chain transparency in all our businesses especially as we become more global. Supply chain issues are important and not easy to solve because of the complex social realities of India. But the good news is that it does not make my job any more difficult.
Achieving success as a Chief Sustainability Officer happens when core members of the business get the job done. It allows us to advocate for important societal issues by playing an enabling role rather than policing. We end up having greater impact on community wellbeing by following this path.
Q: The CSR law appears to get a lot of attention in India. Is a company’s compliance to 2% CSR law enough to assess it as a responsible company? What other metrics do you look at when you are assessing the Mahindra Group’s overall responsibility?
This 2% CSR law has its pros and cons. It is certainly not a cure for all ailments that prevent a business from being responsible. Again, like BRR, it has helped in bringing attention to corporate responsibility. However, even compliance of a high order does not mean that an organisation cannot be irresponsible in other ways.
The 2% CSR law also helps in providing solutions for companies like ours. However, in this whole conversation about CSR, we tend to ignore the biggest role of a corporation in the society. The area where a company has the highest social responsibility is in providing employment and ensuring wellbeing of its direct and indirect employees. It is extremely important that an organisation solves people’s problems well and treats them well. These are the core elements of social responsibility and they don’t fall within the CSR law. Therefore, the idea of what is a responsible corporation has not been defined yet and neither are the metrics of it laid out. A lot of it has happened only because of the good intent of some fantastic leaders who have led corporations for the last 100 years in our country.
In India, we have been able to meet our intent and contribute through our actions to the society in many ways. Whether there is a law or not, I think the work is getting intensified.
The Mahindra Group does many things to do business responsibly. A lot of this is embedded in the Mahindra Sustainability Framework.
A critical part of business responsibility is to solve problems that climate change is throwing in our path. I think this is one of the big concerns of the Mahindra Board. In the last decade, we have been investing in businesses in this area. Our investment in electric car manufacturing is a prominent example of this. In our real estate business, our focus is to build green buildings. We have set up a business to responsibly recycle old automobiles. We have been in the solar power sector for over 7 years already and are entering into the waste to energy industry.
These businesses have come out of opportunities and risks which climate change is throwing at us. These green businesses are solving climate change related problems. A good scalable industry is the only way to address such problems at a large scale. It cannot be done through 2% CSR.