through a different lens

March 25, 2016 0 comments

In the words of the Aditya Birla Group’s Chairman Kumar Mangalam Birla, the Group’s Sustainability Vision is: “By 2017, the Aditya Birla Group endeavours to become the leading Indian conglomerate for sustainable business practices across its global operations.” To achieve this vision, we are innovating from the traditional sustainability models to one consistent with our vision to build sustainable businesses capable of operating in the world we hope to see emerge in 2030 and 2050. It is in our own interests to contribute to mitigate our impact in every way we can, and also prepare for further mitigation and potential adaption to planetary changes as we go forward.

592-2We began our quest with a question, ‘If everyone and every business followed the law as written today, is the planet sustainable?’ We quickly concluded that around the year 2050, when the earth’s population reaches an estimated 9 billion, climate change, water scarcity, stress along with pollution, and an overload of waste, if left unchecked, would set the planet on a possibly irreversible course to un-sustainability. It is therefore intuitive that laws be tightened over time, and imperative that the Aditya Birla Group remain ahead of the curve.

Our first step has been to set up a sustainability program in our current operations, under the heading ‘responsible stewardship.’ By doing so, we try to move from merely following local laws to aligning ourselves voluntarily with the international standards set by the global bodies of the International Finance Corporation (IFC), the Organisation for Economic Co-operation and Development (OECD), the International Organization for Standardization (ISO), Occupational Health and Safety Advisory Services (OHSAS), the Global Reporting Initiative (GRI), and others. We are working hard to develop and improve our management systems and their performance by making sure that they conform to the Aditya Birla Group’s sustainability framework of policies, technical standards, and guidance notes by giving our employees the chance to train, learn, understand, and apply improvement techniques to reach higher standards of performance. So far, we have had much success with respect to reductions in energy use, water use, and improvements in safety performance. We are working towards achieving the World Business Council for Sustainable Development’s Water and Sanitation and Hygiene pledge (WASH) to ensure that we provide safe drinking water, sanitation, and hygiene in all our operations. Each of these achievements helps reduce and mitigate our impact on the planet and are hence imperative to building a platform for the future.

However, if we are to create sustainable business models and systems, ‘responsible stewardship’ by itself is not enough; we need other components to help us with a greater transformation. We need to understand how many laws will need to change in order to support a sustainable world. Our performance will need to be improved further to meet these laws, possibly by redesigning our business models. We call this ‘future proofing’ our businesses. This has two components; the first, we call ‘strategic stakeholder engagement’, which involves scanning the time horizon for disruptions by discussing global megatrends with experts in the fields of climate, water, human rights, supply chain management, biodiversity transparency, and reporting, in order to understand what constraints might be placed on our businesses by 2030 and 2050. By doing so, we are able to build our capability to understand which external changes might heavily influence our value chains and business models in the future, and what might be expected of our products and brands. For example, the world will need businesses that are able to mitigate and adapt to climate change, with robust and sustainable supply chains that are also impervious to all external forces that will inevitably begin to affect us in the future. The second part of our ‘future proofing’ program is to test our current business models and strategies against various scenarios designed to simulate what the world will potentially look like in 2030 and 2050. To achieve these results, sustainable businesses will take time, particularly when we consider some of our complex supply chains. By pushing to be the leader today, we are giving ourselves the best possibility of achieving long-term success.

One example of a transformational business model can be seen in the work done by our Group business, Novelis. Novelis has consciously become the largest recycler of aluminium in the world, with 54 % of its raw material coming from around 2 billion cans recycled annually. Understanding that climate change and increasing difficulty in licencing new mines would mean closing the loop, and recycling aluminium instead of continually mining new raw material would be the better model, Novelis has invested heavily in new recycling technology and new capacity in Europe, Brazil, and Korea. The move aims to support the transformation to a circular economy whereby previously extracted material is used over
and over again.

Working with other members of the cement industry under the umbrella of the World Business Council for Sustainable Development’s Cement Sustainability Initiative, UltraTech has benchmarked its efficiency and found that it is one of the most energy-efficient cement companies in the world. Alternative materials, slag, and fly ash from furnaces in other industries bring forth a symbiotic approach to reducing waste and carbon dioxide, thus helping fight climate change and eliminating landfills.

LIVA, our natural fluid fabric made from wood which is harvested from sustainably managed forests that meet the Aditya Birla Group’s fibre sourcing policy, is bringing sustainable viscous staple fibre to the world of high fashion. The fashion industry is highly conscious of supply chain management and we are working with the Sustainable Apparel Coalition, a group of over 200 apparel companies, with a vested interest in improving the way we do business. Their goal is to measure the performance of our business management systems using the Higg Index—a measure developed for the fashion industry to advance supplier chain performance by brand and by product.

It is interesting to note that nowhere are sustainable strategies more important than in the land masses of India, China, and South East Asia because over half the population of the planet lives there. Land mass and natural resources are already feeling the strain, with often cited pollution, biodiversity loss, growing levels of water, stress, and the need to manage the growth of electricity production decoupled from a country’s carbon footprint. This makes sustainable development not just a business ‘nice to do,’ but a central business imperative because ‘businesses cannot survive on a planet that fails.’

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