According to reports, factors that drove businesses and leaders a decade or two ago are no longer adequate for steering organisations today. Monetary profits are no longer sole success indicators for companies; gaining importance are factors such as corporate governance, human rights, employee welfare, resource footprint, energy management, biodiversity impact and community inclusive growth.
Collectively, these aspects, spanning across economic, environmental and social domains, come under the gamut of ‘triple bottom line’ performance. The business imperative today is to be internally more conscious of the footprint across domains.
The number of organisations internally applying holistic sustainable growth models has significantly increased over the past decade. Globally, most successful corporations have put in place long and short-term sustainability goals and targets which are integrated to business strategy.
Organizations are now gearing up to leverage on the green products and services market, which presents growth and revenue opportunities. Several organisations are additionally working with their supply chains to improve their triple bottom line performance, minimising indirect risks to operations.
Organisations are also realising the importance of transparency with various stakeholders. As a result, the disclosure on CSR/sustainability performance has also gained momentum.
From around five organisations voluntarily reporting on their sustainability performance in India in 2003-04, the number has steadily increased to 70 in 2013. Majority of voluntary reporters are currently following Global Reporting Initiative (GRI) guidelines.
Sensing the change, governments across the world, especially India, focused on this shift. Recent policies and notifications in India, covering aspects of climate change, energy conservation and responsible procurement include the National Action Plan on Climate Change (NAPCC), Perform, Achieve and Trade (PAT) Scheme, Renewable Purchase Obligation (RPO), Renewable Energy Certificates and the National Policy on Bio-Fuels, to name a few.
The government is now also playing an active role in promoting disclosure on the triple bottom line performance by businesses. National Voluntary Guidelines (NVG) by Ministry of Corporate Affairs and SEBI mandates on sustainability performance disclosure are a few examples.
Currently, the SEBI mandate requires the top-100 companies, by market capitalisation, to disclose their CSR/sustainability performance using the NVG guidelines.
Process efficiency and waste minimisation initiatives help businesses to cut down on energy and water resources, besides demand for raw material, reducing overall operational costs.
Such practices allow organisations to retain best talent, and reduce attrition and re-hire related expenditure.
Community inclusive growth programmes allow organisations to address their concerns more comprehensively, and therefore leading to peaceful co-existence.
Internalising sustainability best practices are not just helping companies to be viewed as responsible corporates — contributing toward their brand building — but also attracting a wider pool of potential investors and shareholders.
(The writer is partner, climate change and sustainability services, E&Y. With inputs from Adit Sharma, senior professional, E&Y)