Rewarding multiple companies for a common sustainability goal

EPA

It is often said that sustainability’s major challenge is to bring various stakeholders together on the same table – biologists with designers, CEO’s with the workers, NGO’s with private sector etc. Sustainable development is a systems issue which can’t be treated in isolation. For example, just looking at the increasing financial bottom line is not a healthy indicator of prosperity, when, on one end, the worker conditions down the supply chain are inhumane and deforestation is disturbing the bio-diversity at the other and banks in between are lending monies to companies that allow the often “unintended consequences” to repeatedly take place.

Let’s consider a simple example. A is a mining company. B is a bank. C is a software services provider.

A decides on a site to start its mining activity to mine raw materials out of the earth. The site offers maximum mining potential with minimal costs (labour, technological social, political). A goes to B for investment and loan. B offers to invest and give the loan as it sees future returns. C provides all the software services to A and B to fulfil their business interests.

In the business as usual scenario, this is may be fine. However, when you view it through the lens of sustainability, things change.

A sees the communities living in the area. It looks for opportunities of co-creating along with the native population. It looks at the amount of ecological dis-balance caused (perhaps a flood downstream, displaced top soil, lowered water tables etc.) as a result of its activities.

B, the bank, looks at the sustainability of A’s operations and only then provides the loan.

C, only when it is convinced that the new project will be beneficial to all the stakeholders concerned (which also include the scope of its extended enterprise), will it offer to provide its services or else will let go of this money-making opportunity.

In the above example, all the three companies can work independently of each other pursuing their own goals of sustainability, or they can work together to achieve real sustainable development – which brings a overall systemic change.

Tata Steel, Yes Bank and Infosys are three of the 25 companies that recently received awards for sustainability at the CII ITC Sustainability Awards. All the three are creating a positive sustainable impact. But won’t it be nice, if all three in reality co-create their work together!

For seven years, CII ITC Centre of Excellence for Sustainable Development (CESD) has been doing an excellent job of rewarding companies with Sustainability Awards based on rigorous assessments on various sustainability criteria. That does motivate companies to strive for a more sustainable environmentally friendly behaviour, but will not cause real developmental change.

Rewarding multiple companies for a common goal

The theory that if everyone cleans their own backyard, it would result in a cleaner world, does not hold true. That works on the principle of self-interest (the hard-core capitalist idea). What we need is a collaboration between people that not only promotes self-interest but also a concern for the neighbour’s interest. The theory of planting good seeds for yourself and for your neighbour works well here, because when the winds blow, they will carry the good seeds from the neighbour onto your own fields.

So, keeping this thinking in mind, I think it would be much useful in bringing change if combined awards are awarded for collaborative efforts between the companies coming together for a common sustainability goal.

For example, Tata Steel may have launched a Renewable Energy project to illuminate about 1600 villages, produced the first branded Lead-free galvanized sheet, launched Tata Steel Skill Development Society and measures and improves the Human Development Index in villages around its operations – but the real change is when , Tata Steel provides its steel to only fuel efficient and greener cars, to energy efficient buildings etc.

Yes Bank , may have facilitated inclusion of 200MW of clean energy in India’s electricity grid with massive debt exposure to wind, solar, and waste to energy projects – but real change will only happen when the bank follows the Equator Principles and refuses to fund non-renewable energy projects.

Infosys, may report under the GRI framework, and commit to be carbon neutral by 2020. It may also have a million square feet of built up area as Platinum LEED certified – but real change will happen when it says no or charges extra premium to software projects for companies associated with oil and gives discounts to projects associated with the renewable energy.

Sustainability must be considered in context with its surroundings – a particular company cannot be called sustainable since it’s out of context – it’s a collective whole that matters, not just some part in isolation.

I may have overstretched the expectations from these companies a bit, but isn’t that what will bring systemic change?

Related reads:

If you found this to be useful, please share it. Thank You!

Filed under: Sustainability Tagged: CII-ITC Sustainability Awards, Equator Principles, Infosys, Sustainable development, Systems thinking, Tata Steel, Yes Bank