- 5 months ago
In this thought-provoking episode of the Outlook Business Podcast, Sudipto Dey, Editor, Sustainability & Regulatory Affairs, engages in an insightful conversation with Ramnath Vaidyanathan, Head, Environmental Sustainability at Godrej Industries Group. Together, they explore the evolving landscape of corporate sustainability in India and the nation’s progress towards achieving its Net Zero ambitions.
Mr. Ramnath offers a candid assessment of the challenges surrounding the Paris COP commitments, explaining how certain loopholes have eroded public trust in such global forums.
The conversation also unpacks his perspective on why green premiums should take precedence over green discounts, and why Chief Sustainability Officers (CSOs) are uniquely positioned to become the next generation of corporate CEOs.
Drawing from the Godrej Group’s own sustainability journey, Mr. Ramnath distils four key lessons that other conglomerates can learn from.
1. Make a move, don’t overthink the target – The first 80% is easily achievable.
2. Give importance to data – Good decisions have to be backed by good data.
3. Invest in people – Skill and upskill employees.
4. Define purpose – Values, purpose, and culture are critical for driving sustainability
👉 Tune in now to discover how sustainability, innovation, and community come together at Godrej—and why these lessons matter for shaping a greener future.
Mr. Ramnath offers a candid assessment of the challenges surrounding the Paris COP commitments, explaining how certain loopholes have eroded public trust in such global forums.
The conversation also unpacks his perspective on why green premiums should take precedence over green discounts, and why Chief Sustainability Officers (CSOs) are uniquely positioned to become the next generation of corporate CEOs.
Drawing from the Godrej Group’s own sustainability journey, Mr. Ramnath distils four key lessons that other conglomerates can learn from.
1. Make a move, don’t overthink the target – The first 80% is easily achievable.
2. Give importance to data – Good decisions have to be backed by good data.
3. Invest in people – Skill and upskill employees.
4. Define purpose – Values, purpose, and culture are critical for driving sustainability
👉 Tune in now to discover how sustainability, innovation, and community come together at Godrej—and why these lessons matter for shaping a greener future.
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LearningTranscript
00:00The media has a big role to play in this narrative building as well.
00:02I think the best action is done by good storytelling.
00:04I think there is a bit of fatigue among the general population with the talk about climate change,
00:08but I think we've pursued it the wrong way.
00:09There's been too much happening at a high level.
00:11Like if you see most of the common perceptions of sustainability in the average people,
00:15is that it's all discussed at your cops and your Davos and all these,
00:18and there seem to be a lot of commitments.
00:20But how that's really translating to on-ground action?
00:22We seem to have taken it for a fact that this is a natural phenomenon.
00:25I don't think we have quite been able to communicate the science behind
00:28why things are happening today as a result of anthropocentric sort of impacts of climate change.
00:32I think we've not really communicated that well.
00:34There is a growing distrust in science, which is a bigger worry.
00:37In India, it's very unique.
00:38Like, you know, I don't know if you've noticed,
00:39but regardless of which political party is in power,
00:41our climate commitments have never wavered.
00:43India has a net zero 2070 target.
00:44Who's reporting against it?
00:45Where can I, is there a website I can go to check out?
00:47Where are we against our net zero journey on 2070?
00:49So individual companies will tell you,
00:51okay, 50% more to go to net zero, 30% more to go to net zero.
00:53But from a global perspective, if somebody asks you today,
00:56I know the commitments made and the Paris Agreement,
00:58where are we against that today?
01:00Very difficult to answer that.
01:15Welcome to Planet People Profit.
01:17I'm your host, Sudipto Day.
01:19Our guest today represents 128-year-old Indian business conglomerate,
01:24Godridge Industries Group, that has a rich heritage
01:26of championing corporate social responsibility.
01:29Ramnath Baddianathan, who heads Godridge Group's
01:31Good and Green program, takes us through the evolution
01:35of the group's corporate sustainability journey.
01:38Ram, welcome to the show.
01:39Thank you, Sudipto.
01:40Ram, can you take us through your own
01:42journey into the sustainability space?
01:44I'm curious, you know, because we have interacted over the years.
01:47Yeah.
01:48But I'm curious to know, I'm sure there's
01:50a lot of interesting stories around it.
01:51Well, actually, yes, you know, because I completed
01:54my chemical engineering back in 2005.
01:56That's right.
01:56And I actually took a year off.
01:58And I think a lot of it, I was a little bit concerned about
02:02and a little disillusioned with the entire placement process
02:05in Indian engineering colleges.
02:06And despite having done four years of chemical engineering
02:08by choice, not out of compulsion,
02:11I realized that most of the opportunities that were being presented
02:14to students were in the IT sector.
02:15Okay.
02:16And I really wasn't interested in doing that.
02:18And so I decided to sort of recalibrate, take a year off,
02:21pursue something on the creative side.
02:23So I used to play music then.
02:25So I took a year off just to pursue that.
02:27And I was the editor for a music magazine.
02:29And all of that gave me a little bit of time
02:30to figure out what I wanted to do next.
02:32And at that time, I think a lot of, you know,
02:35the external sort of directions were pointing me towards
02:38that people are saying to get into oil and gas or get into chemicals.
02:41But at that point, I was very interested in the idea
02:43of environmental sustainability.
02:44And I won't say that I foresaw how big it would become,
02:47but I felt that was what something I really wanted to do more from a,
02:51you know, from a purpose perspective as well.
02:53So that's when I decided to pursue my master's in environmental science.
02:57I did a one-year program.
02:59The first half was at Stanford in the US,
03:01and second half was at NTU in Singapore.
03:03And then that's where it really started.
03:04And then my first job was with the National Environment Agency of Singapore.
03:08So very interesting.
03:09My first job was more as a bureaucrat in this space,
03:12the regulatory and the compliance space.
03:14A very interesting learning experience.
03:16But as with all things bureaucratic, after about,
03:19you know, the first part was very interesting.
03:20You're setting up the entire framework for regulation.
03:23But once that, in a very high trust, high compliance society,
03:26enforcement becomes very boring.
03:28So there was such a high rate of complaint,
03:29there was nothing for me to do.
03:31And that's when I decided to come back to India.
03:34I decided to pursue my MBA back in 2011.
03:37And post that, I've been in various aspects of sustainability.
03:39So straight after my MBA, I was in proper process engineering
03:42at a chemical manufacturer in Gujarat.
03:44I was doing EHS management at their plant.
03:47Then I got into the ESG consulting space with the company in Bangalore.
03:50With the same company, they then acquired a micro wind turbine business.
03:53So I was leading the P&L for that particular subsidiary.
03:56So there was more business and selling side, more business development.
03:59And then 2019, I joined Godrej.
04:01I took the sum total of all my experiences till then.
04:03And I was on the buying side of technology.
04:06So it's been a very interesting journey.
04:08What I would say is that I never foresaw how big it would become as it has today.
04:15But with size also comes a lot of greenwashing in terms of ESG careers as well.
04:21So a lot of people seem to want to get into it without really having an understanding of it.
04:25But I still am learning on the job because it's such a new field.
04:30It's not like you establish science as there's a new climate science, a new water science,
04:34a new nature science coming up all the time.
04:36So it's a very interesting space for me to be in.
04:38Interesting, very interesting.
04:40You know, your LinkedIn profile says that you are a home viewer.
04:46Of course, you mentioned that you are a musician.
04:48Yes, yes.
04:49In not so past life.
04:51No, no.
04:52And also the fact that, you know,
04:55so how do you, do you really get time to pursue those passions now?
04:58I find myself having lesser and lesser time to pursue these because I think
05:03with the added focus on ESG in the world, my job scope is also expanding.
05:08Okay.
05:08So there's more, you know, most companies have this approach called double hatting and triple hatting.
05:13I'm almost at five hats right now.
05:15So, you know, it's getting to a space where there's very little time for my other pursuits.
05:20But hopefully, I'll be able to get back to them.
05:22I always keep one foot in there.
05:23I have a 20 month year old as well now.
05:26So I'm hoping that will also inspire me to, you know, through him,
05:30be able to introduce him to some of my passions, such as music or sports, the other things.
05:35So I'm hoping to get some more time.
05:38And the other interesting thing is with the expanding team,
05:42I'm finding that a lot more young kids who are getting into the space.
05:45I feel more confident being able to pass on some of those things.
05:48So hopefully, that'll free up my time for some more creative pursuits, as I did before.
05:52Absolutely. Absolutely. That's great.
05:54You know, coming to the business side of sustainability as a business,
06:02you know, I'm pretty sure you've seen the changes over the last decade or so.
06:05And also the fact that, you know, in the last 18 to, I would say, 18 to 20 months,
06:11you know, life has not been easy for a sustainability professional.
06:14Especially given the cross currents, the global cross currents.
06:19Yeah. Also the fact that, you know, a lot of experts are talking about the fact that there's a
06:24retreat of sustainability themes among businesses in the last 18 months or so.
06:30Yeah.
06:31What's your take on this whole?
06:33So it's very interesting because I think there's a balanced argument to be had here,
06:36because I think there is a bit of fatigue among the general population with the talk about climate change,
06:41but I think we've pursued it the wrong way.
06:43Okay.
06:43There's been too much happening at a high level.
06:45Like if you see most of the common perceptions of sustainability in the average people is that
06:50it's all discussed at your cops and your Davos and all these and there seem to be a lot of commitments.
06:55Yeah.
06:56But how that's really translating to on-ground action and how it's really translating to on-ground impact.
07:01And we keep talking about flooding, for example.
07:02Exactly.
07:03But we seem to have taken it for a fact that this is natural phenomena.
07:06I don't think we've quite been able to communicate the science behind why things are happening today
07:11as a result of anthropocentric sort of impacts of climate change.
07:15I think we've not really communicated that well.
07:18I think in a larger sense, with the political shifts across the world,
07:23there is a growing distrust in science, which is a bigger worry.
07:27In terms of anti-vaxxing or anti-climate change, there's a lot of skepticism around science
07:33with greater availability of public information. There's also a challenge about who is credible
07:39and what is the credible source of information. And I think there are multiple ways in which you
07:43have to fix this. Firstly, I think we have to be much more transparent about action on the ground
07:48and not just, we don't want to see another Paris commitment. We need genuine action on the ground.
07:55The others, I think communication of science and communication of some of these
07:58principles in a more simplistic manner is very important. And I'd say media
08:03also have a very important role in this because we keep speaking about this. But if you see the
08:07Indian media, for example, over the last year, could you tell me, for example, how many prime
08:11time slots were really devoted to discussing the issue of climate change? We speak about it in
08:15terms of tertiary impacts. We'll talk about, oh, the water stress crisis in Bangalore, or we'll speak
08:19about, oh, the air pollution crisis in Delhi. But how many of us are really linking that to the
08:23genuine problem of climate change? So the media has a big role to play in this narrative building as
08:27well. I think the best action is done by good storytelling. And that's where a huge gap is. And I think
08:33more fundamentally, I think, in India, at least, I would say we're still, I have a bit more positivity
08:38compared to Europe or the US, where the evening, whether it's Trump's administration, or if you see
08:44these, you know, CSRD and the EUDR, there's been a bit of sort of deflation of the entire mood around
08:50sustainability. But in India, it's very unique, like, you know, I don't know if you've noticed,
08:54but regardless of which political party is in power, our climate commitments have never wavered.
08:58Yes. You always say strong, nobody's ever changed anything about our renewable energy
09:02commitments, our climate commitments. So we are lucky in that sense, there's stability in terms
09:06of planning, in terms of strategy. But in terms of communicating that to the common denominator,
09:10the lowest common denominator, there's a lot more to be done. Okay. Now, the people, for example,
09:14not relating higher prices of, say, crops or vegetables or atta that they buy to the impact
09:19that climate is having on reduced crop yields. Exactly. So building those narratives is very critical
09:23right now. But I'm curious to understand, you know, why do you say that we don't need another
09:28Paris Agreement? Because I thought that was sort of a, you know, a big, you know, a cornerstone
09:35for the whole debate which has been going on, the discussions that have been going on. So
09:39why do you think that's… Because I think that served its purpose at that time. Okay.
09:43It's great to have commitments, but it's very hollow to keep talking about commitments every few years,
09:50and rather talking about the actions towards achieving those commitments. For example,
09:53India has a net zero 2070 target. Absolutely. Who's reporting against it? Where can I,
09:57is there an online resource I can go, a website I can go to check out? Where are we against our
10:00net zero journey on 2070? You know, we're talking about the 1.5 degree pledge and everybody's…
10:05So individual companies will tell you, okay, we have 50% more to go to net zero, 30% more to go to
10:10net zero. But from a global perspective, if somebody asks you today, you know, the commitments made
10:15and the Paris Agreement, where are we against that today? It's very difficult to answer that. And one of the
10:20biggest reasons is that one thing that's conveniently ignored is that the financial
10:24commitments made as part of the Paris Agreement have not really been fulfilled.
10:27The flow of capital from the developed world to the developing world to fix climate change has not
10:32really happened. If you see the amount that was committed versus the money that's actually
10:35floating, it's been very, very poor. Absolutely.
10:37So I think now every time a COP happens and they're like, there's a new commitment to,
10:42you know, nobody wants new commitments. People want to see actions with existing commitments.
10:46That's what I mean. I'm not saying Paris wasn't important. It was very critical. It was great we
10:49achieved that. But we can't just keep making new proclamations and commitments. It's time to
10:54actually show action on the ground. Interesting. Yeah. Because, you know, we're heading towards another
10:59COP in a few months. Yes. And we'll be having a new set of commitments, new set of, you know,
11:05pledges. Yeah. So it'll be interesting to keep an eye on… Yeah, absolutely. I mean,
11:12if you see this COP is fraught with challenges as it is, you know, they're destroying rainforests to
11:18do a COP is just… I mean, it's a parody almost. It's like something you would see on a
11:23Simpsons sketch, where you're destroying entire rainforests to hold a climate event in Bel-Am.
11:28And in fact, one of the things that we've been told is not to attend it because there's not
11:30enough hotels for all the CEOs to come. So, and they're now building, destroying rainforests to build
11:35hotels, which are never going to be used after it's done. So somewhere, I think things like this
11:41is where it erodes the common man's faith in work on climate change. Like, oh, it's just a big
11:46eye wash. This is just big guys talking about something. It really doesn't mean anything. People
11:50aren't really doing anything about it. Because even the other cops, I remember the last two cops
11:55are both held in very fossil fuel dependent economies. Yes, exactly. So the messaging is also
11:59very important. And it's all people, these world leaders flying in their private jets to these
12:04cops, and then preaching that, you know, we must tax the common man on carbon. So I think there is a lot
12:11that has to be done practically rather than these grand proclamations. Have your cops,
12:15but make it meaningful. So you're saying optic matters. Optics matters, natural content matters.
12:19What are you, what if some, the most, I would say frustrating thing for me is, you know, typically
12:25doing cops, there's a lot of media frenzy. And the first thing they'll ask is, what are your
12:27expectations from this cop? I'm like, I have no idea. And I have no idea what to expect from a cop
12:31because I don't expect anything groundbreaking. That's a side part. You have a meeting of some of the
12:35most important influential governments and industries in the world. And the true fact
12:40of the matter is, none of us really expects anything concrete to come out of it. And what's
12:44the purpose of it all? I think it can be more meaningful, if we are more honest about what
12:49we're trying to achieve, what you're trying to portray. So in principle, have your global events,
12:55have your global meetings, it's important, it's important for us to because this is a collaborative
12:59effort. Absolutely. But let's be honest about what metrics we're tracking. Let's be transparent
13:04about what work is happening. And that's the only way in which you're going to enable both trust in
13:09the entire process. And you're going to get more people on board, their buy-in to really do this.
13:14So there's no need to throw the baby with the bathwater. No, no, of course not. Tweak it.
13:17Meaning, the entire idea of people getting together to solve climate change is not wrong,
13:21but it has to translate into meaningful action, not just, you know, big words and commitments.
13:26Interesting. You know, coming back to the Godrich Group, you know, industries group, I would say.
13:32Okay. You know, good and green is the philosophy that, you know, guides the group's sustainability
13:41programs and all your practices and everything. Could you take us through the, you know, how it has
13:47evolved over the years and could you take us through the thinking? Sure, sure. So as a formal
13:52philosophy, good and green was adopted by the Godrich Group in 2011. It was creation of the first good and
13:57green strategy in the team. But from a philosophical perspective, it is just a culmination of what the
14:01family has all been all about. So the entire history, nation builders, huge philanthropists.
14:06And the interesting aspect is a lot of people don't know is that SP Godrich, who is
14:10Nadir and Adi Godrich's uncle, was one of the pioneers of the nature conservation movement in
14:14India. He's the one who brought WWF to India and he was very involved in tiger conservation,
14:18a lot of the other projects. So they've always had one foot in the green bit as well,
14:23apart from their philanthropy, which is towards community building. 2011 was when it was
14:27formalized and that was the first phase of sustainability, which was on 11 to 20.
14:31The second phase of 21 to 26, we're coming to an end of this and we're now getting into our
14:34strategy for our phase three. I won't get too much into the specifics, but largely I would say the
14:38big shift has been moving from a macro level sort of target, a more principled approach about how
14:44do we reduce emissions, increase renewable energy, reduce waste, more operational. How do we improve
14:51our operational performance and sustainability? In the second phase, it was about how do we look
14:55beyond our operations, look at the entire supply chain, look at sustainable procurement, look at
14:59sustainable supply chains, look at policies, look at governance. That was in the second phase. And
15:04where in the third phase, the real evolution is happening is it's no longer a top-down strategy.
15:09We're not going to have a golden strategy at a group level and then say,
15:12what can each business do? Because I think the maturity level of ESG among the group companies
15:17is so high that it's very bespoke problems of bespoke companies. What I mean by that is,
15:20now we take Godesh properties, for example, they don't have an issue with emissions because their
15:25scope on emissions are very low. They have no issue. They are multiple times water positive company.
15:31So that bit is taken care of. So what's the point of setting emissions targets for them? Rather,
15:34let's focus on the one key area for, there are two key areas for properties. One is construction,
15:38demolition, waste. How do we bring greater circularity to it? Because that's a big issue in India.
15:42Because there's a lot of infrastructure happening and current state of how that
15:46recovery of materials is happening from C and D waste is very poor. The other is green materials
15:50itself. Because fundamentally, if you're making a building, the biggest issue is the embodied carbon.
15:55All the carbon emissions going towards making your cement, steel, tiles, glass. And how do I reduce
16:01that? Now that can be my three ways. You either look at innovative design, where I use lesser amount of
16:06material or I use materials which consumes a lesser amount of energy. Second is looking at alternative
16:13materials. You know, can I look at things away from cement and steel? Third would be on the existing
16:19material, how do I green them? How do I make greener cement, greener steel, greener glass, things like that.
16:23So now if I ask you what the strategy for GPL is going to be in the next five years, that's it.
16:28We're going to focus on these very specific focus areas and focus on them. The good and green goal will
16:33essentially be it'll be a bottom-up one. It'll be a culmination or sort of a combination of these
16:38multiple group companies, their own roadmaps into more of a philosophical sort of vision for good
16:42and green. What we really want to do in the next phase. And I think one common thing across all the
16:46businesses is that it's now we're going to be involved more in landscape level action. What I mean by
16:52that is it's no longer enough for us to look at just our operations or even just our own supply chain.
16:57It's about now trying to influence the entire landscape. And what I mean by this is if you take agro
17:02commodities for example. Okay. It's not enough for gorges to say look I'm going to identify
17:07farmers who supply to me and work with them because that's not how the ecosystem very works. In India
17:12the smallholder farmer is too small and it's really at the aggregator level where any kind of action
17:17can be made. So what's the point in spending countless hours and resources and money in trying
17:23to pinpoint down to that single last denominator. The more common sense approach and the approach that
17:28is really going to move the needle is solving for a sector as a whole in a geography. So rather
17:33than say I'm going to look for gorges farmers who supply milk to solve for dairy, I'm going to look
17:38at the approach saying that how do I solve for dairy and regenerative agriculture towards better
17:42lower emission dairy in the state of Telangana for example. So looking at the landscape overall rather
17:47than just looking at our own supply chains. That also means we're now getting into the space of a lot
17:51more policy advocacy because we've like I said we've come through two phases. So we feel we're in a space to
17:56also share our best practice and things that we've learned with the larger ecosystem. Be it our own
18:01suppliers, be it with the government, be it with our peers. There are no competitors in ESG. So you know
18:05I always call them a peers because an ITC at a Mahindra or you know even a Unilever who's in the
18:12traditional sense of the word they're competitors in the marketplace. But when you're trying to solve
18:16for things like say sustainable palm oil which is a problem both them and us face. Absolutely.
18:20It's a joint approach. So I have the luxury of calling them collaborators and peers rather than competitors
18:25which is a good way to be. So largely that's the big shift. It's very bespoke strategies. It's more
18:32landscape level things and things these are all very challenging because we're not talking about
18:36things that are completely out of our operational control. It's easy to make capex decisions when
18:41it's your own operations, your own manufacturing. When it starts going outside your scope there's little
18:46you can influence. It's veering into very uncharted waters. So it's a big challenge for us but that's
18:52what we believe is needed to really shift the needle at a national level. But tell me one thing
18:58in terms of say you've seen the global cross currents against or you know there are crosswinds
19:04and this thing against sustainability you know in that scenario yeah how do you sort of you know when
19:11you're going down and you're going down to the line managers yeah and to the shop floor level yeah how
19:15do you sort of you know make them believe make them convince them that you know what you are doing
19:20is good and green you know is there a challenge you see there? I don't think there's a challenge in
19:25from a principle perspective nobody's against being good if you go to a line manager say look i think
19:30it's good if you use lesser energy or i think it's good if you use lesser water nobody's principally
19:35going to say it's a bad thing. The real question is not at the line manager level it's actually the
19:39shareholder investor level that's where influence really has to happen and the way i'm looking at it is
19:44that in these crosswinds actually is a massive opportunity for india and indian industry to
19:48become a net supplier of low emission goods and commodities for the world interesting because
19:53we have a very high re target and we have made good progress and we have the luxury of being
19:59obtaining green power at a much cheaper rate anywhere in the world today if you ask any company
20:03will you go for solar the issue is not about convincing them to go for any renewal because
20:06it's cheaper than the grid exactly it's an availability issue it's not a willingness issue or in many
20:11cases a regulatory issue because you know if you're an msm you're a very small enterprise you don't have
20:15enough power requirements to really qualify for buying re which needs to be fixed but in principle
20:21with this with you know avoiding the entire brown growth path that the western world took we have a
20:28chance to really become a supplier of you know low environmental impact commodities now it's happening
20:33at a i would say ad hoc micro basis including us at goddard we've been able to sell certain goods to
20:41european markets certain products with the tag of environmental impact like basically come under
20:47premium because of lower emissions per ton of that product and this is actually already happening
20:53so european companies american companies who have mandates to reduce their supply chain emissions are
20:57turning towards us to say okay show us your lower emission product we'll happily pay a premium to buy
21:02that from you in any anecdotes you'd like to share we have for example in the agro space both from a
21:07dairy perspective we've been actually we have a cattle genetics business as well we've been actually
21:12able to cultivate embryos which have a much lower environmental footprint compared to traditional cattle
21:17and even in the palm oil space we in india it's very unique because palm oil globally is a bad word
21:22in terms of deforestation but in india it's very unique because indian palm oil plantations
21:26do not deforest they've been because in india we can't deforest and own land as corporates
21:32it's being done on contract farming basis with farmers who are probably growing
21:36paddy or something else on those lands degraded lands on which we are now growing palm so it's
21:41fundamentally a sustainable product we've been able to create at god the entire digital
21:47supply chain for the to surely show the numbers behind that and that has actually helped us sell
21:51some of our palm oil derivative products to western customers at a premium because we've been able to
21:56back it up with numbers so you know these are just couple of the anecdotes but that's growing
22:00getting a lot more companies asking for environmental performance behind the products we sell and we
22:05get a preferential sort of supply chain if we show that and this is a big signal to the indian government
22:09as well that if we spend some money right now in creating the database for indian commodities huge
22:14opportunity interesting you know uh i'm also like uh something that i want to do that's crossed my mind you
22:21know when you are going about your strategy in terms of good and green yeah godrich as a group went
22:27through a you know bifurcation last year yeah you know so how did that play out no real impact because
22:34the good and green philosophy was shared by the entire group whether it was industries group or
22:38enterprises in fact both teams were called good and green which led to a lot of confusion because
22:42many people would contact me about boys's good and green team many people contact them about our good and
22:46green team because they were both called good and green the tag i mean the philosophy and the larger
22:50principles are the same so it's not but in terms of operational targets in terms of what it really
22:55meant for governance it's always been separate the real bifurcation happened more at the board level
23:01and it wasn't it didn't it didn't really impact our good and green operational targets or our philosophy
23:06or any of our principles so there was no real impact uh so what i would say is that being in the
23:11industries group one uh huge uh you know it wasn't linked to this necessarily but we've been able to
23:17create board level esg committees okay for each of the group companies has independent directors as well
23:22so there's an additional oversight from external directors which a of course gives us more credibility
23:27in terms of our esg communication but also gives us a very interesting directional sort of focus
23:32because uh you know sometimes it's good to have an outside perspective at the on a board level oversight to
23:38really tell you that this is what you should be doing or you know have you thought about a particular
23:42aspect so that's been a big shift over the last few years on this so could you take us through some
23:47of these for example how do you sort of uh uh of course it has to be both driven you know it has driven
23:52from the top yeah uh is this something has driven from the top and now as you say that you know you
23:56mentioned that it has to come down to the shop floor level yeah you know so how has these structures
24:02been uh created within the organization and how do you sort of uh you know buying employee into the
24:08employees into this whole uh you know good and strategy good and green philosophy yeah what has
24:13been your experience in that so there's a push and pull approach both okay and uh the one big thing
24:18was you a lot of people mentioned about trickling down right we have a different philosophy it's also
24:22sideways and what i mean by that is we have like i already mentioned we have boards uh independent esg
24:27boards at each of these companies just like your csr board csr is mandated by law this is not there's
24:33a mandate for it you've done it voluntarily but csr you have to have a committee yes i'm going to
24:37my law but this is you know more of by design we've created it that's the first level of governance what
24:43you also instituted is for all the senior leadership we have mandatory people in planet gold so every
24:49single member of the leadership regardless of whether your operations your hr your procurement your legal
24:54you have to have one goal in your goal sheet which is either a people goal or a planet goal and what
24:59that's been really interesting is that that's also directly linked to the remuneration okay because
25:04your variable payout is based on your achievement of these kpis so we've actually put our money where
25:09our mouth is we've said okay you have your goals have to be linked to sustainability overall our goals
25:16and your individual rewards also linked to that that's a great way of getting buy-in and and these are
25:20what senior management people all senior management and then of course they have the flexibility to
25:25trickle those goals down to their own teams the way they want to that's freedom they do have so what
25:31has happened that's the push part of it where we've created this we've created this governance framework
25:36and we've made it mandatory for them to take it up so that itself is a big incentive or a driver to
25:40achieve some of these goals but there's not enough to just do that we also invest heavily in capacity building
25:45okay in terms of training uh people on esg but i'm saying training a lot of people just focus on the
25:50operational bit you know tradition like even you said right now no shop flow because our mentality is
25:54the production guys should know about sustainability but we invest heavily even people like our audit
25:58teams and our risk teams to understand our cfos for example we are part of the world business council
26:03for sustainable development mr nadar god is on the ex-co of that and under their programs one of their
26:09programs called the cfo network because growingly i think one of the big shifts is that decision
26:15making and how esg is playing a role in that in financial decision making so our cfos really
26:20equipped with the know-how to really incorporate that okay uh climate risk and climate finance and
26:25you know opportunities are they factoring in these things in their financial decision making so we've
26:29involved our cfos in this as well so that's what i meant by horizontal as well it's no longer just
26:34top down it's across so procurement teams have a sustainability target our audit team has a
26:40sustainability target our legal team has a sustainability target so it's spreading both
26:44vertically as well horizontally across the organization that is what the hope is and it's like i always
26:49bring the example of it you know it when it first started off maybe you know in companies in the late
26:5480s 90s it was a function just like how sustainability was but today it's spread horizontally you know a
27:01finance person has to have very smart knowledge of sap and how to use that as well right it's not
27:06enough for him to say i'm not tech guys i don't understand it the same way sustainability knowledge is now
27:10spreading across the the function so you will have a lot of specialist roles now you'll have
27:14specialists in sustainable procurement r d uh how do you bring in esg principles and new product
27:20development can you have a specific focus on say one guy saying i'm going to work just on sustainable
27:25packaging for example so this is how it's really spread across the organization and it's taken a good
27:31five years to set this entire framework up and now of course in the monitoring phase of already
27:35achieving those targets but uh like i said it's a push and pull approach it's not just mandating
27:39from the top down and you know driving it with a stick but incentives capacity building showing
27:44the opportunities telling somebody at risk that look if you add esg to your portfolio as a personal
27:49growth also it's a really good thing for you to have in your armory is a very good pitch so that's
27:54how we've been able to redo this but doesn't it scare you you know if after some point of time
27:59if everybody is a flag bearer of sustainability what what is the role of a chief sustainability officer i've
28:03often said and i think i wrote an article about this a few weeks ago that i would be very happy if my
28:07role become redundant in a few years because it gives me the option to scale myself as well or
28:11you know what are the additional skills i need to add to really add value to an organization but
28:16of course that may be taking it to an extreme into redundancy but what i would really say is that
28:21it's a good problem to have i'm not scared about it because as with any other function expertise and
28:27domain knowledge is always going to be important but it's really important for the good of the entire
28:32organization for everybody to own a bit of this there will always be you know subject matter expertise
28:38that's required but in terms of breadth of knowledge of this across the organization it's a very important
28:45thing and i'm all for it it doesn't scare me at all good to hear that yeah you know you took us through
28:53this three phases you know of uh good and green yeah uh have them any lessons from these three phases
29:00that you'd like to share like you know phase one phase two of course phase three is of course going
29:04to happen but are there any lessons that you've picked up from phase one put that into practice
29:09in phase two and going forward phase three you're going to see some of the practices in phase three
29:13absolutely i think a lot of lessons we continue to learn on the job all the time i think the first big
29:17lesson in the first way he learned was that don't let perfect be the enemy of good you know a lot of
29:22people in 2011 who are already worrying about 2020 so how will we achieve those we're like what we
29:27learned is make a move start moving on things don't worry about the last 20 percent the first 80 is
29:33easily achievable in any sustainability journey so people will how will i ever get to 100 re i'm like
29:38fine that doesn't mean you shouldn't get to 50 to start off with but that 50 makes a big impact
29:43so it's more important to start moving on things rather than worry about whether you'll get there at
29:47the end nobody knows if you'll get there at the end to be honest climate science is also
29:50constantly moving the goalposts because we're constantly in catch-up right but that's a very
29:54important thing and i think that's a principle i tell everybody because it seems very daunting
29:58for companies who are just starting on their sustainability journey okay oh my god look at
30:02you guys are on this you're doing this how will we ever get there we're like all of us started at
30:06some place right so that's really critical the second is the sheer importance of data data is critical
30:14okay and we've investing heavily now in uh analytics and data really strengthening the
30:20accuracy of our data reporting systems because that is critical in decision making okay you can only
30:25make good decisions if you're backed up with good data and this is true of any sphere in esu as well
30:31unless you know accurately say for example if you have a factory like some of our activities which
30:36make say 10 products it's great to have macro level data but if you really want to start solving for
30:40problems you have got to look at product level monitoring absolutely that's when you start
30:45thinking okay this is my more energy intensive product now i'll actually give you a case where
30:49we moved one of our more energy intensive products to a factory which has a higher renewable energy
30:53consumption okay so by doing that we took a big emitting sort of product from one factory to a place
31:00where it becomes zero emissions despite being a big energy consumer that's how it helps in decision making
31:05so data and decision making absolutely critical we live in an age where we're data rich but we have
31:11volumes of data i don't know if we are using it smartly enough and with ai and other technologies and
31:17we have a massive opportunity to really get very useful insights for decision making on this the third
31:22thing would be people and uh you need to invest in good people you need buy enough people you need to know
31:28to influence people uh having the right team having the right ownership at the top is very critical
31:33when i say people i'm talking everything from leadership to skilled personnel to constant
31:38upscaling of existing personal as well and the fourth and most important which is very often
31:43overlooked is values it's very important to understand why sustainably important to you from
31:48a values and a purpose perspective unless you define that everything is going to have a short-term life
31:54now i know at god is now because the value part is so strong it doesn't matter who's in the chair
32:00so the family sort of uh that value has been so set in the family that it doesn't matter who's the
32:06ceo who's the cso nobody's going to go do anything that's against that exactly you know against that
32:13value system so that is very critical so it becomes a culture culture values and purpose are very important
32:19and not enough not enough is spoken about importance of that in driving sustainability so these are some of
32:24the big lessons i would say but the family does play a big role right huge like that there's a
32:28the signaling messaging coming from that and very actively ignored it's not just signaling all the
32:33board members all the board committees i spoke about have one of the family members or two other family
32:38members in those so they're part of the boards and they and they're not just they're very knowledgeable
32:43about the subject as well they spend time in inculcating knowledge about this as well so any discussion you
32:48have with them cannot be very peripheral they get into the depth of things so i think it's a in a
32:55way it's very lucky because not many csos or sustainability leads have that kind of access or the ear of the
33:02promoter but we are lucky in god is to have that and i think we've been able to use that to our advantage
33:07really accelerate our esg journey interesting you know of course csr came kicked in sometime in 2009 and
33:14you know that becomes a compliance issue uh you see overlays between the csr and the and the
33:22sustainability journey towards the net zero goals other businesses have yes absolutely we've already
33:26done it see csr let's understand one thing climate risk and climate vulnerability and water and climate
33:33change have social impact as well they're not just a macro environmental thing it affects people on the
33:38ground whether it's heat stress in the urban or you know lowering yields for farmers these are all
33:44things that actively impact them so we have actually used a lot of our csr funding to solve for
33:50community level climate issues okay we've done four large watershed programs in some of the most
33:54doubted areas of india in telangana and madhya pradesh in maharashtra bead you know the sugar belt is known
34:01for its drought issues and today we're at about uh 14 times water positivity because of that i mean for
34:06every one liter water we consume through watersheds we add 14 liters back to the environment and this is
34:11largely be done more from a community perspective it wasn't that our factories are in these locations
34:16we don't stand to benefit anything from this but this is more towards enriching the overall
34:20ecosystem in india so i think there's a massive overlap between csr and esg but one must be very
34:26careful not to dilute the principles of csr and greenwashing can be a very big risk in this space
34:32because csr as such as you know you know it's very tightly bound by regulations exactly but there are
34:37a lot of important principles of csr as well while on paper it may not be against the csr regulation
34:43but in spirit also it's important it should benefit the community and the planet at large now for
34:48example we've done a lot of csr projects on plastics and we did it at a community level to really look at
34:53communities with mlbs and say okay how do we solve for the problem of segregation collection all those
34:57things and now we realize that the challenge isn't the value chain i mean that there are challenges there
35:03but the real challenge is the actual science behind it like we don't have good quality recycling
35:07technology we don't have you know we don't have enough alternative materials we don't have enough
35:12recycled or recyclable plastics in the so we're pivoting out of our csr work towards incubators and
35:17accelerators we're going to create solutions for the entire ecosystem not just for godrich so that's
35:22another great example of how you use csr to create some common good so there's a massive overlap between cs and
35:28esg and i think because esg itself is now covering such a big spectrum of things everything from
35:33human rights to emissions to climate vulnerability see you'll see a lot more overlap between these
35:38two but from a compliance perspective does it become very challenging because you know the boundaries
35:45do you so when you're crossing those boundaries if you have it that's the thing it's all about
35:49creating good processes and good checks in place to make sure that your decision making on this is
35:54ticking all the boxes okay but if you create good governance structure around it there's no real
35:58challenge to it you know there's a growing concern about you know the extreme weather and the climate
36:04are you going to see more action on that front especially you know the supply chains yeah corporate
36:09india are vulnerable you know we've seen that in recent past are you going to see more action on the
36:14front from the group and on overall basis like i think yeah because one of the things i mentioned is
36:19the landscape approach which is again now solving for but it's a very big canvas and there are a lot more
36:26questions and answers at this stage because even if you take say infrastructure like gothic properties
36:32i can build a more climate resilient building on the planet i want i can build a platinum data factory
36:36for a chemicals business which is all the climate resilience aspects no heat stress kill i have put
36:41coatings to reduce heat uh which means my air conditioning costs go down i put in water recycling
36:46zero liquid discharge zero waste landfill but what happens if the approach road to the factory which is
36:51owned by the municipal council gets flooded or gets destroyed by a weather event so i think that's the
36:57big challenge climate resilience is can't be isolated to individual uh you know infrastructure we have
37:04to look at climate resistance from an interoperability perspective it's a collaborative approach not just
37:08collaborative with an industry we collaborate with communities with government as well so just to
37:13start off with i know there is a lot of planning happening on the uh on in bombay at least for the
37:18climate risk uh resilience planning for one creating a climate resilience plan for mumbai uh very early
37:24days yet but we are actively contributing to that as well in terms of our know-how in terms of our
37:29resources but that's a big area of concern climate resilience because that's not in nearly talked about
37:34enough uh even like i mentioned right agri yields we report on weather patterns impacting agricultural
37:41leads but we haven't yet linked it to how do i say build crop insurance uh which really takes into
37:47one climate risk today crop insurance is there as a product but is it so if i invest in my agri value
37:53chain to build climate resilience could that then lead to a lower crop insurance premium for the farmer
38:00so these kind of interlinkages between the financial sector and the agri sector these still have to be
38:04built so we're still in a very early stage i would say we've adopted we have a climate resilience plan
38:10now we have run a tcfd assessment all of that is really built into our you know operating plans but like i
38:16said it's not enough for us to just look inwards it's about building those connections to create
38:21these sort of plans for the larger macro environment you know it's been like from 2011 to 2025
38:28and going forward you know it's been a journey which i'm i'm pretty sure there's a lot of learnings
38:32here yeah but from the economics point of view of sustainability yeah you know do you see enough
38:39consumer buying into sustainability i think it varies by sector to sector now if you take a
38:44the prop i always go back to properties as a great example for a successful green product sort of
38:50ecosystem it's one of the few sectors where a green product is very clearly defined
38:54a platinum rated building you know what the parameters are to be a platinum rated building
38:59you know what the parameters are for a gold rated building so there's no no discretion or no discrepancy
39:04on understanding what a green product really is and it has a defined segment for buyers there is a segment of
39:10commercial customers residential customers who will want to buy a platinum rated home but the same
39:14thing is not there in say a low value sort of product market say in consumer products or in agri
39:21now a bar of soap somebody's buying a bar of soap is not really looking to buy pay a premium to have
39:26a more sustainable bar of soap so that's where the real challenge is there is a certain sector or
39:31segment of consumers who are willing to pay a premium who are looking for greener products
39:35but it's still largely the b2b customer you know space where other businesses are buying from us
39:40that's where we see their demand for greener products at the individual consumer level not yet
39:45but i don't believe we've asking them the right questions because there are two and this is i get
39:52into debates about this with people all the time because we always talk about a green premium exactly i was
39:57coming to that is but why not a green discount because you can't say sustainability has saved me money
40:03which it has because if you consume lesser energy if you move to re which is cheaper if you consume
40:08lesser water you've saved money so when you save money by going green why don't you pass on that
40:13money as a green discount to your consumers yes we always talk about oh i've done this extra so i'm
40:17going to charge a green premium but why not a green discount then the economics of this really have
40:22to go we're not asking the consumers the right questions so even if we see the surveys right they'll be
40:25very broad based you know if you ask them would you buy a sustainable it's always a caveat saying would
40:29you buy a sustainable product if it meant it was more expensive but why are we adding that caveat
40:34if i told a consumer these two products are the same price would you pick the most sustainable one
40:38they'll say yes exactly so i think it's asking the right questions communicating esg better through
40:43our products and that's another big area of focus for us how do we communicate sustainability
40:47information about products better to consumers to enable them to make a more informed decisions also
40:52what we're seeing and you have a young child as well i'm sure you'll also understand that absolutely that
40:58generation is getting more and more uh sort of invested in buying products that not just are
41:04so sustained but also ethically absolutely they want to buy from companies which have that strong esg
41:08principles and backbone so the companies which are identifying this trend early and communicating
41:14this about their products effectively are already ahead in this race it's getting better but in the in
41:20a price sensitive market like india where cost and price is still a major decision making tool you
41:25know for customers to buy anything it'll take some time it's not going to happen instantly but the
41:30shoots of this are already there but from the group perspective yeah uh uh do you see a time where
41:36you'll have a portfolio of products which are good and green and you and you sort of uh and that
41:42portfolio we already do we already in fact we're coming up by the end of the civil coming up to the
41:46product scorecard okay which shows for every product from 2020 to now how have we improved the
41:52environment performance of that particular product okay we're going to come up with the green product
41:56scorecard for this and we're going to come and this is what i spoke about we're going to communicate
42:00this information to our consumers as well to help them understand that you know the product they're
42:04buying today probably has a 50 percent lesser energy usage compared to say 2020 and so we're already
42:10creating this portfolio of good and green and i am very uh careful not to use the word green product
42:17because unlike say you know properties where it's a clear definition what a green product is
42:22we only talk about making products greener there is no absolute green unless it's defined unless we
42:27unless say the fmc industry got together and said okay for a bar of soap this is the cut off for
42:33emissions if you do point this thing kilograms of co2 per bar of soap if you're above this you're not
42:39a green product you're below this you're a green product unless we get to that level of baseliding
42:43all i can say is that i have reduced my emissions for this product by 20 percent in the last three
42:47years so i've made it greener but by what definition you call something an absolute green product it's
42:52impossible unless we define industry level standards for this but you see us moving towards this concept
42:57of uh green discount you know do you see us moving towards that at some point of time i hope so i mean uh
43:04i i don't know why it's already not happening but i i would hope so something we're trying to
43:08also you know incentivize within our group but the first step is really to have that product
43:13level scorecard information as to what should that discount be based on the environment performance
43:17of that particular product so it will take time to buy in like you know the idea of a green discount
43:22is still very because you mentioned 15 years sustainability even today i still get asked the
43:26question is sustainability good for business i'm like it's obviously good for business you know it's
43:31every single major index in the world has told you that being strong with sustainability improves your
43:36financial performance investors today first thing they'll ask you is what are your esg goals
43:43how you're doing in emissions and i i am an investor cause at least once a month because 50 percent of
43:48the time is spent on asking about esg so clearly investors are looking to put their money towards
43:53esg forward companies not just because it's the right thing to do because they view it as a lower risk
43:59we have a very climate uncertain future and companies which are better prepared for this are viewed by
44:03investors as a lower risk so for me that part of the box has been fixed how do we translate this to
44:09green discounts for products is the next part of it which hopefully we'll do so do you see that
44:14happening in the next 10 years when this uh as as roll out this yes good and green progress yes at least
44:20from our perspective we'll be able to at least do something in the next five years i would hope so
44:24but from the larger ecosystem perspective 10 years maybe some of the bigger companies you'll see and you'll see
44:29more esg even now if you see there's a subtle shift in advertising there's a lot more focus on
44:33sustainable products in advertising it's a subtle shift but you're seeing it you're seeing a use of
44:38a lot more like you know if you see coke did entire camping around a zero uh they removed the label from
44:44the sprite bottle yes and they just embossed the bottle and they said this is a new this thing for
44:47reduction on this plastic so you're already seeing it happening among the big brands as that customer
44:51segment grows you'll see more of this happening so younger generation my hopes are all on them that they
44:56will make demand because once they're voting with their wallet right that's when you'll see the
44:59major shift happening your journey i remember you mentioned it once you know uh or decarbonation
45:05journey of course i think the the low-hanging fruit is the solarization yes you know and of course the
45:12and the less said thing is the energy efficiency improvements yes you know would you like to sort
45:16of you know take us through your journey your experience in that so it's very yeah it's very interesting you
45:22know if you we did a study of our in 2022 we did a study of our decarbonation up till then it was
45:28actually 60 percent of our emission reduction actually came from energy efficiency and not from
45:32adopting green power so a lot of people don't pay enough attention to this they focus more on
45:37transitioning from fossil fuel to green which is good but just improving energy efficiency is a huge
45:43you know it's a huge mover of the needle uh we are actually signatories to this ep 100 commitment of
45:48the climate group which is a commitment to double our energy productivity by the year 2030 when the
45:53we took the target in 2018 and that's been a big driver for us to really improve and energy efficiency
45:58is actually the easier sell compared to say re also because most energy efficiency products don't
46:04require heavy capex investments some replacement products will be there but the you know the incentive
46:10that you if you consume less energy you're going to save your operating costs is a very easy buy-in
46:16for manufacturing teams the real struggle is uh when you start looking at some things which may
46:21not have a quick payback period but have a big climate impact which is why we introduced the
46:25idea of carbon price and using an internal carbon price in the decision making so and it's not it's
46:30not just for the sake of using a carbon price we are spending that money elsewhere in reducing our
46:35emissions impact whether it's through re whether it's through offsets through planting trees or whatever
46:40it is what if i could translate that cost in the decision making for a technology itself which means
46:44that i want to spend that money later to mitigate so building in that carbon pricing has actually
46:48helped us bring down the uh sort of payback period for some of the you know on the edge product
46:54projects which are like oh we're not quite sure this is a three hour four year payback you know we're
46:58not quite sure whether you should invest in this we've been able to bring this down to two years
47:01which then makes it you know more feasible for the companies to really take up these projects so
47:07i would say energy efficiency has been a big mover of the needle for us now interesting you know
47:11uh coming back to the role of chief sustainability officer we talked about it earlier yeah you know
47:17are there any sort of uh how do you see the role changing in going forward and are are there any sort
47:23of myths that you feel needs to be busted about this role which uh maybe you should you know your
47:29insights will help some of the youngsters coming into this space okay i mean first in in terms of
47:33the evolution of the role i think the cso's will start playing a larger role at the decision making
47:37table okay most companies have a smaller group at the top management made up of the key leaders
47:43in the organization who uh lead the strategic decision making you will find cso's playing a
47:48larger role in these because see these esg impacts on business are getting more and more prevalent so
47:54that has to be factored in the larger macro sort of level in terms of myths about i think one
48:00again future evolution i've told you like right cso's will have to upskill themselves they'll have to
48:04learn data science they'll have to understand uh other aspects of the business to really you know
48:08and talk about green products for example how does how does the cso then become almost a business
48:13development lead for the audience because how do you identify green products or sectors to get into
48:17which could be you know not just reducing environmental footprint but a source of revenue and opportunity
48:22for the company as well one myth i'd like to bust is that it still is a very specialist role
48:26you know it's not a a lot of people think people can double hat saying oh the chief communications
48:32officer can also do esg because it's largely a communication no it's not it still requires a
48:38lot of expertise you need specialized people and now you're getting into domain specialization okay
48:43for a financial services cso has to be very has to be very knowledgeable about what it means for that
48:49sector it's not enough for generalists to come in and sort of do the job for everyone so a lot more
48:55depth of skill a lot more depth of knowledge is required for this and uh you know what i would give the
49:02advice i would give for young people trying to get into this role is again build your depth of
49:05knowledge and from a soft skill perspective influencing because ultimately it's getting
49:11the buy-in of the uh the people with the money the promoters and the shareholders to really influence
49:16some of them to put their money towards esg forward uh sort of strategy so learning how to influence
49:21people and of course having good depth of knowledge these are two non-negotiables for people getting
49:27into this role finally how far is the cso from the ceo role i think a cso could eventually in the next
49:36five years you'll see maybe certain cso's going to see your role because like i said a cso has to
49:41have much more uh in-depth understand the business now it's not exactly uh specialist like you're not
49:45sitting outside the functions anymore so you know even me i mean i have a very good idea for the business
49:51is run now from a products to our finance to our legal to our audit processes so you can see i could
49:57i could definitely foresee like how certain cfos grow into ceo roles how certain manufacturing
50:01offers grown to ceo i can see a cso growing into a ceo role as well in the future because a lot of ceos
50:07actually now are very actively involved in sustainability you know so a lot of it lost
50:11essentially active now driven by ceos of company so the same can happen the other way around as well a
50:16lot of cso's can pick up sort of strategic direction especially if the company is invested towards
50:20esg lens product view or esg lens uh strategy view you will see this growing into that i mean it's
50:25it's a it's an interesting question and i can definitely see it happening i think it's a lovely
50:29note to you know a positive note to end the show absolutely and uh i look forward to maybe uh you
50:35wearing that hat someday i think the same delhi but hopefully hopefully let's see thank you
50:42thank you ram thanks for your time and thanks for the insights thank you pleasure thank you thank you
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