- 5 days ago
Discover why modern businesses are judged not only by profits, but by purpose, impact, and the value they create for society.
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00:07Welcome to NamTalks, the Namtech Sustainability Podcast. We are at a decisive moment where
00:14businesses are not only going to be judged by their profits, but also by their purpose
00:19and the impact that they have on society. In India alone, 1,000 listed companies are
00:26now mandated to publish their business responsibility and sustainability reports.
00:32To understand this, we are privileged to have today Mr. Shailesh Haribhakti, a leading voice
00:38on integrated reporting, ESG governance and green finance. Mr. Haribhakti has been helping
00:47companies embed sustainability in their governance strategy and performance.
00:52I'd like to start by your focus on this integrated reporting. Why is it turning out to be such
00:58a powerful tool and what is the criticality of integrated reporting?
01:03You know, two things are driving integrated reporting. Business models are getting disrupted
01:11at a pace never before seen and that pace is going to only accelerate. Therefore, the desire
01:20of the consumers of financial and other information is to know not about the past, but about what
01:30the future holds. And that is where integrated reporting has come in as an extremely powerful
01:36source of gleaning what is there in the future of this company. Because it talks about relationship
01:45capital, environmental capital, human capital, innovation capital, physical capital, and financial
01:53capital. It's when these six capitals blend that you get a window into the future as opposed
02:01to a rear view knowledge of the past.
02:05One of the important things that has now come with SEBI mandates, first 500 companies, now 1000
02:13companies. So what's really happening with regard to BRSR, which is business responsibility and
02:21sustainability reporting? Where is it going? You know, I'm extremely pleased with the fact that BRSR
02:28came into India. It was the first time that corporate India actually had a taste of what it takes to
02:36actually measure your carbon footprint, to actually realize that there is a supply chain, which is
02:43bringing in carbon into your premises. All these realizations began to grow on people only when BRSR became
02:54mandatory. So while I'm all in favor of voluntary compliance, I think BRSR actually catalyzed the interest
03:07in focusing mind, attention, resources, human capital, and innovation capital on making sure that you can make
03:17more out of less and you can do it in a way that you are sustainable for the planet.
03:23That's why BRSR is so critical. I'm now beginning to see a trend where the non-compulsion part is
03:32kicking in. One of the things that we see is that with regard to sustainability or climate or
03:39environmental concerns, it's about tech, but more importantly, it is also about mindsets, about
03:47cultural elements, about behavioral aspects. What do you think about that?
03:51I'm a great votary for culture. Culture eats strategy for breakfast. No question in my mind about that.
04:00And that is why it's so critical to reorient the mindset. The moment you start saying that you have
04:09to change your mindset, there is a resistance and a pushback. But if there's a reorientation,
04:16which says that you will continue to remain profitable, in fact, you will make more money or the profit will
04:22grow. But the profit with purpose will not only make the bottom line look good, it will make you look
04:32good as a corporate citizen. The good news for the planet is that the economic imperative has been
04:39established. Moving from economic imperative to the domain of investment itself. And now we hear
04:46and we talk a lot about impact investing. So what really is impact investing? I think it's best
04:53illustrated by examples. Let us take work which we have not even imagined needs to be done. For example,
05:00the cell phone that you have, you are not using more than 10% of its capacity.
05:07How good would it be if through great education and empowerment of people who have a sense of how to
05:17make full use of it or to be established to make you empowered to do that and do that in
05:25the comfort
05:26of your home? Take any other device that you use. The capacity that you use it at is so abysmal
05:36that it's a shame that that work of using what you have to its full capacity is not being done.
05:42Without AI and without digital analytics, it is impossible to become so scalable.
05:52A lot of this is still a bit fuzzy. So what is really, if we have to look at an
05:59impact assessment,
06:01how do you make out its success? What are the key indicators or benchmarks in terms of looking at
06:09and assessing that whether an impact assessment is successful or not?
06:15Fantastic question, sir. My strong belief is that it is feedback and the voice of the customer who
06:26you think you are impacting, which is critical to actually doing a successful impact assessment.
06:32When you speak to the people who have benefited, for example, in my case, which I talked about
06:39earlier, the farmers, they come and tell their stories like nobody else can. A farmer turned up one day
06:47with a bunch of bananas, which he needed four people to hold up because it had so much weight in
06:56it.
06:56And he had done it because of the impact investment that the company had done in terms of
07:02enabling him, enabling him to grow it at scale and make it so munificent. So that is where we could
07:11then
07:13say that, yes, the yield from this same piece of land was X. Today, it is 10X.
07:21We have seen that impact investment is coming in certain sectors. Energy is one of them. Health is
07:29one of them. Education is one of them. But to really have a more tangible benefit out of it,
07:37it needs to go beyond these sectors. So what is the real pathway and mechanism to really attract investors
07:45into other sectors who can focus on this impact assessment? It's absolutely so critical what you
07:53are asking. Because it's only when these stories are told, repeated and communicated in an effective
08:01manner that the real larger investments will start flowing. Education, for example. The learning
08:09capability of every individual is distinct. I believe very strongly that every municipal school,
08:15in our country, must have an AI mentor for each child. Because in one classroom, say standard six,
08:24there are 20% students who are at fourth standard level, 20% who are at eighth standard level.
08:32And so the teacher who's giving out a lesson is not becoming meaningful. And it becomes so critical
08:42that that that hyper-personalized education is actually made available. Now, the value of that education
08:51can become so significant. So the point is that if these insights become ubiquitously known,
09:03then the impact investment which will invest in AI based mentors and that kind of investment will start
09:12taking off at scale. We've talked about reporting, we've looked at the need for impact assessment. It's also
09:22going forward critical that a lot of companies are not talking about net zero, net zero targets.
09:28What do you think needs to be done to really make it happen and make it really achievable in the
09:36image it passed?
09:37You know, sir, this is again an extremely loaded question. The definition of net zero is not clear
09:46to people. They believe that if they are net zero on scope one and scope two, they're all right.
09:5580% of your footprint comes in from
09:59your supply chain. 80% plus. In some cases, it is 90%. Now, if you're not measuring and tracking that
10:07scope three,
10:09you simply are pooling yourself that you are getting to net zero. It doesn't matter that you don't have
10:17a plastic bottle or drinking water out of that. What is important is that the realization of carbon emission
10:27has to percolate right down to the first person who actually does the first carbon emission.
10:35And it's important to track it through the entire chain.
10:41That realization is just beginning to dawn in corporate India.
10:45Yeah. So if you look at the, as I said, the immediate past, or if you look back,
10:50you need to think ahead. Absolutely.
10:53In terms of that thinking ahead, that while you have got down to the unit level,
11:00how does all that collectively come up to actually make those targets realizable?
11:07Again, fantastic. I think we need digitization at scale. You need a platform which will measure,
11:15track, modify, assign responsibility, make sure that the necessary sensors, the IoT, the equipment,
11:25all of that is actually put in place. In order that the measurement happens, what is not measured is
11:33never going to change, is never going to be improved. And so becomes critical to measure,
11:41to track, to have this digital platform, to have governance around it. Boards of directors will
11:48have to ask the right questions to make sure that this whole digital process is actually delivering
11:56or taking us to the net zero destination. It should become a visible way to track it.
12:03Without that, no governance can happen. And we are not going to get to net zero. If the country has
12:10to
12:10reach 2070 net zero, then every economic entity in our country will have to reach net zero much before
12:17that. True. Now, if you want to do that, then you need to make this trackable. And it has to
12:25be done digitally.
12:26And it has to come like that. We remember the population clock as it was ticking at some point in
12:32time.
12:33We need to see a net zero clock established everywhere across the length and breadth of the country
12:39to make sure that people get aware that, oh, we are nowhere near achieving it. And therefore,
12:48let's start doing something about it.
12:50You are a finance expert. We often have this debate that is it really a cost burden or a
12:59competitive advantage? What do you want to say about that?
13:02It's clearly a competitive advantage. I give you an example because only examples tell the real story.
13:08I was sitting in the board meeting of a hard to abate industry board. When I mentioned to them
13:17that the marginal cost of renewable power per unit
13:21is one fifth the cost of fossil fuel power. At that time, we had done some computations.
13:30That's when the penny dropped. And people began to look at how can we make sure that grid power on
13:39a
13:39sensible quality basis is available continually. That's the chief problem of renewables.
13:46You're on the board of several companies and you have been looking at investments. What do you think
13:53is the role of boards and investors in making this happen and happen at the accelerated pace that is
14:01so necessary, not only desirable? It's very critical. You know, it is important for boards to request the
14:10chairman in the 10 minutes that he or she gets at the annual general meeting of a company to mention
14:19the
14:19company's big ideas on sustainability. I just came back from the AGM of a company and the chairman actually
14:28spent one fifth of the time of his address on talking about why this company is becoming sustainable.
14:35Why is it? How is it fulfilling its desire to be gender neutral? How is it becoming diverse? How is
14:44the social, the human, all of these aspects which define ESG being taken care of?
14:52What are the biggest opportunities that we see in this space as of today?
14:57I see abundant power at democratized costs. I see that as the greatest benefit of a focus on ESG.
15:07And this is feasible. Technology exists. We have figured out the way to do it. We just have to invest
15:13in the grid. We just have to invest in the evacuation of power. And we need to invest in the
15:19last mile
15:19connectivity. And this is happening at scale. The second thing that is going to happen is autonomy.
15:25We just need a bunch of agents talking to each other autonomously. We need to see autonomous vehicles
15:34coming into the country. And finally, we need to create energy from waste. We need to move
15:43waste into hydrogen in a renewable manner. All the technology for doing this exists.
15:50All we need to do is to come together as a country and make it happen.
15:55We at Nandak School of Sustainability are invested in building a cadre of professionals who are
16:02conscious technologists, who can take the leadership and the mantle of sustainability forward.
16:09From a career perspective, what kind of a message would you like to give to them
16:15so that they get motivated and they see opportunity in this area?
16:20You know, to the youth of this country, I say we have a lot to learn from you. The biggest
16:27pull factor today that I experience is from the younger generation. Yesterday in my office was this young
16:35girl, 30 under 30 recognized person. She brought home to me the reason why we have to do all the
16:44work,
16:45great work that Nandak is doing. Because they're not going to tolerate a tomorrow where they are breathing
16:52foul air, where they're drinking water. They can't drink water from a tap. It's a shame that we can't drink
16:59water from a tap.
17:00And it's also a shame that we can't enjoy everything around us in an abundant manner,
17:08just because we are harming the environment by our actions. And it's only the young generation which will
17:15bring this home. So to them, I say, keep demanding that we become green, that we become net zero.
17:23Thank you, Shailesh. Wonderful to have you here. You've been watching Namtech Talks. What we do is we
17:29bring the experts and the voices of today who can talk of the future. So please keep watching and we'll
17:37come
17:37back with more.
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