Aditya Gurudanti ,
Associate Director & Head (Sustainability),
Stirrup, An Xcelerate Venture,
The way we do business has changed, and business leaders have realised that incorporating sustainability & ESG aspects into their way of doing business isn’t just an add-on or optional but has become mandatory. The urgency of climate change, societal pressures, and evolving regulatory environments has positioned sustainability not merely as a moral obligation but as a critical component of long-term business viability and competitive advantage. While not necessarily complex, business executives have to understand and navigate this new terrain to position their organisations for a sustained competitive advantage.
Any business has two sides to it – cost & revenue. The positive difference between revenue & cost is what drives stakeholder value. As we widen our lens to include different types of cost & revenue <refer Natural Capitalism>, the value proposition of sustainability becomes clearer. Recent studies underscore the financial benefits of adopting sustainable practices. Integrating sustainability into business strategies not only addresses environmental and social concerns but also enhances financial performance. A PwC survey revealed that nearly two-thirds of directors (64%) now align their strategies with Environmental, Social, and Governance (ESG) issues—a 15-point increase from the previous year—indicating a strong correlation between sustainability focus and improved financial outcomes.
Organisations with well-defined sustainability strategies are increasingly attracting investment and talent, fostering a cycle of growth and innovation. The International Capital Market Association (ICMA) reports a significant rise in green bonds and green financial instruments, reflecting investor confidence in sustainable initiatives. This trend is further supported by the European Union's Sustainable Finance Disclosure Regulation (SFDR), which mandates transparency in sustainability practices, thereby enhancing investor trust and engagement.
For C-suite leaders, the challenge lies not only in acknowledging the importance of sustainability but also in embedding it within the corporate DNA. This requires a shift in mindset and a commitment to align sustainability with business objectives. Leaders must cultivate a sustainable corporate culture that influences decision-making at all levels.
The foundation of an effective sustainability strategy begins with a clear vision. Leaders must articulate their commitment to sustainability in a manner that resonates with all stakeholders, including employees, customers, and investors. This vision should be complemented by specific, measurable objectives that align with broader corporate goals.
To establish this vision, executives should engage with key stakeholders to understand their perspectives and expectations regarding sustainability. When integrating diverse viewpoints, leaders can develop a holistic strategy that addresses the needs of all stakeholders while driving business value.
Case Study: Godrej Good & Green
Godrej Industries has established itself as a leader in sustainability through its flagship initiative, Good & Green, which aims to impact society and the environment positively. The initiative is embedded in the company’s broader strategy to drive inclusive growth and environmental sustainability. The Good & Green program focuses on key areas such as sustainable sourcing, environmental stewardship, community development, and empowering employees to play an active role in sustainability.
One of the most significant achievements of Godrej Good & Green is its commitment to sustainable sourcing, with the company aiming to ensure that 100% of its raw materials are sustainably sourced by 2025. Godrej has already made significant strides in sourcing sustainable palm oil, timber, and paper, ensuring that these materials are responsibly sourced to prevent deforestation and promote biodiversity. The initiative also extends to energy conservation, with Godrej targeting 100% renewable energy use across its operations, reducing its carbon footprint while maintaining operational efficiency.
The program has positively impacted local communities by providing livelihood opportunities to 5 million people in India, focusing on education, health, and skill development, thereby empowering marginalised communities to thrive. Godrej's Good & Green strategy exemplifies how corporate responsibility and sustainability can be seamlessly integrated to drive social, environmental, and economic value for the company and society.
A thorough assessment of existing sustainability initiatives is crucial for identifying gaps and opportunities. This evaluation should encompass an analysis of current practices, stakeholder perceptions, and the organisation's environmental and social impacts.
Leaders should utilise data-driven methodologies to assess performance against industry benchmarks and best practices. This insight will enable organisations to understand where they stand in their sustainability journey and identify areas for improvement. As the Deloitte report emphasises, data analytics is essential for making informed decisions that drive sustainability efforts.
Case Study: Life Cycle Assessments (LCAs) in the Cement Industry
The cement industry, known for its high carbon emissions, has increasingly adopted Life Cycle Assessments (LCAs) to enhance sustainability. Leading companies like ACC Limited and UltraTech Cement have integrated LCAs into their operations to assess and reduce the environmental impact of their products. ACC’s efforts to minimise its carbon footprint through LCA-driven initiatives have led to a significant reduction in CO2 emissions per tonne of cement produced. For example, ACC’s use of alternative fuels like industrial waste has helped reduce the carbon intensity of its products. Additionally, ACC’s focus on green products contributes to the broader goal of sustainable construction practices. These LCA insights have been critical in driving resource efficiency and aligning with global climate goals.
Similarly, UltraTech Cement, part of the Aditya Birla Group, has utilised LCAs to improve the sustainability of its cement production. In its 2023 Sustainability Report, UltraTech outlines its commitment to reducing CO2 emissions intensity by 25% by 2030, an objective supported by the insights from LCAs. The company’s focus on recycled materials and renewable energy is reflected in its ongoing efforts to reduce its environmental footprint. UltraTech’s adoption of LCA practices has enabled it to implement energy-efficient technologies, contributing to significant energy savings and emission reductions across its operations. These efforts highlight the importance of LCAs in driving continuous improvement in the cement industry, contributing to more sustainable manufacturing processes and products.
Integrating sustainability into corporate strategy requires alignment with core business objectives. Leaders must identify opportunities where sustainability initiatives can enhance profitability, operational efficiency, and brand reputation.
For instance, sustainability can be integrated into product development, supply chain management, and marketing strategies. By embedding sustainability into these critical areas, organisations can create innovative solutions that meet consumer demand for environmentally friendly products while simultaneously driving revenue growth. Reports suggest that companies that align sustainability with their core business strategies are more likely to achieve long-term success.
Case Study: IKEA’s Sustainability Strategy
IKEA’s sustainability strategy focuses on circularity, climate action, and social responsibility, integrating these principles into its business operations. The company aims to be climate-positive by 2030, reducing more carbon emissions than it emits, and has already achieved over 50% renewable energy usage across its global operations. IKEA has committed to sourcing 100% of its wood from sustainable sources and transitioning to a circular business model where products are designed for reuse, repair, and recycling. Additionally, it has partnered with organisations like the Ellen MacArthur Foundation to drive circularity across industries. These initiatives reflect IKEA’s comprehensive approach to sustainability, ensuring environmental stewardship and social fairness across its supply chain and operations.
Creating a culture of sustainability within an organisation is paramount to the successful integration of sustainable practices. Leaders must champion sustainability at all levels and encourage employees to embrace environmentally and socially responsible behaviours.
To foster this culture, organisations should invest in training and education programs that empower employees to understand the importance of sustainability and how they can contribute. This not only enhances employee engagement but also drives innovation as teams collaborate to identify sustainable solutions.
Case Study: Dr. Reddy’s Ambassador Programs
Dr. Reddy’s Laboratories has effectively integrated sustainability into its operations through its Sustainability Ambassador Program, which empowers employees to drive green practices across the organisation. Launched as part of its Sustainability and Responsibility (SAP) initiative, the program has successfully engaged employees in key sustainability efforts such as energy-saving initiatives, waste reduction, and water conservation. Ambassadors have played a vital role in helping the company achieve a 15% reduction in energy consumption at its manufacturing facilities over two years and in reaching zero-waste-to-landfill status at several of its locations. The program not only aligns with Dr. Reddy's environmental goals, such as reducing Scope 1, 2, and 3 emissions, but also fosters a culture of sustainability, empowering employees to contribute directly to the company's long-term sustainability objectives.
To ensure accountability and transparency, organisations must implement robust measurement and reporting frameworks for their sustainability initiatives. This involves setting clear metrics and key performance indicators (KPIs) that align with the established sustainability objectives.
Regular reporting on progress not only demonstrates commitment to stakeholders but also provides opportunities for reflection and continuous improvement. Companies should communicate their sustainability efforts through various channels, including annual reports, sustainability disclosures, and social media. This transparency builds trust with stakeholders and reinforces the organisation’s commitment to sustainable practices.
Case Study: Lupin’s ESG Databook and Transparency Score
Lupin Pharmaceuticals has demonstrated a strong commitment to sustainability through its ESG Databook, which provides a comprehensive, data-driven account of the company’s environmental, social, and governance practices. The ESG Databook outlines key metrics such as a 30% reduction in carbon emissions by 2030, energy consumption, water usage, and waste management, all aligned with global standards like the Global Reporting Initiative (GRI). As of the latest report, over 50% of Lupin’s facilities have reduced their water consumption, and the company has been committed to reducing waste to landfill by 50% by 2025. This initiative not only enhances trust but also supports the company’s efforts to attract responsible investors, demonstrating its leadership in integrating sustainability into core business strategies.
Sustainability is not an isolated endeavour; it requires collaboration and engagement with external stakeholders, including suppliers, customers, and industry partners. Leaders should actively seek partnerships that amplify their sustainability efforts and foster innovation.
Collaborating with external organisations can provide valuable insights and resources that enhance sustainability initiatives. For instance, joining industry coalitions focused on sustainability can facilitate knowledge sharing and best practices that drive collective impact. As highlighted by McKinsey, collaboration is key to scaling sustainability efforts and achieving meaningful results (McKinsey, 2023).
Case Study: ITC Choupal Initiative
ITC’s e-Choupal initiative has revolutionised rural agriculture in India by providing farmers with access to critical information and sustainable farming practices through internet-enabled kiosks. Launched in 2000, it has empowered over 4 million farmers by offering real-time market data, weather forecasts, and best practices, allowing them to make informed decisions and improve productivity. The initiative focuses on promoting sustainable farming techniques such as water conservation, soil health management, and pest control, thereby reducing environmental impact and enhancing crop yields. Furthermore, ITC ensures fair prices for farmers through direct procurement, creating a more transparent and efficient supply chain. The initiative exemplifies how technology and sustainability can be integrated to improve livelihoods and promote environmental stewardship in rural India.
Innovation is at the heart of sustainability integration. Organisations must encourage creative thinking and experimentation to develop new products, services, and business models that align with sustainability principles.
Investing in research and development can lead to breakthrough solutions that not only address environmental challenges but also create new market opportunities. Leaders should foster an environment where employees feel empowered to propose innovative ideas and challenge the status quo, ultimately driving the organisation toward a more sustainable future.
Case Study: Patagonia’s Sustainability Programs
Patagonia has long been a leader in sustainability, integrating ethical practices into every aspect of its operations. The company uses 68% recycled or sustainably sourced materials, including organic cotton and recycled polyester made from post-consumer waste. Patagonia’s commitment to sustainability extends to its Fair Trade Certified™ factories and its Worn Wear program, which promotes the repair and reuse of garments to reduce consumption and waste. By pledging 1% of its sales to environmental causes through the 1% for the Planet initiative, Patagonia has donated millions to support conservation and climate change efforts. The company’s transparent reporting and dedication to environmental activism underscore its role as a product and business sustainability pioneer.
"Embedding sustainability into our core operations is not just about compliance & ratings; it's about driving innovation and unlocking new market opportunities. Organisations that take this step will lead the way in a rapidly changing world."
Organisations must also focus on grassroots sustainability initiatives that engage employees and local communities. Companies like Wipro have launched employee-led programs that encourage staff to participate in local environmental projects, such as tree planting and clean-up drives. These initiatives not only contribute to environmental sustainability but also foster a sense of community and belonging among employees.
Integrating sustainability into corporate strategy is no longer a choice; it is an imperative for organisations striving for long-term success. By following a structured roadmap, leaders can effectively embed sustainability into the fabric of their organisations, driving value for stakeholders while addressing pressing global challenges.
The journey towards sustainability is multifaceted and requires commitment, collaboration, and innovation. As leaders embrace this transformation, they position their organisations to thrive in a changing business landscape and be active architects of a more sustainable world.
The Journey Into Industry
Mr. Aditya Gurudanti is a seasoned sustainability leader with 13+ years of experience in driving ESG initiatives across industries. Previously, he led ESG at Lupin Ltd. & Sustainability Operations at Dr. Reddy's Laboratories and worked as ESG Manager at Novartis, focusing on sustainability reporting and operational efficiency. Mr. Gurudanti has expertise in climate risk, integrated reporting, and compliance with global standards like DJSI and ESRS. He is dedicated to mentoring teams and advancing sustainability in organisations.
Xcelerate is an integrated ESGRC operating and investing platform headquartered in Singapore. It partners with / acquires entities operating in the GRC and ESG segments across the APAC and the EU regions. It has made rapid progress in its objectives to create a strong platform for cutting-edge technologies, high-quality teams and entities with significant domain expertise that work together to provide tools and solutions that enable entities to manage risk, meet regulatory requirements, and sustainably conduct business.
