Sustainability will be a critical factor as businesses ready themselves to hit the revival road in the post-pandemic period
Responsible conduct is not a new paradigm for Indian businesses, which have always had the mandate to minimise the adverse social and environmental impact of their operations. Many businesses in the country are integrating the United Nations’ Sustainable Development Goals (SDGs) into their core philosophy, thus creating value for a diverse set of stakeholders beyond customers and shareholders.
The raging coronavirus pandemic has provided ample evidence that responsible businesses are resilient businesses. This crisis has made the relationship between business and society more complicated and, at the same time, more visible, necessitating a much stronger alignment between business and societal interests.
Given the circumstances, the imperative is to ensure that as businesses focus on economic recovery once the pandemic eases, it is not at the cost of sustainability considerations.
Adopted in 2015, the SDGs provide a comprehensive framework to plan, measure, and monitor progress towards creating a world that is prosperous, green and just. Existing business regulations in India — among them the corporate social responsibility charter and the ‘national guidelines on responsible business conduct’ — have either been aligned or are in the process of being aligned to the SDGs. The Indian government is also finalising a ‘national action plan on human rights’, which has strong linkages with several SDGs.
As more companies adopt the SDGs structure, a few common characteristics are discernible. These sustainability principles are imbibed into the very spirit of the organisation and are pervasive at all levels, going well beyond regulatory requirements.
Clear sustainability targets and goal-setting have been instrumental in organisations doing well on SDG measurements. Business commitment to the goals relating to climate change, gender equality, clean energy, sustainable production and consumption, etc are often well documented in sustainability reporting. Businesses are increasingly adopting the principles of resource efficiency, the circular economy, and climate change mitigation to ensure long-term survival.
Sustainable businesses do not just concentrate on their areas of operations; they also influence their value chains and engage with key stakeholders to deliver on the sustainability agenda. Supply chain sustainability initiatives have been instrumental in driving positive environmental and social impact across the board.
The emphasis, initially, was on suppliers’ compliance with standards and codes of conduct, but this engagement has matured considerably to take in supply-chain transparency and deeper collaborative efforts between buyers and suppliers.
Sustainable businesses are also redefining the way they engage with communities. Community development initiatives are based on people participation, ownership and close collaboration with local governance systems.
Multistakeholder initiatives, with participants from economic, political and social backgrounds deliberating and jointly deciding solutions to common problems, have emerged as a strong enabler in delivering sustainable outcomes. Businesses are pooling their resources, wisdom and expertise through such initiatives to resolve common sustainability challenges.
Contrary to popular belief, sustainability is not the prerogative of resource-rich and large organisations. The evidence clearly shows that micro and small enterprises are equally effective in delivering on the SDGs and, sometimes, even more effective in driving sustainable change at grassroots.
Covid-19 has resulted in massive economic losses and social challenges. We have seen the best and worst of the corporate world during this period. On the one hand, there has been exemplary leadership, with companies speedily stepping in to combat the crisis within and outside their operations. Empathetic enterprises have stood by their workforce and partnered their supply chains to support them as well. Undoubtedly, these companies have forged stronger relationships and collaborations to emerge stronger from the crisis.
On the other hand, some companies have put only their interests at the fore. They have taken unanimous, destructive decisions — order cancellations, improper layoffs, no support for migrant or contract labour — that have exacerbated the situation, especially for the vulnerable. These companies have faced a backlash for their unethical behaviour and run a real risk of losing the trust of their employees and supply chains. Their operations are likely to be in jeopardy as things move slowly towards revival.
The pandemic has set us back considerably on achieving the SDGs. It has also exposed weaknesses in our existing systems, particularly the inability to protect marginalised sections of society. Businesses will have to rethink their strategies while being mindful of this context.
Businesses should also anticipate changes in consumption patterns. Consumers and investors will demand more transparency in the way businesses operate. Capital flowing to businesses will be inclined to apply the lens of sustainability in their decision making. Strong partnerships among stakeholders, with an emphasis on the vulnerable, will be crucial to building resilience across businesses and systems.
Wholehearted participation from the private sector will not only go a long way in ensuring that India stays on track to achieve its SDG targets, but will also ensure the survival of businesses.