Rising Awareness in Local Communities
With growing awareness on environmental and social issues – global warming due to greenhouse gas emissions, pollution due to toxic releases, over-usage of natural resources, displacement of local people and rising inequity – organizations are being forced to adopt measures that show their responsibility and commitment towards environment and society.
The recent protests in the state of Orissa, India, by Dongria Kondh tribe against Vedanta’s bauxite mining project at Niyamgiri Hills (See “It’s Tribal Faith Vs Vedanta Might in Kalahandi Forests”) reflect the rising trend of social unrest. Similar actions by local tribal groups in the adjacent state of Chhattisgarh have stalled big steel giants – Arcellor Mittal and Posco – from moving ahead with their construction plans. The dissent expressed by coastal communities in Maharashtra against a 10,000 MW nuclear power plant shows that sensitivity among local communities towards industrial activities has increased as it affects not only their lands but also their livelihood. Strong opposition in coastal Andhra Pradesh against a 12,000 crore thermal power plant to be constructed in the wetlands has recently led to revocation of an earlier clearance given by the Indian Government. The rights’ awareness has increased manifold over the last 10 years – fueled by a saga of false promises and failed commitments, lack of sensitivity and responsibility, both by government and corporate. Today, this ‘historical baggage’ weighs heavily on businesses as they go out to explore opportunities. The challenge for today’s companies would be to build high levels of trust and transparency, and a strong ethical background to gain confidence of local communities.
Evolving Roles for Organizations
Organizations need to redefine their strategies to ensure longevity of their business operations.
For long, businesses have excluded social and environmental concerns from their business domain, i.e., they never bore the burden of environmental damage caused from pollution through toxic elements, emissions, etc. Nature was viewed as having abundant resources, unlimited capacity and immense power to revitalize and sustain itself. Lately, the realization has gradually dawned that the potential of anthropogenic emissions has had far reaching effects than initially thought.
The unfortunate part of the Indian Story is that, first, the old draconian laws related to land acquisition create disenchantment among local communities. The authoritative nature of the law leaves no scope of being heard. The subsequent displacement and loss of livelihoods, inadequate and poorly managed compensation schemes, and absence of alternate sources of livelihood create a social rift. Second, though the environment laws are well-defined, the weak implementation mechanisms still allow organizations to pollute menacingly causing damage to environment and biodiversity. The local communities feel marginalized, cheated and ignored.
One might argue that business organizations are meant to make profits and they need to be bothered primarily with shareholder value. But this would hold in good stead had industry been non-polluting and our natural resources were abundant enough to last an eternity. Unfortunately, reality is different. The assumption of profitability as the sole motive of a business entity does not seem to be valid anymore.
Some companies have taken strong measures to implement sustainability principles – sustainability reporting, well-defined CSR policies, and focused programmes. Though the efforts of some organizations are laudable, a quantum change would be observable only when many such companies participate in the process. Much genuine effort needs to come from corporate to realize the true meaning of “Sustainable Development”.
Of late, concepts such as CSR, community development, ecological footprints, eco-products, eco-tourism, green buildings, etc., have gained popularity in the corporate world. However, the common understanding for a majority of business organizations still rivets to organizing mundane activities such as tree plantation, distribution of saplings, announcing awards, and attracting media as means to show their commitment towards sustainable development. The real contribution expected of companies is getting lost in the humdrum of such celebrations. While the nature of business operations continues to remain same, these philanthropic gestures do not have the potential to bring about the desired change – a positive feeling among the local stakeholders.
What is needed is a radical change in outlook to integrate sustainability principles in business strategy. Businesses must address the central causes of discord rather than approaching it from the periphery. It must address the impact of business operations on all stakeholders – upstream and downstream. This would be a challenging task given the ‘historical baggage’ – an unpleasant experience that is hard to forget.
Proactive organizations have initiated activities that have helped resolve issues related to pollution, resource management, livelihood generation, energy conservation, education, health, improvised local markets, and many more. The domain of organization thought process has extended beyond core processes to include peripheral activities related to outsourced agencies, vendors, end-users, product life cycle, disposal, etc. This is an evolving form of corporate responsibility that encompasses the vendors, distributors, customers, employees, and all associated agencies.
The Road Ahead
We have had a good long spell of ‘consumerism’ that has propelled the fast growth of companies and, along with it, intensified the pace of depletion of natural resources. Consumerism has taken deep roots. One needs to understand that when it actually comes to buying green products, words and deeds part ways. This impact has conditioned customers’ mind-sets. The conventional customer behavior governed by ‘value for money’, discounts, freebies and promotional offers cannot be overturned in short time.
Now, our existence is at stake and the same industry has the potential to get us out of this. The reasons are simple – only a market-based mechanism can have that reach and depth to bring observable changes
Are our organizations prepared to undertake a comprehensive sustainability assessment of business activities – starting from resourcing of raw materials, supply chain management, production, sales and distribution, marketing, end-customer usage – complete product-life cycle assessment?
We need to know – Are we set to realize the concept of sustainability? The words ‘eco’ and ‘green’ have become a buzz word in advertising circles. Much hype has been created around eco-products and services. Are they really eco-friendly? Are we really following a relevant criterion or creating confusion in the marketplace?
The erstwhile business models excluded society and environment by varying degrees. With growing pressures from rights activists at a national/global level to many local and regional NGOs, citizens’ groups, etc., the business models need to take due note of social and environmental impacts. This has become a grueling challenge. The conventional CSR practices would not work in future and would be a resource drain.
Sustainable Strategy means an activity or a process that is reliable, valid and can repeat itself either on its own (self-reliance) or with partial external support from industry.
The future organizations need to look at ‘sustainability’ not only as a challenge for growth but also as a critical parameter for existence. Companies need to develop strategies that can convert environmental and sustainability considerations into competitive advantage. Organizations must look towards radical innovations. Innovations in renewable energy, nanotechnology, biomimicry (learning from nature), are some promising areas.
Organizations riding the ‘sustainability’ bandwagon must understand the relevance of sustainability principles to be able to design robust strategies to overcome challenges and define new business models that incorporate – environmental and social dimensions into its growth story.
The author is currently Vice President (Sustainable Strategies) at ThinktoSustain.com – a market space for ideas…Media Contact: editor@thinktosustain.com
