Environmental impact has become one of the biggest selling points for brands when striving to gain consumer attention. Whether intentional or not, the potential to mislead consumers regarding the environmental benefits of a product or service (that is, greenwashing) and the legal risks associated with it has also grown. How does the Indian marketer fare? Is there real action behind the ‘green’ talk? More importantly, how transparent are they in their reporting on sustainability measures?
RAVI CHAUDHRY Chairman, CeNext Consulting & Investment Pvt Ltd
In India, green technology and sustainable business practices are generally perceived more as compliance issues rather than something that must be done. Sustainability is not just about reducing a company’s carbon footprint, it is more about a corporate character — the corporate DNA that is defined by how the CEO and the board view their responsibilities towards society and nature. It is about what positive hand-print the company is willing to leave behind, on a day-today basis.
Corporate sustainability has four different facets: * Reducing consumption of all natural resources to bare minimum which means (a) reducing consumption per unit output and (b) zero tolerance for waste of any kind. This needs to encompass energy, water, minerals, chemicals and all natural resources. * Ensuring minimal discharge of pollutants. * Increasing self generation of renewable energy to the maximum extent possible. * Ensuring that none of the corporate actions or decisions will have any adverse impact on any section of our society — today or tomorrow.
If we apply these yardsticks, only a handful of companies will score well. The reason is simple — sustainability is not a mainstream agenda, neither for the government nor for industry.
The government needs to look beyond just environment clearances. It needs to take a holistic view and steer corporations towards pursuing policies in a different direction. For example, industry typically perceives natural resources as tradable objects for expropriation, rapid consumption and depletion; the new attitude must veer towards replenishment, integration and holism. Industry traditionally looks at making nature productive; the shift in emphasis should be to make nature sustainable. This is possible only if we deviate from our current focus on seeking power over nature to seeking alliance with nature — and evolve and implement new policy frameworks that take cognisance of three key factors: depleting natural resources, pollution in our living spaces and tangible threat of climate change.
As Jeremy Rifkin puts in his book, The Third Industrial Revolution, “The old science puts a premium on autonomy from nature; the new science focuses on participation with nature. The right to exploit, harness, and own nature in the form of property is tempered by the obligation to steward nature and treat it with dignity and respect. The utility value of nature is slowly giving way to the intrinsic value of nature.”
This is possible only if both government and businesses start realising that a country’s economy is the wholly-owned subsidiary of nature. It is important that leading industry associations and chambers of commerce re-calibrate their role beyond lobbying for their members only. They need to take the decisive step forward from being merely ‘industry’s voice’ to becoming ‘nation’s voice’. This is not difficult; it has now become imperative. The only choice is: accept the new realities willingly, or grudgingly — in which case it may be too late. Industry associations need to create stringent self-regulatory mechanisms. Of course, it will mean a little less profit in the short-term; but there is no other way.
There is no other option.
Former EU president José Manuel Barroso’s 20-20-20 voluntary plan by 2020 is a giant step in the right direction. The proposal called for a 20 per cent reduction in greenhouse gas emissions by 2020, a 20 per cent increase in energy efficiency by the same year; and a 20 per cent increase in the deployment of renewable energies, again by 2020. We can have our own version of it — but we must set an agenda in the right direction.
Germany has vigorously pursued policies to ensure that each new building they construct is a potential mini power plant that could suck up the renewable energies on site — the sun, the wind, the sewage flowing out of the house, and the waste generated. This calls for an interactive collaboration between government, construction industry, architects and urban planners. We have the requisite talent in our country. All we need is a collective will.
DEEPAK HALAN Associate Professor, School of Management Sciences, Apeejay Stya University
A number of organisations today, across the world, are marketing products and services labelled as ‘environment friendly’, ‘ozone friendly’ or ‘CFC free’. While we do have a large number of environment-conscious companies doing their bit for pollution control, it is unfortunate that a few companies dubiously claim their product to be environment friendly. In fact, there is a term for this — greenwashing — where companies do little more than pay lip service to the cause.
These companies often spend more time and money claiming to be ‘green’ than actually spending on green practices. For instance, consider this soft drinks company, which boasts of green marketing strategies, such as developing a new billboard designed to absorb air pollution and growing plants in several old bottles that can absorb almost 50,000 pounds of CO2. However, the same carbonated drinks company is also known to draw large quantities of water from Rajasthan, a region known to be prone to scarcity of water and occasional droughts. For every litre of soft drinks, three litres of water is extracted by the company. This has led to drying up of wells and have also considerably lowered the water table in the region.
On the other hand, there are many other examples where companies have really understood the very real and urgent need for taking green initiatives and are doing some wonderful work to make their products environment friendly.
Consider McDonald’s. It made a start by adding the colour green to the original red background in its logo to convey to the customers that it is an environment friendly company. But it hasn’t restricted its efforts to marketing only. McDonald’s has taken several green initiatives, such as using environmental-friendly refrigeration and converting used oil to biodiesel before speaking about it in its marketing communication.
Now consider Tata Motors. It is said to have put up an eco-friendly showroom using natural material for its flooring and energy efficient lights.
State Bank of India has used eco- and power-friendly equipment in its new ATMs, thus cutting power costs as well as earning several carbon credits. The Taj chain of hotels is developing eco-rooms with energy efficient mini bars, organic bed linen and napkins made of recycled papers and CFLs or LEDs instead of conventional lighting.
In other words, just as many companies are making real efforts in this direction, the whole issue gets discredited when we hear of companies that treat sustainable growth as a marketing gimmick.
I feel there is an urgent need for companies to get their product carbon foot-printed by an accredited agency before making any claims of being environment-friendly. The good news is a new certification; the ISO 14067 is being developed to increase transparency in quantifying and reporting CO2 emissions over the entire lifecycle of products and services.
Talking about India specifically, the enforcement of existing environmental laws is lax. For instance, the use of plastic bags has been banned quite some years ago, but they continue to be used by buyers and sellers.
To eradicate greenwashing and to force companies to develop effective strategies in this direction, we need strict enforcement of enacted laws, imposition of tax (Germany, for instance, is considering levying a carbon tax on air passengers flying into the country) and pressure from citizens.
The consideration for environment protection has to figure in every marketing policy, plan or strategy. It is not the case today, especially if the company enjoys monopoly or has a captive market. I think the carrot works better than the stick and what we need is some sort of government-sponsored reward or recognition of high quality of efforts, initiatives and reporting in this area.