Betting on 'good and green' hasn't hurt Godrej's wealth creation

Sustainability and development have been key goals for the group

The company which patented the world’s first springless lock is working hard on locking up carbon, meeting other development goals along the way. And shareholders have had little reason to complain.

The group flagship, Godrej and Boyce Manufacturing Company, aims to have around 30 per cent of its revenue from good and green products which also help meet development and environment goals, a top official reiterated on Tuesday. Godrej has had a similar goal for 2020 at least since 2010-11.

Group companies have outperformed the market in the period since. The S&P BSE Sensex which shows the performance of 30 companies which are among India’s biggest listed names, was up 11.2 per cent from March 2011 to September 2021. Group companies have outperformed including Godrej Industries (11.7 per cent), Godrej Properties (21.1 per cent) and Godrej Consumer Products (22.5 per cent).

The Godrej group defines a green product as one which is environmentally sustainable. This can include a product which consumes fewer resources, or emits fewer of the greenhouse gases which result in global warming.

Godrej defines a ‘good’ product as one which is for customers at the bottom of the pyramid, and also addresses one out of eight social issues which form part of the United Nations Millennium Development Goals. This includes targets like getting rid of extreme poverty and fighting against the spread of the human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS)

It is relying on innovation to help meet these goals. One of the group companies came up with an air-conditioning unit which cut energy consumption by 80 per cent.

“The design employs highly optimized vapor compression cooling system integrated with advanced evaporative cooling technology to reduce energy consumption. While small solar PV (photovoltaic) incorporated in the design will be instrumental in reducing power consumption from the grid, intelligent integration is accomplished through smart control systems. Furthermore, such a solution would be able to provide affordable access to cooling, which has become a critical necessity in many hot climates around the world,” according to a 2019 company statement which announced that the design had qualified as a finalist for a million-dollar Global Cooling Prize.

It also came up with Ezee Liquid Detergent. The product is easier on the environment as it does not contain phosphates.

Similar innovation will play a key role in meeting its good and green target said Godrej & Boyce chairman and managing director Jamshyd N. Godrej while speaking at a virtual press event on Tuesday on the group’s environmental, social, and governance (ESG) practices.

Godrej and Boyce Manufacturing Company is part of the diversified Godrej business group based in Mumbai. Its verticals include furniture, furnishings and fittings; appliances, chemicals, as well as engineering; financial services; and aerospace and defence. Godrej and Boyce had a revenue of Rs 11,500 crore in 2019-20 (FY20).