Prof. (Dr.) M. D. Teli*, Shraddha Teli & Sanket Valia
*Institute of Chemical Technology,
Mumbai, India,
Abstract:
The concept of Sustainable development of the business is explained and requirement of coherence between three bottom lines (TBL) of measuring the success of business- financial, social and environmental, is emphasized .The alarming situation of the world in terms of limited resources and GHG emission is brought to the focus which is a key factor for driving sustainability agenda. Then follows the description on importance of creating value for stake holders and the role to be played by the business enterprises in order to attain sustainability. Subsequently significance of sustainability in textile value chain is discussed, advocating that there is an urgent need to change the mindset of the people to exploit the weak ones in the value chain. In addition to TBL, the organization needs to orient its HRD policies and governance and commit strongly to ethical business practices. Sustainability makes a strong business case and hence it should be aggressively followed.
- Introduction
The concept of Sustainability needs to be first understood, since many a time’s sustainability is taken as if “something longer lasting”. However, in truest sense it’s not the longevity of the operation, but more so, it is a balanced and coherent operation which takes place without the expense of the society or surrounding environment. By definition, the UN World Commission on Environment and Development (1987), terms sustainability as the, “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
There was a time when success of business used to be measured only in terms of swelling profits the balance-sheet of the company showed to the shareholders. In fact “generating the profit” was considered only the sole purpose of Business and thus many of our practices in the business, could be questioned when it comes to looking at the corporate social responsibility/commitment or environmental protection is concerned. Over the years, the business success has come to the measurement of three bottom lines: Financial, Social and Environmental and in all these three aspects, a successful business organization is expected to do well. However, it has been found that the companies consider social compliance and environmental compliance more as a burden on them and hence, in order to follow the legislative norms and comply with the laws, majority are found to do an eye wash- many a times called green wash, where in very little is done of the relevance on these two fronts. Naturally the integrated sustainability- as shown in the Figure.
Sustainability measurement scheme
The common subset of all the three circles will be very much dismal if economic performance of the company is not proportionately balanced with social and environmental performance. If neglected, the circles representing social and environmental performance will be very small (indicating just an eye wash)and then, this subset will be very small, reflecting very little of worth is truly sustainable.
Nested approach to Sustainability
Hence the nested approach to the sustainability shown in the next figure is projected, where in it is envisaged that the sustainable economic performance which is very vital life blood of the company should be a subset of sustainable community which intern should be the subset or sustainable environment. Though it sounds idealistic, indeed the world has been brought to the brink where in our natural resources are depleting at alarming rate; Green House Gasses (GHG) emissions are shattering the faith of the inhabitants, in the production activities being undertaken which take further toll on the scarce water and natural resources.
The rare natural resources are dwindling at the shocking levels (WWF, 2010); The global social order, is crumbling and we also witness financial crisis after crisis after the Great Depression (IMF 2011).The world is witnessing earth-shattering exploitation of our non-renewable resources, climate change and its alarming effects, as well as, the growing Carbon Footprint leading to distressing consequences, such as water scarcity, declining natural capital and crop cultivation, hunger, rising costal risks, decreasing global forest areas and so on (WWF 2010). This is the result of “business as usual” practices which companies undertake in which their operations result in the unbridled exploitation of the natural capital. In other words for the company’s profitability the society and the environment are paying the cost.
As said by Albert Einstein, “The world will not pass its current state of crisis by using the same thinking that created the situation”. It is time before it is too late, that this transformation from a culture of unfettered consumerism to a culture of sustainability has gained momentum (BIC) which further brings us to the topic of responsible production and responsible consumption.
UN Global Compact calls the business leaders of the world to follow certain basic principles of responsible business practices in order to avoid such situation from deteriorating further. This includes 10 basic principles which talk about respecting human rights, taking care of Labor, Environment, following anti-bribery code of conduct best business practices in governance etc.
Having adversely impacted by the after effects of all these unbridled production activities of the business houses, the modern consumer who is enlightened on the causes of this situation and concerned about the future of our children, is increasingly shifting his/her attention to measuring prosperity, through the Ecological Footprint (Wackernagel& Rees 1996), the Genuine Saving Estimate (World Bank 2006), Human Development Index (UNDP 2009) and the Ethical Reputation Index (ERI 2008) in addition to the SENSEX – the stock exchange indexes of the corporates.
These may be some of the additional parameters for measuring corporate sustainability that are changing the businesses over the time. The companies are getting increasingly interested in stakeholder engagement process. The one which is now become inevitable, was realized as the need by Jamsetji Tata, who viewed community as not just a stakeholder of the business, but rather as the very purpose behind the business (Tata Steel 2008-09)
Can we prosper as an organization when our surrounding society is in abject poverty? Our environment is totally exploited? It’s not possible, as Bill Gates puts it; and even if for a short term, we might make some money, it will be at the cost of society. Our children’s future, the very existence is in danger. Hence the age old definition of business for only making profit must see a paradigm shift and as Jamsetji Tata felt, businesses have also the responsibility of the community/ society and the environment. Hence it is important if however, progressive business organization may be, unless it takes right steps in engaging all the stake holders including its shareholders, understands their concerns and addresses them, it’s not going to be truly sustainable.
- Creating Value for Stake holders through Sustainability
Sustainability encompasses not only shareholders’ financial gains, but it should be concerned about all the stake- holders. It should include social commitment-welfare of their workers and their future growth, community and their needs in terms of health, education and primary needs like water and sanitation, environment around it and see that water and air pollution is avoided and it does not burden the planet with increased Carbon footprints. It should create truly Sustainable Value model as suggested by of Hart and Milstein as shown in the following figure, is the one we all businesses have to emulate if we are concerned about true sustainability.
Hart and Milstein model
It becomes then abundantly clear that only increasing profit figures showing financial performance and doing some corporate responsibility programmes with environmental compliance will not be automatically going to make our operations sustainable. Merely having the best of technology and thus possessing certifications like ISO9001-2000 for consistent quality, Social Accountability Certification like SA8000 , Environment Compliance as depicted in ISO14000-2001 and Occupational Health &Safety Assessment System OHSAS 18001- 2007 do not guarantee that the Enterprise is going to be sustainable. We need to do beyond all is required to comply with. Sustainability permeates through the core values and commitments and thus it has to be reflected in all the sub activities of the business: it’s purchase and raw material handling policy, finance, operations, human resource development, R&D, PR, Brand image building compliance with laws of the land, marketing and customer satisfaction, after sales and way how their goods are finally disposed off, etc.
As suggested by this model business has to look within (internally) and also external climate in which business operates. It has look also for consolidation of the business for today and plan for the future growth. Hence as shown above, the Stake Holder Value model is divided into 4 quadrants.
2.1 Today, what companies should do to strengthen internally?
The one bottom left-wherein today’s company has to align its operations and adopt the advanced technology in such a way that it tries to establish coherence in the triple bottom lines of business. So in addition to the financial performance, it acquires social accountability and environmental compliance. It has to put in place best of technology so that it can reduce the waste, make its operations lean, and achieves cost- effectiveness by taking all the necessary measures while maintaining international quality standards. Recycling of water, energy conservation and use of renewable energy are additional measures it has to adopt.
2.2 Today what companies should do to strengthen its image in external society?
The next quadrant- bottom right which is for the external parameters in which today’s business has to work, which include management of reputation, building of image and legitimacy of operation with good rapport with the community. It is here the company has to be perceived by the government agencies, society around as an asset to them. They should be happy that such an organization is flourishing in their midst. Unless such a conducive surrounding exists, there is always an uncertainty that any NGOs, or Govt. agencies or the community at large will revolt against the operation of the company. All this is possible if right transparency and genuine commitment to society, to the law of the land, to all bodies involved in taxation, etc. is shown.
2.3 Tomorrow, keeping future growth in mind, what companies should do to strengthen itself internally for building capacity?
The next top left quadrant is again for the future what steps the company should take? It is evident that within the company’s four boundaries, it has to see that right type of exclusive talent being retained. Good capability within personnel is built up. Their talent is managed well and proper incentives and opportunities provided for application of newer technology, for innovation and research and accordingly sufficient investment is made. It is necessary that such a core competence is built within so that by application of out of the box- innovative ways, newer products could be launched which can change the very matrix of their operation and growth. The frame work of VRIO needs to be looked into where in the human resources are retained and encouraged looking at the composition of Value, rarity, inimitability and organizational capacity. Hence sustainability involves highly encouraging and stimulating human development measures in place, with good room for their progress. Unless Human Resource development policies are thus not in conformity with the needs of sustainability, it is truly difficult to achieve sustainability of an enterprise.
2.4 Tomorrow, to achieve high future growth, what companies should do externally in response to macroeconomics and market?
Finally the top right quadrant relates to macroeconomics of the future in the external world. The new markets are to be tapped. New ways of marketing totally different out of the box-innovative products are to be developed addressing the aspirations of the people who are at the bottom of the pyramid. The most important fast growing market is this BOP market and the aspiring population in growing economies is in fact the true market potential for the business growth. And it is here the growth will come in significant proportion. Don’t we understand why big brands are eying at India, China, Brazil, and Russia? It is not only for getting the products manufactured in these regions, but more so, that they want to manufacture at the lowest cost as they see main market in these countries.
All this has to happen with transparency and good governance. We have seen the economic empires are crumbling down because of bribery, corruption and greedy business practices and it is here the commitment to values-the inner driving force which listens to the voice of conscience is important.” There is a sufficiency in the world for man’s need but not for man’s greed.” These words of Mahatma Gandhi are to be remembered as they have roots in sustainable operations and self-reliance at its core.
- Sustainability and Textile Value Chain
Hence unquestioned commitment to values and belief in welfare of the society is strong, true sustainability will always elude us. Till then what we should do? Do the things as market forces are making us to follow whether we like it or not and get attuned to doing such “good things” even if it is with reluctance.
For example, let us apply this philosophy of sustainability to our Textile Value Chain in Garment manufacturing and supplying to the brands. Thousands of textile manufacturing units are following what the western consumer wants today, as the US and European Brands actually are dictating the terms of the retail business in fashion trade. It was the German ban on azo-dyes which made suppliers like India, China to fall in line to exclude the dyes having such carcinogenic compounds; Red- listed chemicals, heavy metals, formaldehyde, phthalates, NPEs, etc. were all being taken off. Oeko-Tex certification certifying the use of safe chemicals and dyes became incumbent upon every exporter of garments to western world. Initially developing economies and short sighted scientists wasted their time considering them as non-tariff barriers. End of the day whatever is bad for the health and environment in the west is also bad for those reside in this part of the world. We learnt this lesson and had to fall inline, but the precious time was lost in preparing for the same. We knew post liberalization since 1990, that market is going to be globalized and we need to stand in competition with manufacturers in the developed world. Naturally our technology had to be upgraded, if we have to address the demands of the modern consumers since they are enlightened on host of issues and thanks to Face book, twitter and YouTube communication revolution. Today’s consumer is buying branded clothing; but while paying such a huge price, it is quite logical that s/he sees that her/his garments are manufactured eco- friendly way, there is no labor exploitation, there is no environmental degradation, all those who are involved in this supply chain-people as well as planet and other stake holder-all of them get their dues, no child labor is employed, society does not have to pay the cost. On the other hand, society benefits out of the growth of such businesses as they also undertake a number of welfare measures which are beyond the capacity of the government. This is what the conscious consumer wants to see. S/He wants to feel good by wearing the garments which come from the Brand which has status and image in the society of following “good business practices”. Although this should be the policy of truly committed business enterprise, possible only when Brands put their foot down and dictate the terms, it gets percolated down the supply chain. Sadly only under the compulsion and pressure from the Brands, our manufacturers of clothing, follow all the guide lines and try to become compliant, as it is the only way they can get their share in growing globalized market.
It is also important to know that there is no more distinction between domestic customer demands Vis-à- Vis that of overseas. Gone are those days when we used to think that domestic customer can accept inferior quality against the ones in the global world. Now every single brand is available in our own market, it is a seamless market economy and hence ever one – the modern consumer wants the best garments, best in quality and cost effectiveness as well as from those brands who have great reputation and brand image. And to help modern consumer to distinguish between what is good and what is questionable accrediting agencies have come up with certifications. These certifications indicate that the garments are produced responsibly with all compliances and going beyond them, indicate the Brands participation and philosophy of encouraging to decrease Carbon footprints. Surely such labels enlighten the consumer, as to what brand needs to be supported in the interest of the community and planet as a whole. More the consumers support such Brands, more financial muscles the brands get in advocating sustainability measures not only to their direct suppliers(manufacturers) ,but also down the value chain, that is to the supplier’ supplier i.e. raw material suppliers to the manufacturers and in final analysis more and more people and planet may benefit.
- Sustainability requires changing our mind-set of exploiting the weak!
Hence Sustainability—is just not limited to compliance of what is required to do by law, but to do beyond the compliance and follow true culture of achieving true prosperity which can benefit all the stake holders. It is a philosophy and way of living the life and has to be depicted in Technology, raw material and Inventory management, management of money and of human resources, management of Environment and all the other aspects of business with total transparency. Good governance and ethical and transparent financial business practice are bedrock of such enterprise.
Coming back to specific requirements, one also needs to know that days are being counted of the exploiting practices of the manufacturer who continually squeeze his suppliers of raw materials say dyes, chemicals, fabric in terms of buying from them at rock- bottom price leaving him no choice but to cheat on quality or get out of the business. These practices are rampant. Many a times misusing the terms of payments, he will not pay them for over 6 months and how can then the suppliers will survive? What kind of sustainability in value chain they can incorporate? What manufacturer’s do is an actually stem from what brands do with the manufacturers. While Brands demand all the measures to be in place as far as sustainability is concerned, none of them are ready to pay a few pence more. Brands find manufacturers as weak- ones ,dependent on them and thus try to exploit them and manufacturers in turn, instead of seeking right price from Brands ,find easy way to exploit suppliers –the next weak link and seek unreasonably rock bottom price for their materials- dyes, chemicals, fabrics etc. But this cannot last longer and these kinds of practices are actually real hurdle in sustainability.
Hence it is important that in the truest sense if such Green technology applications are to remain sustainable, the brands which actually earn a hefty profit margins should pass on their share to all those involved in their supply chain so that every one’s financial health is well maintained and they grow healthily and continue to supply conforming to whatever quality of the materials they have agreed upon.
- Sustainability: It makes business sense and not a burden to carry on.
Like in all other fields, Sustainability in Textiles is also about starting with the end in mind; but with the added responsibility of making the right choice, right first time, because there is voluminous use of the end products and hence whatever little we save, it is indeed going to make a significant difference.
Sustainability in the value chain through green chemistry is in fact something which makes business sense and it offers one a competitive edge if the company emphasizes on innovation and R&D. We need to adapt to measures like eco-friendly processing with energy and water efficient processes, making such measures financially sound and paying. Minimization of waste generation, recovery of various chemicals and heat, adapting to the substitutes which are bio- degradable, conforming to standards and legislations and getting accredited with eco-labels are some of the steps today ’s enterprise has to undertake.
The business has become so much competitive that every retailer has to undergo pressure from various quarters which include investors, customers, NGOs, competitors, legislations, suppliers, media and public. And while maintaining the cordial relationship with all these stake holders, the retailer has to build the brand image and thus parameters of sustainability is one of the greatest tools for the retailer to score on their competitors and attract the public opinion as well as customers.
In addition to various sustainability dimensions of the product as far as its manufacture is concerned, no customer is going to buy the product if it is not trendy, if it does not make him to make style statement which s/he looks for, if it does not give the functional value for specific purpose wears. These kinds of thus functional performances are additionally expected by the modern customer as he knows they are important for his wellbeing and for getting maximum value for the money paid. Some of the functional effects customers would like to see depending upon the type of product include the following:
- Water repellent finish
- Oil Repellant finish
- Stain resistant finish
- Self- cleaning finish
- Antibacterial finish and Fragrance finish for freshness
- UV Protecting finish
- Electromagnetic shielding
- Flame retardant and heat stable finish
- Wrinkle free and durable press finish
Hence we need to gear- up for the requirements of the future generations.
- Sustainability and R&D activities at ICT
- Hence Sustainability and Green Technology are intertwined. Some of the efforts of our Institute of Chemical Technology includes first and foremost that it has started a Master’s Degree course in Green Technology. Besides that at the Textile Department every singly research student doing his her work has sustainability at the core. Some work for process intensification to find the processes which are energy and chemical efficient, production efficient, with improved performance in a cost effective ways. Among many of the research areas, following are a few which
- Application of Starches extracted from Waste germinated grains in Textiles to be used as Thickeners in Printing as well as their modification into Super absorbents.
- Wrinkle free finishing of cotton using non formaldehyde finishing agents PCA- PMA, CA etc.
- Hygienic, Fragrant and Mosquito repellent cotton using Natural oils
- Microencapsulation of fragrant essential oils
- Natural dyeing of Cotton using safer mordents
- Modified dyes with antibacterial properties
- Microbial Dyes
- De-polymerization of Polymers PET, Nylon and synthesis of dyes, surfactants and antibacterial
- Use of various absorbents for dye removal and heavy metals from effluents
- Ethical commitment and Sustainability
With this forgoing discussion question arises that is sustainability a choice or inevitable path for all of us to follow at least to secure a future for our children. We cannot rob their future for our benefits since it is not absolutely worth it and thus, this planet has to be cared for. Caring for People and planet will not be sustainable unless there is a strong commitment of the management and mainly the promoters as well as all the stake holders. There is equal responsibility on the consumers to encourage goods which are manufactured with sustainability at the core. But to me Social Accountability, commitment and environmental respect cannot come without the ethical commitment of top management and readiness to make use of transparent business practices. So the main issue is Ethical commitment which stems from internal drive, having roots into individual’s belief system. We must acknowledge that we are one world and one people and have right to coexist being inter connected. In absence of commitment to ethics, social welfare and environmental welfare will be always discounted at any convenient opportunity. Those who care for this world, such responsible businesses have to thus lead by example. Only then we can flourish. As Bill Gates puts it “Businesses cannot flourish in the midst of abject poverty” and hence corporate philanthropy is also another dimension of sustainability. Good governance and no room for any exploitation or bribery are some of the features of an enterprise which can vouch for sustainable business operations. Such business activities will create positive value and generate true wealth in the environment by following in letters and spirit, the words of Mahatma Gandhi, “Be the change you want to see in the world.”
- Conclusions
Sustainability is not a onetime subject. A lot of awareness needs to be created from various forums / conferences etc. It has to be the core principle of functioning of any enterprise. Newer values such as “One World – People and planet” that demand acceptance to interconnectedness and co- existence of economies for collective prosperity, aimed at maximizing human happiness, will emerge. Only the ethically committed corporate firms will achieve a “win- win” situation for all the stakeholders. The business conscious of their Brand image will have to sincerely aspire to be the change- agents of society, economy and the environment by following in letters and spirit, the words of Mahatma Gandhi, “Be the change you want to see in the world.”
Acknowledgements
*Authors express gratitude to all the researchers whose work is cited in this article.
