Position: The Indian Prime Minister’s advisor in the National Council on Skill Development; vice-chairman of Tata Consultancy Services and chairperson of the board of governors of the Tata Institute of Social Sciences
Contribution: Built TCS from a small software services firm to a multinational IT services behemoth. As CEO, he had spearheaded TCS’ efforts to reduce its carbon and ecological footprint and helped build a company ethos sensitive to the environment and society
At the Powder River Council of 1877, Chief Sitting Bull said to his people, “Hear me, my people; we have now to deal with another race—small and feeble when our fathers first met them, but now great and overbearing. Strangely enough they have a mind to till the soil and the love of possessions is a disease with them… They claim this mother of ours, the earth, for their own, and fence their neighbours away; they deface her with their buildings and their refuse.”
The Chief’s lament obviously fell on bare rocks, yet his words continue to echo through generations. Since the beginning of the Industrial Revolution, the rate of resource exploitation to fulfill human needs has gone up nearly 7 times because the population of the world has increased from a billion then to 7 billion now. The human desire to consume is unlikely to abate, which means producers will have to use resources super efficiently and reduce dependence on nature to the barest. The heart of the problem is the difficult economics of using limited resources for a future population.
All businesses are built on the principle of adding value or taking away value from somewhere and adding it elsewhere. In the process they use energy, impact land, water and air and generate waste. These form the ecological footprints of businesses. The survival of business, society and the earth depends on reducing this footprint. It is not possible for businesses to act on minimising their impact on each of these elements unless they are measured properly in real time.
The proportion of energy produced from carbon-based resources, for instance, is extremely high in India. There are multiple ways to reduce consumption of energy. One way is to use better technology to improve productivity. One of the government-backed institutions in India, the Bureau of Energy Efficiency (BEE), has done it quite successfully. The BEE’s primary goal is to bring down the energy intensity in the Indian economy. It works with state governments and other agencies to promote energy efficient buildings and adoption of energy saving equipment such as CFL lights instead of incandescent bulbs. CFL lights helped the southern state of Kerala save about 300 MW of electricity last summer and eliminate power cuts.
The other way is by measuring the value created and the dependence on nature for creating that value. It is called naturenomics. To give a hypothetical example, if a company uses 10 units of power produced from fossil fuels, it gets a rating of 100. If it brings down its energy use by 20 percent then its rating improves to 80. If it then substitutes its energy source with renewable ones, its rating drops to zero.
This can be measured against an index and gradually the company goes from being in ecological debt to monetisable ecological credit. The higher level of productivity will naturally also be reflected in the share price of the company.
Progressive corporations can take a leadership role in building a sustainable world by adopting the following:
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(This story appears in the 22 June, 2012 issue of Forbes India. To visit our Archives, click here.)