The idea that being ESG compliant undercuts profitability is a misnomer: STL’s Akanksha Sharma
Akanksha Sharma, as the Global ESG Head for STL spearheads the company’s vision for CSR and Sustainability. She drives a portfolio of community projects aligned with the UN Sustainable Development Goals. Akanksha brings in experience from organisations such as UNICEF, Jubilant Food Works and Vedanta. Post her MBA, she has done an advanced program from Harvard Business School. In an exclusive conversation with People Matters, Akanksha shares her deep expertise on leading sustainable business practices, ensuring greater integration of ESG frameworks into businesses and designing a purpose-driven work culture.
As companies are expected to strengthen their stance on ESG, how can businesses become a force of good and lead initiatives geared towards making a difference at the ground level? What are some emerging trends that you see?
Environmental, Social, and Governance (ESG) practices of businesses are coming under closer examination as the effects of climatic extremes, social unrest, and governance failures become more visible for investment portfolios globally. In response, decision-makers ought to view ESG as essential to remaining competitive in this new era.
Enterprise leaders must therefore have a firm grasp on various aspects shaping ESG dynamics today and embed them meaningfully into business models and policies to drive tangible change.
ROI needs to be redefined as investors are looking beyond an organization’s balance sheet performance. Additionally, with regulations becoming more stringent businesses will need to ensure sustainable manufacturing practices like waste diversion and reduction, zero liquid discharge, sustainable sourcing, green product development, and action across their value chain. Simultaneously, they will need to focus on more credible disclosures irrespective of their size, while converting visions like net-zero pledges into tangible action.
Having spoken about the narratives of development at length in your recently published book ‘For the Greater Common Good’, what is your take on the challenges that prevent organizations from leading sustainable business practices? How can they address these roadblocks better today?
While embracing sustainable business practices is no longer a discretion, but a strategic imperative for organizations, it is easier said than done. There are several barriers. I would like to highlight a few major ones: Lack of knowledge and skills, often at the very top, on how to differentiate business operations on factors other than their financially profitable outcomes; lack of visibility and clear priorities on areas that must be targeted to bring business operations in consonance with ESG demands; and lack of motivation to stick to a sustainable transition roadmap. Overcoming these roadblocks will involve equal evolution in business policies and the perception that shapes them.
Sustainability is being valued universally by consumers and investors alike. Today, businesses are best positioned to leverage their sustainable practices as a unique selling proposition. Here, thinking long-term and investing in green technologies, renewables, socially-inclusive operations, and people-centric practices will put businesses in a position of advantage.
Companies also have enough reasons to embed sustainable constructs across their entire value chain. This will prepare them better for a disruptive future over those who don’t.
All of this will involve taking risks, thinking out of the box, and exploring new business models. For instance, rather than limited CSR capital, today, there is a need to explore the possibilities of alternatives like blended finance to fund and scale sustainability projects. Finally, since the roadblocks to sustainable transition are too big for a single organization to address, building cross-sectoral partnerships for change remains an inalienable priority at present and well into the foreseeable future.
What is the role of technology in ensuring greater integration of ESG frameworks into people practices? Beyond relationships with employees, how can businesses today cultivate the right relationships with the communities they work either directly or indirectly?
The availability of technology is a significant catalyst for companies that are open to improving their ESG positioning. There are multiple tech levers that they can use to integrate ESG imperatives into their business model, each of them bearing positive implications for consumers, investors, and communities. For instance, intelligent business operations can improve resilience, reduce waste, enhance profitability, and simultaneously optimize carbon emissions from operations. An end-to-end digitized value chain, while ensuring faster time to market and delivering the experience that the customer seeks, also brings greater transparency and accountability into supply chain operations, ensuring greater conformance with labor and ecological rights. Here, technologies like cloud, IoT, and Blockchain have an overarching role to play.
But fundamentally, businesses have to acknowledge that they are an integral part of communities, with their success irreversibly linked to the latter's fortunes.
At STL, our endeavor is to be a ‘responsible leader in ensuring a connected and inclusive world’. This focus reflects in the way we have designed and implemented our ESG agenda to bridge the digital divide. Through our various initiatives in education, and women empowerment, over 700,000 lives have been positively impacted from FY19 to Q1 FY23. We have also positively impacted 2 Mn. + lives through our various initiatives in healthcare from FY19 to Q1 FY23.
Corporate social interventions must be geared toward achieving broader national and global priorities bringing into play modern technologies, partnerships, and people-centric policy making. An empowered and resilient community is ultimately in the best interest of businesses, hedging the multifaceted ESG risks that we are almost certain to encounter in the days ahead.
Along with strengthening CSR initiatives, how can leadership today drive the right values at an organizational level? What are the building blocks of building an inclusive, purpose-driven work culture?
The durability of a company's ESG stance depends on how well it can embed sustainable value within the corporate’s DNA and secure buy-in from institutional stakeholders at every level. This is only possible by triggering the conversation internally and actively promoting a culture that prioritizes inclusive values.
Leadership needs to start by outlining institutional sustainability goals for a definite time frame which emphasizes a strategic intent to drive positive shifts, both within and beyond the organization’s boundaries.
It should be followed by incremental changes that demonstrate the management's commitment to those goals. For instance, optimizing energy consumption of the assets and switching to renewable energy, co-processing waste, achieving water positivity and assessing the environmental impact of the product portfolio, among others. The idea is to lead by example on the operational front and motivate your employees to think sustainably and relook at everything they do from this perspective. At STL, we have strengthened our focus on sustainability by committing to environment stewardship driven at the forefront by a goal to achieve Net Zero Emissions by 2030.
However, it is also critical for the leadership to consciously invest in human factors like fostering an inspiring and collaborative work environment, promoting opportunities for learning and skill development for the employees and ensuring their health and safety, giving back to communities through volunteering and operating in strict adherence to the principles of human rights and the fair labor code. A governance environment that is pluralistic, ethical, takes a zero-tolerance stand on malpractices, and lends a voice to employees at every level, is a significant motivator.
What is a word of advice you would like to share with our community on designing more impactful ESG practices at every level of the organization? What is that one thing they should start doing immediately to lead their businesses sustainably?
For designing impactful and relevant ESG practices, leadership must revisit institutional goals, find out how they resonate with the broader interest of the planet and communities, and faithfully make and implement amends wherever there are conflicts. The idea that being ESG compliant undercuts profitability is a misnomer. Because, as stated earlier, for the present generation of consumers and investors alike, ‘sustainability’ itself is a differentiator.
On an immediate basis, leadership needs to change their perception of ESG as a tool for regulatory conformance and investment magnet into an enabler that can help their organization to outlast future disruptions.
Also, rather than merely a compliance requirement, the idea of being sustainable and operating by ESG standards should be actively infused into institutional conversation and corporate culture.