It is estimated that currently our ecological footprint exceeds the earth’s biocapacity by 50%. This means that it would take 1.5 earths to keep up with our current rate of natural resource consumption. Our unsustainable consumption patterns and its irreversible damage on the environment is now evident and beyond debate. Each of us, therefore, has to be more sensitive and responsible in our consumption in order to have a sustainable tomorrow.
Organizations are among the highest consumers of resources and also among the largest contributors of emissions. Hence, they have a significant role to play in how we take the sustainability mandate forward. More importantly, given the influence that organizations have on the society, they should be able to leverage it to bring forth social change.
Also read | SD Shibulal’s earlier column
At Infosys, sustainability is not a focus area limited to the idea of sustainable consumption. To us, sustainability is at the core of our business. Our business philosophy—Predictability, Sustainability, Profitability and Derisking (PSPD)— has been the underlying and overarching aspect of every business decision that we have made over the past three decades. Our focus has always been on being sustainable as an enterprise and the traditional scope of sustainability has been a part of this larger focus.
To begin with, we have several sustainability initiatives targeting our resource consumption. Our rainwater harvesting methods for instance, have made our Mysore campus, which is one of our largest campuses, 50% water sustainable. We are constructing green buildings which are extremely energy efficient. Our new campus in Hyderabad, another of our large campuses will soon become a zero-discharge campus. Power consumption, like for any organization, is one of our biggest concerns. Currently the use of renewable energy is not preferred as much as traditional sources like power grids, primarily due to the lack of commercial viability and scalability. Infosys is, therefore, working with the local governments in the states in which we operate to bring about policies to make renewable energy more viable. We are happy to have made substantial progress in this regard. This, we believe, will encourage all organizations to switch to renewable energy.
Enterprises of tomorrow, I believe, will need to focus on three key areas—green innovation, reducing resource intensity and fulfilling their social contract.
Firstly, with rising complexities, organizations have to figure out how to optimally utilize resources. Today this need to reduce resource intensity is at the centre of most discussions happening and action taken around sustainability. Take, for instance, the steps by the telecom industry in India, which is one of the fastest growing in the world, with over 826 million telephone subscribers in the country today. The industry had grown rapidly and in an inefficient and unscientific manner with several towers coming up in a small radius due to intense competition. With this trend in mind, to prevent creating a future where we would be surrounded by mobile phone towers, a joint venture was created by the three fiercest competitors in the market. These three telecom giants merged their entire existing infrastructure to create a new telecom tower company. This company provides passive infrastructure to any service provider and allows them to focus on their core strategy of increasing market penetration. This company now has over 100,000 towers. It has grown into the largest telecom tower company in the world illustrating the financial benefits of improved resource utilization, leave alone the social ones.
Let us look at the green innovation space. Global investment in low-carbon energy was a record $243 billion in 2010. Green industries have now grown at an incredible rate, with investments in low carbon energy nearly doubling in the past five years alone, driven by the demand for both green suppliers and green energy. The need of the hour is to extract increased value from available resources and to achieve this, green innovation will have to lead the way.
The good news is that green innovation has a huge market potential. Organizations which are quick to realize this will have a significant advantage. Look at the Car2go project which started in Germany. It is a unique car-sharing rental service which allows consumers to rent Smart cars and pay for services according to different factors such as time and fuel used. This model not only reduces the number of cars on the road, but also complements the public transport system by creating an alternative. In Austin (Texas, US) alone, they have had over a 100,000 rentals in a year and have expanded to four cities in three countries, clearly indicating the growth potential of such a green innovation.
Finally, organizations are one of the most significant institutions beyond governments that can drive economic progress. They also play a prominent role in the creation and distribution of wealth, thereby improving the general standard of living. However, organizations also depend on the immediate operating environment and the society at large to draw their resources from and to operate in. Therefore, there exists an implicit quid pro quo between organizations and society. Organizations, on their part have an unwritten social contract to operate legally and ethically and uphold the highest standards of transparency and corporate governance. They also have to be resourceful in their usage of resources and give back to the society from which they take so much.
These are unwritten social contracts but they have to be fulfilled if organizations need to earn the trust and the moral right needed to operate in the society. This is the only way they can be sustainable as an enterprise. Most importantly, this is the only way they can create sustained stakeholder value.
To conclude, sustainability can be looked at from various perspectives—business, legal or social. However, the only truth we need to bear in mind is that we have a moral responsibility to create a world for future generations which is better than, if not as good as, the one we inherited.
The author is set to take over as chief executive officer and managing director of Infosys Technologies Ltd on 21 August. This is the third in a series of articles he’s writing forMint on seven strategic themes that Infosys has identified and sees as transforming businesses going forward.