Sunday, 28 July 2013

"Pump no more" - The beginning of Water wars

Pump no more.

author - Mo Polamar

This bumper sticker is perpetually in vogue with regard to oil and its drilling and soon will be in vogue with regard to water.

Water is a not only a scarce resource but also an elemental resource. It is a scientific fact that we are a sum total of five elements, earth, fire, wind, water and ether, If there is one good reason for humans to flourish on earth it is because of water. Water is the only element that we consume directly whereas the rest of the elements are used in adulterated forms. Water, for centuries is assumed an infinite resource and we used and abused the resource so far through all the various economic revolutions, be it the industrial or agricultural.

Oil, all though, cannot be compared with water is also an abused resource. For decades we have been pumping oil and increasing our dependency on it. We have been repeatedly told of the day when we will run out of oil. Not so ironically the stock market is the custodian of the total available oil as the declared and to-be drilled oil reserves reflect on the stock market and contribute up to 12% of the global financial markets. By measuring the oil reserves we are able to easily define a scarcity scenario, this scenario helps create market value to oil and to the infinite products that oil enables.

So, Is it time to measure water and commoditize as we did with oil. On one hand it seems like a good idea because water once declared in the market as a commodity a price discovery process will take place automatically. A simple reflection of that value in the consumer market is that Coca Cola will cost about 10 times the present price. For some that might be a good outcome as it brings discipline to the factories and industry that abuse the use of water. But consider the downside, Large corporates like Reliance and other will own the water reserves and will manipulate the price to suit their share holder need leaving the common man applying for loans to purchase water to drink and to wash up, imagine and visualize with your olfactory.

Lets take a step back and assess the challenges in measuring water. Water is getting scarcer and the indicators are obvious, like the average depth of a bore well in India now is 1400 ft from a 250ft two decades earlier. It is long accepted that it is an impossible task to measure the water reserves, as many factors like rainfall, under ground aquifers, demand driven by individuals and industry are unpredictable. Continuing to model the need and use of water is an important task but the objective must be to conserve and not to discover water in the financial markets. Conservation can be achieved if Water is viewed as a national resource and not as a state resource therefore strong central policies with even stronger governance structures are required. Conservation policies are in the short run an unnecessary inconvenience for the industry but in the long run it will lead to savings as water conservation and energy consumption are directly related.

Every state government has policies that contradict in on way or the other. Considering there are no strong policies to conserve water, the policy that must be awarded is in Punjab, energy use for pumping water is free for agriculture and industry burning a hole of about 3000 crores to the government and influencing a 6% fiscal deficit. Water is getting scarce in Punjab and irrigation is effected leading in reduction of production of agro products, a steady and steep decline is seen over the last decade.

I live in Bangalore and I am concerned with this policy because it takes away water from under my feet, so! Pump no more.
Some one else living in Pakistan is concerned with this policy because it takes away water from under their feet, so! Pump no more.
Those that live in Punjab must be concerned the most. Many rivers flow through the state, Punjab is at the foothills of the great Himalayan range. What if Punjab runs out of water???

So! Lets change the bumper sticker to -  "Pump no more water" 

Need OR Want? : CARS

Few weeks ago, I came across an interesting article by the Daily Beast titled 
Young Americans are Abandoning Car Ownership and Driving” which truly opened my eyes. It was fascinating to know that a previously gas-guzzling, developed country, with access to the world’s finest cars, has its youth opting NOT to apply for a driving license let alone buying a car!

Apparently, back in 1983 nearly 80% of 18-year olds applied for their driving license but in 2010 the number fell to 61%. The primary reasons for this change obviously stems out of the fact that living expenses in most american cities are high. Between paying hefty rents and attempting to save for the future, there is not much left to invest in this mode of transport.

This made me realise that the same could happen in OUR country. In India. Among our college students and young working men and women. With the existing cheap local transport options to get around the city like buses, auto rickshaws. Local trains and even the new metro trains set-up in most of the big cities, make this even easier.

Let us not forget that parking stops in ANY city now are hard to find. Most of us think twice before getting out on the town on weekends for the same reason. Servicing these metal beasts can leave you with a deep gaping hole in your pockets too! Many of us don’t even enjoy driving anymore, admit it you do too! I know I do!

Although in many cases it may be convenient but does anyone really want to go through the stress of owning a car? What about finding a safe place to park it when you are out of town! Now with so many safe options, services like meru , taxiforsure, easycabs, bangalore city taxi and uber
3. rented car dealers -  carzonrent, avis and zoom car
Why not just pick up the phone and call when you need one?

During the week, companies offer bus and cab services to pick up and drop their employees which proves to be very convenient for many. With restaurants and super markets being in every neighbourhood and with some even providing delivery services.
Banks and courier services providing free drop-in and pick up services for customers, one wouldn't need to go too far to fulfill their daily, weekly or even monthly needs. Even malls and movie theaters are now found around every nook and corner!
So, now do you really need to buy that car?

I feel many young people today just don’t need a car. Comments?

Sunday, 21 July 2013

Sustainable Roti , Kapda aur Makaan

Now, that there has been an overall slow and steady shift towards sustainability in every sector. This term applies for everything like environment, economics and development, food, construction even healthcare. In education, Universities are now creating environmentally friendly campuses and insist on compulsory modules on sustainability for students ranging from microbiology to IT, Arts to MBA's. Apparently, Princeton University offers over 50 courses addressing this very topic. At Princeton, there are more than 50 courses, among four academic areas, with significant sustainability components.

As mentioned earlier, in construction, engineers and architects are trained and encouraged to source their raw materials locally, opt for energy saving lighting solutions and  try as much as possible to maintain the ecosystem around their project sites.
Total environment OR Zed to name a few.

Food companies have started offering locally grown- organic options as their customers themselves are more aware and questioning where their food products come from.
One can order organic vegetables and fruits online at the links below
Now you also find organizations which help you set-up your own terrace organic gardens where you can grow your own fruits and vegetables -

In the case of clothing, fashion brands are skilfully combining design and sustainability. For example the vegan shoes range “Mink” or clothes made using organic vegetarian silks and cottons. 
Organic Clothing available for order Online or
Or even "Ahimsa" silk.

With the above I have covered the basic needs of people i.e. Roti (Food), Kapda (Clothes) and Makan (Home), even education. All Industries which we can see have begun to understand and have started looking for alternatives to benefit their own industry and wants and needs of their customers. Even the luxury products are going through a phase of continuous innovation and searching for newer options.

One thing I’d like to point out, from above, is that becoming or aiming to be “sustainable” doesn't necessarily mean lowering the standard of living but more on encouraging people to realise that less of many things can actually lead to a better life and benefit another as well - Moving away from an industrial growth model to one focused on well-being.

Although it is true that Sustainability the concept may be easier to understand but very difficult to apply at a more practical level it is can be considered like trying to be “good” or “honest”. Everyone probably wants to be so, but how many manage that? There is and always will be a giant gap between the aspiration and what we are capable of doing so in reality. So does that mean we stop trying to do good? So why can’t we do the same for Sustainability which ultimately benefits us and our children, companies and countries and even the world?

Would love to hear your comments in this one!

Saturday, 20 July 2013

Sustainability Reporting – Overview of the Most Important Standards Worldwide and in India

I started out writing this blog to share my excitement of the Sustainability microsite of one of the most popular brands of our times.  At last, Sustainability Reports dont have to be intimidating pdf's with a data-overload!  However, midway through that piece, it seemed important to present the context and the bigger picture first.  This is the first of a two-part blog on Sustainability Reporting - trends that are hot and trends that we love.  Meanwhile, also look the Whitepaper on the subject of Sustainability Reporting on our website.

First, there were Financial Reports.  They greatly changed the way businesses dealt with each other, with investors and with their customers.

The earliest Environmental and Corporate Social Responsibility (CSR) Reports were used by companies primarily to counter negative images issues, or by small and mid-sized outliers with high environmental concerns - the tree-huggers among enterprises.

Over the last decade or so, as Sustainability is integrated into enterprise strategy to drive business growth, Sustainability Reports have emerged as important tools.  More recently, such Reports have been morphing from being standalone, weighty documents or THINGS, to the integrated, interesting PROCESS of Sustainability Reporting.   But more of the emerging trends in the next blog.  Let us first look at the most popular Sustainability Reporting standards.

The Global Reporting Initiative (GRI); .
The GRI guidelines for voluntary disclosure of sustainability parameters were introduced in 2000.  The GRI website currently lists over 5,000 organizations and over 12,000 GRI Reports.  The current generation of GRI guidelines – G3 and G3.1 – asks for disclosures under three sections with a fixed number of questions under each section – Strategy and Profile (42 questions), Management Approach (37 questions), and Performance Indicators (84 questions).  There is an additional section on sector-specific disclosures for a limited number of sectors.  Based on the number of questions responded to, the Levels A, B and C are accorded to the applications.  A ‘+’ is accorded to applications at any level if it has gone through an external audit process.

The Carbon Disclosure Project (CDP);
235 enterprises to the first CDP questionnaire sent to the biggest corporations asking them to report their greenhouse gas emissions in 2003.  The number of respondents has now grown to over 2,500 and CDP is credited with having the largest database of enterprise-level climate change information. Meanwhile CDP is now more than eponymous, having introduced CDP Water Disclosure, CDP Supply Chain, CDP Cities, and most recently, forest footprints.

While the GRI and CDP are multi-stakeholder, not-for profit/ private frameworks, the UNGC, ISO and the OECD MNE Guidelines are initiated by the international organizations - the United Nations and the OECD respectively.

The United Nations Global Compact (UNGC). The UNGC's ten principles for businesses - covering environmental responsibility, human rights and workers rights - were officially launched in 2000.  Interestingly, the principles are a central reference point for the GRI Guidelines.  With over 7,000 participating businesses, the largest database of corporate sustainability reports can be found on the UNGC website.
The Organisation for Economic Cooperation and Development(OECD) Guidelines on Multinational Enterprises (MNE's).  These are recommendations addressed by OECD governments to multinational enterprises operating in or from adhering countries.  The "Disclosure" section encourages timely and regular disclosure on social and environmental issues, in addition to financial ones. 
The International Organization for Standardization (ISO); 
ISO is a non-governmental network of national-level standards institutes and technical bodies that co-ordinates international standards for business and products.  While most of ISO's standards deal with technical subjects, The 1SO 14000 Series of standards focus on corporate environmental management systems and ISO 26000 covers social responsibility. 

India-SpecificStandards and Guidelines
Sustainability Reporting is still at a nascent stage in India.  Around 80 companies are now reporting under the GRI framework.  Last year, 53 companies out of the top 200 by market cap to whom the CDP questionnaire was sent,  responded to the questionnaire. 

As elsewhere in the world, Sustainability Reporting is mandated in India only to the extent of the 'Disclosures' required by legislations such as the Companies Act, Environment Protection Act etc.  However, in addition to some directives that are at the pilot stage, the following measures introduced by the Government in the past few years specifically targeting Sustainability issues in enterprises is expected to have a marked impact on Sustainability Reporting as well:

The Companies Bill 2011 was passed by the Lok Sabha in december 2012.  said India would become the first country to mandate corporate social responsibility (CSR) through a statutory provision. that mandates companies in India to spend 2% of their profit in the preceding 3 years on CSR activities and report a CSR Policy.

Effective 2012-2013, these guidelines mandate that CPSE’s spend at least 0.5% of their PAT (if PAT is less than Rs. 100 crores) and Rs. 50 crores + 0.1% of their PAT (if PAT is more than Rs.100 crores) on various Sustainable Development activities such as Carbon Management, Renewable Energy and Sustainability Reporting.

National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Businesses (NVG) launched on 8 July 2011 by the Ministry of Corporate Affairs, Government of India, the Guidelines recommend 8 principles for voluntary adoption by companies. These principles are intended to address the interests of various stakeholders of the companies, including employees, customers, NGOs and investors.

Next week we will look at the most recent trends in Sustainability Reporting.

Sunday, 14 July 2013

Funding Sustainability

Speaking ahead of the World Environment Day on June 5th. Mrs Chanda Kochhar said "ICICI Bank has been assisting projects and initiatives in the area of environmental sustainability for over two decades. We continue to support initiatives being taken by the industry in this area. As the same time, we will also look at the projects that protect our biodiversity (flora and fauna) as well. As we observe World Environment Day, I have mentioned to my team that they should identify and support at least one project to protect an endangered species in the country to start with."

I am afraid this kind of lip service has caused more confusion to the response to climate changes. The primarily contradiction comes from the fact that Ms. Kochhar seems to speak about sustainability, environment and biodiversity in different tongues, frankly coming from the CEO of India's largest private bank, i am a little worried.

Funding sustainability for banks means funding renewable energy projects and that in my opinion is not a "special" approach because the collaterals the bank demands for the loan is no different from the other projects that they fund. In fact the collaterals with regard to renewable energy are mandatorily solid when compared to any other project that is in need of funds. The collaterals and the project needs are similar such as the land on which the renewable energy project will be implemented, the central government's promise to provide subsidy on the domestic front. Ms Kocchar also mentions the villages adopted and the yet-to-sdopt species, which are part of the CSR program of ICICI. The fact that she mentions these within this Environment Day speech suggests that somewhere in her wise mind she correctly believes that social responsibility and environment conservation are not different topics. 

When will this intuitive belief convert into right language?

Sustainability – What does it mean?

Last week I shared where one could get information on the science, opinions that matter and where to actively engage in discussions about Climate Change and Sustainability. This week I would like to concentrate on just the term "Sustainability".

The most popular definition for Sustainability or Sustainable Development is -
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs” -  Brundtland Commission, “Our Common Future"

So what does THAT mean? Does it mean planting plants on your campus? Going "GREEN"? Or is it taking care of the Social and Environmental impacts while keeping an eye on the Economic aspects?

Everyone today is using it, but how many know the true meaning of the word? What does that term mean to an individual, enterprise or Nation? Does it mean different things? And if you don’t truly understand the meaning, how can one practice it? I would like to clear any doubt or confusion – right here, right now.

Climate Miles Pvt. Ltd has a training arm called EcoSlate which about 3 years ago started working with school children and has slowly moved on to college and MBA level students.  If you look within yourself, you will know what Sustainability means, but how to explain it to a student? Is it keeping half a bar of chocolate back in the fridge so that you can enjoy it later in the day? Is that considered Sustainability? We sat for hours discussing the best way to come up with it and we found it in an old bedtime story that you, I and generations before us would have heard over a million times since time immemorial!  
The story about The Goose that laid the Golden Egg. Remember that one? Where a farmer found a goose that lays one golden egg a day. He got rich but also greedy and he couldn't wait to open up that goose to find all the gold inside. Naturally, the goose has none inside and the farmer lost his fabulous source of wealth. 
Sustainability is something like that. Using just what we need for now and keeping some for later. Now was that hard? Although the moral of the Goose story is about greed, it holds true for this discussion as well. Don't you agree?

Now having discussed the meaning of the term we can attempt to understand how we can take action as individuals, families and companies. 

Discussing Sustainability would be incomplete without mentioning Pavan Sukhdev. We shall discuss him in detail at a later date, meanwhile to know more about him check out his website
It would be useful to check out his book too titled - Corporation 2020: Transforming Business for Tomorrow's World which quotes -"Change won't just happen as there are no easy or elegant solutions" - Pavan Sukhdev
Follow the links to find reviews for the above book Corporation 2020: Transforming Business for Tomorrow's World by and

Let us look at what other pioneers in the field have to say about Sustainability  and its relationship with development for Companies and Nations.

Dr. Rajendra Pachauri, chairperson of the Intergovernmental Panel on Climate Change (IPCC) in his interview says "sustainable development is not possible without action on Climate Change" - meaning we need to take care of the issues or problems brewing at hand in order to be able to move towards Sustainability.

Al Gore, former Vice President, USA, in this greenbiz article - says short-term thinking is "functionally insane". "It's not only insane where the values that we share are concerned, its functionally insane where the well-being of that business is concerned. It's the wrong decision for the investors, for the shareholders, and for all the stakeholders."says Gore. He goes on to say, "Customers, too, want to do business with companies that are part of the solution, not part of the problem".

Here'es a look at Al Gore's seven business points about Sustainability.
1. Pollution is waste and the result of inefficiencies. The message: Polluting companies are inefficient.
2. Sustainability enhances brand reputation.
3. There are long-term returns in being sustainable. At some point, stakeholders will hit companies with short-term focus.
4. Customers and partners are demanding sustainable business practices.
5. Carbon tracking will be integrated into business processes as regulators require it across the globe.
6. Sustainability can boost employee morale and attract the next generation of customers. 
7. Tackling a topic such as innovation leads to new innovations.
        Till next week. Where we share more of our learning!