Corporate Sustainability Speaker PPTS/Day 2/Parallel... · 2014-12-15 · Corporate Sustainability Past Present & Future Wastech 2014 sunil r parekh Associated with Vibrant Gujarat
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Corporate Sustainability Past Present & Future
Wastech 2014
sunil r parekh
Associated with Vibrant Gujarat since 2003 and Founder - PanIIT Alumni- Gujarat.
Flow of thought
• The world of corporates
• Corporate Sustainability - short historical perspective.
• CS- Drivers
• Future Trends
World of Corporates
People
• Media, Print, TV.
• Social Media is king
• NGOs
• Investors, Bankers
• Staff
• Vendors
• Customers
• Government
• Regulators
• Service- eg • Lawyers, Accounts, Auditors,
Hotels, Telecom, IT, w/house, Advert
Planet
• Resources
• Elec, fuels
• Water, Air
• Land, Soil
• Transport
• Climate Change Consequences, mitigation
Profit
• Economic- 2008!
• Market Risks- free trade
• Political Risks-Mi India,
FDI, M&A
• Financial-ex, int, I Tax
• Operational Challen
• Environmental Risks
• Investor expectation
• Shareholders
• Civil Society Qs
• Consumer preferenc
• Technology, Innov
CS- Recent Developments India
• Facilitating Compliance with environmental
standards & safe guarding natural resources.
• Stand alone Philanthropy (India-Edu, Healthcare, community livelihood,
infrastructure projects).
• New environmentally & socially conscious CS approaches that
reduce multiple risks & deliver enhanced profitability.
• No more a moral act but an investment in the long term, mature
enlightened self interest of the company.
What has pushed this is
• Stronger regulation, Effective implementation
• Put operations at risk (closures, strikes)
• Social, Environmental issues hurt company value
• Reputation at stake
• Investors, FI, informed Shareholders ask a lot Qs.
• Framework of Elkinton’s Triple Bottom-line.
• CS as a way to convey that the future is secure.
Corporate-Drivers for investing in CS
1. Regulations.
2. Access to capital.
3. Expanded consumer base.
4. Social license to operate.
5. Innovation.
6. Brand and Reputation.
7. Operational Efficiency.
Regulations
Indian Regulation
Regulation
• Many legislations are post crises, post disaster
driven rather than long term & strategic.
• Many are copies of each other !!
• UN calls it an intellectual bankruptcy of
governments. Only 12/27 EU have CS Laws.
Awareness aspect often neglected. swatchch…
• Eg today there are 1700 regulations on Climate
Change world wide!
Access to Capital
• For safe guarding investments, the financial community has developed Responsible Investment Guidelines with a primary aim to minimise social & environmental impacts, now expectations are for a better RoI with CS.
• ESG(Environment, Social, Governance)-
– UN Principals for responsible Investment(UNPRI)
– Equator Principle
– IFC Performance Standards
– The Climate Principle
Dow Jones sustainability Index,
FTSE4Good Index, STOXX.
S&P BSE Greenex (EE) &
S&P BSE Carbonex (Mitigate CC)
Corporates- Balanced Score Card,
Study- 13-31% Earnings drop w/o Sust S chain.
Changing Consumer Preferences
• Ipsos survey in the US showed 25% prefer green products. Youth are more
green, cool!
• Indian youth are also more sensitive & prone to proactively lead a green
lifestyle. 2/3rd<65 year old.
Social License to operate
• Game changers Porter & Kramer say there are 4 justifications for corporate action for community development- moral obligation, sustainability, license to operate, reputation. Eg all extractive industry have to struggle for more land, air impact, water competition, movement.
• Companies therefore use social accountability standards to assess & benchmark performance using SA 8000 of CEPAA, UN Global Compact, ISO 26000.
Innovation
• 72% of corporates surveyed in 2013 (KPMG, E&Y) said that
Innovation is a key opportunity that emerges as their
companies focused on bringing change through social &
environmental engagements! ( more sustainable products, supply chains,
operations, new energy sourcing, better monitoring of operations, cost reduction).
• Far sighted governments lead this change for social
development by engaging attention of corporates thru
innovative programmes, schemes.
Priorities- CS
• Economic Growth & Sustainability is a must
even before we get into talking about Social &
Environmental concerns.
• Cannot be taken for granted eg Nokia, Sony->
Samsung, LG. Severe competition.
• First before CSR, we must CR!
• Public Trust for corporates is at its lowest.
Sensex at 100. 1979 Sensex at 10,000 Sensex at 20,000 Sensex Today: Preeminance-6.
ACC ACC ACC Bajaj Auto
Asian Cables Bajaj Auto Ambuja Cement BHEL
BallarpurI nd BHEL Bajaj Auto Bharti Airtel
Bombay Dyeing Bharti Tele BHEL Cipla
Bombay Burmah Cipla Bharti Airtel Coal India
Crompton Greaves Dr Reddy’s Cipla DLF
Ceat Tyres Grasim Dr Reddy HDFC
Century Textiles GujaratAmbuja Grasim HDFC Bank
Glaxo India HDFC HDFC Hero Motocorp
Grasim Industries HDFC Bank HDFC Bank Hindalco
GSFC Hero Honda Hindalco Hindustan Lever
Hind Motors Hindalco Hinduthan Lever ICICI Bank
Hindalco Hinduthan Lever ICICI Bank Infosys
Hind Lever ICICI Bank Infosys ITC
Indian Organic Infosys ITC Jaiprakash Associates
Indian Rayon ITC L&T Jindal Steel & Power
ITC Larsen & Toubro M&M L&T
Indian Hotels Maruti Maruti M&M
Kirloskar Cummins NTPC NTPC Maruti
Larsen & Turbo ONGC ONGC NTPC
Mukand Iron Ranbaxy Ranbaxy ONGC
M&M Reliance Energy Reliance Energy Reliance I nd
Nestle Reliance Ind Reliance Ind SBI
Reliance Ind SBI Reliance Comm SterliteInd
Scindia Steamship Satyam Computer SBI Sun Pharma
Siemens TCS Satyam Computer TCS
Tata Engineering Tata Motors TCS Tata Motors
Tata Power Tata Power Tata Motors Tata Power
Tata Steel Tata Steel Tata Steel Tata Steel
Zenith Wipro Wipro Wipro
India’s Top 100 most valuable Companies- NSE study
INDIA: Sectoral distribution of companies
reporting to
CDP 2013 Investor Information Request
FUTURE 1
• India- Water & Energy, climate events, availability, Prices.
• Trend- CS as a strategic investment (not a cost) for
competitive advantage thru differentiation, better RoI,
Innovation. Way beyond CSR.(P&G, CLP, UPS)
• CS Investments tied to operational strategy & budgets &
measured the same way as other regular investment
decisions eg expansion, new prod Dev, export dev..
• Realisation-CS as a Financial Solution that offer better
long term returns than various other high short term
payback projects.
FUTURE 2
• Need for common measure & systems that generate
credible information on the actual impact of CS
initiatives. Data, analysis & monitoring is key. retention
• Use of a robust & rigorous framework of regulation by
companies to plan with confidence.
• Good stable Govt sustainability regulation can actually
support Innovation & Growth & mobilise private
capital for CS projects in a big way. Eg Targets greening, Skilling
numbers then…
THANK YOU!
srparekh@gmail.com
Pharma Unit- Laws Manufacturing
1. Drug & Cosmetics Act, 1940 with Amendments
2. The Poisonous Act, 1919
3. The Dangerous Drugs Act, 1950
4. Drugs (Control) Act, 1950
5. Bombay Drug Control Act, 1959
6. Gujarat Drug Control Rules, 1961
7. Packaged Commodities (Regulation) Order, 1975
8. Standard Weights & Measures Rules
9. Standard Weights & Measures Act, 1976
10. Water (Prevention & Control of Pollution) Act, 1974
11. Air (Prevention & Control of Pollution) Act, 1981
12. Environment Protection Act, 1987
13. Prevention of Food Adulteration Act, 1954
14. Indian Electricity Act, 1910
15. Electricity Supply Act, 1948
16. Boiler Act, 1923
17. Indian Explosive Act, 1884
18. Gujarat Water & Air Pollution Control Act .
HR & CC 1. Factories Act, 1948
2. Provident Fund Act, 1952
3. Family Pension Scheme, 1971
4. Payment of Gratuity Act, 1972
5. Payment of Bonus Act, 1965
6. State Welfare Fund Act
7. Workmen’s Compensation Act, 1923
8. Employment Exchange Compulsory Notification of Vacancies Act, 59
9. Apprentice Act, 1961
10. Payment of Wages Act, 1936
11. Minimum Wages Act, 1948
12. Contract Labour (Regulation and Abolition) Act, 1970
13. Personal Injuries (Compensation Insurance) Act, 1963
14. Maternity Benefit Act, 1961
15. Indian Trade Union Act, 1926 and 1947
16. Bombay Industrial Employment Standing Orders Act, 1946
17. Employees State Insurance Act, 1948
18. Employers’ Liability Act, 1938
19. Employment of Children Act, 1938
20. Industrial Disputes Act, 1947
21. Sales Promotion Employees (Conditions and Services) Act, 1976
22. Arms Act, 1954
Finance
1. Maintenance of proper Books of Accounts as provided in section 209-210 & 11 in the Companies Act, 1956
2. Compliance under manufacturing & other companies (Auditors’ Report) Order 1975 under section 227(4)(A) of the Companies Act, 1956
3. Cost Accounting Records (Bulk Drugs) Rules, 1974
4. Asset Register – Maintenance
5. Payment of statutory dues before due dates like advance tax, Tax deducted at source, Term/Demand Loan repayments to Financial Institutions, Banks, etc.
6. Central Sales Tax Act, 1956
7. Gujarat Value Added Tax (VAT) Act, 2003
8. Gujarat State Tax on Professions Trade, Calling & Employment Act, 1948
9. Income Tax Act, 1961
10. Central Excise & Salt Act, 1944 and rules framed there under.
11. Medicinal & Toilet Preparation (Excise Duties) Act, 1955
12. Excise (Spirit) Act, 1863
13. Collection of Statistics Act, 1953
14. Drugs (Prices Control) Order 1995
15. Compliance of Accounting Standards
16. Foreign Exchange Management Act, 1999.
17. SEBI Act.
Company Affairs Dept
1. The Companies Act, 1956 / 2013
2. Securities Contracts (Regulation) Act,
1956
3. Industries (Development &
Regulation) Act, 1951
4. Listing Agreement
5. SEBI (SAST) Regulations, 1997 as
amended from time to time.
6. SEBI (Insider Trading) Regulations,’92.
Legal, Procurement, Supply Chain, Insurance- another 29 Laws, Acts, registrations, filings
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