First off, you are most passionate on the topic of the environment. There are certain initiatives that Godrej & Boyce has started. I would like you to talk to us a little bit about your environmental initiatives. You said that ESG as a word is clubbed together and misused in a lot of ways. A little bit on that front as well.
Environmental issues have been very close to the family for generations now. Our father, grandfather, all of them, were very keen on creating a green garden city. The whole idea was that in the chaos of Bombay can you have some area of calm? And in some sense, it also creates a better environment for working. Why do people take holidays, go off to a forest reserve or see tigers, etc? The whole experience is one of calming and being with one with nature. And we are very lucky that we have the privilege of preserving a mangrove forest here. I think it has allowed us the freedom to look at this not just from the environmental point of view, but also from what it is that our business responsibility requires us to do.
So over the years, we have now coined this word good and green. And the idea really is that, as a manufacturer we have responsibility. And I think the entire corporate sector has a responsibility, not just from a pollution point of view but also from a leadership point of view, that you need to make the corporate sector a leader in wanting to do good.
Of course, the biggest criticism is that companies like green washing all the time. Of course, they do, there is no doubt about it. But at the same time, journalists and others have to keep everyone honest about what they do and what they do not do, etc. So it is an important aspect. I feel that when the word ESG was coined, it brought together issues of environment, socially responsible, responsive sort of reactions, etc. and governance altogether. In different contexts, they make sense but bringing them together does not actually make sense to me.
So I look at it as three separate topics, which really need to be covered in that sense. But the environment is something that I hope and wish everyone in the corporate sector takes much more seriously, because eventually, if we leave the planet in a better condition than when we first inherited it, it is so much better for every generation so that should be the guiding principle.
If you could talk a little bit elaborately about Godrej & Boyce’s environmental initiatives; I do not want to call it ESG, since you touched upon that topic. What are the key projects and how it is adding to G&B’s top line as well?
You have to start at the beginning here, in the sense that every company whatever they make or do, they use energy, they use water, of course, they can pollute or not etc. So I think that is where we come in. What we are looking at is our supply chain green? Okay, are the products that we make easily recycled? Do they use materials that are recycled? Can they be recycled? Those are the important things. There is a concept of a circular economy that what I make somebody else can use in a different way. So landfill has become one of the biggest problems for every city. So how do you avoid landfill? How do you remove waste from going to landfill? So can we take on targets of zero waste to landfill? Can we be water positive in everything that we do? Can we keep reducing our energy consumption? So these are all the factors that really come into play and which we have been following.
So for instance, we have halved our energy consumption in a specific way based on the amount of business you do, etc. Over the last 10 years, and our aim is that in the next 10 years, we will again halve it. These are the big programmes that we have. We are already water positive, we are already in a situation where we have zero waste to landfill. So it is important that these ideas get spread out as much as possible. For instance, one of the businesses we have is a green building consultancy. It helps the real estate sector to build green buildings which are certified to a particular standard. In this case, the Indian Green Building Council Standards. Our consultancy has helped hundreds of buildings, thousands of buildings come up in India by being much more green, and we are able to provide that same, I mean the whole idea of the corporate sector is that they use a lot of building space, right, whether for factories or offices etc. So can they be more green, can they be less energy consuming? Can the insulation be better? Can the paint be such that you have zero volatile substances in them, more say water-based paints?
So there is a whole series of standards. The other thing that we have done is we have worked very closely with CII to develop green product standards because I think it is important that there would be a good universal standard for green products. What is a green product? You know, what may seem to you to be a green product may not be to somebody else. So green product standards are important and then there is something called the green company rating, and you can do this in a disaggregated form.
Every division can say what is their footprint? Does it meet a green company standard? And can you keep improving it all the time? These are the types of things that we have done and continue to do and will continue to do for as long as we can.
In one of your AVs also, I saw Planet Before Profit. How do you keep that balance when it comes to conserving the environment and also looking at profit?
It is a very simple thing in the sense that you have to keep asking yourself and keep questioning all the time whether what you do is ethical or not? You know, is it going to result in an improved position for the planet or not or is it going to result in an improvement in profit only and not for the planet? I think this balance is not easy, but it is quite possible if you ask the right questions every time.
In terms of the larger picture, you are one of the biggest conglomerates in the country. India’s own ambitious target of net zero emissions, our representation and role at COP 28, again is going to be crucial. How do you think we can really progress as a society? There are certain issues where we are calling this crisis as the white man’s burden for developing countries. What is your view on that and your thoughts on that?
Well, I think the whole idea is that we know that climate change is resulting in certain very detrimental heat effects where it has become difficult for people even to work and live. We also know that water is under great stress everywhere. So the issue of climate change is such that one person’s action will help, but it is the collective action that really makes a difference.
Now, India you can always argue to say that we have amongst the lowest greenhouse gas emissions per capita in the world because we have a big population and we are a developing country. But if you add up all the emissions that India has, we are right up there, number three or four in the world. So I think we should not take, sort of hide behind the fact that our per capita emissions are low. I think we need to face facts that we really have such a huge amount of emissions because we are a big country.
Eventually, China and India, as the two largest population countries in the world, will have the largest amount of emissions, there is no doubt. So we have a big responsibility, no doubt about it. I would say that organisations like the COP28 which take place every year, you know, each year there is a gathering of all the parties to these treaties, do help because they set ambitious targets for everybody. Now, the net zero by 2050 which was what the Paris target was at the COP at that time, is something that is for everybody as an average, it does not mean that developing countries are going to be able to do it by 2050 but if they can, wonderful. But it puts a huge responsibility on the developed world which has grown by having a different model.
You know, they had to use 50 years ago also, there were no solar panels, Jimmy Carter, President of the United States, was the first person to put a solar panel on the White House. So the world has come very far on technology, solar panels and solar energy today has become affordable for everyone especially where there is no electricity. So for India to take a target of 2070 is a very ambitious target. But because it is 50 years away, we cannot say, oh, we will worry about it later. You have to start now. And there are lots of things we are doing. Our government, our Prime Minister has been very ambitious about wanting India to move in that direction. And I would say that the targets that India has set for itself are very ambitious.
Is it sustainable though?
Yes, yes, entirely. I do not say it is not sustainable. I think the challenge for us is that we are growing rapidly. Whilst we are growing rapidly, our energy consumption is also growing rapidly. And at the same time, we are trying to say that we want to become more energy efficient. So it is a big challenge, but it is doable. It is not impossible. Once India becomes self-sufficient in the manufacture of solar panels, and you are not dependent on China for solar panels as we are currently it will make a huge difference. So by 2030, to expect that we will be able to meet our renewable energy targets of 500 gigawatts is entirely doable.
Many people say that the environmental crisis is more of an urban problem than a a rural problem. On those lines, you have pledged to conserve the mangroves in Vikhroli as well. Your thoughts on how the AQI levels are depreciating, especially in the metro cities. And how do we deal with this as individuals?
This is not an urban and rural divide. You know, agriculture results in plenty of methane emissions. So to say that cities only are responsible also is not correct. Yes, cities are more responsible because the income levels are higher, they can do more about it and there is a need for them to do. The whole issue of air pollution has to be looked at, at two levels. One is a political level and the other is a technical level.
Technically, everyone understands where the pollution is coming from. It is not that difficult to understand. There are emissions from automobiles, there is dust that comes from construction. Even a car moving on a road or a truck moving on a road the tyres create dust all the time. We understand that these are all the things that are creating. But what to do about it is where the question comes.
Unfortunately, the politics between states creates some barriers. And I would recommend as an interested party because things like air pollution, concerns the public. Tomorrow, if you tell people to drink polluted water, what is going to happen? But we are allowing people to breathe polluted air without any consequence. I would say that the political class in India definitely needs to introspect on this issue and not make it a political issue but cooperate on air pollution issues, cooperate on water pollution issues, because these are basic things as human life depends on clean air and clean water.
It is a great responsibility for our political class to be able to come together on it. On a technical level, it is not difficult. We know what the answers to many of these things are. Even for a simple thing like construction, which you see all around you, you can follow certain standards on dust abatement, use water sprays to keep the dust level down. There are many things you can do. What was London like 50 years ago? What was Los Angeles like 50 years ago? They have all cleaned up their act.
So it is all demonstrated that we can do it. We can have clean air and clean water if we put our mind to it. It is somewhat unfortunate that we have not all been able to come together, whether it is interested people from the environment lobby or it is politicians or bureaucrats. People need to come and agree to do something about it.
Mangroves are important, not just from an emissions point of view because it is a carbon sink. Mangroves are important because it allows a complete ecosystem of fisheries, of water, exchange between brackish water and clean water. It provides a great service. In coastal areas, it provides a service like a barrier. Suppose there was a tsunami, a mangrove certainly helps you to reduce that. It was demonstrated even in Chennai when we had the tsunami at that time. Wherever there were mangroves, there was less damage. So I mean, it is our choice as a nation, as a society, what do we want to do? Of course, there are many priorities, we want to give people good education, we want to give them good healthcare also but we also want to give them the basics, which is clean air and clean water, which is the basis of good health.
My takeaway is change happens now or it is going to be too late if we do it.
It is never too late. Let us put it that way because no matter how bad it is, there is always hope, but people have to come together to do it. That is the only point. I think that if we are always going to fight and blame each other for it, then it is not going to get done. But if we come together, it can be done.
I want to touch upon the overall business of Godrej & Boyce. There are 14 verticals. I want to understand what the long term plans for G&B are. Also in the next five years, what is your aim and vision?
Well, we have 14 businesses. Some of them are quite small; some of them are quite large. And in between, many of them are traditional. We are 126-years old. They have come a long way. But our vision is that we have to be innovative. And as I said earlier, environmentally conscious about what we do in every one of our businesses. So if you see the furniture that we make, we want to make sure that we are buying material that is made in a sustainable way and used in a sustainable way and recyclable.
Similarly, in appliances also, it is the same thing. There is something called producer responsibility and this is going to become very important in the world because society is essentially saying that if you make something, you should be able to take that back and recycle it or do something with it that is environmentally safe and in a good way. So this is the way we are approaching it.
For us, good and green products, which today make up close to 40% of our overall turnover, are very important and especially in consumer goods. G&B has large consumer facing businesses but we also have large industrial facing businesses. And so, yes, there is a long tail with 14 businesses, but they are because some of the businesses are quite new, they are less than 20 years old and they have not grown to the extent that they could have. Our vision essentially is that we will grow 10 to 12% a year. That is our long term average growth. That has been that way and would stay that way, we hope.
We see that all businesses should be profitable from the point of view of not just financial returns, but also from their impact on society. And I think that as we go along, we have to keep on being innovative. One thing I learned very early on was that you cannot have a thriving company without having innovative products and innovative people. That is at the core of it. But at the same time, you have to be sustainable also. So this confluence of innovation and sustainability is really what is crucial.
Are we foreseeing any new verticals coming up in the near future?
You already complained that there were too many businesses.
No, no, no, it is not a complaint, it is appreciation.
No, no, the point is that we do appreciate that we are in 14 businesses, you know and it is not necessary for us to grow to be in a new business. So we have to grow faster and more innovatively in all our businesses. That is our intention.
This is a business that is built within this family. What is the one thing or the few things that you have been personally invested in, in this overall business of G&B? And something that you are very invested in among the 14 verticals?
Well, let us put it this way. I do not have a favourite. My approach has been essentially what I just mentioned. How innovative are we in every business, making sure that we continue to be innovative, not just in products, in processes, in the way we do things, in the safety of people who work here. Industrial accidents are a challenge for everyone, but how do you handle that? These are the important aspects which I get involved in to a very large extent to make sure that we are green, as green as we can be to make sure that we are as innovative as possible and to make sure that we have a good safe environment working for everyone.
Just to follow up on that, the next generation after you is already training under you, when can we expect them to enter the business in full capacity?
They are already there in the business, so it is not that they are not. Just to give you my own example, I learnt everything I know from my father by example and it really helped me to understand the business and be with him closely all the time and I learnt a lot. So I think every generation has to have their own way of doing things and I think that the promise of future generations is such that they will always be better than the previous one. So, on that basis I am very confident of the next generation.