You are here  »  Home   »  Corporate Focus   »  CSR And Sustainability
Godrej: Innovating its way towards sustainability
CB Bureau, Delhi November 2, 2016

Godrej is probably one of the most well-known brands in India, with or without the eponymous steel almirah that so many of us grew up with. Established in 1897, the group has diversified into areas such as consumer goods, real estate and agriculture over the past century and is easily one of the biggest conglomerates in the country. Godrej Industries is one of its holding companies and consists of consumer goods, real estate, agriculture and gourmet retail (Nature’s Basket).

Unlike many large companies in India, Godrej’s CSR prioritises quality over quantity—a wise decision. It is focused mainly on sustainability, with skills training coming in a distant second. Aside from that, some standard CSR projects have been undertaken with NGOs for the upliftment of the disabled, women empowerment, and health and sanitation. The Group, as part of its Vision 2020, has pledged to ‘create a more employable workforce, build a greener India and innovate for good and green products.’ This it does through its various trusts like Pirojsha Godrej Foundation and Godrej Memorial Trust; the trusts hold 24 per cent of the shares of the Group’s holding company. The flagship Soonabai Pirojsha Godrej Foundation set up in 1972 owns a fourth of the shares in Godrej & Boyce Manufacturing Co. Ltd, which is the holding company for the Godrej Group, with stakes in various Group companies. The dividends from these shares fund the CSR programmes taken up by these trusts in areas such as healthcare, education and environmental sustainability.

Being Good and Green
The main features and goals of Godrej’s three-pronged CSR strategy are highlighted below:

1) Ensuring employability: The target here is to impart skill training to one million youth and improve their chances at a well-paying job and self-employment opportunities. This includes training them in areas such as beauty, sales, construction, farmer productivity, and technology. Last financial year, over 72,000 people were trained in these various skills; to date, about 160,000 people have benefited from this programme. The modus operandi is to collaborate with various implementation partners wherein Godrej provides part-funding for training, creates the curriculum (based on NOS/Sector Skill Council guidelines), provides teaching and learning material, conducts training of trainers, and monitors and assesses the training, while the partners impart the actual training courses. In terms of actual results, a three-year-long impact assessment of its employability programmes was initiated in April of this year.

Last year, Godrej Consumer Products joined hands with Nudge Foundation on Saloni – a programme that provides training on beauty and personal care; the target is to pull one million people out of poverty by the year 2020. Till the last FY, the programme was implemented in 221 centres across the country.

Sales training has three programmes running in parallel: Sakhi which is rural entrepreneurship training for women; Vijay for channel sales; and Prerna for training in general trade. These tend to be of shorter duration than the sessions for the other skills training.

As of now, in terms of numbers, there seem to be more success with small and marginal farmers and construction workers than in slightly more high-skilled areas such as sales, entrepreneurship and technical work. The variation in the trainee numbers across different skills is explained away as part of the demand–supply factor. Details on the strategies to improve these figures remain hazy. At the same time, collaborations such as the one with Naturals, a unisex hair-and-beauty salon chain, to set up a training academy are helping in expanding their reach.

2) A Greener India: This is the key thrust of Godrej’s sustainability initiatives and includes five goals: carbon neutrality, reduction in specific energy consumption and increase in renewable energy use by 30 per cent each, water conservation and zero waste to landfill. Each of these goals has several programmes and strategies to help achieve the desired results by 2020. Most of these efforts are based around its factories and manufacturing systems. The baseline assessment year for each of these goals was 2011 and through its green software that maps and analyses the environmental footprint, progress at each of their manufacturing plants in India has been tracked. Monitoring at their international plants was started last year.

Carbon neutrality means net zero carbon emissions achieved through various projects such as renewable energy and greenhouse gas (GHG) mitigation. As per internal estimates this year, there has been a 44 per cent reduction in specific GHG emissions. For reduction in energy consumption, Godrej plans to bring down the energy required to manufacture each unit of their products by 30 per cent, through a mix of energy conservation and process reengineering. The group has already exceeded this target. So with the target of increasing renewable energy sources by 30 per cent, which they have done through adopting clean technology like solar, wind and biomass in their manufacturing plants.

Water positivity is to be a net surplus giver of water to the planet. This hinges on reducing consumption while reusing and recycling water through various technologies like rainwater harvesting and wastewater treatment. This has seen a 30 per cent reduction till the first quarter of 2016. Initiatives such as the 2015 collaboration with NABARD on water conservation in its 1,000-hectare watershed programme in Beed district, with a spend of about Rs 70 lakh–Rs 1 crore, have helped in accelerating the water-positivity status.

Zero waste to landfill is to decrease generation of hazardous and toxic waste and avoid landfill as much as possible. This requires similar strategies of recycling and reuse as water positivity. The improvement made to date is a 50 per cent reduction in waste to landfill. Godrej also promotes sustainable and local sourcing, as exemplified by its chemicals subsidiary and consumer products divisions.

3) Product innovation: The overarching objective is to generate a third of the company’s portfolio revenues from ‘good’ and/or ‘green’ products. ‘Good’ is defined as products that benefit the poor and the marginalised; ‘green’ products are those that are eco-friendly and environmentally sustainable. The idea is to come up with innovative products that fulfil at least one of these two criteria. Examples include the Good Knight Fast Card which battles mosquito-borne diseases without being expensive or consuming much electricity, green buildings certified by Indian Green Building Council (IGBC), and an eco-friendly liquid detergent. An interesting innovation is the Godrej Chotukool, a small refrigerator made for rural India, where frequent power outages are the norm more or less. The fridge works without electricity and is capable of cooling 10 to 12 bottles a day. It will be interesting to see if the R&D team is able to come up with many more innovations as the number of such products currently is quite low. More investment and focus on this part of their CSR is urgently required.

Being Socially Responsible
Aside from these 2020 goals, Godrej’s employee-volunteering programme called Brighter Giving facilitates the participation of its employees in long-term projects as well as occasional events. The former is typically done in partnership with various NGOs like Mentor Me India, which involves tutoring children from poor backgrounds; Shraddha, which helps autistic children and young people; and Kshamata, which works with women who are survivors of violence. Other events are more to the tune of one-off, daylong activities, such as celebrating World Environment Day, donation drives, green carnivals, etc. – the sort that corporate India thrives on. Godrej regularly organises conclaves on issues pertaining to environment and sustainability, gathering together thinkers and doers from industry, advocacy groups and academia. Godrej also strongly supports Teach for India and Worldwide Fund for Nature (WWF).

The Pirojshanagar industrial garden township in Vikhroli, Mumbai, is one of the crown jewels of Godrej’s sustainability initiatives. The mangroves are rich in biodiversity and there have been substantial investments of resources to protect and conserve them. The project also gave rise to the Soonabai Pirojsha Godrej Marine Ecology Centre and a project on carbon sequestration.

In the last FY, Godrej’s subsidiary companies spent Rs 4.46 crore on CSR, as compared to Rs 2.78 crore in 2014–15. Some of its other CSR initiatives include the Godrej Memorial Hospital, which offers healthcare services at affordable costs (based on the philosophy of sustainable philanthropy), adoption and maintenance of mangroves in Mumbai (second only to the Sanjay Gandhi National Park in the city), and the Smile Train, which helps poor children get corrective surgery on their cleft lips. The Pirojshanagar industrial garden township in Vikhroli, Mumbai, is one of the crown jewels of Godrej’s sustainability initiatives. The mangroves are rich in biodiversity and there have been substantial investments of resources to protect and conserve them. The project also gave rise to the Soonabai Pirojsha Godrej Marine Ecology Centre and a project on carbon sequestration. The Naoroji Godrej Centre for Plant Research was set up for research in plant biodiversity and design-conservation methods and strategies.

Another way in which Godrej seeks to do its bit for community development is reaching out to people from the Scheduled Caste/Scheduled Tribe and physically challenged categories. This is done either through partnering with various NGOs or by recruiting candidates from these backgrounds, the latter being a major performance indicator. Monetary donations as well as disaster- and food-relief drives are conducted as well. As is common across most large conglomerates, in 2015 Godrej started a process of carrying out community-needs assessment at their manufacturing locations across India to understand viable and impactful CSR projects that could be taken up in and around those places. In the future, Godrej plans to explore projects in the areas of health and rural enterprises.

Three of Godrej Industries’ subsidiaries (agri business, consumer products and properties) have their own CSR policies although there isn’t much difference in the content or objectives. As part of their Code of Conduct, the tenets of sustainability, ensuring the interests of all stakeholders, promoting human rights, inclusive growth, and environment protection have been adopted. Among some of the awards that Godrej has won for its work on CSR and sustainability in 2015, notable are Green Co Best Practices Award, CII’s National Award for Excellence in Energy Management, and Indian Chemical Council’s Energy Conservation and Management award. Godrej Industries is also a part of the India Climate Disclosure Leadership Index (CDLI).

CauseBecause Feedback

On the 2013 Companies Act on CSR, there has been some flip-flopping by the chairman, Adi Godrej. In 2011, his stance was that this was a move to divert money for political purposes, while two years down the line, he turned into a supporter of this legislation. Nevertheless, while his words may not always be consonant with his company’s CSR actions, the actions themselves are quite commendable.

Despite substantial work being done by Godrej Industries, it will be useful and advisable to issue annual CSR and sustainability reports for a thorough understanding of the progress made and the challenges faced. Godrej & Boyce did issue one such report for 2013–14, while the consumer products division came out with its first sustainability report earlier this year. One will like to see more of such disclosures on a regular basis for each of the Group companies, especially as environment seems to be high on Godrej’s priority list. The first public Godrej Properties Limited sustainability report is planned to be released this year, which is a welcome sign. Impact assessment on the employee-volunteering project is also desirable, as typically such efforts are at risk of being high on visibility but low on actual effect if they are not continually monitored. Right now, there’s little information to understand their impact, if any.

On the sustainability goals, persisting with the same baseline figure for a decade can give off the false impression that much progress is being made and lead to a premature self-congratulatory mode. The best-in-class companies revise their baseline figures on a frequent basis to better reflect the increasing need and urgency of a greener environment and combating climate change through revised expectations and better technology.

On the sustainability goals, persisting with the same baseline figure for a decade can give off the false impression that much progress is being made and lead to a premature self-congratulatory mode. The best-in-class companies revise their baseline figures on a frequent basis to better reflect the increasing need and urgency of a greener environment and combating climate change through revised expectations and better technology. Godrej will be well advised to follow suit. However, it is one of the few large Indian corporations making sizeable efforts to give back as much as it takes from the planet, and that in itself is a great example for its peers. 





Print    Bookmark and Share


comments powered by Disqus

Subscribe to newsletter