Special lecture by Prof Jagdish Sheth on 'Why Sustainability Matters

Special Lecture by Professor Jagdish Sheth on ‘Why Sustainability Matters’

Professor Jagdish Sheth, Professor at Goizueta Business School, Emory University, USA, delivering the lecture

At the launch of IILM’s Executive MBA for PSUs in CSR, Sustainability and Innovation in collaboration with Sheth Center for Innovative Leadership, Professor Jagdish Sheth, Professor at Goizueta Business School, Emory University, USA, delivered a lecture on ‘Why Sustainability Matters’ and chaired a Round Table Discussion at an event organized by IILM at India International Centre. Taking forward its vision to educate and develop innovative, entrepreneurial and responsible business leaders, IILM, in collaboration with Sheth Centre for Innovative Leadership (SCIL), is offering an Executive MBA in CSR, Sustainability and Innovation which is designed in consultation with United Nations Global Compact, industry experts and some of the world’s leading professionals from the area. Designed for working executives and public sector managers to enhance their understanding of sustainability, innovation, government policies and latest management paradigms, the Executive MBA will give the participants a unique 360 degree understanding of how to develop and deploy practices which promote sustainability and innovation across the five core functions of an organization – Strategy, Finance, Marketing, Human Resource Management and Operations.

Dr Bhaskar Chatterjee, who is widely acclaimed as the Father of Corporate Social Responsibility (CSR) in India and has been instrumental in framing and issuing the CSR guidelines for Public Sector Enterprises (PSEs) said, “India is poised at the cusp of Sustainable Development Movement and in keeping with that IILM has developed a unique curriculum which will help busy professionals get a degree in CSR, Sustainability and Innovation through online and interactive sessions on weekends.” The event to launch the Executive MBA with Prof Jagdish Sheth’s lecture and a Round Table Discussion was attended by important guests from major PSUs and some Corporates in India such as NISG, BHEL, IOCL, NTPC, Rural Electrification Power Distribution Company, STEM Alliance, National E-Governance, Power Grid Corporation of India, JSL Stainless Ltd., TATA Steel Ltd., ONGC, IOCL, Indian Aviation Academy, Warehousing Development & Regulatory Authority and PHD Chamber. The PSUs were impressed to learn that IILM’s Executive MBA course provides an attractive opportunity for enhancing the skill sets of CSR personal and that Rule 4(6) under Section 135 of Company’s Act 2013, allows CSR spend to be used on capacity building for executives of the company. This event therefore opened for them an opportunity for sending their executives for this unique Executive MBA programme. Professor Jagdish Sheth’s lecture on ‘Why Sustainability Matters’ at the event emphasized the importance of improving skills of executives in the area of CSR, Sustainability and Innovation. Known for his scholarly contributions in consumer behaviour, relationship marketing and related areas, Prof Sheth is the foremost, leading expert on consumer psychology and marketing with over 50 years of combined experience in teaching and research at the Universities of Southern California, Illinois, Columbia, MIT and Emory amongst others. Several world leaders, including Former President Bill Clinton and Prime Minister Modi when he was the Chief Minister of Gujarat, have been advised by him. Prof Sheth was also instrumental in setting up the first Indian Institute of Management (IIM) at Kolkata. Professor Jagdish Sheth’s Lecture Professor Sheth began by emphasizing that the issue of sustainability is no longer just a nice thing to do like CSR but it’s a necessity. Professor Sheth in his lecture elaborated how the largest carbon footprint happens in homes in America because of refrigeration followed by Super Markets that have high utilization of refrigeration. He said, “It is important for people to do Mindful Consumption and Sustainability should be mandatory.” Professor Jagdish Sheth made several significant points on the importance of sustainability in his lecture stating that ecological sustainability and shared value will be the next twin frontiers of competitive advantage as were quality and customer satisfaction in the 80’s. He said, “The biggest show stopper will be neither the capital nor the technology. It will be the environment.” He said that the Industrial Revolution made one key difference and we are paying the consequences of that now with a rising curve toward a crisis because it divorced production from consumption. Before the Industrial Revolution we produced in the same place and consumed in the same place, same time and there was no need for refrigeration. By making production and consumption separate while we can scale up production, it needs to be shipped to some other place when the local market cannot consume all that they produce. So we went through economies of scale concepts and that created a huge carbon footprint. The largest carbon footprint does not happen in the factory, it does not even happen in the transport but seventy percent of all carbon footprint shappen at home and home is the biggest polluter in America. The materials are all chemically based walls - prefab and assemble which spews a lot of Shri Kamal Singh, Executive Director of UN Global Compact Network India during the audience interaction with Professor Sheth

Shri Kamal Singh, Executive Director of UN Global Compact Network India with Shri Anil Rai and Shri Anand Rai

negative pollutants in the air. In America when a home burns, they burn with fumes which are noxious. He also pointed out that cars, which are part of the home transport, are another big polluter and that’s why he said that he strongly advocated electric vehicles. He also said that home refrigeration leaves one of the biggest carbon footprint and at the second place is the supermarkets where there are 24/7 freezers and refrigerators constantly producing carbon footprint. He said that the solution is simple - we can we put production and consumption in real time and real location rather than time separated locations. Professor Sheth said that another mistake we have made is to abuse and exploit nature which is a biological living breathing organization. We have made the worst mistake of over utilizing without thinking about replacing nature that nurtures us. He said that we need to focus on the consumer and think about how to make

mindful consumption as we don’t want to damage the environment. The United Nations Millennium Goals triple bottom line – People, Planet and Profit is about how profit alone is not sustainable. He mentioned that all Capitalist thinkers such as Adam Smith are being questioned and so is the obligation of the corporation to just make money and so are people like Milton Friedman who had said that big businesses and social agenda are not to be mixed together. Observations about Sustainability Professor Sheth made important points in his lecture about sustainably. He said that just as quality and customer satisfaction emerged as the company’s competitive advantage in the last century, sustainability and shared value will emerge as competitive advantage in this century. Quality delivered bottom line profitability through cost reduction and customer satisfaction delivered top line growth through customer life time value (CLV).Similarly, sustainability will improve the bottom line through cost reduction and shared value will enable top line growth for companies. The Good News and the Bad News He said that the bad news was that Sustainability will encounter strong resistance both internally and externally and it will require both internal and external marketing. The good news according to him is that sustainability and shared value will be harder to imitate, and therefore, will have the first mover advantage. Without an economic or environmental crisis, it is hard to bring about corporate transformation. According to Professor Sheth, “Sustainability is a marketing problem, both internally and externally and a company needs to motivate and market and all the stakeholders that includes doers, enablers, and supporters. He said, “One needs to take a marketing approach by thinking of stakeholders as customers and shaping as well as exceeding their expectations.”

Mr and Mrs Rai with distinguished guests at the event Ms Aarti Rai with Shri Jayant Shah, Business Director of Professor Sheth’s Academy of Indian Marketing (AIM)