SHOHAB RAIS

SUSTAINABILITY: A RECKONING FORCE

A 360-degree view that considers all stakeholders’ needs and blends both financial and non-financial goals into key business strategies

SHOHAB RAIS

CHIEF OPERATING OFFICER - INDIAN CHEMICAL BUSINESS, TATA CHEMICALS LIMITED

Globally, the chemical sector is a key engine for an economy’s growth and forms the bedrock for all major industries. The US $165 billion Indian chemical industry needs to adopt a two-pronged approach to reach the ambitious target of US $ 300 billion by 2025, as set by the government – by grabbing the opportunity to expand to a global scale and by recognising and embracing sustainability as a strategic business blueprint. Sustainability, however, cannot be viewed from a limited lens. It is a crucial subject and its principles include business continuity and social impact in addition to the environmental aspects of the entire value chain. It is not just about effluent and discharge but encompasses energy & water efficiency, adoption of principles of a circular economy, climate change mitigation and biodiversity impacts of business; it is also about seeing the complete picture, a 360-degree view that considers all stakeholders’ needs and blends both financial and non-financial goals into key business strategies. Globally, the chemical and petrochemical industry contributes to

“Following a circular model – reusing and recycling, instead of disposing of, is a product of innovation and R&D”

“Sustainability currently is at the periphery of education and needs to become a part of the core”

one-eighth of the industrial carbon emissions. Given this, it becomes imperative for chemical manufacturers to contribute to limiting global warming to 1.5ºC. Accelerating sustainability and decarbonisation are clear priorities now. Robust sustainability strategies and policies could help drive encouraging changes across the business. Furthermore, when it comes to sustainability, the industry must set business agendas that are aligned with the environment and local communities and are beyond compliance requirements. The actions that can contribute to the chemical sector becoming sustainable are: • Use of renewable energy • Use of alternate fuels including waste and biomass • Recycling products for raw materials • Developing bio-based and green products • Addressing health and safety risks to employees and in communities of operation • Creating awareness and imparting skills to the workforce to imbibe sustainable practices These can make a significant impact on building a sustainable tomorrow. However, critical in the journey towards industry leadership, global significance and sustainability is innovation.

Innovating for sustainability

Innovation aimed at sustainability within the chemical sector has far-reaching effects. As a business strategy, chemical companies must focus to innovate and create products that begin their lifecycle through sustainable inputs and processes and also are innovative in their application to integrate the needs of the economy, society and the environment. Innovation to achieve sustainability will be a defining factor for the chemical industry, especially the speciality chemicals segment. As per a recent report by McKinsey & Company, the speciality chemicals market in India is expected to grow from US $ 28 billion in 2018 to US $ 40 billion by 2025. This exponential growth potential provides the opportunity to the speciality chemicals sector to adopt innovative approaches to capitalize on the new market for cleaner and greener products and practices. This market has taken a step in that direction, which brings into focus the concept of a circular model. As companies today strive to build a truly circular economy, what we need to recognise is that it is driven by innovation. Following a circular model – reusing and recycling, instead of disposing of, is a product of innovation and R&D. Recycling spent lithium-ion batteries from discarded laptops, mobile phones and even electric vehicles, to extract raw materials is one such example. This innovation does not only reserve valuable resources and minerals but is used in the manufacturing of a product that runs cleaner vehicles. The sustainability road map of several industries such as agriculture, auto and nutrition includes revamping efforts and strategies for inclusive growth. Let’s first look at the agriculture sector. We are witnessing an uptake for sustainable solutions. A whole range of bio-pesticides, bio-fertilisers are being developed in the agriculture sector which aims to give efficiency at par with its traditional chemical counterparts.

Today, many global and local chemical companies are investing in R&D and innovation for this sustainable change and bio-substitutes can be a major facilitator. Innovation is also taking centre stage in the auto industry, including in a product like tires. A key component used in tires – rubber is being replaced by Highly Dispersible Silica or HDS, making way for green tires that improve fuel efficiency and reduce the rolling resistance, improved wet grip for safer tires and improved abrasion resistance that improves durability. Green tires are the new-generation tires that reduce CO2 emissions as well as fuel consumption, thereby controlling pollution. Hence, what the chemical companies are doing in the R&D labs could have benefits that can only be limited by our imagination.

Educating for sustainability

While imbibing sustainable practices across functions of a chemical company is imperative, this vision must be inculcated in its people, the workforce and the extended team across the supply chain. Individuals involved in the process of delivering sustainability need to have the right capabilities and proficiencies to understand and implement these practices, while also encouraging sustainable development.

Sustainability currently is at the periphery of education and needs to become a part of the core. As an industry, we need to partner with institutions to play a role in bridging the gap, in terms of emphasizing the need for sustainability and innovation as the current students could be our future leaders. Today, preferences are changing and customer organisations are seeking greater participation and commitment towards these areas. Hence, to improve business and market share, we must strive to build what the market needs which is a sustainable business in the future – respecting the environment, planet, and people, and building an ecosystem around it.

Investing for sustainability

Lower carbon footprint along with building a manufacturing eco-system that is committed towards the cause of preserving and protecting the climate and environment begins with an investment in a sustainable enterprise strategy that is focused on green technologies and clean development mechanisms. A global group of 23 chemical companies has committed to setting Science-Based Targets (SBTs). This is a major step to commit towards Science-Based Targets to reduce carbon emission in absolute terms. These companies cover sectors such as transportation, utilities, consumer products, textiles, banks, information technology, hospitals, mining, food & beverages, chemicals, construction materials, pharmaceuticals, telecommunications, education etc.

Government intervention

By signing the Paris Agreement, the Prime Minister has already given a clear signal about the future direction in this journey. Additionally, giving an impetus to industries to march ahead on the road to sustainability are government initiatives. During the Union Budget 2021, the Finance Minister also highlighted the need for strengthening the environmental, social, and governance (ESG) parameters for corporate India. This is in addition to various schemes that are already in place about solar and wind energy.

Conclusion

In the current context, as we all work towards overcoming the challenges of the COVID-19 pandemic, the importance of a strategic focus on sustainable practices and environment-friendly products and services has come to the forefront. The increasing use of plastics during the pandemic has further accelerated the need for sustainability efforts. The chemical sector should view this as an opportunity to align its practices and operations to the UN goals of sustainable development. Concepts such as ESG are being increasingly talked about, hence for chemical companies, it is even more essential to position themselves as responsible manufacturers by shedding light on the prominence of a circular economy, carbon neutrality and introduction of green products. The whole gamut of sustainability can be tapped by the chemical industry by leveraging its forte in technological advancements, R&D and innovation to become responsible manufacturers, who contribute to safe and affordable food, give clean water access to communities and foster a green tomorrow with carbon-free energy and transportation.