People, Planet, Profit: Creating A Better Future

Among the first to embrace the ‘Good and Green’ vision, Godrej Consumer Products or GCPL launched its sustainability agenda almost a decade ago. Since then, it has reduced specific energy consumption by 33 per cent and increased its renewable energy portfolio to 29.4 per cent. 

Initially, GCPL's focus was on improving the environmental and social impact of its own operations to minimise its footprint on climate, water and nature. Now the company has zoomed its sustainability lens from process to product i.e., from its operations to the entire value chain. 

While the contours of GCPL's sustainability strategy have evolved over the years, people associated with the company believe that its long-term vision — ‘people and the planet alongside profit’ — remains clear and uncompromised. 

"Our targets have evolved over time and our goals now include a commitment to decarbonise in line with science-based targets and achieve net zero Scope 1 and Scope 2 emissions by 2035, protect people against endemic vector-borne diseases, make greener products with sustainable packaging and implement a public-private-people partnership model to manage solid waste for municipalities," says Ramnath Vaidyanathan, AVP & Head - Environmental Sustainability, Godrej Consumer Products.

Fighting Hurdles

According to a report by cKinetics, the 2030 sustainability targets of many companies are not in line with the Paris Agreement, but 2050 net zero goals are. 

As per the Paris Agreement, the world needs to halve its emissions by 2030 and attain net zero emission by 2050 to avoid the disastrous impacts of climate change. However, only 24 per cent of companies have committed to halving their emissions by or before 2030, indicating a significant deviation from the specified pathway, the report states. 

For GCPL, the primary challenge in implementing sustainability initiatives is no longer in obtaining internal buy-in or in-cost, but rather in identifying tools, technologies and models to solve hard-to-address challenges such as tracking emissions in our supply chain, energy storage, green hydrogen generation or traceability of raw materials. 

"As we have evolved into a fairly mature ESG-focused organisation, the biggest challenge lies outside our control – in our supply chains and in the ecosystems that surround our operation. We have extended our sustainability efforts to our suppliers and are actively engaging with them to ensure they meet our sustainability standards," adds Vaidyanathan. 

For these challenges, Vaidyanathan believes that the key is in finding the right balance of investment, both in terms of financial resources and timing of the investment. "In an increasingly competitive market, we are finding ways to bring sustainability into the heart of our strategy, to move from thinking about the risks from climate change to thinking about the opportunities that new markets and customers bring with them," he says. 

Notably, as part of its commitment to nation-building, GCPL as an FMCG company uses close to 20,000 metric tonnes of plastic packaging every year. The company collects 100 per cent of post-consumer plastic waste as part of extended producer responsibility compliance. Since FY2017-18, more than 99 per cent of waste from landfill has been diverted to recycling or coprocessing.  

Talking about profitability, in FY22, the company reported revenues of Rs 6,951.56 crore from operations and profit after tax of Rs 1,479.15 crore with a net profit margin of 21.69 per cent. 

What next? 

By FY2025-26, GCPL is eyeing to reduce greenhouse gas (GHG) emission intensity by 45 per cent, using 2011 as the baseline) and carbon neutrality for Scope 1 and Scope 2 emissions. 

It also aims to reduce water intensity by 40 per cent by 2025 compared to 2011 while maintaining water positivity, cut specific energy consumption by 40 per cent, maintain zero waste to landfill and achieve zero liquid discharge, increase renewable energy use by 35 per cent, and ensure that all products are greener than in 2020. 

"We don't just set ambitious targets, we follow through with comprehensive, strategic, and innovative approaches to ensure we achieve them and where we fall short, we assess the reasons and take corrective actions rapidly. We are committed to our journey towards a more sustainable future, and every step we take in this direction brings us closer to our vision," asserts Vaidyanathan. 

Talking about internal targets and goals at Godrej, Vaidyanathan mentions that the green performance is guided by the sustainability team at the corporate level and driven by manufacturing cluster heads and team members at each of the company’s manufacturing locations. 

Also, the journey towards Godrej's sustainability goals is a meticulous one, involving several strategic steps that focus on internal targets for each manufacturing plant. A board-level ESG committee approves the company’s short- and long-term strategic imperatives and sets goals with timelines 

"Based on these, we conduct an extensive series of discussions with various stakeholders to create a shared understanding of the priorities, financial plans, quantifiable targets and projected benefits for the forthcoming years," Vaidyanathan adds. 

Meanwhile, an annual operating plan is then put into action, in which sustainability targets are woven into the key responsibility areas for its dedicated green champions, who implement the green initiatives and report on outcomes.