There is a common perception that corporations interested in sustainability are mostly those based in US and EU where consumers generally ‘care more’ about the societal and environmental footprint of the products they buy and the food they eat.
The latest research on consumer behaviour indicates that this may not be the whole truth with consumers in emerging markets such as India, China and Brazil showing an increasing interest in the environmental impact of their purchasing decisions as opposed to Western consumers.
At the same time, governments in emerging markets are tightening regulations to encourage companies to minimize pollution and play a more active role in solving sustainability challenges in their local context. For example, Chinese legislators recently passed the first amendments to the country’s environmental protection law in 25 years, promising greater powers for environmental authorities and harsher punishments for corporate polluters.
Another example is India. Recently, the Government of India passed a new law requiring companies to invest 2% of their net profits in local community projects. While many companies, including Maersk Line, have been involved in local community projects in India for years, the law is sparking renewed conversations among corporate India on how private companies can best support the government and civil society in accelerating India’s economic, social and environmental development objectives.
Discussing shared sustainability challenges & opportunities with Indian customers
In order to better understand how customers in emerging markets like India are addressing the sustainability challenges and opportunities specific to their sectors, Maersk Line in India recently hosted a roundtable discussion with eight of its key customers across Indian based multinationals covering industries such as steel, automotive, textiles and chemicals. The roundtable which included representatives from Mahindra & Mahindra, TATA, Reliance, ITC Ltd-PSPD and Aditya Birla Group included presentations from Maersk Line’s global sustainability advisor, Mette Olsen, and the NGO, Forum for the Future, and involved lively exchanges between the participating companies on their respective sustainability challenges.
“The roundtable discussion was a unique opportunity for Maersk Line to learn what some of our most important customers and business partners are doing in this important area and also share some of the work we have been doing at a global level,” Explains Franck Dedenis, Managing Director for Maersk Line in India.
“At the same time it was a good opportunity to explore concrete areas where we as local companies with global outlooks and strong values can work together to address some of India’s core sustainability challenges.”
Dr Vidya Tikoo, Vice President, Sustainability Framework, from Aditya Birla Group, adds: “This was a good forum for us to discuss and explore opportunities for how we as private companies can contribute towards sustainable development in India. We look forward to taking these discussions further with Maersk Line and the other participating companies in the roundtable.”
Introducing SLICE – Sustainable Logistics Initiative by Conglomerates in Emerging Economies
At the end of the roundtable, a number of concrete actions were identified where the participating companies committed to collaborating on concrete sustainability initiatives, including sharing data on environmental impacts across the supply chain and joint community investment projects aimed at improving the livelihood for Indian truck drivers.
In order to effectively follow through on these – and future – ideas, the participating companies agreed to formalise the initial discussions into a regular roundtable format focusing on advancements in sustainable logistics in India. The new initiative which will convene on a regular basis on the initiative of each of the member companies has been named SLICE: Sustainable Logistics Initiative by Conglomerates in Emerging Markets.
Beroz Gazdar, Senior Vice President of Sustainability at Mahindra & Mahindra explains: “The enormity of the challenges businesses face today dictates that no single entity, however large, can successfully tackle them on its own. It is quite clear that true sustainability can be achieved only through collaboration. The initiative by Maersk Line in India of bringing its Indian stakeholders together to collectively work towards sustainable logistics is a step in the right direction. Addressing common concerns through regular interaction will be a win-win for all.”
Concludes Geeta Uppal, Head of Ocean Logistics, Reliance Industries Limited: “I am pleased to be invited as a participant in this initiative by Maersk Line. I look forward to some common goals and learnings that will continuously look at improvements in the supply chain towards a more sustainable environment.”
India’s new “CSR law” explained
After years of debate, the Indian Parliament passed its first update of the country’s corporate law in more than 50 years, which includes several important provisions that modernize India’s corporate governance rules. The provision that has gotten the most attention is the so-called “2 percent” requirement, which has made India the first country in the world to mandate companies to invest in philanthropic causes in their local communities, e.g. activities that promote poverty reduction, education, health, environmental sustainability, gender equality, and vocational skills development. The requirement will apply to all companies over a certain size that are incorporated in India, whether it is domestic or a subsidiary of a foreign company. In practical terms, this means that about 8,000 companies will be spending a combined total of up to US$2 billion annually on local community activities in order to comply with law. The law will apply to all Maersk companies incorporated in India.