Leadership commitment to sustainability can transform organization, feels Nazeeb Arif

Interview with Nazeeb Arif for India CSR Leadership Series with Nayan Mitra

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KOLKATA:  There are many kinds of companies in the world – some, that are active in contributing to sustainability, some that are neutral and some that are inactive. But, here we have ITC Limited, which is the only company in the world to be carbon, water and solid waste recycling positive for over a decade! Very happy to share the interview of Nazeeb Arif, the Vice President and Chief of Corporate Communications of ITC Limited. CSR Leadership Interview Series:

ITC takes sustainability very seriously. Please do share some of its conscious efforts regarding this.

Yes indeed, sustainability lies at the core of ITC’s corporate strategy. More than two decades ago, when Mr. Y. C. Deveshwar assumed office as Chairman of ITC Limited, ITC redefined its vision to make societal value creation a primary purpose of business. This focus on sustainable value creation emerged from the needs to respond to some of the formidable challenges confronting the world, and more so developing countries like India. Since the industrial revolution, the world had progressed significantly in creating material wealth.

Unfortunately, the growth model followed by nations across the globe paid scant attention to the widening income inequities and widespread environmental degradation, threatening the future of the planet and its people. Even today, some studies point out that the wealth of only 8 people in the world equal that of 3.5 billion people, who are at the bottom of the pyramid.

It is today well recognised that climate change is here and now, impacting habitations and future growth in myriad ways. The growth in world population, urbanization and use of resources do not match the capacity of the earth to replenish such resources. Today, it is estimated that to meet the demands from the rising population, global crop production needs to double by 2050. As per National Geographic, the planet must produce more food in the next four decades than all farmers in history have harvested over the past 8,000 years. India mirrors most of the global sustainability challenges.

These unprecedented challenges indeed point to a writing on the wall that business cannot succeed in societies that fail. It is in this backdrop that ITC crafted a vision to not only create an extremely competitive portfolio of businesses but contribute simultaneously to replenishing the environment and creating sustainable livelihoods.

Aligning business models and outcomes to national priorities is at the heart of ITC’s credo of “Putting India First”. This is manifest in many ways in ITC’s journey to create an exemplary sustainable organisation. ITC’s businesses were challenged to innovate models that would not only make them internationally competitive but would simultaneously build environmental and social capital. This led to the globally recognized initiatives like the e-Choupal, which has benefitted over 4 million farmers. Large scale programmes like afforestation, watershed development, sustainable agriculture, animal husbandry together with women empowerment, primary education, vocational training, health and sanitation have benefitted millions in rural India. Today, ITC’s businesses have created over 6 million sustainable livelihoods, addressing a major area of national priorities.

Spearheading environmental stewardship, ITC’s resolve to pursue a low carbon path and replenish natural resources has made it the only company in the world to be carbon, water and solid waste recycling positive for over a decade. Over 40% of the total energy consumed at ITC is from renewable sources. The Company has also pioneered the green building movement in India, establishing some of the world’s highest rated LEED Platinum certified green buildings.

What is the role of leadership in guiding the company towards sustainability?

Leadership commitment to sustainability can transform organisations to become enterprises of tomorrow, contributing to a better, secure, sustainable and inclusive future. Chairman Mr Deveshwar’s vision to serve larger national priorities, born out of his patriotic fervour and belief that businesses can make a difference to transforming society, indeed inspired the distributed leadership and Team ITC to innovate business models, which could create much larger societal value.

The ITC leadership believes that the innovative capacity, creative capability and entrepreneurial vitality that businesses employ to create winning brands and businesses can be leveraged effectively to create larger societal value. An enterprise of tomorrow is not about creating shareholder value alone, but to innovate business models that create societal value as a core purpose of business, thereby making the businesses more sustainable in the long run. This approach to define performance across the dimensions of the Triple Bottom Line therefore creates institutions that generate sustainable value for all its stakeholders, including shareholders.

When the leadership is committed to such long term goals, it drives innovation across the organisation to create larger societal value. Such an overarching vision also helps align employees, partners and associates to a larger super ordinate goal giving more purpose to their thought and action. When this philosophy is internalized across the organisation, the DNA of the enterprise enables it to become future ready as a sustainable value creator.

What is shared value? Is CSR and shared value same?

Traditionally, shared value refers to policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the community in which it operates. Therefore, what is implied is a business model that, in the context of its operations, also creates social capital. Many have also referred to this as strategic CSR.

CSR has also been defined by different organisations to represent largely philanthropy or employee voluntarism. In some cases, CSR has also been defined from the strategic perspective where business operations are designed to yield inclusive and sustainable growth. Various studies have pointed out that strategic CSR or shared value is more scaleable and replicable, apart from enabling meaningful outcomes.

The new Companies Act in India has mandated large corporates to spend 2% of profits on CSR activities. While this will raise more funds towards societal purposes, the focus has been primarily on prescribing outlays. To my mind, a focus on outcomes rather than outlays spurs creative capacity and innovation to create shared value. In the absence of innovation that leads to a larger outcomes for every rupee spent, many may construe this requirement as an additional tax. We also believe that more than financial resources alone, it is the managerial resources that also bring to the table a level of commitment, experience and passion to deliver projects of social significance much more effectively. In that sense, CSR moves from a subject of compliance to one of commitment. Social investment, in the context of business, utilises the related experience and expertise of an enterprise to multiply the impact of programmes designed to create societal value.

Mangaldeep incense sticks are ITC’s CSR or backward integration?

ITC’s Agarbatti Business with its flagship brand Mangaldeep works with a large number of small-scale vendors, thereby supporting the creation of sustainable livelihoods, especially for women and tribals living in rural India. Women engaged in agarbatti rolling are free to sell to anyone though ITC stands as a willing buyer.

What is the role of private companies like ITC in nation building?

The sustainability challenges that confront us today are immensely daunting and of unprecedented magnitude. It would be naïve to expect any single section of society to provide all the solutions. There are roles that every section of society will need to play, be it the government, business or civil society. We believe that businesses are well placed to enable high impact societal programmes since they are present in the frontline of economic activity and have various touch points in society. Therefore, they are also in a position to deliver outcomes that are more meaningful at a comparatively incremental cost. I have already spoken earlier of the innovative capacity, creative capability and entrepreneurial vitality of the private sector that can make a transformational change in societal value creation. However, I strongly believe that it is public-private-people partnerships that bring about the most meaningful and impactful social programmes. This is because of their potential to bring in the best of strengths of every section to achieve a shared objective.

It has been ITC’s aspiration to be a national champion and contribute to larger national priorities. ITC’s ‘India First’ philosophy, finds expression in the Company’s relentless efforts to create competitive Indian businesses, spanning agriculture, manufacturing and services, building world-class Indian brands, investing in state-of-the-art national assets and developing intellectual capital owned in India through a globally benchmarked ITC Life Sciences and Technology Centre. This national focus enables ITC to create, capture and retain larger value in the country. Every sinew of the organisation has been primed to transform ITC into a vibrant engine of growth that would not only make a growing contribution to the Indian economy but do so in a manner that would reward shareholders by serving national priorities.

Building further on the globally acknowledged ITC e-Choupal model of rural empowerment, the Company has forayed into the fruits and vegetables segment which is aimed at strengthening the farm-to-fork value chain that addresses the challenge of farm wastages, manages food inflation and further enhances rural incomes. In alignment with the Government’s Make in India vision, ITC is investing in 20 state of the art integrated consumer goods manufacturing and logistics facilities that are being established across the country and will become a powerful driver to unleash a competitive farm-to-fork value chain which will also empower and enrich farmers.

ITC works very closely in supplementing some of the Government schemes. What are its challenges and opportunities?

As I mentioned earlier, I believe that public-private-people partnerships can deliver the most impactful social programmes. In line with this belief, ITC has forged 49 Public Private People Partnerships till date covering areas like watershed development, women empowerment, primary education, livestock development among others. In addition, it also works with several expert organisations and NGOs to provide value to social programmes. ITC’s social investment programmes focus on high priority areas of the Government.

For example, ITC initiatives such as Climate Smart Agriculture and Watershed Development are all aligned to the vision of Doubling Farmer Incomes.

The programme on sanitation and solid waste management similarly contributes our humble efforts towards the government’s Swacch Bharat Mission. Recently, ITC has partnered with the NITI Aayog to train 2 lakh farmers in 25 districts under the Aspirational Districts Programme launched in support of Prime Minister’s vision to developthese areas. It works with several state governments, such as Maharashtra, in supporting the Rural Livelihoods Mission. These are some of the ways that we contribute to some to the Government’s commendable efforts in scaling up socially beneficial projects.

About Nazeeb Arif

Nazeeb Arif is the Executive Vice President and Chief of Corporate Communications of ITC Limited, one of India’s foremost private sector companies and a multi-business Indian conglomerate with a market cap of US$ 50 billion. Arif is the spokesperson of the ITC Group and on the Company’s behalf interacts closely with all its external stakeholders including multilateral institutions, Government, Chambers of Commerce, Media etc. He is also a Member of the Sustainability Compliance Review Committee set up by the Corporate Management Committee of the Company. Currently he is the Liaison Delegate in the World Business Council for Sustainable Development, Geneva, representing ITC. Arif is also on the Board of Trustees of the ITC Sangeet Research Academy, a unique institution engaged in the preservation and teaching of Hindustani Classical Music and on the Consultative Committee of AkshayPatra Foundation.

Arif’s professional experience spans 32 years. Prior to joining ITC in 2006, he led the Indian Chamber of Commerce (ICC) as its Secretary General and CEO. Earlier, he has also served the Federation of Indian Chambers of Commerce and Industry (FICCI), the apex Industry body in the country. In these roles, he has actively advocated policies for building competitiveness of Indian Industry to enable a larger contribution to national economic development. During this time, he also served as an Adviser to the Asian Development Bank (ADB) in its South-Asian Sub-Regional Economic Co-operation (SASEC) project promoting greater regional co-operation amongst 4 countries in South Asia.

He has been very actively involved in environmental and sustainability issues, and his initiatives have also been awarded by international organisations. He was awarded the United States Asia Environmental Partnership –“Environmental Leadership Award”. Arif set up the Environment Management Centre at ICC which won the world’s best project by the International Chamber of Commerce, Paris, the apex body of business in the world. Arif led a team from Europe and India to implement a project funded by the European Union on Industrial Disaster Management.

Arif was invited by the United States Government as part of the International Visitors Program, and also by the European Commission as part of the European Union Visitors Program. He was also invited to attend the International Institute for Leadership in Germany (Theodore HeussAkademie, Gummersbach) by the Friedrich NaumannStiftung.

Interview was conducted by Dr. Nayan Mitra.

Dr. Nayan Mitra: Dr. Nayan Mitra comes with a rich mix of diverse professional experience, in which she straddles seamlessly between academics, social and corporate sectors. As a Developmental Consultant and Researcher, she works closely with some of the eminent Corporations and not-for profits of India as well as being in their Advisory and Board level capacity. She has conducted several social researches for multi-lateral agencies; the findings of which have become important bases for sustainable action. She has been a resource person in eminent Institutions of higher learning in the areas of CSR and Corporate Governance and has important peer reviewed research publications to her credit in double blind peer reviewed national and international Academic journals and books as well as delivered at key Conferences. Her book, ‘Corporate Social Responsibility in India: Cases and Development after the Legal Mandate’ alongwith co-editor Dr. Rene Schmidpeter is a first book of its kind that charters the development of mandated Indian CSR from a multi-stakeholder perspective. She is the recipient of the coveted India CSR Author Award two years in a row in 2017 and 2018. She spearheads the India CSR Leadership Series. She was a finalist of the prestigious Chevening Gurukul Scholarship for Leadership and Excellence – 2013, as conferred by the Foreign and Commonwealth Office (FCO) of the British Deputy High Commission.

Disclaimer: The thoughts captured in the interview is solely that of the interviewee. The views expressed by the author in this feature are entirely her own and do not necessarily reflect the views of India CSR.

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