Need To Consider ‘Sustainability Return On Investment’ As Well: Alok Raj Gupta, Founder, Envecologic
How does Envecologic utilize the principles of Environmental Economics to address the issues of sustainability and climate change?
Environmental Economics is at the core of our services. Name of our company itself is a synthesis of ENVironment and ECOnomic LOGIC. We believe that as the climate change and distortions to environment brought about by unsustainable practices have roots in capitalism, which has pretty much been the order of most economies of the world, their solution too lies within that same framework of capitalism.
Envecologic focuses on solving environmental problems by ensuring that the investment leads to a boost in the financial top line or bottom line of companies. This is done by integrating sustainability in the value chain of the business processes. We address the biggest failure of traditional business practices, which is ignoring environment in the decision making process. Our expertise allows us to factor in the environmental component as well, so we can place a monetary value to the associated costs and benefits. Old practices that led to fast depletion of natural resources and over-polluting of environment have backfired, and we are now spending huge sums on cleaning up and restoring natural resources.
As thought leaders, we have published and delivered talks extensively on emerging concepts, such as that of circular economy. We have been conducting trainings on these topics for corporations, so that industries begin to move beyond traditional linear practices. We have also worked on developing climate change adaptation strategies for various sectors by analysing costs and benefits vis-à-vis traditional practices. Overall, our work principle is defined as ‘using economic logic to understand and propose solutions to environmental problems’. We are pushing the agenda of environmental economics in solving real world problems through research and advisory services, workshop and training programmes and publishing thought leadership white papers and reports.
How can sustainability be integrated in the existing value chain?
That is exactly what Envecologic is striving to work on, every single day. First step is to understand the value chain well and identify areas which lead to negative environmental externality. Then, prepare a plan which leads to better balance between planet and profit. Businesses worldwide are working hard to reduce costs by improving returns on capital. We propose that adopting sustainability oriented practices is the best strategy to do that.
There are emerging concepts which we are extensively working on, such as ‘Green Supply Chain Management or Green SCM’, ‘Circular Economy’ and ‘Sustainability RoI’. In Green SCM, focus is on coming up with strategies to make value chain leaner in order to produce less waste and make processes less material and energy intensive. Similarly, Circular Economy focuses on closing the loops so that we extract fewer resources from nature and release less waste into it. The concepts have still not found wide acceptance in India. We conduct workshops and training sessions to help companies understand the benefits and ways to implement.
How can information dispersion be leveraged as ammunition in the fight against climate change?
There are three vital aspects to note here. First, the problem of climate change and fast depleting natural resources is affecting like never before. Second, the magnitude and manifestation have never been experience in the history of known civilizations. Finally, these problems are multi-layered and multi-dimensional in nature. Our best chance to deal with the greatest challenge of our generation begins with understanding it well. Building a sound understanding of the problem itself is a critical task. It’s only when we learn to identify the problems, understand how the changing climate is impacting us, and through which channels, can we begin to find solutions and ways to adapt.
Thus, Envecologic is proud to have developed unique platforms to disseminate climate change and sustainability related information across masses – Envecologic TV and Sustainability Today.
Envecologic TV is an online platform where we conduct and publish interviews of people working in the area of sustainability as well as those who are suffering due to climate change. We have already made a great headstart with the interviews, and are now working towards capturing sustainability stories from deeper quarters of India.
Sustainability Today™ is India’s first monthly e-magazine on climate change and sustainability. We came up with this initiative to educate people on how changing climate is impacting them in their daily lives. Climate change and other challenges like air pollution are becoming increasingly severe. There are high level reports and governments talking about it but people at large are still not equipped with the right set of information to deal with the altering environment. We are striving to fill that gap. We have started with the English edition, but would like to cover other vernacular languages to cover greater readership pan India.
How has capitalism led to some of the biggest sustainability challenges the world faces today?
Almost two and a half centuries ago, industrial revolution fastened the pace of economic growth and development across countries and economies, and over all these years it has evolved into multiple new concepts, like free trade, globalization, capitalization, etc. But as economies and corporations have grown bigger and mightier across sectors, spectres and borders, their need to consume more (and hence produce more) has also grown beyond measure, resulting in an ever increasing need for energy and natural resources. With this growing need, the pace of dependence on energy resources, as well as other natural resources, the production and consumption levels, the wastages, the dumping of goods – all these activities have surpassed any previously fathomable levels. Unimaginable volume of carbon released into the atmosphere, especially over the last 50 years, has led to global warming. Resulting climate change has been wreaking havoc all over the world in the form of extreme weather manifestations, fast melting glaciers, increased instances of floods and droughts and vector borne diseases. The list is long. In the name of economic development, forests have been cut at exponential rates to be turned into deserts and concrete jungles. Lakhs of tonnes of wastes from factories are making our water tables and rivers toxic. Antarctic ice shelves are disintegrating like never before. Species are getting closer to extinction. Summers are getting unbearable. Activities like mining in several parts of the world have literally devastated the local bio-diversity. Rivers have dried up. Migratory birds have changed their timing and course. Deforestation has led to removal of mineral-rich top soil and now chemical fertilisers and genetically modified seeds are used to grow food. Because of disproportionate economic development and impacts of climate change in the primary sector quarters of countries like India, significant population is moving towards cities, where the pressure on resources is fast becoming unsustainable. The list is long.
How can the dilemma between economic development and environmental protection be addressed?
First of all, it must be understood that the two are not mutually exclusive. Economic development is a much broader concept as opposed to economic growth, and entails overall improvement in the quality of life over a sustained period of time. For long, we have wrongly perceived that balance between development and environmental protection or sustainability is a matter of trade-off. In fact, if sustainability is not observed, achieving long term development will become difficult.
For example, factories kept flushing their industrial wastes into rivers to the extent that flora and fauna have been terribly disturbed along several parts of rivers such as the Ganges and Yamuna. Now, the government is spending thousands of crores to clean them, instead of using the resource to add value elsewhere. Our exponentially expanding cities of concrete have been encroaching upon forest areas, turning our habitat into urban heat islands. As a result, we spend more money on electricity to live in AC cooled rooms around the clock for most part of the year. At another level, economic advancement has led to more production, more consumption and more waste generation ending up in landfills. On an average, Delhi, for example, produces over 8,000 metric tonnes of waste, while its landfills are already over-limits and epicentres of unimaginable health hazards for people living in the vicinity. This trend does not even qualify as development, forget about sustainability.
The perceived dilemma can be done away with by trying to strike the right balance between planet, people and profit. So far, we have largely focused on just profits. So, traditionally, if we focused simply on financial return on investments (RoI), we need to consider sustainability RoI, which will quantify benefits accrued to the environment and people as well. Healthy environment and people factors will obviously bear a positive impact on financials gains.
How can collaboration between governments, corporates and educational institutions be leveraged for effective knowledge dissemination in addressing the issues of sustainability?
Needless to say that governments, corporates and educational institutions must work in tandem towards the common goal of sustainable development. Preparing young minds at educational institutions is vital for right orientation so they can contribute significantly keeping sustainability applications in mind. At another level, academic hubs are critical to produce interdisciplinary and in-depth research work in understanding various dimensions of climate change and other environmental issues as well as develop various mitigation/adaptation solutions. Corporations must implement sustainability strategies pro-actively. Business community is the single largest community which can lead to significant impact if they start integrating sustainability in their value chain and work towards becoming carbon neutral. Government, of course, must replace development agenda with sustainable development agenda. And in order to achieve that it must closely work with corporations and academic centers. State policies in case of solar power, for example, on prices, subsidies etc. determine the pace of adoption. The ‘Re-imagine Phoenix’ initiative is a good example which focuses on fostering new public-private partnerships to reduce the volume of waste sent to the city’s landfills by 40% by 2020. If I may add, the fourth, and perhaps the most important stakeholder is the common people/citizens. Slight change in habits and preference can result in significant positive impact on the environment. Envecologic (www.envecologic.com) is closely working with all four groups to pace up adoption of sustainability in all business-as-usual activities.
