Sustainability Presents A Unique Economic Opportunity: Sindhu Gangadharan

In a world where climate change is an unescapable reality, sustainable development through ESG has become increasingly relevant for companies of all sizes. According to a joint study by NASSCOM and BCG, Assets under management (AUM) for ESG-themed funds increased to USD 650 million in FY21 from USD 275 million in FY20, a 2.5X increase. The acceleration in this segment has only increased since then. 

The Tech sector has clearly taken on the mantle of leadership in ESG and is now playing a significant role by paving the path for its clients in the journey of sustainable development. 

BW Businessworld’s Rohit Chintapali got in touch with Sindhu Gangadharan (SVP & MD, SAP Labs India and Head, SAP User Enablement) to grasp the importance of sustainability initiatives for businesses of all sizes. Read on for excerpts from the interview. 

Why should businesses focus on sustainability? Could focusing on sustainability give businesses a competitive advantage?

For businesses, sustainability is no longer just the right thing to do, it has become a core strategic imperative. In addition to managing top-line and bottom-line, forward-looking organisations are now focusing on sustainability as the third dimension to drive business growth. Managing the ‘Green Line’ will be critical to enterprise success as customers, employees, and even investors are increasingly turning towards companies that are taking pro-actively deploying sustainable business practices. The growing shift towards sustainability will not only have a positive impact on the planet, but also presents a unique economic opportunity. Increasing environmental regulations will also require organisations to disclose the ways in which they are reducing their carbon footprint across their entire value chain. Therefore, it has now become more important than ever to invest in sustainable innovation that considers climate impact and helps foster socio-economic development.

Do sustainability goals make as much sense for SMEs in India?

Businesses of all sizes now have the expectation to act sustainably, and this includes SMEs. Small enterprises face the expectation from their customers to be transparent about their offerings’ environmental impact. Second, SMEs have the growing pressure from their investors, business partners and even regulators to keep a track of their carbon emissions and implement more sustainable practices in their operations. Young talent are also more eco-conscious today, hence, SMEs’ approach towards sustainability can have a potential impact on their recruitment and talent retention as well.

How do you see ESG investing measuring up to impact investing in the forthcoming future in India?

Industries in India have a great opportunity to embrace sustainability as an opportunity to take a huge leap of leadership rather than a compliance challenge. Indian governments across national and state level are already creating a conducive policy environment and funding including the announcements in the recent budget. However, considering the evolving and global nature of sustainability, the industries in India need to aspire to be ahead if not in lock-step with their peers/competitors globally. Organisations like SAP are creating more awareness around ESG as an investment theme amongst the investors and other stakeholders in the Indian markets. The recent SEBI circular on sustainability-related reporting for the top-1,000 listed companies should help create a shift in the stance towards sustainability reporting and leveraging technology for the same.

What is the role of technology in helping enterprises bolster their sustainability efforts?

Technology can help drive sustainable business practices by enabling enterprises to measure their carbon footprint, assess and reduce carbon emissions, improve resource productivity through circular processes and perform safer sustainable business processes. Technology can enable holistic steering and reporting. The expectations on how business success is measured has been evolving beyond pure financial metrics. To advance the topic of holistic steering and reporting, we became a founding member of the Value Balancing Alliance which aims to create a global impact measurement standard for monetising and disclosing impacts of corporate activity. Data will play a significant role here, helping organisations measure their ESG efforts. For example, our ‘SAP Cloud for Sustainable Enterprises’ offers a comprehensive suite of solutions to allow businesses to identify, quantify, analyse, and act on data through their end-to-end operations to help them manage their sustainability performance. 

‘SAP Cloud for Sustainable Enterprises’ includes the SAP Product Footprint Management and SAP Responsible Design and Production solutions along with SAP’s existing products like the SAP Environment, Health, and Safety Management application and the SAP S/4HANA Cloud solution for product compliance. The SAP Sustainability Control Tower solution, on the other hand, offers an overview of sustainability impacts and performance against green objectives.

How are SAP Labs’ sustainability goals playing out in India?

We certainly believe that the next phase of growth for India should be targeting zero emissions, zero waste and zero inequality. SAP Labs India campus is free of single use plastic. Almost 95 per cent of our power requirements are met by green energy sources. Almost 70 per cent of our transport facilities are powered by e-mobility solutions. As an Enabler, some of the key sustainability solutions like Product Footprint Management are driven from Labs India for SAP’s half a million customers.

With half a million customers, what is SAP’s impact in managing the global sustainability development goals?

SAP plays the role of both an exemplar and an enabler in its commitment to a sustainable future. As an exemplar, we lead by example in our own sustainable business operations. SAP has been serious about climate change for more than 10 years now. We set our first carbon reduction targets in 2009 – and achieved them 3 years later in 2012. In 2021, we set our goal to be carbon neutral by 2025 and we’ve brought that forward to 2023. 

And the enabler side is how we scale and help others become Sustainable Intelligent Enterprises. SAP customers generate 87 per cent of total global commerce as 94 per cent of the world’s 500 largest companies are SAP customers. Just imagine this reach we can have by delivering digital solutions that enable our customers to manage their own – and the planet’s -- limited resources productively and contribute to a sustainable economy. By doing so, we create a multiplier effect for positive impact. As an enabler, SAP addresses the needs of organisations delivering value across all 17 UN SDGs. 

Our focus is on how we can help businesses run more productively, transform business models, and deliver disruptive growth. As leaders in ERP technology, powered by our innovation, reach and relevance over 50 years, we help enterprises unlock the power of a combination of technologies including analytics, cloud applications, blockchain, AI, data management and business intelligence in integrating business and consumer insights into their core and industry-specific business processes to activate sustainability at scale across their entire value chain.