Sustainability is finally creeping up the corporate agenda in Asia.
But the rise in companies with a conscience isn’t entirely a matter of doing the right thing. Across the region, an increasing number of firms are harnessing sustainability’s potential for profit.
From greater efficiency in use of resources like energy and water to reduction, reuse and recycling of materials to innovative green products, they are countering the myth sustainable practices will inevitably have a negative impact on a company’s bottom line.
Few brands are genuinely pan-Asian: in our globalised world, if a brand’s operations don’t stop at a national border, there’s no particular reason to limit them to a continent. Nonetheless, there are several brands from Asia with extensive operations across the region that are making money by embracing sustainability.
Some of the region’s most visible companies to be doing so include Philippine conglomerate Ayala Corporation, Indian IT firm Infosys and South Korean water company Coway, while the likes of Singapore real estate firm City Developments Limited and Korean electronics giant Samsung SD often see their efforts rewarded in sustainability rankings, such as the recent Global 100 ranking of the world’s most sustainable firms.
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We find it funny when sustainability is seen as a new agenda, instead of just the way of doing things.
Hariprasad Hegde, global head of operations, Wipro
Here are four more leading Asian firms to have profited from virtue.
Wipro: Sustainability as a way of life
Environmentally friendly behaviour is part of the culture of Bangalore-based IT services company Wipro. “Conservation of resources has been central to our business since long before sustainability became a fashion,” says the company’s global head of operations Hariprasad Hegde. “It’s a way of life for us. We find it funny when sustainability is seen as a new agenda, instead of just the way of doing things.”
The focus, moreover, is on delivering financial value. “We believe that every effective action must be financially prudent,” says Hegde. “We don’t take financial liberties, and we don’t do anything for the sake of making a statement. In my 15 years with the company I haven’t found anything that’s more expensive to do sustainably.”
The company gets 37 per cent of its energy from renewable sources, particularly small hydro-electric plants, with a target of 48 per cent next year. Wipro believes it can make its buildings at least 30 per cent more energy efficient with improved systems and a centralised command centre using the Internet of Things to dynamically monitor and regulate energy use. The company is also targeting a reduction in its net fresh water intake from conventional sources by 70 per cent, while 95 per cent of organic waste generated by its facilities is reused within them.
Hegde says that merely having sustainability policies in place is insufficient. “Policy is for a steady state. To really drive the sustainability agenda, you need leadership and huge aspirational goals, and then you craft a path to get there.”
Kao Corp: Backing out of fossil fuels
The Tokyo-based cosmetics and chemical company, founded in 1890, instinctively combines profitability and sustainability. It says in its mission statement that it “seeks to achieve both profitable growth and contributions to the sustainability of the world”.
The company aims to reduce the environmental impact of its products throughout their life cycle. Its biggest focus within that cycle, though, is on consumer use; about 50 per cent of the total emissions from its products are generated at the use stage, and so the company has been working to reduce both their CO2 emissions from use and the amount of water consumed while using them. It cut the latter by 24 per cent between 2005 and 2015, while 84 per cent of the company’s product packaging can now be reused.
In its own operations, during the same period Kao reduced CO2 emissions from manufacturing by 29 per cent, and during distribution by 33 per cent, through a combination of initiatives. The company is focusing on green energy: it has eliminated all energy sourced from coal and is moving towards removing all fossil fuels; and it is installing solar capability at its new facilities.
Kao has moved to LED lighting at its plants, logistics centres and offices. And it has introduced a range of other energy-saving systems, including more efficient control of boilers and the use of steam to generate heat.
Godrej: In pursuit of shared value
Mumbai-based conglomerate Godrej, which has holdings as diverse as consumer products, agriculture, chemicals, property and industrial engineering, among others, is structurally committed to sustainable behaviour: 24 per cent of its holding company is in a trust that invests in causes including the environment. The company has put so-called shared value at the heart of its sustainability efforts, consciously aiming to pursue projects that link business success with social progress.
Godrej says it’s aiming to be carbon neutral, with a positive water balance, to send zero waste to landfill, and to reduce its energy consumption while upping its use of renewables. It has been progressively reducing the amount of greenhouse gases its operations produce, employs green software to help it do so, which analyses its environmental footprint across the production cycle.
The company noted in its latest Sustainability Report that it had reduced specific energy consumption by 31 per cent; its specific greenhouse gas emissions by 27 per cent; its specific waste sent to landfill by 9 per cent; and its specific water consumption by 21 per cent. It also increased the share of energy from renewable sources to 15.5 per cent.
Fuji Xerox: Environmentally conscious
The mantra of the Tokyo-based consumer products company (which, as a joint venture, is technically only 75 per cent Asian), that “corporate social responsibility is synonymous with corporate management”, is borne out in its operations.
“One of Fuji Xerox’s ‘shared values’ is environmental consciousness,” says Janet Neo, the company’s Asia Pacific head of corporate sustainability. “Fuji Xerox has been committed to the path of sustainability from the start, but it became a concept in 1992, when we announced the Good Company Concept, which was motivated by both ethical and financial concern.”
The company is committed to improvements in efficiency throughout the supply chain: since 2005 it has reduced the weight of materials it procures by 20 per cent; reduced the energy it uses in manufacturing by 36 per cent per unit; reduced the CO2 emitted during transportation by 35 per cent; and reduced energy use by customers by 82 per cent.
Again, it is in this last area that the greatest savings are to be made. The company’s green technology helped the Singaporean government, for example, cut CO2 emissions by 1.2 million kg and make annual savings of more than S$100,000; while Fuji Xerox also helped an Australian healthcare company reduce its print costs by 91.2 per cent, equivalent to an annual saving of about A$300,000.