BUILDING SUSTAINABLE BUSINESSES FIT FOR A SUSTAINABLE WORLD 14 It is our ambition to become a leader in sustainable business practices across all our global operations. This means we have to first acknowledge that as a society we are pushing the planet’s systems and capabilities to an unmanageable level and that growth, as we have been accustomed to, cannot continue indefinitely. The time has come when business leaders need to decide whether their enterprises are fit for future purpose and if not, either make them capable of withstanding the constraints that they will be working under, or accept their demise. At the Aditya Birla Group, realising our long-term goal means proactively preparing now for the rising pressures from the external factors that we will be facing as we move towards the worlds of 2020, 2030 and then 2050 and beyond. These pressures will come from the need for mankind to create a sustainable place to live and do business. We use the Stockholm Resilience Centre Model to bring the extent of the challenge that we face to life. It clearly identifies the risks of the planetary limits that we face today, and defines those that are priorities for the future. In order to be resilient to these external changes, it will inevitably require us to do things such as: alter our energy matrix for a reduced carbon footprint, manage and protect biodiversity and find sufficient secure water supplies while coping with changing land use and a burgeoning population. We will need to adapt the way that we engage with our key strategic stakeholders. From meeting our customer’s expectations of greater transparency and traceability, responding to a workforce that is more informed, ambitious and demanding than ever before and ensuring that we bring our suppliers with us as we identify and plan for the challenges of the future by mapping current and then creating future sustainable value chains. Our Model for Sustainable Business and Framework The model that we have developed prepares us for the shifting and shrinking operating space that changing external factors will define for our operations, products and supply chains. By encouraging our leaders to study the future and the key trends taking us there, we are encouraging them to build capable business management systems. We do this for the simple reason that our businesses cannot survive on a planet or in a society that fails and chaotic scenarios of the future do not serve anyone. Over time, we believe that this thinking will differentiate us from our competitors. This is a model that we believe any business that wants to be sustainable in the long-term needs to adhere to. Responding to tightening legal frameworks civilised societies govern businesses with comprehensive legal and regulatory frameworks. It is intuitive that societal laws must not only be complied with but be tightened over time to prevent the trend of growing degradation of the planet. It is crucial that we remain ahead of the curve. Legal systems will eventually have to constrain business operations if we are to remain within planetary limits and we must prepare for those now. To guide us, we look to documented international standards and benchmarked best practices as signposts to the future – these voluntary standards set parameters that are often tighter than national legislation today but may not be constraining enough for the worlds of 2030 and 2050. Together with our strategic stakeholders we are working on the vital question, “Will best practice performance today be good enough for 2030 and 2050 and if not, how must we transform our business models, our products, our supply chain and operational performance to be so?” THE STOCKHOLM RESILIENCE CENTRE MODEL Creating A Sustainable Business // BUILDING A SUSTAINABLE GROUP Climate change B iosphere i ntegrity L a n d - s y s t e m c h a n g e Novel entitie s S t r a t o s p h e r i c o z o n e d e p l e t i o n a e r o s o l l o a d i n g A t m o s p h e r i c acidification Ocean flows Biogeochemical u s e F r e s h w a t e r (no global quant i fi c a t i o n ) Genetic diversity F u n c t i o nal d i v e r s ity ( n o g l o b a l q u a n t i fi c a t i o n ) Phosphorus Nitrogen