Sustainability in business management has gained tremendous popularity recently, and the conversations about sustainability are no longer a niche topic but a central focus for businesses around the globe. The concept of sustainability can be defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs (Soderstrom & Wiseman, 2002). As environmental concerns grow and societal expectations from businesses evolve, companies are increasingly adopting sustainable practices. This article examines how businesses are adopting sustainability practices to meet environmental and social expectations.
In the last decade, there has been a paradigm shift in the business management field where managers are no longer focusing on value creation only for shareholders. The growing accountability and involvement of stakeholders have forced managers to look beyond and generate value for society and all the stakeholders involved. This can be attributed to the growing consumer awareness of the concept, regulatory pressure and at times even the fact that sustainable practices can lead to comparative advantage in the market. Additionally, companies are realising that going green is not just good for the environment but also is crucial to a good business reputation.
Corporate Social Responsibility (CSR) has gained widespread popularity in India, particularly after the Companies Act of 2013, which mandates certain companies to allocate a portion of their profits to CSR activities. This has led to a surge in CSR initiatives, with companies investing in education, healthcare, and community development projects. However, despite these efforts, many firms still tend to focus primarily on profits and view meeting the CSR as a mere legal mandate.
There are several ways in which these businesses are adopting sustainable practices. First and foremost, in the Indian market context, firms are switching to more sustainable sources of energy like solar energy. These firms are often incentivised by the government through heavy subsidies. In the long run, these sustainable sources not only cut down the carbon footprint but also help cut down business costs, thereby increasing efficiency and in turn market competitiveness.
Furthermore, several companies are involved in becoming carbon neutral wherein they try to setoff their annual carbon emissions by opting for eco-friendly campaigns and practices. Some of these campaigns include widespread campaigns to plant trees or reforestation practices.
Moreover, companies are now investing in research and development of sustainable practices within their business. These investments might not yield much in the short run. However, in the long run, they have the ability to provide the company with a competitive advantage. With the growing demand in the Western world to work and source from ethical and sustainable businesses, these investments are often considered highly crucial.
Also, in the Indian market, there are several companies that are spearheading Indian companies’ sustainability drive. For example, the Tata Group that is known for giving back to the society. The company has integrated sustainability into its core business strategy, focusing on areas such as renewable energy, water conservation, and community development. These initiatives have not only benefited society but have also enhanced the company’s reputation and profitability over the years.
Another example is the Mahindra Group which has embraced sustainability through its philosophy of ‘Rise of Good”. This philosophy emphasises the importance of creating a positive impact on society and the environment. The company has invested in renewable energy, sustainable agriculture, and community development initiatives, demonstrating that sustainability can drive business success.
Sustainability in the Indian business landscape still requires a combined effort from all stakeholders, including the government, businesses, and consumers. While there are significant challenges to overcome, the opportunities for sustainable growth are immense. By embracing sustainable practices, Indian businesses can contribute to a more sustainable future while also enhancing their competitiveness in the global market. As the world increasingly shifts towards sustainability, Indian companies must adapt and innovate to thrive in this new landscape.
Author – Sanya Khaitan
Ecole Globale Girls’ School
