Coca – Cola Sparks The Change With The Fruit Circular Economy

Coca-Cola India has a new ambition – to become a complete beverage company. Which essentially means providing more choice to the consumer by offering newer beverages and many based on fruit and fruit juices. This has been inspired by the concept of the circular economy or a virtuous economic cycle. This initiative will create a spurt in the company’s local procurement of fruit and farm level interventions and will have a positive impact on the Indian horticulture ecosystem. The two key components of this project are, launching new and innovative products and sustainable sourcing.

Product innovation and taking them to market is handled by Asim Parekh VP, Fruit Circular Economy, Coca-Cola India who says “To spark the change we’re bringing many other drinks like tea, coconut water, and juices to our customers. We are launching several new local brands at various price points and for different customer categories. Infact, we are now emulating a start up with 17 brand launches in 2018 and many more slated for 2019. We have made small teams that are quick to innovate, quick to market and adapt. Our core philosophy aided by a sustainable supply chain is about reaching customers and mapping their journeys in detail,”

This way of functioning is a big shift and is rooted in the understanding that India is not exactly a homogenous country, besides social and cultural diversity, there is economic classification. In addition, the modern consumer in big and small cities and even semi-urban areas wants personalization of their products and services. Keeping the potential growth of the economy in mind, even seemingly small customer segments could be large value generators.

One such sustainable sourcing program is Unnati Mango. The program was started to increase crop yields, save water, bring in ‘Good Agricultural practices” and improve the livelihoods of mango farmers in Chittoor district of Andhra Pradesh. Emboldened by the success of the program, the company has now extended this framework to other fruits and placed it under a strategic framework called the “Fruit Circular Economy”. Under this program orange sourcing and farming initiatives were launched in 2016 across the water stressed regions of Maharashtra and Madhya Pradesh. It encouraged the adoption of newer varieties of orange that have 50% higher juice content. Says, Ishteyaque Amjad, VP, Public Affairs, Communications and Sustainability, Coca-Cola India and South West Asia , “Entering and staying in the fruit production and processing ecosystem is part of our long term strategy and commitment to the country. Through these sustainable agricultural initiatives we plan to double farmer’s incomes. All projects under the Fruit Circular Economy framework consist of modern nurseries with high quality plants, intensive training to farmers, drip irrigation techniques and an assured buy back. About 250,000 farmers would be benefited over 10 years through these programs. At one level, these projects help the company in creating resilient high quality supply chains at another they also ensure that the shift towards juice based beverages is a smooth transition.”

Coca-Cola’s 2020 sustainability goals put sustainable sourcing of key agricultural ingredients as a top priority. Concerted efforts are being made by the company and nearly 250 bottling partners in more than 200 countries and territories to ensure this becomes a reality. The Coca-Cola Company is one of the largest buyers of Indian agricultural produce, sourcing 95% of its ingredients locally. This helps the company in sourcing high quality produce and also benefits the local farmers who get a ready market. India is the second largest producer of the fruits and vegetables in the world. The country grows the most amounts of bananas, papaya, mangoes, guavas, pomegranates and is the second largest producers of potatoes, green peas, tomatoes, cabbage and cauliflower. However, only 2.2% of fruits and vegetable output in India is processed. Coca-Cola views this as India’s untapped potential.

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The Journey to Creating a Sustainable World

Business is hitting against two important headwinds; climate change and technological disruption. In a recent panel discussion at Economic Times Global Business Summit, Dr. Ajay Mathur of TERI spoke of the worrying impact a world warming by 2 degrees will have on India with increased floods and droughts and erratic monsoons. Water would perhaps be one of the biggest challenges in the near future. Additionally, extreme poverty, waste, energy and biodiversity, are all discrete elements that need to be fixed, not just in India, but the world over. In this scenario, what kind of leadership will be needed to create an equitable and sustainable society? Can sustainability be achieved at scale? Can we limit emissions?

Increasingly, companies are dedicating teams to work on social responsibility and sustainability issues. They map the material risks that their companies face, interface with stakeholders, develop strategies to mitigate or eliminate them. The finance function that until recently merely counted the pennies that the company made has started to look at ways to measure the impact of the company’s sustainable and social actions. The production department tasked with improving the efficiency of operations now also concerns itself with using sustainable materials. The marketing team not only promotes the products but also promotes the well-being of people. The CEO’s thinking is moving from shareholder value maximisation towards maximising value for all stakeholders.

Business leaders, depending on their varied contexts are also prioritizing various approaches to sustainability challenges. For instance, Sanjiv Paul of TATA Steel says that sustainability strategy needs to be embedded into business to manage environmental risk, Tony Henshaw of Aditya Birla talks of the need to map supply chains in a transparent manner keeping sustainability issues in mind. Dr. Srikanta Panigrahi of IISD believes that global reporting standards can solve many of the sustainability issues of companies and Arun Maira who has been part of many large companies feels that a systems thinking approach is the way to go.

Yet, something is amiss. None of the environmental or responsibility challenges seem even close to being solved. For instance, the connected world, used to moving things and information, has no automatic way of managing discarded products. Which is why our landfills are showing no signs of reducing and possibly never will unless we start thinking of ourselves as part of a system that needs to be redesigned. As JP Chalasani, CEO, Suzlon says, “Our energy related issues are not just about adding more capacity but redesigning the grid to factor in renewables”. The flows of value—not just of materials, but of data, knowledge and participation need to drive a radical new design of business.

The more significant challenge is that we are in an age where large multinational corporations are themselves being disrupted by new challengers who have digital skills at their very core.

Perhaps the need of the hour for business is to hire more designers. Systems thinking is not just about mapping the system but about designing a better system. The future will witness a rate of change at a velocity never seen before. Acceleration due to technological change may bring the world closer, but it could also lead to a faster pace of wanton destruction. Designing a better world will not just be about new processes but a better way of thinking and communicating. Balancing the impact of our actions on people, the environment and everything around us. We therefore need people who are willing to collaborate in mapping customer journeys and product journeys with empathy as the central belief.

A new kind of leadership is needed that builds trust, is driven by values and is open to change. The leader has to be a trustee to all the stakeholders, rising above the stereotypes to decide what she will and will not do. As a trustee to the organisation, there is no exit strategy. The leader is responsible for the impact of her decisions. This could be food for thought for venture-funded companies that are currently destroying business models without taking responsibility for the damages caused. Deep, meaningful conversations and not just excel sheets hold the key to responsibility. Thinking not just about what new perspectives might be needed, but also finding entirely new ways to create and update our thinking models over time in collaboration with other people in the industry, policy makers and customers themselves. The corporate brand needs to be more human, responsive and above all trustworthy.

Based on Panel Discussion at ET-GBS 2019: “Sustainability – Embedded Strategic Planning”

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Sustainability is a key focus for Applied Materials

Applied Materials has grown from a small start-up founded in 1967, into one of the world’s most admired global companies. Applied is a leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. One of the company’s fundamental commitments is to maintain sustainable and ethical business practices. According to Srinivas Satya, President and MD of Applied Materials India, “We strive to make a positive contribution not only to our industry but to our larger communities and the world around us. So, the whole concept of sustainability is very important for us.

Applied’s mission is to provide materials engineering solutions that enable customers to transform possibilities into reality. The company’s competencies are in highly sophisticated methods of materials deposition, removal, modification and analysis. The company applies these technologies primarily in systems used by its customers for semiconductor manufacturing. Applied Materials also plays a leadership role in display manufacturing systems. So, virtually every new flat panel TV or smartphone display that one sees has been processed on one of its systems. This involves forming thin layers of material on a glass substrate. Srinivas Satya says, “Our expertise in modifying materials at atomic levels and on an industrial scale applies to both glass substrates and silicon wafers.”

Applied Materials has a very active program called design for environment. The goal of this program is to design products and services to minimise the consumption of natural resources and maximise efficiency. The team asks questions like: How do we minimise the footprint energy consumption of our products? What design choices can we be making to optimise usage of electricity? How do we reduce emissions? How do we internally have additional steps so that the output has less impact on the environment? The company has reasonably aggressive standards on how much it wants to reduce the energy footprint of its machines. The India centre also contributes significantly to these initiatives.

The company’s actions are not limited to manufacturing alone; they link to the operations as well. Beginning from the supply chain and getting the material into the factory, each of the machines has thousands of parts that come together. For the sophisticated products the company ships it could be conservative and use a lot of packaging materials that would end up as waste.  But then the energy footprint goes up. Thus, the company has a packaging technology team as well. They have expertise in designing reusable packaging, including specially engineered boxes, crates, shipping containers and transport carriers.

Reflecting on future trends and sustainability Srinivas Satya says, “Artificial intelligence, big data, machine learning are at an inflexion point. We know that 5G wireless is coming, later 6G. We are assessing the potential future sustainability impacts of these technologies as part of our overall Environmental, Social and Governance (ESG) strategy. What materials are used inside these devices? Can the devices and their components be recycled? How do you handle the refresh? Increasingly in the future, the conservation of materials will become super important.”

Based on a conversation with Srinivas Satya, President and Managing Director, Applied Materials India Private Ltd.

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Can Davos create the language of balance?

The game is on!

It’s been on for a while now, and we’ve all been playing. You, me, social platform owners, brand managers, political parties and more. While our motivations to play the game of social media may have differed, we all loved the game. We shared photos, likes, dislikes, views and more on Twitter, Facebook, Instagram and anything else that became the latest place to hang out on.

For companies wanting to engage potential and existing customers, voters, donors and volunteers it was a field ready for picking. Instead of relying on the age old marketing methods of post-facto research, here was live data on what people believed in, expected, desired and brought. The information was gathered, analysed and then used to make focused campaign messages, video, photos and sometimes even news that resonated with the targeted customers. This helped achieve the marketing objective, i.e. product purchases, votes, donations and anything else that the campaign funder desired. The game became a self-feeding cycle where we shared our information and marketers adapted the insight to give new products and services. A win-win for all. We got appreciation, a chance to say our bit, sometimes huge visibility when a message, photo or video went viral and many times a warm fuzzy feeling of well-being and togetherness. Marketers got a new sales channel with instant feedback loops of ready and willing customers. Social platforms backed by venture capitalists raised even more capital based on the rising numbers of advertisers and users. All was well with the world!

Who cared that the data was surreptitiously aggregated, communication was at times fake and digital surveillance was raising its ugly head? Privacy was dead after all. The Google CEO had announced it to be in 2008.

Then came fake news, Cambridge Analytica and the deep inroads into Facebook data that seemingly swung the US elections. It was a strike of unimaginable proportions. It shook the world in the same way that the nuclear strike had in 1945. But why did it raise such a stink this time round, it was marketing after all? The election candidate was just a product, data that had been available anyway and campaigns that had been based on what voters wanted to hear anyway? Analytics had simply generated remarkably accurate insight and remember privacy had been dead anyway, so what was the big deal?

This time though it was different! Smart marketing driven by lax laws and a receptive audience had converted the biggest show of democracy into a spectacle which could almost be comic if it wasn’t so tragic.

It’s no longer a game now. It’s a real and present danger. Information is being captured about us and can and will be used against us. At stake is everything we stand for, the right to express, the right to believe and the right to equality. In a data centered world, the company or person who controls the data will control us. There is very real danger that unfettered data access could create monopolies, duopolies and dictatorships.

But where is corporate responsibility in all this? As global leaders congregate in Davos for the World Economic forum it is perhaps time to discuss what rapid globalisation and technological change will mean to for business responsibility in this era. The difference between the manufacturing giants that caused environmental pollution and the software companies is that environmental pollution and damage is there for everyone to see and feel, the actions of digital companies on the other hand have been hidden. Now that they have been called out the contagion is spreading fast, almost everything is under scrutiny, data laws, privacy settings, news sources and feeds and above all the big question – how do we ensure corporate responsibility in a world driven by technology? Recent events have shown that the promise of a technology driven world may not be goodness and bright, happy, shining people but something far darker and disturbing. Can we come together to create a better future or will forever be victims who did nothing when it was time to end the game? Can Davos create the language of balance?

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Titan and the Girl child go hand in hand: NE Sridhar, Titan

It is well known that representation of women at workplaces is relatively less as compared to men. The #metoo campaign has also highlighted harassment women face at the workplace. Gender diversity has therefore come up as an important issue for making companies equitable and socially responsible.

However, for Titan, the manufacturers of watches, jewels, eyewear and perfumes, women have always been an integral part of their business. It was 1987, well before CSR programmes took shape in India, that Titan took a conscious decision not to hire from the market and the industry (except for a few seniors) and started hiring young boys and girls and trained them to become watchmakers. The girls made a natural fit to watch assembly operations. They were good at repetitive activities and had the natural finger dexterity that helped them go about the assembly operations. At the same time, the company started working in various communities to encourage young women to form self-help groups in the community. The self help groups skilled them to be productive and today many of them have been part of this extended arm of the company for more than 20 years. Hiring young women and youth from far off schools also created a need for Titan to support education in the neighbourhood, for the needy and meritorious. So about 30 years back, the company began providing them with scholarship support for continuing higher education. Mr Sridhar, AVP & Head of Corporate Sustainability at Titan says, “Working with women in the community, hiring them in our manufacturing operations ensured that young girls and women became central in many ways to the way we conduct our business and operations.”

Sridhar believes that people mistakenly look for a company’s CSR model through the lens of philanthropy. The company works in the community and hence must do what the community wants from it not just what the company wants. About half of Titan’s watches and eyewear business today comes from women. Add to it more than 95% of the jewellery business comes from women. Therefore, the connection with women and girl child comes naturally to the company. This connection led Titan to include girls and their education as an important peg in all their CSR initiatives.

Titan’s focus in CSR is to align its competencies to do good and do right.

One of the company’s core competencies is design. This competency led Titan to think about using the design for good and initiate the Design Impact Awards. These are grant awards that were aimed to positively impact the underprivileged communities to design for the benefit of society.

Second, Titan started as a manufacturing company before it became a house of brands and hence skilling became necessary for the company. Thus, skilling the underprivileged became part of its CSR engagement.

Third, Titan products, jewellery and watches, are all about craftsmanship. Hence, working with Indian arts, crafts and heritage is the third focus area.

Titan believes that for promoting education in the society, it is essential to start with the girl child in the country. In the remedial education model, Titan focuses on improving the quality of language, English, Mathematics and Science through sessions in government schools. Trained tutors handle these sessions after school hours. Tutoring is done through innovative teaching methods using Teaching Learning Materials (TLMs). The use of TLMs enhances the quality of inputs and also ensures that the children who drop out or perhaps have poor attendance are motivated and put back into school to complete their studies till class ten. This activity has been undertaken in Krishnagiri in partnership with KCMET (KC Mahindra Educational Trust), covering about 6000 girls in government schools.

For the out of school girls, dropouts and the ones who are not enrolled in schools, Titan has a learning centre model. It brings them to a place commonly used in the community and provides them inputs on the model. This programme not only enhances the learning levels but also makes the classes interesting through innovative TLM’s by the tutors. They enter mainstream schools after learning level 5. Both these programmes cover about 13,500 children.

In both models, the education goes beyond regular classes. It also ensures that the girls participate in extracurricular activities, helps them build their talents, participate in science fairs amongst others. The consent of the community is taken for enrolling the children. The company has created a sense of holistic support for the girl child with the aim of having her stand on her feet. Therefore, Titan aims to cover all elements of a girl child’s growth till self-sufficiency.

The company also has many associates, successfully running Titan and Tanishq showrooms. They have benefitted from the relationship with the company and have a will to give back to the community. Rana Uppalapati is one such business associate of Titan Company Limited, who is also a skater. With a sense of giving back, he set out to cover the Indian Golden Quadrilateral, a distance of about 6000 kilometres. As part of the journey, he raised funds for the education of more than 18,000 underprivileged girls and, more importantly, created awareness on child safety, especially on ‘good touch and bad touch’. This activity reached to over 3 lakh adults and children.

Although most companies think about CSR as working within a radius of company premises, Titan has decided to go beyond that. Given its pan-India presence, it felt the need to spread its CSR beyond the boundaries of company locations, where about 20% of the company’s activities takes place. About 80% of the CSR activities take place in the prioritised states of Karnataka, Tamil Nadu, Uttarakhand and Sikkim. The company also contributes to non-priority states during exceptional circumstances such as their work in Kerala during the recent floods. Sridhar says, “Behaving as a responsible corporate citizen far outweighs what we want to do as part of the company’s CSR programme.”

Based on a conversation with NE Sridhar, AVP & Head – Corporate Sustainability, Titan Company Ltd.

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