Excerpts of ITC chairman and managing director Sanjiv Puri’s speech at the event
The global narrative can be summarised in three words: polycrisis, permacrisis and uncertainty, and all this is a result of the new geopolitical dynamics, re-globalisation and climate emergency. The manifestations are before us — extreme weather events, disruption of supply chains, structural inflation, concerns on food security and water security, the pressure on social inequity and the growing challenge of global demographics. All this is certainly creating a stress of unprecedented proportions. We do have the advantage of rapid advancement of technology, particularly digital technologies that do offer solutions, but they also accentuate change and will redefine work in the future. Amidst all this, it is evident that given the sustainability challenges, progress cannot be made unless the strategies of growth and competitiveness are redefined to serve the larger purpose of making the world a better place.
Any strategy today that is devoid of addressing societal issues is, in my view, outdated, irrelevant and can only be short-lived, because unless we address these issues, there is no tomorrow. Strategies today — the growth model and the competitiveness model — have to bring to the centre of business models the issues of sustainability and inclusivity. ITC, I believe, has walked the talk over the years. We believe that enterprises can play an important role in transforming the world and making and solving some of the serious challenges of societal progress. It is no surprise that today’s stakeholders are saying that the role of enterprise is not merely to create economic capital.
Enterprises must simultaneously create economic, social and environmental capital, and it is possible to do so. ITC has walked the talk for a considerable period of time and as an organisation, we are today not only carbon positive, water positive, solid waste recycling positive; our value chain supports 6 million livelihoods. We have also created economic returns for the shareholders. I think the challenge is really about selection of the business model, selection of the strategies and if that is done correctly, I believe it can actually create unique sources of competitive advantage. Let me give you some examples. In the three sectors of the economy which we are present in, agriculture, services and manufacturing as broad themes, we have to deal with these challenges as part of ITC Next. We have pressed the accelerator hard on digital, on resilience, on agile and purposeful innovation, on sustainability and inclusive growth.
Let me give an example of agriculture which is a lifeline of the economy, not merely because it has got the largest workforce, but also because it is important from the point of food security and energy transition. Nitin Gadkari has been championing the cause of bio-diesel and very rightly so. It is not only a critical source of industrial raw material, it’s also a sector that is threatened by the challenges of climate change. The Harvard Business Review says that agriculture production in the world must rise by 58% to 98% by 2050 to meet all these growing needs, and that has to be done in a situation where natural resources are depleting. That is a big challenge, but I believe it can be a big opportunity for India, because we have the largest arable land. We are leaders in many commodities and have huge headroom to grow vertically, given that our base of productivity is on the lower side. What we need to do is to create competitive and resilient value chains.
Let me share two interventions that ITC has made in this respect which create societal value as well as value for the enterprise. One is ITC MAARS, which is an integrated agritech phygital ecosystem to empower the farmers. I think the policy interventions by the government to promote FPOs and Digital India have given us the tool to address some of these pressing challenges. We piloted it with chilli crop in Andhra Pradesh and in one season got 26% improvement in incomes, and better quality of produce. This opened up business opportunities for us. We’ve rolled this out since April last year. We have about half a million farmers, around 1150 FPOs, the idea being empowerment of 10 million farmers with 4,000 FPOs.
The second intervention is climate-smart agriculture which we embarked on a few years back. Seventy per cent of the districts in which we started work a few years back are in high resilience, high yield zones. We today empower 7 lakh farmers over 2 million acres. The idea is to multiply it over time. What is interesting is that, not only have farmer incomes gone up by up to 66%, GHG emissions have reduced by as much as 90%. So what is good for the planet is also good for the farmers. Integrated to this is our water management programme, both on the demand and supply sides, which has improved water efficiency across many crops.
We have also created rainwater harvesting capacity to irrigate about a million acres.
I would also like to briefly touch upon three other broader issues. I think future success will come to nations and enterprises that press the needle hard on innovation and research. The R&D spend in India is less than half of the global average. We need to collectively work in improving this. The second is to take advantage of the demographic dividend and also the manner in which the future of work may be redefined. I think all of us can play a very important role in skilling and reskilling and upskilling, as that’s the only way towards inclusive growth. The third facet is adaptation. While the world is focused on decarbonisation, the reality is that temperatures will go up beyond two degrees. That’s the prediction, and as they do so, extreme weather events and heat waves will multiply. So what about adaptation to live through this hot new world?
I think that’s an area that is required for competitiveness.
I hope that as ESG is gaining currency, it will motivate more and more companies to adopt. But for ESG to be really successful, I think a lot of confusion and noise needs to be removed. We need a framework that is harmonised and standardised. The frameworks that we have today are all in the context of the western economies.
