ADITYA BIRLA GROUP ‘It’s All About Change in Mind­set’

The Economic Times - - Special Feature -

The $ 41 bil­lion Aditya Birla Group may be seen as a novice in mesh­ing sus­tain­abil­ity into its busi­ness goals and pro­cesses. It’s true; only partly. The con­glom­er­ate, with a pres­ence in 36 coun­tries, has just about be­gun to ad­dress sus­tain­abil­ity is­sues in a strate­gic and struc­tured man­ner. Yet, one of its com­pa­nies, the At­lanta- based Novelis is be­ing cel­e­brated for its re­mark­able foray into ‘cir­cu­lar­ity’ - the very cut­ting edge of the global sus­tain­abil­ity de­bate.

Novelis, a leader in rolled alu­minium prod­ucts, has so trans­formed its busi­ness model that its de­pen­dence on baux- ite min­ing and pri­mary alu­minium is drop­ping rapidly. Its re­cy­cled in­puts for the last quar­ter of 2015 were 53 per cent. For the year, the co. pur­chased over 50 bil­lion used bev­er­age cans to feed it plants.

This is what Tony Hen­shaw calls ‘fu­ture proof­ing’ a busi­ness or its sup­ply chain in a sit­u­a­tion when the world is in­ex­orably mov­ing to­wards a se­ri­ous re­source crunch.

He is of the opin­ion, in a generic sense, that sup­ply chains of many busi­nesses are ‘built on sand.’ They can crum­ble with the slight­est of dis­tur­bance. Tony is seek­ing to build value chains erected on ‘con­crete foun­da­tions.’ For a con­glom­er­ate like Aditya Birla which is com­modi­ties-heavy it makes em­i­nent sense.

Tony hails from the UK and has been all over the world; clean­ing up oil spills in Bo­livia at a Shell joint ven­ture, ne­go­ti­at­ing with indigenous com­mu­ni­ties, work­ing on for­est con­ser­va­tion with a gas pipe­line com­pany to com­mis­sion­ing mass tran­sit trains in Seoul and Por­tu­gal.

In many of his as­sign­ments he has had ‘an­tag­o­nis­tic ex­pe­ri­ences’ and was mostly en­gaged in fire-fight­ing of sorts. He is now happy to func­tion from a sta­ble In­dian plat­form.

“Our mod­els will have to in­volve stake­hold­ers and make in­vest­ments in value chains even if the pay­back may not be as high as we think it ought to be,” ex­plains Tony al­lud­ing to the grief that many global com­pa­nies have come to re­cently in­clud­ing auto gi­ant Volkswagen. “If we don’t do this, the al­ter­na­tive could be worse.”

Tony joined the Aditya Birla Group in 2013 from the min­ing ma­jor Vedanta Re­sources plc, and is now en­gag­ing with Birla com­pa­nies that are in var­i­ous stages of sus­tain­abil­ity evo­lu­tion– from Novelis at the tip of the spear­head to some still try­ing to align them­selves with in­ter­na­tional stan­dards in sus­tain­abil­ity.

Ac­cord­ing to the frame­work he has crafted for the Group, he de­scribes the first step in the sus­tain­abil­ity jour­ney as ‘re­spon­si­ble stew­ard­ship’ which is largely com­ply­ing with laws and rules. Then comes the ‘stake­holder en­gage­ment’ stage where com­pa­nies ac­quire the ‘abil­ity to un­der­stand how fast things will change and where busi­ness dis­rup­tions will oc­cur.’

And fi­nally, the ‘fu­ture-proof­ing stage,’ where com­pa­nies stay ahead of ma­jor trend curves. Bulk of the Birla com­pa­nies, he con­cedes, is in the mid­dle level.

A group sus­tain­abil­ity com­mit­tee is al­ready in place. Ev­ery busi­ness in the Group now has a sus­tain­abil­ity com­mit­tee chaired by re­spec­tive CEOs. A group-wide IT sys­tem, chris­tened, En­ablon, has al­ready been rolled out to 200 sites. “It will al­low us to start or re­fine sus­tain­abil­ity re­port­ing,” says Tony.

He in­sists that much of sus­tain­abil­ity is about mind-set change. The ques­tion to be asked is - is your mind open to the fact that the world will change. Tony has been ask­ing ques­tions of CEOs within the Group. Ev­ery Tues­day at 5.30 pm, since the last two years, a we­bi­nar on sus­tain­abil­ity, with par­tic­i­pa­tion from all group com­pa­nies hap­pen

with­out fail.

Mean­while, the Group is be­gin­ning to take lead­er­ship strides; the world’s largest pro­ducer of vis­cose sta­ple fi­bre and yarn now wants to elim­i­nate wood sourced from en­dan­gered forests. Says Group chair­man Ku­mar Man­galam Birla: “We are ex­cited to help drive in­no­va­tion in the devel­op­ment of fab­rics made from new fi­bres that re­duce the pres­sure on the world’s nat­u­ral forests.”

When a com­pany re­spon­si­ble for over 20 per cent of the world’s vis­cose makes a com­mit­ment like this, the in­dus­try’s sup­ply chain goes into up­heaval, for the good.

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