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