As India embarks on an ambitious journey towards becoming a $5 trillion economy, the emphasis on sustainable development has never been more crucial. The Environmental, Social and Governance (ESG) framework has emerged as a vital guide for businesses, encouraging them to operate responsibly while addressing the pressing challenges of climate change, social equity and ethical governance.
At the NDTV World Summit 2024, Gagandeep Sethi, Senior Vice President of Integrated Operations and Sustainability & Responsibility at Pernod Ricard India, underlined that the company operates under a comprehensive global ESG program, encapsulated under the umbrella theme "Good Times from a Good Place." This program is closely aligned with the UN Sustainability Development Goals, focusing on four core elements: nurturing the environment, promoting circular economy practices, valuing people and ensuring inclusivity.
Mr Sethi explained the starting point for the company was to ensure sustainability in operations. "Everything that we do, while consuming all these resources, we have to ensure we restore the balance of the earth," he said.
He noted the importance of circular economy principles in their production processes. "While we produce products, we do it sustainably, in terms of maintaining the circularity, end-to-end value chain."
Mr Sethi also highlighted the social aspects of ESG, particularly diversity and inclusion. "Diversity and inclusion is a big impetus, and we are fully committed in terms of increasing the inclusion of gender in our workforce."
He spoke about the cascading effects of these elements, including carbon neutrality and water management, claiming, "We are a water-consuming product, in terms of managing our water balance and hence our water targets and also a lot many steps have been taken."
Asked how Pernod Ricard India was innovating its production processes to align with ESG goals, Mr Sethi said, "Innovations have to be embraced, and we see it as a cornerstone to attain our endeavours."
"It starts with design. We have aligned our entire renovation process, the stage gate in terms of the right decisions around ESG happens at the right time," he said.
He stressed the need for sustainability considerations during the product design phase. "Are we going for a product or a service which will address the sustainability part of our objectives?"
Mr Sethi also highlighted the importance of sustainable sourcing in their supply chain. "Our product is primarily ethanol, which can be sourced from various sources. Those smart choices using technical innovation around our fuel from fossil fuels to biomass which is more sustainable."
He explained how packaging choices contribute to sustainability. "The lower glass you use in your primary packaging, you are lowering the absolute value in energy consumption."
Sethi mentioned that Pernod Ricard's group target on scope 1 and 2 reduction was around 55 per cent, with India taking a leading role.
He added that advanced technologies, including AI, play a crucial role in optimising resource use. "So much of data is being produced. There has to be a layer which screens and makes info out of the data which can then be used to make some decisions, which is where AI comes in."
Mr Sethi discussed the challenges of building sustainability initiatives, noting that the initial steps in ESG are often profit-neutral. "The first few steps that we take in ESG are profit-neutral," he said.
He acknowledged difficulties related to new capital investments, saying, "When you are talking about capital investment capacities, but you have a design for sustainability, re-engineering is where larger sustainability investments would come in."
