Economic development is driven by entrepreneurship, innovation, upgradation and diversification and external outreach. At the same time, it needs to include all sections of the human capital and ensure the sustainability of the natural capital. However, development, from the perspective of both sustainability and inclusiveness, still remains a far-shot in our communities! More than the ideation or planning, it is the implementation that often gets handicapped given the paucity of public sector resources like funds, skills and know-how. This makes it all the more imperative now for the private sector industry to play a pivotal role in achieving the sustainable development goals.
Despite an uptick in impact and ESG (environment, social and governance) based investments and a growth of sustainability strategies by the private-sector, most sections of that community still look at these as part of their CSR (corporate social responsibility) plans. However, the magnitude of these challenges merits far more attention from the private sector than just a CSR plan. This is because these challenges affect the fortunes of private sector businesses in multiple ways:
The list can go on. But the point is that, directly or indirectly, the private-sector industry is being impacted negatively by the twin challenges of sustainability and inclusiveness; and that should be a motivator in itself for it to contribute meaningfully towards sustainable development.
At the same time, converting every development need into a billion-dollar business idea is not a feasible solution. Many high-tech solutions emerging today to address developmental needs are expensive and hence, out of the purchasing power of a mass chunk of the population in developing countries like India.
The best solutions in such circumstances are ideas that are both low-cost, hence can be implemented by masses, and have long-term benefits, so that we are not forced to invest in new plans every year. Both aspects run contradictory to private sectors’ interests: a higher-priced product typically plays on value, not volume, and hence earns higher operating leverage, while repeated purchases for new versions/plans of a product ensures continued sales. Nevertheless, the real need is to devise low-cost and long-term solutions, and see how it can be made financially viable for the private sector’s involvement.
Andhra Pradesh, a state in southern India, offers such a solution. Its Zero Budget Natural Farming (ZBNF) policy aims to address one of our core development challenges—food, at the right quality, quantity and price—and it aims to cover all the farmers of that state by 2025. ZBNF farming practices involve using natural inputs as bio-inoculants instead of chemical fertilizers. These inputs are available within the villages and at a far lower cost than the expensive fertilizers and pesticides of the chemical industry. It is also seen to create a better quality crop, which has long-term benefits for the health of the consumers. Low-cost and long-term beneficial solutions like these can help combat certain sustainable development challenges.
But implementing this to the scale required would necessitate the involvement of the private sector. For instance, Azim Premji Philanthropic (the family investment office of Wipro’s Azim Premji) is already investing in scaling up the technical resources needed in this project. Apart from funding, private sector involvement would be practical to devise cost-effective and profitable ways to scale up the availability of the natural bio-inoculant inputs in every village, so that the cost to migrate to ZBNF farming from chemical farming does not increase due to non-availability of inputs in any specific village/cluster. Private sector involvement would also be practical to devise seamless channels for marketing the final product to consumers within and outside the state, including creating the brand awareness of the product’s health benefits for consumers. This list can go on!
In the end, anything that ensures an increasing supply of consumers (with an equivalent increase in their purchasing power) for private sector businesses should be motivation enough for them to be involved in achieving sustainable development. Else they may end up looking at a future of fighting for the market share of a constrained consumer base, thus leading to even more price wars and profit erosion!
The above article was originally published in the CSR Gateway newsletter of the Confederation of Indian Industry (CII).