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Be Green, It Pays

P. Ganesh     June 3, 2013
Being socially responsible is not new to Godrej. We have been at the forefront of philanthropic and social activities for several decades and our team members across businesses champion and contribute strongly towards different causes.

We have crafted a long-term vision named 'Godrej Good and Green' for playing an active part in creating a more inclusive and greener India. This is founded on 'shared value' initiatives that create both social and business benefits. As part of the initiative, we aspire to train one million rural and urban youth in skilled employment by 2020. We aim to create a greener India by achieving zero waste levels, becoming carbon neutral, having positive water balance and 30 per cent renewable energy. We also aim to have a third of our portfolio revenues comprising good and/or green products and services.

The Numbers
#Revenue: Rs 4,866 crore, up 32%
#EBITDA: Rs 862 crore, up 31%
#Net Profit: Rs 727 crore, up 41%
#ROE: 32%
(Figures for 2011/12; Source: Annual Reports)

#Socially weaker and physically challenged people comprise 11% of local staff
#Cut energy use in making Good Knight coils by 8.5%

These goals are a crucial part of our business planning discussions and we have made specific commitments towards achieving them. We have cross-functional teams from supply chain, marketing, R&D and finance which work on improving our gross margins. These teams explore energy conservation and waste elimination options and have generated savings in excess of Rs 200 crore over the past three years, a win-win on both the business and 'Good and Green' fronts. These initiatives included reducing the specific energy consumption in the making of each case of our Good Knight coils by 8.5 per cent, leading to a cost saving of Rs 1.73 crore this year. We also shifted from the PVC packaging of our Good Knight Active+ refill to the more environmentally sustainable PET packaging, and re-engineered changes in product design to make it more environmentally sustainable.

Another great example is the cross-functional initiative led by the finance team to optimise capital employed and enhance economic value added. By encouraging suppliers to switch to paperless processing, we have ensured faster transmission of funds and, in return, better credit terms for the company, another win-win. The drive also encouraged various initiatives to remove bottlenecks to ensure optimised usage of available production capacity.

Our teams continue to look for opportunities, both big and small, to be 'Good and Green'. We eagerly subscribed to the Department of Corporate Affairs's initiative of sending annual reports electronically, actively encouraged and convinced a large number of our shareholders to opt for this format. For the copies that we do print, we have been doing so on eco-friendly paper over the past few years.

We have made a good start towards realising our 'Good and Green' ambitions and are excited about the potential that it holds.

P. Ganesh is Executive Vice President - Finance and Commercial of Godrej Consumer Products. He has been adjudged the Best CFO in the category - Commitment To Triple Bottom Line.

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