Budget 2023-24 Expectation: Why ESG concerns of FMCG industries should be emphasised

With the budget presentation approaching close, expectations of the fast-moving consumer goods (FMCG) industry are at an all time high. FMCG forms a formidable space in daily life consumption and hence an important aspect of demand-based capital system. Apart from generating employment and fulfilling enhanced lifestyle choices, the industry also provides for economic diversification and can be a major contributor to the Indian dream of being a five trillion dollar economy by 2024-25. However, the issues of environmental, social, and governance (ESG) become a major aspect in this sector. As FMCG is based on fast consumption, it has a disproportionate onus to ensure sustainability. And, if we expect to create a large but eco-sensitive, sustainable economy, FMCG will have to be responsive to the greater roles they play in the context of the society and the ecology in which they function. As FMCG industries have elaborated supply-chains they also affect the production-consumption cycle of varying sectors. Hence, a good ESG approach can have multi-fold benefits for the economy at large. Additionally, FMCG products are also expected to be thoughtful towards human health. Of course, human health constitutes an important aspect of sustainability, this issue further becomes more crucial for this industry because many of its products are consumed directly by the people. This requires a round-table approach, whereby government, industry and people can collectively share their diverse concerns and can form out a way ahead. With the Union government being open to innovative ideas in the ESG aspects, and global giants like Coca-Cola prioritising these issues in their production and supply strategies, the future of the industry seems to be bright. In line with these we have with us Mr Rajesh Ayapilla who is the Director-CSR and Sustainability for India and Southwest Asia (INSWA) for the Coca-Cola Company, who would be discussing his company’s approach towards the issues aforesaid. [caption id=“attachment_12021672” align=“alignnone” width=“300”] Mr Rajesh Ayapilla[/caption] Excerpts: What are the ESG priorities for Coca-Cola India? How are they aligned with Coca-Cola Company’s overall vision? At Coca-Cola Company, we believe in ‘Refreshing the World & Making a Difference’ – our journey is deeply rooted in our purpose which entails a clear vision of adding value to the lives of our consumers, partners, and the communities we serve. The cornerstone of our sustainability management is identifying and focusing on the highest-priority ESG issues for our company, system, and stakeholders. We have developed concerted initiatives such as World Without Waste, Water Leadership, Fruit Circular Economy, and women empowerment for some of our highest priority ESG issues. Through our ESG initiatives, we aim to create a sustainable business and a better-shared future that makes a positive impact on communities and our planet. What role does a corporate entity play in ensuring overall awareness towards addressing ESG concerns in a community?  As responsible corporate citizens, organisations are prioritising ESG as a business imperative and embracing sustainable practices by embedding it in their business strategies. Keeping ‘people’ and the ‘planet’ at the core, partnerships with purpose are playing an instrumental role and both public and private collaborations are evolving. An increased focus on attaining a circular economy is changing the game. Driving educational campaigns and accelerating eco-conscious solutions are instrumental in spreading awareness. At Coca-Cola, our interventions are geared towards creating effective and sustainable socio-economic models, to support the Government of India’s vision of a self-reliant India. It is about creating sustained outcomes that drive value and fuel growth while doing good for the planet and its people. How would you describe your sustainability journey so far in India? Were there any challenges? While we have been committed to delivering our goal of emerging stronger in driving growth sustainably and responsibly, we have taken every step aligned with our core purpose of refreshing the world and making a difference. Through our Fruit Circular Economy initiative, we have marked a decade of successful implementation of Project Unnati – impacting the lives of lakhs of farmers across 12 states in India. Whereas, through our Water Leadership project we have created over 150 water conservation projects. Our global mission of creating a World Without Waste has had a transformative journey in India. As part of this global initiative, our ambition is to make our packaging recyclable globally by 2025 and use at least 50% of recycled material packaging by 2030. In India, we are hopeful of achieving 100% recovery and recycling of post-consumer packaging, mainly bottles and cans, in the next 2-3 years as part of its ‘World Without Waste’ initiative. Sustainability requires businesses to reframe their strategic perspective and systematically operationalize it into clear metrics and concrete actions that create value. This poses a great challenge for companies, but also offers new opportunities for organisational development. Hence, we have strategic multi-stakeholder partnerships to drive progress on our sustainability imperatives. Please explain Project Unnati. We feel farmers are the backbone of the agriculture system. One of our key ESG pillars, the Fruit Circular Economy initiative is aimed at aiding the agri-ecosystem by enabling and empowering farmers in India. Project Unnati, the flagship program under the Fruit Circular Economy initiative, has been launched along with our partners to address the challenges of low farm productivity, poor technology adoption and fruit wastage in the horticulture sector. The adoption of Good Agricultural Practices (GAP) coupled with Ultra high-density fruit plantation technology (UHDFP) has enabled a productivity increase of up to 5X for certain farmers. This has led to a significant increase in the farmer’s incomes, thereby upscaling and enhancing their livelihoods across 12 states in India. Focused on five fruit varieties Mango, Apple, Orange, Grapes, Litchi, and sugarcane, the program is aimed at propelling the horticulture supply chain and building agriculture production capacities across the country. For over a decade, Project Unnati has been successfully propelling Honourable Prime Minister Narendra Modi’s call for an ‘Aatmanirbhar Bharat’ by enabling many Indian farmers to their path to self-reliance. A recent report by Moody’s Analytics suggests that the agriculture sector will decide India’s growth journey. How is Coca-Cola Company’s flagship project Unnati, helping the sector grow? Through Project Unnati, we have been supporting the horticulture industry by enhancing farming efficiency, strengthening forward linkages, and building food-processing capacity in the country. With a focus on increasing farm productivity through innovation and technology, Project Unnati is in line with the Government of India’s priorities towards doubling farmers’ income. Since its inception back in 2011, through Project Unnati, we have been ensuring surplus availability of Indian fruits, thereby meeting both local and export requirements. Project Unnati has thoroughly evolved to make real, purposeful interventions at each step of the agricultural value chain. The program encourages reduced input costs for farmers, higher productivity, local procurement of farm products, increasing export demand for locally produced fruits and driving economic prosperity of the farmer communities while reducing the waste across the value chain. The company has further strengthened the reach of the initiative and aims to bring in more fruit varieties to enable a more efficient and productive farming community. What are your recommendations for reforms required in the Indian agricultural sector and how FMCG companies can play a role in it? In an agriculturally strong ecosystem such as ours, FMCG giants must join hands and support the small-time stakeholders. There are multiple reforms and schemes put in place by the government which are continually benefitting the sector at all levels, and it is only right for us to also claim space to help them in their efforts. The present reforms have created prosperous and diverse opportunities for the Indian agriculture sector and have impacted the lives of farmers by providing more choices for them. Furthermore, the government reforms make it easier for corporate giants to implement their corporate governance and social responsibility programmes for rural communities that help them thrive while not only fulfilling their compliance requirements but also doing plenty to give back to the community that plays the biggest role in their growth. According to estimates, in 2019, 77 million individuals had diabetes in India; how does your company look towards healthier beverages? At Coca-Cola, our vision is to craft brands and choices of drinks that our valuable stakeholders can love and get refreshed in body and spirit. Globally, as well as in India, we strive to introduce ‘Beverages for Life’. From pure indulgence to functional, all categories are important, and all brands will have a distinct role to play in consumers’ lives. We will continue to play our part by expanding our beverage portfolio to provide more choices to our customers, where they can enjoy the drink in moderation as a part of a varied diet. We are offering choices with zero-sugar or reduced added sugar such as Coca-Cola Zero Sugar, and Diet Coke as well as with added vitamins and essential micronutrients to make them more nutritious. We are offering small packaging choices to promote conscious consumption by always providing consumers with clear information about the product. We will continue to expand in this space of zero or low-sugar variety to offer consumers a plethora of healthier options. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.