Corporate social responsibility (CSR) has become an established part of the global landscape, with companies worldwide abiding by the United Nations Global Compact and many governments starting CSR initiatives. In this has emerged sustainable entrepreneurship. It sets up and manages businesses integrating economic growth, environmental stewardship, and social responsibility. The whole ecosystem ensures long-term value that benefits current and future generations.
Michel Doucin, a French economist and political analyst, has analyzed the concept of corporate social responsibility. He says Corporate social responsibility has been met with widespread enthusiasm for some years. Companies worldwide abide by the United Nations Global Compact launched by Secretary-General Kofi Annan in 1999, and today, nearly 6,000 groups of companies are engaged in CSR. In September 2010, the ISO 26000 standard on social responsibility was adopted, with 93 per cent of the participating standardization organizations from 90 states voting in favour.
Doucin believes that such enthusiasm for social, environmental, and human rights (which emerging countries have shared) is reassuring in a world generally concerned mainly with profits.
But are we misinterpreting this apparent unanimous adherence to the concept? Is the definition generally used in Europe—that of the European Commission, which considers CSR an approach by which “companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders voluntarily”—truly universal?
He goes on to analyze that CSR has now emerged as a strategic way of managing a company by anticipating the changes in consumer tastes and future social and environmental regulations, building workers’ creative motivation, and preventing the company’s reputation (and, by extension, shareholder value) from being damaged. It gives responsible companies a comparative advantage. In this utilitarian approach to CSR, ethics hardly have any importance. This idea has been popular, including in certain emerging countries like India.
The Confederation of Indian Industry (CII) encourages entrepreneurs and innovators to be part of the transformative initiative that focuses on sustainability. In India’s rapidly evolving business landscape, entrepreneurs are shifting their focus towards environmental sustainability. Green entrepreneurship, a rising trend, goes beyond profit margins, aiming to integrate economic activities with ecological well-being.
At its core, green entrepreneurship seeks to promote innovative solutions for pressing environmental challenges. Entrepreneurs in this space aim to create ventures that operate harmoniously with the planet, emphasizing resource efficiency, conservation, and eco-friendly practices. This approach catalyzes positive change, recognizing the intrinsic link between business success and environmental stewardship in pursuing a sustainable future.
The Rise of Innovation in Low Carbon Tech in India
As of December 2023, over 6,600 startups in the cleantech sector (Green Technology, Renewable Energy and Waste Management) are spread across over 450 districts in 34 states and union territories.
Despite this momentum, turning innovative concepts into widespread realities demands a solid support system. Entrepreneurs in this field grapple with diverse challenges, including entering new sectors, clarifying the benefits of clean technology, and nurturing new ideas. Building customer confidence is pivotal, as potential clients often avoid untested technologies. This highlights the importance of establishing a supportive environment for translating innovative ideas into practical solutions.
CII’s Green Entrepreneurship Council
As part of India’s premier business association, CII GBC is at the epicentre of this narrative, supporting and amplifying the voices of green trailblazers and collectively scripting a story of sustainable prosperity for the nation.
Its Green Entrepreneurship Council (GEC) emerges as a crucial catalyst, addressing critical needs to bridge the gap between groundbreaking cleantech concepts and their widespread implementation by emphasizing lowering the cost of customer acquisition and bolstering brand positioning. The Council works toward accelerating the growth of startups by cultivating an interactive ecosystem that brings together innovators, implementors and mentors.
Micro-, small and medium-sized enterprises and self-employed workers are the backbone of economies. Globally, they represent about 90 per cent of businesses and account for over two-thirds of employment. The share of self-employed workers, many of whom operate in the informal sector in developing countries, tends to decrease as economies’ gross domestic product (GDP) per capita increases.
United Nations has recognized entrepreneurship’s important contribution to sustainable development by creating jobs, driving inclusive economic growth and innovation, improving social conditions, and addressing economic, social, and environmental challenges in the 2030 Agenda for Sustainable Development context.
Inequalities between and within countries, including the digital divide, have amplified and widened because of the pandemic, affecting progress on the Sustainable Development Goals. At the firm level, these inequalities are strongly associated with gaps in productivity, scaling up, innovation and growth, all of which impact not only aggregate economic growth but also inclusion and societal well-being.
“We owe most of the social progress of the past to entrepreneurship and to the capacity to create wealth by taking risks and pursuing innovative new business models,” World Economic Forum Founder and Executive Chairman Klaus Schwab wrote during the height of the pandemic. “But we must rethink what we mean by ‘capital’ in its many iterations, whether financial, environmental, social, or human.”
In its article, WEF points out that SDG 9 is critical since it elaborates on sustainability in Industry, Innovation and Infrastructure. Targets include promoting inclusive and sustainable industrialization and, by 2030, significantly raising the industry’s share of employment and GDP and doubling its share in LDCs. Others include increasing access to financial services for small enterprises, upgrading infrastructure and retrofitting industries to make them sustainable.
It further adds that SDG 12: Responsible Consumption and Production. Targets include achieving sustainable management and efficient use of natural resources, reducing waste generation, achieving environmentally sound management of chemicals, and reducing their release. The goal also encourages companies (especially large ones) to adopt sustainable practices and integrate sustainability information into reporting cycles. With the growing importance of sustainability in business, corporate executives are hard-pressed to embrace a paradigm shift away from the sole purpose of generating profits for shareholders toward advocating sustainable development and long term value creation in their organizations.
In recent years, numerous studies have linked the implementation of corporate sustainability initiatives to improved business and financial performance. Similarly, from a valuation perspective, it is believed that sound corporate environmental, social and governance (ESG) practices would increase a company’s value. This can be attributed to the impact of ESG practices on three areas: cash flow accretion, lower cost and better access to capital, and market-specific factors.
Despite overwhelming evidence validating the case for corporate sustainability, many companies may struggle to develop a clear business plan that embeds a sustainability strategy. This underscores the importance of putting rhetoric into action.
