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BLOG: Sustainability as the new business enabler

Vish Iyer | Sept. 7, 2012
Sustainability is transforming the competitive landscape and forces companies to change their business models.

The last two decades have seen an increasing trend in the quest for sustainability. More than just a buzzword of this century, sustainability is impacting and transforming the competitive landscape and forces companies to change their business models. According to a U.N. Global Compact CEO Study released, 93 percent of CEOs see sustainability as central to their company's future success, with commitment being highest in the Asia Pacific region. It can be even more attractive, if it's viewed as a business enabler, as it has the potential to create new markets and improve efficiencies. 

Beyond making sustainable products, companies embracing sustainability have the opportunity to achieve longer-term business growth by making processes less resource-intensive and spur innovation. Moreover, sustainability can also improve a company's social scorecard and provide an economically viable chance to improve community relations. 

Bottom-of-pyramid opportunities

The World Resources Institute estimates that people at the bottom of the income pyramid, who earn less than $3,000 a year, embody a global market of more than $5 trillion. Bringing much needed services to them - water, sanitation, energy, and housing - through innovative, low-cost and for-profit business models could be profitable and sustainable.

Clean energy solutions

According to McKinsey Global Institute, the opportunities in providing clean energy solutions could be $1.6 trillion by 2020, up from $670 billion in 2010. China alone spent US$34.5 billion on renewable energy in 2011 and is expected to spend $5 trillion yeans on this in the next 10 years.

Intelligent cities of the future

Another area of opportunity is with the intelligent city paradigm. By 2030, two-thirds of China's roughly 1.5 billion people will live in cities. To cope, China will build 50,000 new high-rise buildings, 170 mass-transit rail systems and 100 new cities. These cities will, however, be very different from those of today as they will be built using smart technologies and collective intelligence. They will have buildings that glean energy from the sun and rain to reduce energy consumption, traffic monitoring through embedded software in cars or traffic poles and dispense healthcare and consumer services to citizens at home, saving not just cost and time but also valuable resources.

These cities will be built on a cloud infrastructure that will make them both easy to run and sustain. The blueprints of these intelligent cities are already on mayors' drawing boards in Tianjin, Guangzhou, Hangzhou, Chengdu and Ningbo.

This is only the beginning for sustainability.  The goal for carbon neutrality is far from being achieved; there is so much more that needs to be done. That is why it is important that the business community plays a key position, by leveraging sustainability in a profitable approach.

Vish Iyer is the president of TCS Asia Pacific.



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