IDH is a global organisation that works with businesses, financiers, governments, and civil society to realise sustainable trade in the global value chain. In an interview with ET Online, Kandal talks about how Indian firms, particularly MSMEs, can benefit by joining the sustainability (production) bandwagon. Edited excerpts:
Economic Times (ET): In India, often-cited issues are that business suppliers lack environmental management systems, have hazardous labour conditions and chronic overtime issues. What strategy have you adopted to address these issues?
Jagjeet Singh Kandal (JSK): IDH has been working in India since 2009 to promote sustainable value chains across sectors, including cotton, tea, spices, palm, and apparel. We are doing it by bringing together government, companies, and civil society organisations (CSOs) in action-driven coalitions to jointly set ambitious targets and formulate co-investment plans that unlock the growth of sustainable production and trade to deliver large-scale impact on UN Sustainable Development Goals (SDGs).
IDH works with businesses through active partnerships to ensure smallholders have better income through agricultural operations, and a better environment by retaining biodiversity and practising climate friendly agriculture, among other interventions. We connect these themes to also focus on gender and facilitating women leaders to play a significant role in agricultural supply chains. Our working template also ensures businesses’ capacity building to address social and environmental concerns in their operations with a view to finding solutions through joint action.
ET: For most Indian MSMEs, survival in today’s competitive environment remains the primary goal. While this segment is reeling under many sustainability challenges, the awareness about the need to tackle those remains low. Also, these firms have little idea of how sustainable practices can also be economically viable. Tell us how IDH is working towards creating awareness across tier-2, -3 regions and the hinterlands.
JSK: India is a key country of focus for IDH, as not only it is one of the largest producers but is also among the largest consumers – which puts it in a strategic position to take a leading role in promoting sustainable trade across value chains. In the agro-commodities sector, we have worked with our partners to address issues related to responsible agrochemical use, smallholder inclusion and livelihoods, gender, sustainable agricultural practices and living income. We support partner organisations in creating and investing in sustainable supply chains.
In our Regenerative Production Landscape Collaborative and Southern India Landscape programmes, we are working with partners on the ground to promote sustainable agricultural practices and connecting companies with smallholders for the offtake of sustainable produce.
We are also witnessing a slow but steady shift in the business approach of mid-size companies as they are increasingly getting eager to adopt sustainable trade practices to compete in global markets. Businesses are viewing responsible sourcing as a step towards creating supply chain leadership.
Pic: Jagjeet Singh Kandal, Country Director – India, IDH.
ET: During the COP26 summit in Glasgow in 2021, Prime Minister Narendra Modi announced India’s desire to achieve net-zero emissions by 2070. How do you rate the pace and direction of the country’s efforts toward achieving this ambitious goal?
JSK: While many companies have announced their net-zero plans, the pathway to reaching this goal is unclear. Over 70% of any business’s carbon emissions come from its supply chain and, thus, it is a work-in-progress for all. The movement to make the undertakings and establishments achieve net-zero emissions is a significant task at the government level. The major pain points that need addressing are better collaboration, scaling up solutions, making this the norm, and working closely with smallholders and enterprises across the value chain to embed sustainability in their operations. Prime Minister Narendra Modi’s commitment must be looked at through the lens that each country starts at a different point of compliance and the diversity and scale of India have been considered in setting the targets.
ET: Indian firms’ GVC participation is still low compared to their peers. How can a concerted effort towards responsible sourcing help change the status quo?
JSK: Indian participation in global value chains through exports is on the rise in some sectors, though not all. Practising responsible sourcing would help firms become more attractive to buyers as they will see prudent environmental, social and governance norms being followed in supply chains, thus contributing positively to the overall reputation of Indian firms, and reducing the risk of doing business for those global businesses who source from India.
ET: “Most multinational companies and brands already have a responsible sourcing policy in place. However, they need to bring in a certain element of contextuality aligned with Indian market realities,” you said this recently. Could you explain this, and what actionable blueprint does IDH have for firms to actualise this goal?
JSK: Most MNCs have sustainability built into their supply chain at global levels. However, the ground realities in India can differ from other geographies. In India, smallholders account for over 85% of the farmers. The supply chain dynamics also put several layers between the farmgate and retail. Keeping these realities in mind, it becomes increasingly important for companies to look at transparency while implementing their policies to reach all actors in the value chain. To ensure companies make responsible sourcing part and parcel of their business operations, we have launched the ‘India for India’ initiative. We will engage with businesses of all sizes to sign up to a responsible sourcing pledge, creating an opportunity for collaboration with multiple stakeholders.
ET: Tell us how IDH is undertaking a holistic effort towards meeting the UN’s Sustainable Development Goals (SDGs)?
JSK: At IDH, driving change in systems is at the core of our work. We bring together government, companies and CSOs in action-driven coalitions to jointly set ambitious targets and formulate co-investment plans that unlock the scaling of sustainable production & trade to deliver large-scale impact on these pillars, which contribute to the Sustainable Development Goals.
As we strive to achieve the SDGs through our work, we are also building capacities of businesses and small-farm holders in India to follow best practices — for instance, climate-smart agriculture, regenerative agriculture, gender sensitivity, inclusion and diversity, soil conservation. We are also enabling businesses to better measure their responsible sourcing efforts to ensure their sustainable trade operations follow global norms.
ET: The Indian farming community is dominated by marginal farmers who are unaware of the economic gains of the sustainability push. What is your assessment of the gravity of the situation?
JSK: While, traditionally, Indian farmers have used sustainable farming practices to ensure minimum crop losses and improve yields, they have increased the use of agrochemicals. To achieve a sustainable transformation of the sector, the work has to start from the ground level. We work with our partners to create awareness among farmer groups and also share best practices on sustainable farming. We also work with retail partners to connect farmers with the markets. The government’s role in all this is monumental, as they have the capability to drive change through right policy interventions. Also, they have a direct engagement with the farmers, and can help scale up the outreach and impact.
ET: Do you think the global food value chain is one area where Indian players need to step up their sustainability-related efforts?
JSK: While we see a shift in India, there is still a lot to be done. We remain one of the largest agricultural producers in the world, but inefficiencies in our supply chain lead to tremendous loss of food, putting pressure on us as a country to feed its population. It is pertinent to think not just about production or retail but to embed sustainable practices at all levels in the supply chain to minimise wastage and ensure food security for all.
