Tech Mahindra Chief Sustainability Officer Sandeep Chandna said sustainability has become a CFO issue as the returns on investment are obvious. "Today profitability is linked to the ESG strategy and that's been a shift over the last three to four years," said Chandna.
Chandna is a member of the 2024 class of Constellation Research's Sustainability 50. Here are some takeaways from my conversation with Chandna.
The sustainability journey. Chandna has been a Chief Sustainability Officer for more than a decade and perhaps the biggest change has been that people are more educated about the role. "When I started, everybody had their own definitions of sustainability. When I got into details, somebody said you'll have to plant trees. I said that was a good thing to do. Another said donate to charity work. Once again, that's good for society. We had to build out what sustainability meant with a purpose and a vision," explained Chandna. "We charted out environmental, social and governance structures and processes that were clear. It has to be top driven but grassroots at the same time. Today every part of our strategy has sustainability in it with stakeholders, data and champions."
Small steps. Chandna said awareness of sustainability and small actions make a big difference. Tech Mahindra has Green Marshals, who drive environmental awareness. Simple things like PCs being turned off on Friday evening in an organization of 150,000 people save a lot of emissions.
Sustainability and CFOs align. "Previously, we used to go to a CFO saying what we wanted to do. The world has changed now. The CFOs are now coming to the CSO saying, 'When will you implement the net zero strategy?' or 'What's the impact of renewable energy on the bottom line?' Today profitability is linked to the ESG strategy and that's been a shift over the last three to four years." He added that ESG boosts engagement among employees and reduces attrition.
Data matters. Chandna said the data of sustainability is the hardest to put in place. Just defining what supply chain data has the biggest impact on sustainability can be challenging. Once data like carbon pricing data is in place along with water and power usage is in place the argument for sustainability efforts is much easier to make. Tech Mahindra now has the data pool in place where sustainability has its own budget line. He added that data tracking an entire procurement process through multiple partners will remain challenging, but Tech Mahindra and third-party data can get you far.
Scope 3 emissions data. Scope 3 emissions are carbon emissions that are indirectly generated by a business outside of its physical footprint. Tracking that data is a big challenge. Chandna said:
"The world is a bit confused about Scope 3 and has a lot of simple questions. If you lease a building where does that carbon data reside? We looked at our supply chain and prepared a document saying how we would build the capabilities of our suppliers first, best practices we follow and business impact. We do a workshop for all suppliers every year and reward the ones that have implemented best practices and hit goals on their scope 1, 2, 3 goals."
Chandna added that incentivizing electric vehicles for employees would help as would offices closer to homes. Employee commuting can have a big impact. Business travel can also move the needle.
Generative AI, a sustainability blessing and curse. Today, generative AI workloads are sucking up power and stretching resources. Chandna, however, is hopeful that generative AI can analyze and optimize electricity generation and distribution, optimize trade and come up with more sustainable material design. Transportation optimization via generative AI can also improve sustainability. Those options have more long-term impacts, noted Chandna. "Today the data centers are consuming a lot of energy," he said.
In the short-term, renewable energy for data centers makes the most sense for AI workloads, but over time AI can optimize a lot to improve carbon emissions.
