Future-proofing

After several years of work, we now feel that Birla Carbon has reached a mature stage in our sustainability journey. We continue to invest in people and technology, making strong progress on our key performance indicators, which in turn enables our operations to be sustainable for the short to medium term. 

It is now time for us, aligned with the Aditya Birla Group three-step agenda for ensuring long-term sustainability, to future-proof our approach and assess the resilience of our business for the decades that lie ahead. It is for this reason that we have engaged with Forum for the Future, a specialized non-governmental organization, to help us identify the risks and opportunities that could impact our business in the years to come. While we have been aware of and responded to these issues over the last 170 years, we believe it is time to provide more structure to our thinking in this area.

To help us prepare for the potential realities that we could face, Birla Carbon has identified a preliminary set of megatrends that we believe could have a real impact on how our business develops. The process is just beginning and will take some time; we will begin to explore it over FY2017.

The Megatrends that could affect Birla Carbon

Although our analysis of these key global megatrends is at a preliminary stage, we present here several potential implications that the same megatrends could have on our business and our pursuit of SOE throughout Birla Carbon.

Climate Change

The release of greenhouse gases into the atmosphere is arguably having an impact on the climate worldwide. Climate change could potentially have a dramatic impact on our facilities – particularly those that are situated close to water and those where water scarcity could pose a threat in future. Birla Carbon already currently deals with extreme weather conditions and annual flooding issues in some areas. We must prepare and adapt our business to these potential risks.

Resource Scarcity

As populations grow, and subsequently the demand for food, water and energy, as well as transport and comfort, it is important that industries take a greater role in safeguarding natural resources and show more responsibility for their use. It is important that we optimize our use of natural resources and recycle as much as possible. This is especially important in terms of non-renewable resources such as oil and gas. The proximity of Birla Carbon’s operations to communities requires us to take great care of how we treat natural resources, particularly water and energy.

Demographic Shifts

According to the UN estimates, the world’s population will reach over 9 billion by 2050. This is a global change but one that will particularly affect the developing world, including South-East Asia and Africa. With a strong global presence, especially in India, Birla Carbon is well placed to help support rapidly growing societies. However, accelerated growth could easily have an impact on political stability in the regions affected. Furthermore, imbalanced population growth could cause fluctuating workforce demands as more countries require younger employees; it is important for companies such as Birla Carbon to be prepared for changing employment contexts.

Rapid Urbanization and Developing World

With accelerated growth comes accelerated development. On the one hand, more than half of the world’s population now lives in cities, placing new demands on infrastructure and society. On the other, the developing world is expected to overtake the purchasing power of the current leading economies within the next 15 years, according to the United Nations Population Fund (UNFPA).

An expanding middle class presents both great opportunities and serious challenges for all industries. Bigger cities will require more of what we already have, from cables to vehicles, which suggests that the future of the carbon black industry is bright and especially for Birla Carbon. Indeed, enhanced purchasing power implies an increased demand for cars – so long as the infrastructure has developed to support more vehicles. Furthermore, it is not guaranteed that cars will even be a mode of transport of choice in the cities of the future; it is possible that social and societal behavioral changes will see the demand for cars reduce in the foreseeable future. This is a clear concern for Birla Carbon; our ability to foresee and adapt to the changing demands of a new social structure will be crucial.

Disruptive Innovation

New technologies allow economies to create more value with less input, which is sometimes described as disruptive: the new technologies supplant established methods of doing things, rendering skills and approaches redundant. Such disruption can have a massive impact on the way that people live their lives and also in the way that companies approach their business.

Birla Carbon is no exception. Changing patterns of consumption could have an impact on how the company develops, forcing us to change how we work. Traditionally, we have invested in state-of-the-art technology to develop carbon black, but our innovations depend on how quickly we can show improvements. With instability in the oil market, technological investments are becoming more challenging to our business.