Practical Sustainability: Carbon Offsets that Improve Society with Aruna C. Newton

Jeff: Welcome to the Knowledge Institute podcast. I'm Jeff Kavanaugh, Head of the Infosys Knowledge Institute and our Chief Learner and Sharer. I'm joined today by Aruna Newton, Head of Diversity, Inclusion, Sustainability, and Reporting Governance at Infosys. Aruna, thanks for joining.

Aruna: Thank you so much, Jeff. Such a pleasure to meet with you again.

Jeff: Oh, it is. It's been too long. I really enjoyed when we had those in-person discussions and events. Today we'll talk about practical ways companies can use carbon offsets to reduce greenhouse gas emissions. Based upon the research at the Knowledge Institute and in Infosys overall seems the best path to impactful carbon offsets is for companies to develop their own programs. Now Infosys turned carbon neutral 30 years ahead of the 2050 timeline set by the Paris Agreement.

Aruna, what did Infosys do to reduce our carbon footprint before we turned to carbon offsets?

Aruna: Jeff, we have a very interesting story to narrate. We owe the success of everything we've done to the vision of our founders. You can imagine even at a time when all of this was very, very nascent, we committed to carbon neutrality goals. It was a time when one of our co-founders, Mr. Chris Gopalakrishnan, was a member of the United Nations Global Compact. You know, would be aware that according to the WBCSD, the built environment around us, including our homes and offices which obviously enables all of us to prosper and grow, also contributes about 40% of the global carbon emissions. And did you know as high as 30% of the global final energy use? This important insight catalyzed our efforts and actions. And we went on then to commit to infrastructure that we would build that would all be green.

Today thanks to that vision, we boast about 28 million square feet of office space across our campuses with the highest rated green building certification. Jeff, you'll be aware we have large campuses with over 55 million square feet of office space. And obviously being a technology company, we've used technology to the best of our ability, which has enabled remote monitoring, control, and optimization of our operations across 155 buildings. And would you believe it, Jeff, we've actually panned this out to 35 million square feet of office space? So I think the first was becoming aware of these emissions. The second was addressing them, and we went back to actually the first principles.

We went into design these buildings right from the orientation of the building to track the maximum sunlight, to leverage the maximum sunlight. We focused on the width of the buildings. We focused on cladding. I'm just saying it was totally a no-holds-barred approach. I often say that our green initiative steam in the first few years, you can imagine when this goal was first set, we had no idea where to start. We were sent off on a mission across India to study traditional architecture, buildings, mosques, museums, temples, to understand how without modern air conditioning, cooling and heating technologies, how did these structures continue to maintain ambient pressure temperature before all of this came in? How did they manage to do this right through the year with the changing weather?

Of course, all of this effort was also complemented with a huge amount of employee awareness and contribution. We developed something called an Internal Carbon Calculator which we put up on our intranet and we got employees to use this. And it actually facilitated the introduction of alternative transport and travel modes to and from work pre-COVID. This was one huge pillar of our work.

The other was the focus on renewables. And today I'm proud to say we have over 60 megawatts of installed solar capacity. We are not an electricity generation company, but we own this. We joined the RE100. We're the first company in India to join the RE100 way back in 2015. And today about 54% of our electricity for India operations comes from solar. And in RFY-22 report, we also computed that about 53% of our electricity requirements and data centers comes from solar. So literally these were the two very, very important pillars of our carbon neutrality strategy.

And then we decided that anything that we could not reduce we would offset through the carbon offset projects, mostly our travel emissions, and of course, a completely different strategy to tackle that.

Jeff: Great. Well, that leads me to the next question. Just take a breath because that was more than a mouthful. And certainly that could be the subject of a lot further discussion. For now, I think the takeaway is a lot was done for both reduction and renewables. But yet there's a residual. There's something left and you just can't get rid of it internally. And that's where these offsets come in.

Now unfortunately, studies show that many carbon offset projects overstate their impact. The European Commission found that 85% of the projects it examined were not going to achieve their reduction claims. And then you've got this unreliable carbon market, and so companies have developed their own programs. Given all this and given the Infosys focus on ethics governance, good measurement, how did Infosys leadership develop a carbon offsets approach that would represent a true reduction in carbon emissions?

Aruna: So, Jeff, of course at the time when we started this off, our approach to carbon offsets was guided by the ethos of a larger social development. This ethos is something that has defined our business success since inception. In fact, you'll be aware that this ethos also formalized the setting up of the Infosys Foundation way back in 1995 to continue to earn the respect of the community as an important stakeholder.

So what we decided to do is that we would have a line of sight to the investments that we made in this particular space. We were very particular about that. So our carbon offset projects were actually characterized by social economic benefits to the community. We went with, at that time I remember, the CDM projects offered by the UNFCCC and, of course, a little later with the gold standard. I think what was important for us at that time we were making this choice was to make sure that we adopted a methodology that was credible and that was also robust, that was understood by the world and accepted. So in 2015, '16, we commissioned about three offset projects which included a household biogas project with two high efficiency, biomass cookstoves.

Jeff: And we'll get to that detail in a moment. I'm glad you paused because before we get there, one of the most prominent challenges with carbon offsets is this concept of additionality, meaning a carbon offset needs to fund reductions that wouldn't have happened otherwise. For example, if I paid you for your forest you already have to preserve it, you might get some funds, but it was never really in danger so it's not an additionality. How did Infosys assure additionality with its carbon offsets?

Aruna: You're right, Jeff. A lot of this is still voluntary, and therefore, it does create room for a lot of confusion. For us. I think underscoring our approach was something that was globally credible. We were very, very particular to select something that people could relate to, that we could check back on, that actually had a robust methodology. And of course, the CDM projects at that time of the UNFCCC are the gold standard backed by this robust methodology that I'm speaking of was a natural choice.

Jeff: The next topic or question is one I've been excited to raise with you. Infosys has a portfolio, a group of community-based carbon offset projects. And these focus primarily on the socioeconomic development, like you mentioned, of overall communities. These projects address climate change and also benefit more than 100,000 rural families. It sounds like more than a carbon offset. It sounds like something special. Did it set the carbon offset program apart? Can you comment on what it means beyond the carbon itself?

Aruna: Well, actually the number is a little more like 184,000 families that continue to benefit from our offset projects. Since 2016, we've implemented about seven efficient cookstove projects, about three biogas projects, one rural electrification project, and one very special project. It's called an Integrated Community-based Project. It has the solar, it has the cookstoves, the street lighting, and also the public health center.

So I think what sets us apart very honestly, Jeff, is the care that we take to identify and select the project. Importantly, our team actually goes into the field and makes a firsthand assessment connecting directly with the proposed beneficiaries and tailoring the solutions that importantly would fit their context. So it isn't like an approach that you just go and position someplace. It's important for you to study the needs of the community, to understand the resources that they have, and to understand whatever you implement is something that the community will be able to sustain. So we did all of this for improving health, education, employment, and most importantly, reducing or minimizing impacts on the environment.

I think the big piece is about working with the community to sustain the impact. Jeff, you'll be proud to know that today our projects impact 11 of the 17 SDGs. And along the way, in addition to health and probably are aware that the collection of firewood for traditional cooking in many rural homes in India, a job of collecting this firewood is normally given to the women in the household, the women and the girls. So as a result, young girls actually risk threat to their lives when they go out collecting this firewood in the nearby forests. They miss school. So, of course, they miss education. The lady of the house who's cooking is inhaling the fumes from these stoves, impacting her health and the health of the family around her negatively.

So you can see just this one effort to introduce cookstoves to allow the community to use biogas as a fuel source just simply elevated the game hugely. It allowed the women to enjoy a better quality of life. It allowed the children, the girl child in particular, to also attend school.

And I think importantly, it also created a portfolio of local jobs. Our carbon offset projects have also created about 2,500 plus jobs for the youth in the community. So I think the whole idea is how do you enable a community to sustain itself and to enjoy a quality of life that they deserve? I think that's kind of like at the heart of the work that we're doing with the community.

Jeff: Well, that leaves the arcane counting world of carbon assets far behind. That's inspirational and I'm very glad you were able to lay that out in detail. And surely there's relevance there for other companies as well to look at something beyond the look good, feel good aspect, and maybe more of a do good in multiple dimensions.

Moving to the next topic about companies and leadership roles, as I think about this, more companies than ever before have sustainability leadership positions. According to several studies, nearly eight in ten have an executive responsible for sustainability. What's the most important thing that corporate sustainability leaders should know to make their offset program successful?

Aruna: So I think what I just narrated about our approach, we call it the three-pronged approach, of reducing electricity consumption, investing in renewables, and of course, offsetting the emissions that we could not reduce. I think this approach, three-pronged approach, and the social impact is what won us the United Nations Global Climate Action Award in the climate neutral now category. The UN was very, very impressed with the way we had thought this through. And you're right, the way we created an impact that just went beyond doing what might have easily been a takeoff, just purchase credits in the carbon market and hope it could do the world a lot of good.

I think the first thing market sustainability leaders could look at is own the impact that you want to create. And when I say own the impact that you want to create, it's important, therefore, for you to do your homework. Understand the projects that you can actually invest in that you will be able and willing to be accountable for.

The second is get involved. Of course, you could have a battery, depending on the resources that you have, you could have a battery of people running the project for you. You could outsource all of this, and today there are experts who are available to tap into. But I think it's important for you to get involved with the impacts that you want to create. For that is important for you to be connected with and understand the needs of the beneficiaries you hope to impact firsthand. There is nothing like an oil plate, a template that you can kind of place in any project and say this is going to work.

I think it's so important when you're looking at social impact. Of course, the gestation is longer, takes a lot more commitment, but the results are so, so rewarding. So I think own the impact that you want to create, get involved, and deliver the results. This approach would help us come a long way in doing all of this that we are doing together more effectively.

Jeff: Well said. And I think that's a good place to end. Want to wrap up with we've listed some bar favorite sustainability resources and experts in the show notes for this episode. Aruna, do you have any favorites or specifics you'd like to recommend?

Aruna: Current favorite is the Practical Sustainability Book, which you authored, Jeff. And I recommend it strongly for organizations keen to reduce their environmental impacts. And I think it's based on experiences that are real. It's based on something that we've done, that we can stand up and defend. I think that's so important. I keep saying Infosys is a living lab of climate change technologies. And imagine being able to share this with the conviction that we've been able to demonstrate, to back all of this.

The Infosys Sustainability Reports over the past decade or so also provide great insights for actions across the ESG dimensions. Jeff, I think there isn't this one book or this one resource alone that I would advocate more than another. To me, I think we need a collaboration to make this happen as a world. We need to give this a much, much bigger push. And I would personally advocate for responsible citizenship for every human on this planet. Imagine if every human being on this planet became more aware of the choices that they made and the impact, the world would be so much better. We wouldn't even be having this conversation about saving the planet.

Jeff: Right. It goes beyond a goal or a tick box and onto a movement and real impact. So again, well said. I think that's a great place to wrap up.

Everyone, you've been listening to the Knowledge Institute podcast. If you enjoyed this conversation, I recommend listening to our previous episode, Practical Sustainability: Impactful Carbon Trading, where we discuss the challenges in the carbon trading market with Dr. Barbara Haya, Director of the Berkeley Carbon Trading Project. We hope you'll subscribe or follow us wherever you get your podcast.

Thanks to our producers, Dylan Cosper, Yulia De Bari, Catherine Burdette. Till next time, keep learning and keep sharing.