Sustainability: Good for the Company, the Community, the Environment
“Our strategy is to create a sustainable business model that’s good for the company, good for the community, and also good for our ecology,” said Samir Somaiya, speaking at CEU Oct. 8.
Somaiya, chair and managing director of Somaiya Group, including Godavari Biorefineries Ltd., spoke at the “Sustainable Energy Roundtable: The Role of Technology, Innovation and Leadership” event, hosted by the Rectorate and the Department of Public Policy. Somaiya’s company produces sugar, ethanol and biochemicals from sugar cane and its byproducts, and even generates power that it supplies to the local grid, as part of the effort to reduce waste and maximize the value of renewable resources.
The 15,000 Indian farmers who grow the sugar cane are uppermost in Somaiya’s mind. His company helps ensure the farmers’ well-being by doing much more than just buying their crops. While the price of sugar has doubled in the past five to six years due to positive policy changes, Somaiya Group also helps increase farmers’ incomes with agricultural innovations such as new forms of crop diversification, as well as passing on the company’s profits from power and ethanol.
Somaiya also set up microfinancing opportunities after meeting a small farmer who broke his contract with the company. Somaiya learned that the farmer needed about $400, quickly, to help pay for a family member's wedding. So he sold his harvest elsewhere after borrowing at an interest rate of 100 percent. Microfinancing helps those in low-income brackets by offering banking services (including credit and loans) at reduced rates.
Somaiya believes that his business model helps farmers earn while protecting their dignity and joining the stream of development. “There’s no point in environmental sustainability without financial sustainability,” Somaiya said. “If there is a change in global policy to allow free trade of sugar, and if local policy were to allow the full use of ethanol for fuel, and farmers were to grow new crops as well as sugar, farmers’ incomes could triple.”
The company doesn’t stop there. It operates 20 nurseries, six rural schools, a scholarship program for 600 children a year, and a higher education institution with 35,000 students. 70 percent of participants are the children of farmers.
“This is a concrete story about how sustainable energy and development can go hand in hand, and not only in one way,” said Diana Urge-Vorsatz, a professor in CEU’s Department of Environmental Sciences and Policy whose research focuses on sustainable energy and climate change, during the discussion following Somaiya’s presentation. “Business models like this are what’s missing in the policy solutions.”
Mel Horwitch, dean of CEU Business School, echoed Urge-Vorsatz’s enthusiasm. “We need more of these kinds of entrepreneurs,” he said. “Corporate social responsibility needs to be a good business model.”
For more information about Somaiya Group, see http://www.somaiya.com.