WhatPackaging?: How important is it for companies in India to start thinking about climate change and sustainability-related data?
Nagesh Kamat: As per statistics, Indian industries contribute to 41% of the total energy utilisation in the country. Also India’s target of net-zero emission by 2070 and continuous climate change events around the globe makes it a priority for every organisation to contribute towards the aim of net zero emissions. Companies have started disclosing sustainability related data to disclose its green initiatives and and its relationship with investors and clients inline with stakeholders' demand for transparency and accountability.

WP?: How should they start doing this?  
NK: There are various frameworks and standards available in the market to disclose sustainability related data. (GRI, TCFD, SASB, CDP, EcoVadis etc).

WP?: In what way does sustainability affect equity investments?
NK: Investors are increasingly concerned about the risks to their investments posed by climate change and the transition towards more sustainable forms of production. The Security Exchange Commision recently proposed new rules that would require publicly traded companies to disclose their climate-related risk in a standardised way that would be subject to audit. If adopted, the new rules would impose additional costs on SEC-reporting companies. But, they could also provide benefits to investors, the companies, and the economy as a whole.

WP?: In what way? Please explain this for our readers.
NK: Well, there are four ways. For starters, one can protect and improve the company’s reputation – build trust through transparency and respond to rising environmental concerns among the public. Then boost one's competitive advantage – gain a competitive edge when it comes to performance on the stock market, access to capital and winning tenders. After which there is, track and benchmark progress - benchmark your environmental performance against your industry peers, with an internationally recognised sustainability score and feedback against your climate targets and finally uncover risks and opportunities – identify emerging environmental risks and opportunities that would otherwise be overlooked, to inform data-driven strategy.

WP?: Should we re-look at the companies according to certain sustainability criteria?
NK: As mentioned earlier, companies can benchmark their performance by disclosing their sustainability related data and get ratings by agencies such as CDP, EcoVadis, S&P Global, Sustanalytics, MSCI, ISS ESG, DJSI.

WP?: During the recent COP 27, a new standard for sustainability reporting - the ISSB was discussed. From what little we have understood, the ISSB is important for our industry. And how does our industry talk to lobbyists and policy makers at international and local forums?
NK: International investors with global investment portfolios are increasingly calling for high quality, transparent, reliable and comparable reporting by companies on climate and other environmental, social and governance (ESG) matters. And so, on 3 November 2021, the IFRS Foundation Trustees announced the creation of a new standard-setting board—the International Sustainability Standards Board (ISSB)—to help meet this demand.

WP?: On sustainability and circular economy we need to establish whether circular economy is even possible for inks. More importantly, what can be recovered and reused.
NK: The use of bio-derived renewable resources in printing ink formulations are present in the market. Companies such as Inx EcoTech and  FlexiStar have BRC packaging inks, the first solvent-based biorenewable ink certified by NAPIM (BRC Index 80). Also, the National Association of Printing Ink Manufacturers (NAPIM) launched its BioRenewable Content (BRC) program.

WP?: I need your insights on  life cycle analysis (LCA) studies for various ink systems (paste - offset, liquid - water, solvent, varnishes, coatings etc). What do these suggest and what is the way forward?
NK: Life cycle assessment or LCA (also known as life cycle analysis) is a methodology for assessing environmental impacts associated with all the stages of the product. BRSR reporting standard introduced by SEBI includes mandatory disclosures on the LCA of products.

WP?: What does a print firm CEO or converter need to know about LCA?
NK: An LCA study involves a thorough inventory of the energy and materials that are required across the industry value chain of the product, process or service, and calculates the corresponding emissions to the environment. LCA thus assesses cumulative potential environmental impacts. The aim is to document and improve the overall environmental profile of the product.

WP?: Ink systems that facilitate easy and clean recovery of substrates (paper, plastic) – are important for a circular economy. Are newer developments making it easier. For example, do barrier coatings facilitate better recovery as compared to MLP?
NK: Several studies have clearly shown that UV inks can be removed from paper and board and can be recycled also the UV-printed paper based materials are recyclable.

WP?: What about bio-renewability and recycling?
NK: There are several components of the label that are considered contaminants that impact the recycling process — inks and pigments included. There are procedures that help to minimise the impacts of these contaminants, but the more eco-efficient the substances are, the easier the recycling process will be and the more sustainable the process becomes. Bio-renewable inks based on renewable natural resources and new eco-friendly materials can play a key role in how sustainable a package may be.

WP?: How is the balance between innovation and sustainability achieved? For example, how do UV ink technologies stand the test of sustainability, recovery and reuse.
NK: UV printing is an eco-friendly technology in which UV ink is processed using a photo-mechanical process that evaporates out of the solvent. The photo-mechanical process eliminates Volatile Organic Compounds (VOCs). Also, printing with UV technology allows printers to work in a safer and cleaner environment due to zero-emission of solvents in the atmosphere. UV printing is considered a green technology, safe for the environment and leaves a negligible amount of carbon footprint.

WP?: What is the total reserves of pigment raw material and what is the rate at which we are consuming it?
NK: As per the India Minerals Year Book – 2020 (the latest edition), the total reserves/resources of ochre as on 1.4.2015 as per the NMI data, based on the UNFC system, have been estimated at 167.79 million tonnes. Out of these resources, about 36.93 million tonnes are under the 'Reserves' category and 130.86 million tonnes are under 'Remaining Resources' category. Of the total, about 87% resources are of red ochre, 11% are of yellow ochre and the remaining 2% are of grades "Not-known". About 78% resources are concentrated in Rajasthan, followed by Madhya Pradesh 11%, Andhra Pradesh 7% and Gujarat about 2%. The remaining 2% resources are located in Karnataka, Maharashtra, Jharkhand and Uttar Pradesh

WP?: And are companies succeeding in making pigments in labs or are they wholly dependent on non-renewables?.
NK: As an example, the Inxhrc natural-based inks contain 50 to 90% (depending on the application and intended use) natural ingredients and are free of allergens, nanomaterials, fluorochemicals, fanal pigments, heavy metals, latex, and PTFE. The point is, they have a 25 to 30% lower CO2 footprint than standard aqueous inks

WP?: And finally, what are websites like Greenwash.com (a website dedicated to exposing misleading ecological claims from large consumer brands), attempting to do? The site has expanded its remit to cover plastic packaging. The website, created by campaign group the Changing Markets Foundation (CMF), has accused brands including Coca-Cola, Tesco, Mars, P&G, Unilever and Sainsbury’s of publicising minor eco-efforts while doing massive damage to the environment.
NK: Greenwashing tricks us into believing change is happening, when in reality it is not. Greenwashing is when a company purports to be environmentally conscious for marketing purposes but actually isn't making any notable sustainability efforts.

---

(Sudarshan Chemical's consulting partner for ESG strategy is EY; and Nagesh Kamat has deployed EY inputs for his answers).