SUPPLY CHAIN TRIBE BY CELERITY-JANUARY 2024

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INSIDE

JANUARY 2024 Volume 8 Issue 1

Leadership interaction with Madhvendra Singh, Chief Executive Officer, Gujarat Maritime Cluster

MISSION SCOPE 3 GHG EMISSIONS

DEVISING An Immediate ACTION PLAN To Achieve ‘Net Zero’ Target

Navigating Global Changes with Optimism in 2024 Dear Readers, As I write this Publishers Note, the geopolitical tensions continue unabated resulting in tensions in the Red Sea region, a critical maritime route. Recent developments have led to significant supply chain disruptions, impacting global trade and economies. These issues stem from a complex interplay of regional power dynamics, territorial disputes, and economic interests, underscoring the fragile nature of international shipping lanes.

While the Red Sea crisis has deepened, India has been bringing about a revolution of sorts in its Maritime sector. Our interview with Madhvendra Singh, CEO, Gujarat Maritime Cluster, captures the significant strides taken through comprehensive reform initiatives, including the visionary ‘Amrit Kaal Vision 2047’. This ambitious plan aims to revolutionize India’s maritime blue economy. The Indian shipping industry is certainly garnering positive attention.

As globalization deepens, it also accelerates economic activities, significantly impacting climate change through increased carbon emissions. The Scope 3 agenda, focusing on indirect emissions across supply chains, is crucial in this context. It emphasises the responsibility of companies to manage emissions not just from their own operations, but also from their broader network, highlighting the interconnected nature of global industries and environmental impact. Our Cover Story delves into this critical topic.

Additionally, we spotlight a major shift in global geopolitics and economics emanating from the Indo-Pacific region. Our opinion article on Myanmar surveys its trade history over the past 35 to 40 years. It underscores Myanmar’s emerging strategic importance as a viable alternative in the supply chain network, offering a counterbalance to China’s dominant role.

As 2024 rolls out, we stand steadfast in our commitment to addressing global issues, from geopolitical shifts to environmental sustainability. We look forward to navigating these dynamic times together, fostering a spirit of resilience and collaboration. Let’s make 2024 a year of positive transformation, marked by progress and hope for a better, more interconnected world.

Warm Regards,

Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com

Published by Charulata Bansal on behalf of Celerity India Marketing Services Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027.

Logistics Partner: Blue Dart Express Limited

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CONTENTS

JANUARY 2024 Volume 8 Issue 1

10 | COVER STORY

MISSION Scope 3– DEVISING An Immediate ACTION PLAN for a Greener Future During the heightened Sustainability Agenda, addressing the elephant in the room – the most neglected, the most complex to measure and yet the most crucial segment – Scope 3 emissions – holds the potential to radically transform business models and create real business value. While companies have been taking imperative steps in reducing Scope 1 & 2 emissions, reducing Scope 3 emissions requires organizations to tackle big challenges boldly, through the lens of value creation and with the involvement of the entire organization and every single stakeholder. Getting Scope 3 emissions reporting right can lead to transformative industry innovations and ensure great strides toward net-zero pathways, demonstrates this Cover Story.

6 | LEADERSHIP

34 | OPINION

Positioning India as an Emerging Maritime Power on the Global Stage

Destination Myanmar – A Strategic Ally for India-Japan-Australia Trilateral Partnership

“India’s global perception as a maritime hub is steadily evolving, buoyed by its expansive coastline, strategic geographical location, and growing capabilities within the maritime sector,” emphasizes Madhvendra Singh, Chief Executive Officer, Gujarat Maritime Cluster…

During the current times of geopolitical flux in this part of Eastern Hemisphere, Myanmar is one country that holds a special status in the geographical, geopolitical, and logistical fabric of ASEAN & the Indo-Pacific Region, writes Ravi Sinha, Ex-Director, GSI and Consultant Geologist.

30 | INTERVIEW

Accelerating Time-to-Market through an Agile Supply Chain “In fashion retail, Speed-to-Market is of essence whether it is B2B or B2C. Speed becomes a very critical parameter as it allows decision making closer to the season,” elaborates Satish Karunakaran, Director – Transformation, Pepe Jeans India Ltd. Editor: Prerna Lodaya DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition.

The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above.

No part of this publication can be reproduced or transmitted in any form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

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LEADERSHIP

Positioning India as an Emerging Maritime Power on the Global Stage “India’s global perception as a maritime hub is steadily evolving, buoyed by its expansive coastline, strategic geographical location, and growing capabilities within the maritime sector. Efforts such as the Sagarmala Programme, PM Gati Shakti programme and port modernization initiatives have bolstered this image, positioning India as an emerging maritime power on the global stage. However, to further elevate its standing and enhance its global ranking in the maritime domain, India can focus on strategic framework for the sector. Embracing digitalization and technological advancements across ports, enhancing logistical efficiency, and bolstering connectivity through inland waterways, enhancing marine financial services are crucial steps,” emphasizes Madhvendra Singh, Chief Executive Officer, Gujarat Maritime Cluster, during this exclusive interaction…

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LEADERSHIP How is the maritime sector taking shape in the country?

The challenges that are faced in boosting trade through maritime gateways are:

India's maritime sector has seen impressive growth due to strategic reforms. Revamping logistics has boosted economic productivity, with coastal shipping and national waterways seeing a twofold and fourfold increase in cargo traffic, respectively, in the past decade.

Major ports handled a record 795 million tons of cargo in FY23, marking a 10.4% growth. This success has augmented India's global trade position, evident in improved Logistics Performance Index ratings over nine years. Second globally in ship recycling, India's focus on shipbuilding and repair, along with maritime clusters, fosters collaboration among stakeholders. Commitment to carbon neutrality in ports through a netzero strategy aligns with sustainability goals. The launch of ship leasing services in GIFT IFSC is drawing global interest, and is demonstrating India’s ambition as a leading maritime player. These efforts modernize ports, improve connectivity, enact policy reforms, embrace digitalization, and address skill gaps, ensuring the industry’s competitiveness and sustainability. GMC, as the global shipping center of India, is leading the way by bringing together the Government, Industry, and the Academia for synergy, efficiency, and collective growth.

What are the challenges that you have faced in boosting trade through maritime gateways?

How can organizations like GMB enable trade facilitation for companies?

1. Geographical Constraints: India's geographical positioning outside major international supply chain routes creates logistical challenges, leading to increased transit times and higher transportation costs for maritime trade.

2. Regulatory Framework: The intricate and evolving regulatory landscape in maritime trade, encompassing customs, tariffs, and compliance norms, presents complexities that can impede the smooth flow of goods and services.

3. Ease of Doing Business: Administrative complexities, bureaucratic procedures, and inefficiencies within the trade ecosystem contribute to delays and inefficiencies, impacting the ease of conducting maritime trade operations.

trade routes and logistical inefficiencies, hampering the seamless movement of goods across the country.

6. Multi-Modal Logistics: Integrating diverse transport modes like rail, road, and waterways for efficient multimodal logistics encounters challenges due to disparate infrastructure standards, coordination complexities, and operational gaps, impacting trade fluidity and cost-effectiveness.

Gujarat Maritime Cluster (GMC) plays a pivotal role in facilitating trade through various strategic initiatives in coordination with Gujarat Maritime Board (GMB): 1. Infrastructure Development: GMB focuses on developing and upgrading port infrastructure, enhancing efficiency, and handling capacities.

This includes modernizing ports, expanding terminals, and improving connectivity with road and rail networks.

4. Infrastructure Deficiency: Inadequate port facilities, outdated infrastructure, and limited warehousing capabilities constrain the handling capacity and operational efficiency of maritime gateways, affecting trade volumes and turnaround times.

2. Policy and Regulatory Support: GMB works on streamlining regulatory processes, reducing bureaucratic hurdles, and implementing investor-friendly policies to attract investments and expedite trade-related procedures.

5. Connectivity Gaps: Insufficient connectivity between ports, hinterlands, and various modes of transportation results in suboptimal

3. Trade Promotion and Collaboration: GMC actively engages in trade promotion activities, fostering collaborations with

Under Vision 2047, pivotal initiatives such as the Next Generation Mega Port, International Container Trans-shipment port, island development, inland waterways, and multi-modal hubs are slated to significantly reduce the cost of doing business while curbing environmental degradation. Notably, India’s major ports have witnessed a doubling in capacity over the past decade, enabling swift turnaround times for large vessels, now less than 24 hours compared to the former 42 hours. supplychaintribe.com

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Shipping industry can work towards decarbonation by regressively adopting the renewable energy investment and deployment. Producing fuels like hydrogen, ammonia, and methanol demands substantial energy, and these fuels can only effectively mitigate emissions if the energy used for their production is also decarbonized.

Presently, only 30% of the world’s energy is renewable, indicating a need for rapid scaling up of renewable energy investment and deployment for the shipping industry to produce enough zeroemissions fuel to achieve net-zero targets by 2050. Initiatives like the Green Shipping Challenge, supported by the Ocean Panel, encourage commitments toward net-zero emissions, illustrating progress in this realm. international entities, organizing trade delegations, and participating in global trade forums to enhance Gujarat's maritime trade footprint.

How can corporates collaborate with you in enhancing maritime trade?

6. Sustainability Initiatives: GMC incorporates sustainable practices within port operations, emphasizing environmental conservation, energy efficiency, and reducing carbon footprint in line with global standards.

Corporates can significantly enhance maritime trade through strategic partnerships. Investments in port infrastructure, backing sustainable shipping initiatives, or joint ventures for innovative tech solutions are avenues for collaboration. Optimizing logistics, digitalizing processes, and innovating financing mechanisms also boost trade efficiency and sustainability. Aligning goals and leveraging expertise supports impactful collaborations benefiting both corporates and the maritime sector.

Notably, critical amendments to the SEZ act, IFSCA framework, and DG Shipping regulations have been facilitated. DG Shipping's forthcoming registered office within the cluster, alongside IR Class, promises to accommodate diverse stakeholders including shipowners, managers, brokers, financial institutions, legal entities, arbitration centers, academic institutions, and insurance companies, in one Cluster Complex within GIFT IFSC for better collaboration.

7. Skill Development and Training: GMC invests in skill development programs and training initiatives for port personnel, ensuring a competent workforce capable of handling modern maritime operations efficiently.

Please enlighten us on the recently unveiled ‘Amrit Kaal Vision 2047’, by Hon’ble Prime Minister, touted to be the blueprint for Indian maritime blue economy.

4. Technological Integration: Leveraging technology for trade facilitation, GMC adopts digital solutions for port operations, cargo tracking, and documentation, ensuring smoother and more transparent trade processes.

5. Logistics Enhancement: GMB focuses on improving logistics infrastructure, including warehousing facilities, inland container depots, and intermodal connectivity to streamline cargo movement and reduce transit times.

The 'Amrit Kaal Vision 2047,' introduced

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by the Hon'ble Prime Minister, maps out a transformative course for India's maritime blue economy, projecting a roadmap for the next 25 years with a distinguished target of achieving INR 80 trillion by 2047. This comprehensive blueprint delineates strategic initiatives aimed at augmenting port facilities, encouraging sustainable practices, and supporting global collaboration.

Embracing sustainable development principles, the vision seeks to capitalize on maritime sector opportunities, emphasizing economic growth while championing environmental conservation.

Under Vision 2047, pivotal initiatives such as the Next Generation Mega Port, International Container Transshipment port, island development, inland waterways, and multi-modal hubs are slated to significantly reduce the cost of doing business while curbing environmental degradation. Notably, India's major ports have witnessed a doubling in capacity over the past decade, enabling swift turnaround times for large vessels, now less than 24 hours compared to the former 42 hours.

The Hon'ble Prime Minister also highlighted India's trajectory to emerge as one of the top five shipbuilding nations within the next decade, with plans to establish shipbuilding and repair centers across multiple locations. Additionally, upcoming projects like the International

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Cruise Terminal in Mumbai, and modern cruise terminals in Visakhapatnam and Chennai, signify India's ambition to establish itself as a global hub for cruise tourism. These transformative endeavors outlined within the 'Amrit Kaal Vision 2047' mark a significant leap forward in India's maritime sector, promising economic prosperity while fostering sustainable and globally competitive maritime practices.

We would like to know Gujarat’s ambitious plans to transform non-major ports for a sustainable future.

The state's strategy revolves around several key initiatives focused on enhancing infrastructure, operational efficiency, and environmental sustainability at these ports. Investments are pouring into upgrading port infrastructure, modernizing terminals, expanding berths, and boosting cargohandling capacities to accommodate larger vessels. The goal is to leverage advanced technology and optimized operations to significantly enhance efficiency, thereby attracting more

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trade and investments. Environmental conservation is also a priority.

Gujarat is implementing eco-friendly practices, embracing green technologies, optimizing energy use, and taking measures to reduce pollution. Projects in dredging and sustainable coastal zone management aim to protect marine ecosystems and biodiversity. Strategic partnerships and collaborations, both domestically and internationally, are being fostered to bolster global connectivity and trade networks. These collaborations facilitate knowledge sharing, technological advancements, and the adoption of best practices, boosting the ports' competitiveness on the global stage. This proactive approach emphasizes Gujarat's commitment to sustainable growth and competitiveness in the maritime sector. By focusing on infrastructure development, operational efficiency, environmental sustainability, and strategic partnerships, Gujarat aims to unlock its ports' potential for a vibrant and sustainable future.

What are the key pillars for achieving resilience?

Resilience in the maritime sector relies on several fundamental pillars: 1. Infrastructure Development: Building robust port infrastructure capable of withstanding natural disasters, adapting to technological advancements, and accommodating changes in trade dynamics.

This includes maintaining and upgrading port facilities, terminals, transportation networks and providing the required financial services to ensure continuous operations even during disruptions.

2. Safety and Security Measures: Prioritizing safety protocols, emergency response plans, and security measures to safeguard assets, personnel, and vessels. This involves risk assessments, training programs, and the implementation of advanced security technologies.

3. Adaptive Regulatory Frameworks: Developing adaptable regulations and policies that respond to evolving challenges such as climate

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LEADERSHIP change, technological innovations, and geopolitical shifts. A flexible regulatory environment can enhance the sector's ability to navigate changes effectively.

to enhance efficiency, safety, and operational resilience. Investing in technologies such as AI, IoT, and blockchain can optimize operations and streamline logistics.

4. Environmental Sustainability: Embracing eco-friendly practices and technologies to minimize the sector's ecological footprint. This includes initiatives for emission reduction, waste management, and sustainable shipping practices to mitigate environmental impact.

6. Global Collaboration and Partnerships: Adopting international cooperation, information sharing, collaboration among maritime stakeholders, partnership for insurance facilities, chartering, leasing etc. Partnerships with other countries, potential industry players, and regulatory bodies can bolster the sector's ability to respond to global challenges collectively.

5. Technological Integration: Embracing digitalization, automation, and smart technologies

7. Workforce Training and Skill Development: Investing in continuous skill development programs to equip the maritime workforce with the expertise needed to navigate modern challenges. This includes training in technological advancements, safety protocols, marine law, marine insurance, and crisis management etc.

Could you please share information about your collaboration with ISRO in developing a domestic satellite network tailored for the maritime industry?

Gujarat Maritime Cluster is establishing

Roadmap to Achieve Integrated Logistics ▶

▶

▶

▶

▶

Infrastructure Development: Enhance transport infrastructure, including roads, railways, ports, and airports, ensuring seamless connectivity across different modes of transport. Develop multi-modal logistics parks and intermodal terminals to facilitate efficient cargo transfer between road, rail, air, and sea transport.

Technology Integration: Implement advanced technologies like IoT, AI, blockchain, and data analytics for real-time tracking, inventory management, and route optimization across various transport modes. Develop digital platforms to integrate different logistics networks and streamline communication among stakeholders.

Intermodal Connectivity: Promote intermodal connectivity by integrating different modes of transport through standardized processes and infrastructure.

Establish logistics hubs that facilitate easy transfer of goods between different transportation modes, optimizing the logistics chain.

Regulatory Reforms: Simplify and harmonize regulations and administrative procedures across different states and modes of transport to facilitate smooth movement of goods. Streamline customs procedures to reduce delays and enhance efficiency in multi-modal logistics operations.

Public-Private Partnerships (PPP): Foster collaborations between the government, private sector, and logistics service providers to invest in multi-modal infrastructure development, technology adoption, and

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skill development programs that cater to multi-modal logistics operations. ▶

Skill Development: Invest in training and skill development programs that specifically cater to multimodal logistics operations. Empower the workforce with the necessary skills to efficiently handle and manage the complexities of multi-modal transportation.

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Sustainability Initiatives: Integrate eco-friendly practices into multi-modal logistics operations, promoting the use of alternative fuels, optimizing routes to reduce carbon emissions across different transportation modes, and embracing green logistics practices.

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Data-driven Decision Making: Utilize data analytics and predictive modeling to optimize supply chain processes, inventory management, and demand forecasting across multi-modal logistics, enhancing overall efficiency and resource utilization.

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Standardization and Quality Control: Establish standardized norms and quality control measures to ensure consistency and reliability across multi-modal logistics operations.

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Monitoring and Evaluation: Implement mechanisms for continuous monitoring, evaluation, and feedback to identify bottlenecks, measure performance, and adapt strategies for continual improvement across multi-modal logistics networks.

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India is in a dire need for establishment of financing facilities.

Many major Indian maritime companies have been compelled to rely on financial facilities from other countries to meet their marine financial needs, leading to substantial untapped potential within India’s maritime financing landscape. This reliance on external financial resources not only limits the autonomy of Indian maritime enterprises but also hampers the sector’s growth and development. By establishing indigenous financing facilities tailored to the specific needs of the maritime sector, India can unlock significant potential for growth, innovation, and sustainability. an advanced Maritime Research, Startup, and Innovation Center (RSIC) in its GIFT City complex. One of the startups being promoted is for indigenous launch on demand satellite network for real-time tracking of assets at sea and on land using SAR and AIS technology. The startup is founded by former ISRO employees and has seen unprecedented success where they also got accelerated at SpaceTech, a NASA funded organisation in USA. This collaboration could revolutionize maritime operations by providing realtime tracking, precise monitoring, and optimized routing for vessels, enhancing safety, efficiency, and navigation within the maritime industry. Such a partnership underscores the commitment towards leveraging cutting-edge technology to transform and advance maritime practices.

How can shipping industry work towards decarbonization? Is India doing any significant work on this front?

Shipping industry can work towards the decarbonation by regressively adopting the renewable energy investment and deployment. Producing fuels like hydrogen, ammonia, and methanol demands substantial energy, and these fuels can only effectively mitigate emissions if the energy used for their production is also decarbonized.

Presently, only 30% of the world's energy is renewable, indicating a need

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for rapid scaling up of renewable energy investment and deployment for the shipping industry to produce enough zero-emissions fuel to achieve net-zero targets by 2050. Initiatives like the Green Shipping Challenge, supported by the Ocean Panel, encourage commitments toward net-zero emissions, illustrating progress in this realm. National governments can play a pivotal role by implementing policy measures to incentivize and expedite the transition.

Additionally, in my view, there is a critical need for a universal framework for the development of maritime fuel of the future, given the international nature of the industry so as to avoid future mismatch in demand and supply chains.

investing in R&D for alternative fuels and innovative propulsion systems to explore viable options for reducing emissions.

IV. Policy Frameworks: The government is working on policies and frameworks to promote green shipping practices and incentivize the adoption of cleaner technologies.

While India is making strides, there's ongoing work required to achieve substantial decarbonization.

Collaboration among stakeholders, technology advancements, and continued policy support will be crucial for India's shipping industry to achieve significant progress in decarbonization efforts.

India has initiated several measures toward decarbonization in the shipping industry:

How is the maritime financing segment evolving currently?

What are the steps needed to boost the same?

I. Green Port Initiatives: Ports in India are implementing green initiatives, focusing on shore power facilities, renewable energy integration, and eco-friendly port operations to reduce emissions.

The maritime financing segment in India is undergoing significant evolution, albeit with some unique challenges and opportunities:

II. Fuel Transition: The country is exploring the use of LNG as a marine fuel, with pilot projects and plans for LNG bunkering facilities at ports.

III. Research and Development: India is

I.

Digital Transformation: India’s maritime financing is gradually embracing digitalization, enhancing efficiency in processes like loan origination, documentation, risk assessment, and mortgage registrations. Digital platforms are starting to streamline financing

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procedures, although the transition is ongoing.

II. Government Initiatives: The Indian Government has introduced initiatives such as the Sagarmala Programme to modernize ports and improve connectivity, PM Gati Shakti programme to improve the logistics facilities of the nation.

While these initiatives aren't directly financing mechanisms, they create an environment conducive to attracting investment.

III. Sustainable Financing: There's a growing global trend towards sustainable finance, including in India. Green financing and ESGaligned projects are gaining attention, although the integration of these principles into maritime financing is still in its early stages.

India is in a dire need for establishment of financing facilities.

Many major Indian maritime companies have been compelled to rely on financial

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facilities from other countries to meet their marine financial needs, leading to substantial untapped potential within India's maritime financing landscape.

This reliance on external financial resources not only limits the autonomy of Indian maritime enterprises but also hampers the sector's growth and development. By establishing indigenous financing facilities tailored to the specific needs of the maritime sector, India can unlock significant potential for growth, innovation, and sustainability. India can boost its financial segment by: I. Encouraging Sustainable Financing: Encouraging and incentivizing green financing or ESGaligned projects within the maritime sector can attract more investors.

This can be achieved through policy measures, tax incentives, or preferential rates for sustainable initiatives.

II. Public-Private Partnerships (PPPs): Facilitating PPPs can be instrumental in boosting maritime financing. The

government can create frameworks that attract private investment, potentially through revenue-sharing models or offering guarantees to mitigate risks.

III. Digitalization and FinTech Integration: Furthering the integration of digital technologies and FinTech solutions can streamline maritime financing processes, reduce operational costs, and enhance transparency, thus attracting more investors.

IV. Risk Mitigation Mechanisms: Developing and promoting risk mitigation instruments specific to maritime financing, such as maritime insurance products or credit enhancement mechanisms, can lower perceived risks for investors.

V. Infrastructure Development: Continuously improving port infrastructure and connectivity not only attracts investment in maritime financing directly but also indirectly

LEADERSHIP fosters a conducive environment for investors.

VI. Standardization and Regulatory Frameworks: Establishing standardized practices and regulations in maritime financing can instill confidence among investors and reduce uncertainties, development of a more conducive investment environment.

How is India being perceived globally as maritime hub? What are the strategies that need to be taken to step up its global ranking?

India's global perception as a maritime hub is steadily evolving, buoyed by its expansive coastline, strategic geographical location, and growing capabilities within the maritime sector. Efforts such as the Sagarmala Programme, PM Gati Shakti programme and port modernization initiatives have bolstered this image, positioning India as an emerging maritime power on the global stage. However, to further elevate its standing and enhance its global ranking in the maritime domain, India can focus on strategic framework for the sector. Embracing digitalization and technological advancements across ports, enhancing logistical efficiency, and bolstering connectivity through inland waterways, enhancing marine financial services are crucial steps. Investing in skill development for the maritime workforce, for creating a sustainable regulatory environment to attract foreign investment and promoting sustainable practices within the sector are key strategies that can catapult India's global perception as a leading maritime hub, securing its place among the world's foremost maritime nations.

The government has been laying immense thrust on shipbuilding and repair sectors. Please share the initiatives taken so far and what lies ahead?

India's attention on the shipbuilding and repair sector has been robust, driven by initiatives aimed at elevating its capabilities and competitiveness globally.

Initiatives such as the Shipbuilding Financial Assistance Policy have provided

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crucial financial support and subsidies to domestic shipyards, fostering indigenous shipbuilding. Extending the 'Make in India' initiative to this sector has further incentivized local production, reducing dependency on imports and boosting competitiveness.

Efforts have also centered on infrastructure upgrades within shipyards, focusing on modernization and capacity expansion to tackle larger projects. Additionally, skill development programs have been pivotal, ensuring a proficient workforce equipped with cutting-edge shipbuilding technologies.

India's trajectory involves deeper integration of advanced technologies like AI, robotics, and automation to amplify productivity and competitiveness. There's a concerted push towards promoting shipbuilding for export markets by elevating quality standards and enabling global collaborations.

Continued investments in research and development remain essential, stimulating innovation to enhance efficiency and sustainability within the sector. Sustained policy support, including incentives and schemes, will be crucial for maintaining growth momentum. India's vision for shipbuilding and repair is pivotal in its aspiration to become a dominant force in global maritime activities, positioning itself as a formidable player in the international shipbuilding landscape.

What are the government’s enabling policies to harness supply chain efficiency?

The Ministry of Shipping, Ports, and Waterways (MoPSW) has implemented pivotal initiatives to strengthen the coastal shipping, notably by reinforcing public-private partnerships (PPPs).

Approaching the milestone of granting infrastructure status to coastal shipping, the government is set to extend concessions to private entities, including affordable bank loans and viability gap funding. Recognizing environmental advantages within the port-led logistics system, both private enterprises and the government align efforts to broaden coastal shipping projects while prioritizing carbon emission reduction.

This strategic move aligns with the government's vision of fostering a robust framework for PPPs by FY24, aiming to

optimize India's multimodal connectivity and hubs to simplify coastal shipping operations. i. Multi-modal logistics parks (MMLPs) emerged as integral to this vision, promising heightened efficiency, reduced warehousing costs, and a diminished carbon footprint.

For businesses, especially MSMEs, MMLPs hold substantial promise by offering multifaceted operations and seamless access to both domestic and international supply chains. ii. The PM Gati Shakti initiative underlines the intrinsic value of integrated and seamless connectivity for the movement of goods, services, and people. iii. The Sagarmala Programme, integrating coastal shipping with road and rail networks, focuses on last-mile connectivity infrastructure development, notably road and rail links to ports and the establishment of logistics parks, complemented by private sector investments in double stack train services. iv. The National Waterways Act 2016, concerted efforts aim to enhance trade and transport across designated waterways, aligning with major infrastructure initiatives to boost India's trade competitiveness. v. The success of the Jal Marg Vikas Project (JMVP) under the guidance of the Inland Waterways Authority of India (IWAI), supported by the World Bank, underscores the endeavor's success in boosting regional economies, employment, and reducing logistics costs associated with cargo transportation. vi. The recently introduced Harit Sagar policy guidelines, a progressive extension of the Maritime Vision Policy 2030, delineate a sustainability roadmap aligned with India's carbon emission goals. Mandating comprehensive action plans by major ports, they emphasize waste reduction and measurable emissions reduction strategies.

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Up, Close & Personal

LEADERSHIP

What’s your leadership style?

In my leadership journey, drawing from both military and corporate experiences, I've learned that while the military demands commanding loyalty and ‘leading from the front’, corporate leadership thrives on consensus and collective involvement, and how I put it is ‘Leading from Behind’. Upholding transparency, integrity, and an environment free of corruption has been pivotal in my approach. I firmly believe that nurturing a sense of belonging and significance among team members goes beyond mere words; it's about creating an atmosphere where each individual feels valued, inspired, and empowered to contribute meaningfully toward a shared vision. I always say that it’s not the words people remember, it is the feeling that is everlasting.

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What has been your passion project till date?

How do you unwind yourself after a tough day @ work?

The Gujarat Maritime Cluster project has been my passion because it represents an opportunity to catalyze substantial positive change. This endeavor isn't just about infrastructure development; it's about transforming an entire region into a global hub for maritime excellence. It's a chance to bring together diverse stakeholders, from businesses to innovators, and create a collaborative ecosystem that drives growth, innovation, and sustainability. The potential impact—both economically and in terms of setting new standards for maritime operations, is immense and being a part of this transformative journey is incredibly fulfilling.

After a tough day at work, I find solace and rejuvenation in engaging with various sports, be it cricket, soccer, or tennis, each offering a unique avenue for physical activity and mental relaxation.

Alternatively, a swim provides not just physical refreshment but also a serene atmosphere conducive to unwinding.

Yet, amidst these activities, what truly rejuvenates me is the warmth of my family conversations. The bond shared, the laughter exchanged—those moments alleviate stress like nothing else. This blend of physical activity and heartfelt connections forms a sanctuary that replenishes my spirit, allowing me to face each day afresh, despite challenges.

LEADERSHIP

How do you manage the pressure and the challenge that comes with the job?

Effectively managing pressure and challenges involves recognizing their inevitability within the professional landscape. I perceive challenges not as hindrances but as catalysts for growth and improvement. Among the most demanding aspects for a CEO is navigating the diverse perspectives of individuals within the team. My staunch belief lies in a leadership approach centered on guiding from behind, aiming to unify the team cohesively. This philosophy underscores my conviction that collective effort and teamwork are pivotal in achieving success, allowing for the harmonization of diverse viewpoints towards a common goal.

What’s your Success Mantra?

My Success mantra is…

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Persistence in Idea Generation and Collaboration: I believe in consistently pursuing innovative ideas and fostering collaboration among stakeholders. Creating a shared understanding lays the foundation for collective growth and success.

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Staying Ahead of the Curve: I prioritize seeking out creative and innovative solutions, maintaining a focus on productivity, and ensuring professional fulfillment for my team.

This approach enables us to anticipate trends and remain at the forefront of our industry.

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Emphasis on Collective Effort and Transparency: I value the collective effort of a team and the importance of transparency in our work. This ethos ensures that every team member comprehends the significance of their contributions, fostering a culture of trust and shared responsibility.

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Being Present and Building Relationships: Recognizing the vital role of relationships in business, I allocate a significant portion of my time—approximately 80%—to nurturing international partnerships and fostering creative synergies.

I believe this investment yields substantial dividends in driving the company's success.

One tip to Survive & Sustain in the unforeseen situations / your advice to Next Gen Supply Chain professionals…

Adaptability is the greatest asset in navigating unforeseen circumstances within the supply chain. Embrace a mindset that embraces flexibility, innovation, and proactive problemsolving. Stay informed about emerging technologies and industry trends, cultivate diverse skill sets, and build resilient networks. Remember, agility and foresight are key; anticipate change, and be ready to pivot swiftly when challenges arise.

A book that has helped you at work…

The book that helped me is Managing Oneself by Peter Drucker. This book is a transformative read that has greatly influenced and assisted me in my personal and professional growth.

Drucker's profound insights into selfawareness, identifying strengths, and harnessing one's abilities to excel have been instrumental. This book's emphasis on continuous learning, adapting to change, and taking ownership of one's career path has been invaluable, shaping my approach to work and life in a way that advances self-improvement and effectiveness.

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MISSION Scope 3 GHG Emissions DEVISING AN IMMEDIATE ACTION PLAN FOR A GREENER FUTURE 16 CELERITY January 2024

COVER STORY

Though at an infancy and at slow pace, significant momentum has been building up towards achieving ‘Net Zero’ targets globally. The recently concluded COP28 Summit proved to be THE Defining Moment once again for the global community to collaborate on bold actions that can accelerate progress measured in months, not decades. Amid this heightened Sustainability Agenda, addressing the elephant in the room – the most neglected, the most complex to measure and yet the most crucial segment – Scope 3 emissions – holds the potential to radically transform business models and create real business value. While companies have been taking imperative steps in reducing Scope 1 & 2 emissions, reducing Scope 3 emissions requires organizations to tackle big challenges boldly, through the lens of value creation and with the involvement of the entire organization and every single stakeholder. Getting Scope 3 emissions reporting right can lead to transformative industry innovations and ensure great strides toward net-zero pathways, demonstrates this Cover Story.

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T

HE global climate target of 1.5°C is slipping out of reach.

It now calls for a 7% annual emissions reduction, more than the climate reduction impact from Covid-19, and against the current trend of a 1.5% annual increase, as highlighted in the joint World Economic Forum and BCG white paper ‘The State of Climate Action’. Now, more than ever, it is time for corporates to step up near-term emission mitigation to tackle the climate action gap, as every fraction of a degree matters.

An interesting insight from McKinsey rightly points out that Scopes 1 and 2 emissions tend to be top of mind for organizations looking to reduce their carbon footprints. These cover company-owned and -controlled resources and indirect emissions from energy generation. Yet taking a strategic approach to addressing Scope 3 emissions (indirect emissions that arise across the value chain) often represents the bigger challenge.

The WEF joint study also highlighted that Scope 3 upstream emissions are an

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emission hotspot for many companies and on average ~11.4 times greater than operational emissions. Yet, these emissions are notoriously difficult to tackle as they expand beyond a company’s direct CO2 emissions, as one company alone can have more than thousands of suppliers. To tackle scope 3 emissions, upstream collaboration with suppliers – at scale – is needed.

Across industries, supply chain decarbonization targets have seen a rapid rise in recent years. However, supply chain decarbonization is challenging. In a recent survey of 230 organizations, carried out by SBTi and BCG, 50% of respondents self-reported being “off track” to deliver on their scope 3 target despite 40% of all respondents indicating that executives are directly accountable for the decarbonization work.

To follow through on the supply chain decarbonization targets, corporations must come together with suppliers and collaborate at scale, as emissions often sit upstream in their value chains.

To succeed, corporations and their procurement teams need to apply a

systematic and structured approach to supplier engagement following three consecutive steps:

STEP 1: IDENTIFY AND PRIORITIZE SUPPLIERS First, corporations must understand the emission profiles of its supplier base to identify and prioritize suppliers with the biggest impact on scope 3 upstream emissions. In addition, supplier emissions should be analysed at a category level, as different categories will face different decarbonization challenges and must be addressed with tailored levers. The category level analysis enables a like-forlike comparison of suppliers based on their carbon footprint.

STEP 2: LAUNCH THE SUPPLIER ASK The second step is to define the supplier engagement journey and launch the supplier ask to kick-start their decarbonization work. Suppliers will have different sustainability maturity levels and therefore it is important to envision the supply chain decarbonization as a

COVER STORY Prabodha Acharya, Chief Sustainability Officer, JSW Group Sustainable supply chain practices in India involve responsible sourcing, ethical labor practices, and environmental stewardship. Collaborative initiatives with logistics partners focus on reducing emissions, waste, and promoting circular economy principles. Transparency, traceability, and community engagement are integral to current best practices. CSOs and C-suite leaders collaborate by aligning ESG goals with business strategy. Regular communication, data-driven insights, and cross-functional teams foster integration. They address sustainability in product design, supply chain, and stakeholder engagement. Key elements include cross-departmental KPIs, continuous improvement frameworks, and fostering a sustainability culture.

journey towards a “North Star” along which suppliers evolve, rather than an immediately achievable target. Once the “North Star” is set, progress towards it must be reversed engineered and communicated to the supplier in the supplier ask.

STEP 3: ENGAGE AND SUPPORT SUPPLIERS As the final and most important step, corporates must align supplier incentives, develop support programmes, and monitor progress towards the “North Star”. To facilitate true change, continuous supplier engagement and support are paramount. Supply chain decarbonization is not straightforward and cannot be done using siloed thinking. Yet, it is feasible through a structured approach, building on supplier collaboration at scale, with successful companies reaping the benefits of significant emission reductions and closer supplier relations.

COMPANIES LEADING THE CHANGE As visionary as it may sound, more than a century before the conversation around climate change became mainstream, Jamsetji Tata knew that sustainability was key to business. His vision of sustainability was documented in his letters related to the starting of new industries. Jamsetji was also one of the early proponents of using clean energy to power industry. As early as 1875 he contemplated harnessing the power of water to generate clean, renewable

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energy that would be available to “run the tramways of Bombay, to supply as much electric lighting as may be required in Bombay, and to have a balance over for the supply of power to a few cotton mills, and sufficient for small local industries.”

The Founder’s vision has served as the north star of the generations that followed. JRD Tata’s famous attention to detail extended even to the green cover at Tata companies and institutes.

Carrying the legacy ahead, “Driving momentum towards a sustainable future is a big priority… I think sustainability is the biggest challenge for humankind for the next decades to come, and we definitely need to address this,” asserted N Chandrasekaran, Chairman, Tata Sons.

Standing firm on this foundation, the Tata group is now poised to embrace the future of the planet with Aalingana.

It has been launched with sustainability commitments from seven companies — Tata Steel, Tata Power, Tata Motors, Jaguar Land Rover, Tata Chemicals, Tata Consultancy Services and Tata Consumer Products. In FY20, these companies made up 99.5% of the group’s Scope 1 and Scope 2 emissions, 94% of freshwater use and 99.4% of solid waste.

Collaboratively developed with group companies, Aalingana is focused on three interconnected pillars: driving the decarbonisation of its businesses and value chain; applying a systemic, circular economy approach to reduce resource-use and waste; and preserving and restoring the natural environment.

It commits to embedding sustainability right into their business strategy.

“With Aalingana, we are building a ‘One Tata’ platform to maximise the impact we can have on markets, communities, and the value-chain,” stated Roopa Purushothaman, Chief Economist and Head of Policy Advocacy, Tata Sons.

This green transition, she believes, is the next big opportunity, akin to what digital has been in recent decades: “Sectors like automotive, financial services and energy are being fundamentally transformed.

At the same time, there are risks from not embracing change fast enough.

Fundamental business sense, a longterm focus, government incentives, and customer as well as employee demand for change are all enabling a structural shift.”

In its pursuit to reduce carbon emissions, Robert Metzke, Global Head of Sustainability, stressed as to how Philips has continued to make steps to embed sustainability and climate action in healthcare delivery.

With its Scope 1 (internal) and Scope 2 (energy sourcing) emissions firmly under control, the company has turned its sights on partnering to reduce its Scope 3 emissions – those beyond its direct control – to ensure end-to-end value chain sustainability. In early 2023, Philips became the first health technology company to have its entire value-chain CO₂ emissions reduction targets approved by the Science Based Targets initiative (SBTi). In healthcare, the main share of carbon emissions (71%) are indirect emissions caused by the production and transportation of goods and services that hospitals purchase, such as medicines, food, equipment,

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COVER STORY Anuna Banerjee, Deputy Manager – Corporate Sustainability, JSW Group Organizations aiming to accurately manage/control Scope 3 emissions need an integrated ecosystem that includes robust data-sharing platforms, supply chain transparency tools, and collaborative frameworks. Infrastructure should support real-time tracking of external activities, involve suppliers in emission reporting, and utilize technologies like IoT and blockchain for reliable data. As we progress, the landscape of Scope 3 emissions reporting is evolving towards standardization, increased transparency, and technology-driven solutions. Continuous improvement in data accuracy and real-time tracking will enhance the reliability of Scope 3 emissions reporting.

clothing, and waste treatment. Reducing these is a big opportunity. The good news is that suppliers are also focused on this topic, where increasingly a combination of legislation, transparency, reporting pressure, and employees who prefer to work for sustainable companies is driving change. The critical part is the capability to act. Philips builds capabilities with its customer and suppliers, providing very practical help.

In line with its purpose to pioneer sustainable aerospace for a safe and united world and with its ambition to play a leading role in the decarbonisation of the aviation sector, Airbus extended its greenhouse gas reporting to include CO2 emissions produced by its commercial aircraft during their operating phase – also known as “Scope 3 - Use of sold products” emissions as part of the Greenhouse Gas Protocol.

By taking this significant step, Airbus became the first aircraft manufacturer to report on the emissions generated by its products during their entire lifecycle.

Airbus has committed to reducing by 46% the greenhouse gas emissions intensity generated by its commercial aircraft in service (Scope 3 - Use of Sold Product) by 2035. This near-term target has been validated by the Science Based Targets initiative (SBTi) in early 2023.

Climate change is affecting water availability and accelerating biodiversity loss, with many communities already suffering. Solutions to the climate crisis must factor in human rights and benefit everyone by creating a more equitable, low-carbon economy.

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On this note, Nestlé officials highlighted, “Only 5% of our total greenhouse gases (GHGs) come from our own operations. In contrast, 95% come from our value chain, from activities like farming or shipping. That’s why we’re working with partners throughout our supply chain and transforming our manufacturing and packaging activities to help achieve absolute reductions in GHG emissions. As a result of scaling up GHG reduction projects in our operations and supply chain, we have put peak carbon behind us, reducing absolute GHG emissions year-on-year even as our company continues to grow.”

“To achieve net zero emissions, we need to reduce emissions throughout our business and supply chains. Our progress towards sourcing 50% of our key ingredients through regenerative agriculture methods by 2030 will contribute significantly to our emissions reductions, as will investing in sustainable logistics, packaging, and manufacturing activities. Our Net Zero Roadmap also includes carbon removals. As a company with a large land ‘footprint’, natural climate solutions will form a significant part of our decarbonization pathway, removing carbon from the atmosphere from within our supply chain, the official releases stated.

Hindustan Unilever Limited (HUL) is on track to achieve Unilever’s global target of cutting greenhouse gas emissions from its operations (known as scope 1 and 2 emissions) by 100% by 2030 (against a 2015 baseline). However, these are a small proportion of its overall

emissions. The bigger part – the so-called scope 3 emissions – are those associated with the production of the raw materials and ingredients the company purchases from its suppliers.

These emissions are much more difficult to tackle because they require progress of entire, often global, supply chains. “As such, to reach our net zero target, we must work with our suppliers to help them take action within their own operations and value chains,” the official highlighted.

For HUL, almost 60% of its greenhouse gas (GHG) impact comes from the raw materials and ingredients the company buys to make products.

In its Home Care business, which relies heavily on chemicals, this is closer to 80%. That’s why, with a commitment to achieve net zero emissions across our value chain by 2039, it is working with supplier partners to radically reduce our GHG impact across the value chain.

HUL is collaborating with leading chemical companies TFL and Fertiglobe (the strategic partnership between OCI Global and ADNOC), to pilot the production of near-zero emissions synthetic soda ash – a key ingredient in laundry powder. There are three elements to this pilot. The soda ash is made with some of the first green ammonia produced using green hydrogen from renewable energy. The boilers used to make the soda ash have been shifted from coal to renewable energy (cashew kernels). And the CO2 produced by the boilers is captured and used in the manufacturing process, replacing CO2

COVER STORY that would otherwise have to be procured.

The combination of these three elements results in the production of soda ash with a near-zero GHG footprint. The pilot will help make enough ‘near-zero’ soda ash for about 6,000 tonnes of laundry powder.

Beyond the pilot, the company has also signed an agreement with TFL to supply us with low GHG soda ash made with renewable energy and CO2 capture and use, reducing GHG emissions by more than 60%. “The pilot addresses greenhouse gas emissions at every stage of the product’s (soda ash) manufacture and we believe it is a world first,” says Deepak Subramanian, Home Care General Manager, Unilever, South Asia.

“Doing this while delighting consumers with great, affordable products is at the heart of our strategy.”

This collaboration between Unilever and the chemicals sector is an example of how we’re bringing different parties in our supply chain together to achieve our net zero ambition while, at the same time, delivering benefits for our partners.

In 2022, PepsiCo’s total GHG emissions across Scopes 1, 2, and 3 were approximately 61 million metric tons, which represents a 4% increase from its 2015 baseline, with Scope 3 emissions being approx. 57 million metric tons, up approximately 7%. Much of its carbon footprint (93%) comes from the value chain, or Scope 3 emissions, particularly these three categories: agriculture (34%), packaging (26%) and third-party transportation and distribution (18%).

PepsiCo’s efforts to reduce value

chain emissions focus on three largest emissions drivers: Agriculture, Packaging and third-party transportation and distribution. Combined, these three sources accounted for 78% of our global GHG emissions in 2022, and meeting net-zero goal requires that the company moves quickly and significantly on these in collaboration with its upstream and downstream partners from whom these emissions originate.

“Our agriculture climate strategy goes together with our sustainable agriculture goals. Our preferred practices are those that lead to better yields, improved soil health, lower deforestation and productivity for farmers and lead to GHG emission reductions. We are therefore focusing on sustainably sourcing key ingredients like palm oil and cane sugar, as well as collaborating with suppliers, peers, and other stakeholders to implement and influence better on-farm practices. Additionally, we are engaging our key agricultural suppliers to increase the use of renewable electricity and fuels to reduce the GHG footprint in agricultural processing,” highlighted the company statement.

Packaging is another aspect of the company’s pep+ ambition with a clear link to climate goals. To reduce packaging impact, the company is focusing on incorporating more recycled content and striving to make packaging recyclable, compostable, biodegradable, or reusable. “We are also reducing the weight of packaging material, introducing alternative material, and exploring alternative business models

that eliminate or significantly reduce packaging. We have established a new goal that 20% of all beverage’s servings will be sold through reusable models by 2030. Furthermore, we are engaging our key packaging suppliers to accelerate the adoption of clean energy solutions to reduce the GHG emissions of packaging materials,” mentioned the company report.

Within third-party transportation and distribution, the company aims to improve the efficiency and carbon intensity of the non-PepsiCo fleet that delivers products to customers.

By mapping and quantifying baseline emissions from third-party carriers and engaging with carriers, the U.S. EPA’s Smartway program and industry alliances like the Smart Freight Buyers Alliance (SFBA), we are identifying opportunities for improvement within our carrier base. These include working with our carriers to adopt efficiency measures, use sustainable biofuels and transition to zero-emissions vehicles such as electric vans and trucks.

Underpinning these focus areas is supplier engagement. “We continue to make progress in building internal alignment and a framework for engaging with our upstream suppliers. A portion of our Scope 3 emissions lie within our direct tier 1 suppliers’ operations. Within these, improvements in operational efficiencies and use of renewable energy are expected to lead to a reduction in our Scope 3 emissions. We also partner closely with our tier 1 suppliers to address the further upstream emissions, whether on-

Sanjay Desai, VP / GM, ASIA, Supply Technologies, APAC The industrial sector has a huge role to play in achieving net zero goal by controlling their Scope 3 emissions. It is high time that these industrial sectors adopt better practices of GHG reduction like, replace fossil-burning power with renewable energy or reducing consumption of emissions-intensive products or inputs, avoiding damage to agricultural land or ecological balance. Organizations need to monitor their shipments and vehicles in real-time by adopting mobile sensors and tracking devices. Such techniques will allow them to optimize their routes and make better decisions like consolidating their shipments and frequencies. This, in turn, will help reduce the amount of GHG emissions produced by their supply chains. To move towards net-zero energy goals, the 3PL service providers must incorporate low carbon technologies to mitigate and/or remove GHG emissions in their transportation network. supplychaintribe.com

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COVER STORY Chandranath Dey, Head – Operations, Business Development, L&I Consulting & PAGI, Logistics & Industrial, JLL, India The challenges of decarbonization for manufacturers are technical, economic, financial, and social. The strategy that results from this must go hand in hand with the company’s development, in addition to its digital transition, and be part of the decarbonized trajectory of its territory. In industry, decarbonation is a necessity for all companies to improve their competitiveness and meet environmental challenges. To meet the targets set, the industry sector must generate 20% energy efficiency gains between 2010 and 2030, per ton produced.

farm or in raw material extraction. Such collaborations are expected to lead to a reduction in Scope 3 emissions not only for PepsiCo, but also for our suppliers,” added the company report.

In addition to these focus areas, the company is also trying to address emissions through additional initiatives: ≥ Engaging third-party manufacturers to bring them along on Pepiso’s climate action journey. The company’s third-party manufacturers include franchise bottlers, non-controlled joint ventures, co-manufacturers and co-packers. Improving their operational efficiency will also have an impact on PepsiCo’s Scope 3 emissions. ≥ Continuing Sustainable from the Start, an environmental sustainability impact assessment program for its product development process. The program includes a toolkit and business processes that help to build the capability within our various functions involved in product innovation to understand the environmental and climate impacts of product design and to make sustainable choices. In doing so, they are supporting our strategic, longterm vision to decouple our business from fossil fuels. To learn more, see Sustainable product design.

As businesses and their supply chains embrace their vital role, Scope 3 emissions – often representing the vast majority of a company’s total carbon footprint – will be a key focus area.

Businesses that prioritise the tracking, data quality and reporting of Scope 3 emissions stand to ensure compliance against the new requirements,

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improve transparency, credibility, and demonstrate a commitment to businessdriven sustainability and climate risk mitigation to stakeholders and investors, asserted a study by LRQA. As an interesting PwC study aptly mentioned, “Forward-looking organizations will read the writing on the wall and start developing the capabilities and expertise they’ll need to measure— and manage—their Scope 3 emissions.

By adopting an incremental approach to data collection, organisations can begin making meaningful progress now— before it’s too late.”

This secondary research intrigued us to get additional insights from industry leaders and consultants to offer our readers a nuanced approach to reduce their Scope 3 emissions. Here’s a lowdown or a step-by-step approach to achieve the most crucial ‘Net Zero’ agenda…

Measuring scope 3 emissions is very difficult since most activities happen outside of an organization. What kind of ecosystem or infrastructure does an organization require to accurately manage / control scope 3 emissions?

Prabodha Acharya, Chief Sustainability Officer, JSW Group & Anuna Banerjee, Deputy Manager – Corporate Sustainability, JSW Group: Organizations aiming to accurately manage/control Scope 3 emissions need an integrated ecosystem that includes robust data-sharing platforms, supply chain transparency tools, and collaborative frameworks.

Infrastructure should support realtime tracking of external activities,

involve suppliers in emission reporting, and utilize technologies like IoT and blockchain for reliable data.

Sanjay Desai, VP / GM, ASIA, Supply Technologies, APAC: Very pertinent question. Please note that the purpose of measuring Scope 3 emissions is to trigger actions and resolutions – not create paperwork or lip service exercise. To get a better handle & control over scope 3 emissions, an organization can resort to execute these top measures. These 5 are NOT the only ones but these are accepted norms by most organizations: Formalize baseline and targets for scope 3 elements: The first and foremost common practice in carbon accounting is to establish 1) Baseline score, 2) Set scientifically calculated targets (SBTs – or goals) to reduce emissions compared with the baseline data, i.e., let’s say our organization generated 1,000 tons of CO2e in 2023, and of those 50% are Scope 3 emissions. Let us also assume that our leadership has set a goal to reduce our carbon footprint by 50% by the year 2025 using 2023 as the baseline year. Since we know our carbon footprint and emissions in 2023, we now need to reduce our emissions and decarbonize to 500 tons of CO2e in our goal year. Once your organization has set its Scope 3 target, implement the project initiatives, start collecting proper data, review resource investments, and integrate all these into routine work processes for desired outcomes.

Prioritize material sources: Use materiality assessment analysis to identify your organization’s largest exposure for scope

COVER STORY 3 categories (Products, Services and Vendors).

Engage your vendors and suppliers: For Scope 3 categories like purchased goods and services and capital goods, use your purchased data. Work directly with your vendors to collect data and integrate the data in your own Carbon accounting toolsets to analyze the exposure and resulting factors. Make use of available technology tools or automated applications to put this analysis together instead of resorting to manual calculations.

Set up scheduled surveys: There are many organizations who develop focused applications (Tech Tool sets). The applications help to conduct targeted surveys with your suppliers, network partners, employees, and agencies to collect pertinent exposures like (commuting habits, sustainable practices, resources consumptions, carbon accounting practices and integrate these data elements into your own analysis and measurements !!

Use weight as a measurement for waste emissions: Emissions from waste generated in operations (recycling, wasteto-energy processing, and anaerobic process) should be calculated using pounds, kilograms, of tons of weight, or a proxy assumption so that the results are in line with common accounting as

well as standard global measurement criteria. This will help organizations to benchmark the data and compare on a larger scale.

feedback loop that triggers adaptation and guides change. And it facilitates engagement with ecosystem partners on sustainability action.

Make use of technological platforms and smart data integration tools: Today technology and data analysis tools are available in the market at large and these are also becoming cheaper. Select the most relevant tool sets which can support the needs of your organization.

Try and expand your scope of finding data sources that can be input into your carbon calculations on a regular basis by leveraging these tools.

How important is the role of emerging technologies in positioning organizations to achieve their sustainable goals in the next 2-3 years? Can you elaborate a couple of Key Technologies that would be facilitating the change?

Sandeep Chatterjee, Supply Chain and Sustainability Leader, IBM Consulting: Leading organizations are actively collaborating with their partners on ESG. Shared data governance and common definitions let these companies’ source ESG data more successfully from their partners. In addition, as many as 60% of leading organizations (According to IBM Research) have integrated their ESG efforts with their partner ecosystem. To follow in the footsteps of ESG leaders, organizations must stop solely extracting and channelling data for reporting purposes and start viewing ESG data as part of a platform-enabled loop. This circular approach provides the foundation for continued performance improvement and transformation. It makes ESG data and metrics part of the

Prabodha Acharya & Anuna Banerjee: Emerging technologies are pivotal for organizations’ sustainability goals. AIdriven analytics aids in smart decisionmaking, while IoT enhances supply chain visibility. Circular economy initiatives benefit from blockchain. Clean energy tech and carbon capture contribute to emission reduction. Integration of these technologies is essential for achieving sustainability goals.

Technology companies are leveraging their innovation prowess to lead in sustainability. AI, IoT, and data analytics optimize resource use.

Renewable energy adoption and circular economy models reduce waste. Smart supply chains, enabled by blockchain, enhance transparency.

Sanjay Desai: Technology has always been in the forefront of developing solutions which are well integrated. Such solutions enable data driven decisionmaking, by providing high visibility and

Sandeep Chatterjee, Supply Chain and Sustainability Leader, IBM Consulting To drive real improvement, ESG data and metrics should be embedded into core operations, processes, functions, and workflows. Such integration is key to weaving sustainability into day-to-day tasks and activities. The role of the CSO becomes paramount here in driving this integration. ESG leaders are far more likely to have ESG metrics incorporated into their innovation and digital transformation efforts and integrated into finance functions. Across all organizations, the integration of ESG metrics into core functions is limited, mostly focused on risk management (44%), brand strategy (40%), and customer service/engagement (39%). Only 20% are integrating ESG metrics into supply chain operations; 26% into procurement and sourcing; and just 11% into real estate and facilities management.

This offers a window into huge, missed opportunities. Companies pursuing value-driven sustainability must look for change opportunities that will create a ripple effect. Their view should cut across traditional functional silos and processes—unlocking opportunities for rapid improvement at scale.

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COVER STORY

Organizations need to monitor their shipments and vehicles in real-time by adopting mobile sensors and tracking devices.

Such techniques will allow them to optimize their routes and make better decisions like consolidating their shipments and frequencies. This, in turn, will help reduce the amount of GHG emissions produced by their supply chains. To move towards net-zero energy goals, the 3PL service providers must incorporate low carbon technologies to mitigate and/or remove GHG emissions in their transportation network. allowing standard reporting. Similarly, there are technologies that industries can explore to measure, monitor, report, and control scope 3 emissions. The technology landscape is wide, and it is evolving rapidly. It can be overwhelming to many smaller companies who are seeking to choose an appropriate solution.

It is imperative to follow a structured process of evaluation & roadmap before they commit to a solution. Let us have a look at few of them which are widely in use today.

Digital twins – It will develop digital representations of the real time supply chain operations, to create and analyze various “what if” scenarios for emission reductions mirroring the current situations. This will allow organizations to make data driven decisions to mitigate risks in their operations.

Blockchain – It will allow an organization to create transparent and traceable supply chain operations across multiple sites. Organizational leadership will be able to verify sustainability scenarios to ensure that the information provided by their network (customers, partners & suppliers) is close to accurate which can be acted upon in a positive manner.

Carbon accounting & Intelligence platforms – There are companies who offer an intelligent platform for Carbon accounting as well as evaluating Carbon projects development which contrite

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to the quality of carbon offsets. Such platforms enable Organization to monitor scope3 project to mitigate risks stemming from infrastructure, network, materials movement ensuring the committed quality of carbon offsets for organizations.

Automated Emission Tracking – A Dutch company (GIAI) uses AI to simplify and automate GHG emissions reduction for businesses. Their AI application helps to measure GHS emissions by analyzing the data from various input methods (automated or manual). The AI application dice and slide data to extrapolate measurements and approximate any missing data.

Electrification solutions – Leaf Energy, a US company, offers electrification solutions like electric vehicles (EVs) and charging stations. It provides highspeed charging through its proprietary terminal designs that are compatible with existing grid networks. Leaf Energy also provides a platform that enables real-time environmental tracking, which allows businesses to measure progress at every step of the energy transition.

Algae-based Carbon Capture – ALGIECEL, a UK based organization provides modular photo-bioreactors that convert CO2 emissions into microalgae biomass and oxygen. They have a compact mobile microalgae photobioreactors device which fits into any standard shipping

container. The device helps to enable the transformation of industrial CO2 emissions into biomass rich in foodgrade omega-3, proteins, vitamins, and carotenoids. The carbon capture solution in this way allows industrial plants to reduce their carbon emissions and enable a new revenue stream.

Sandeep Chatterjee: Data is the lifeblood of ESG. It provides visibility into an organization’s operations, letting leaders see where the business is reaching the bar—and where performance has fallen behind. ESG goals for the future lose their significance if they aren’t tied to current performance data. And without the right information, it’s impossible for executives to assess the company’s impact, identify improvement opportunities, or showcase successes.

IBM Research has identified a cohort of organizations with higher maturity in four key areas that enable them to convert ESG to business value… ≥ Data and ecosystems: The sourcing and management of relevant ESG data across the organization and the partner ecosystem ≥ Digital tech: Enterprise architecture for ESG and the availability of ESG data in a clear dashboard ≥ Process and business integration: Embedding ESG metrics across functions

COVER STORY ≥ Skills and decision-making: Adoption of new practices and availability of relevant ESG and sustainability skills Leading organizations are far more likely than others to have made substantial progress in advancing their technology for ESG transparency.

They’ve made more significant strides in furthering the overall enterprise architecture and integrating their ESG data into a dashboard—and they’re 54% more likely to have developed a digital strategy that enables their ESG efforts.

(According to IBM Research) Leaders have also embraced the opportunities for scaling, accelerating, and augmenting ESG with exponential digital technologies. For example, leaders are 58% more likely than laggards to have developed the hybrid cloud capabilities for ESG, 33% more likely to have made significant progress with AI for ESG, and more than twice as likely to have progressed significantly with the use of advanced analytics for ESG. They are also 79% more likely to have made progress in the use of automation for ESG. (According to IBM Research) According to IBM Research, when asked which technologies are most important for ESG, executives highlight the role of advanced analytics in delivering ESG insights, and automation in boosting the efficiency, accuracy, and scaled impact of ESG efforts. For example, automating manual data processes can make it faster and cheaper for companies to achieve transparency.

Applying advanced analytics can also pinpoint improvement opportunities and support modelling that informs more sustainable decisions.

These technologies don’t operate in isolation but complement each other in driving improved performance. If executives look through a particular technology lens, rather than focus on how they can create the greatest impact, immense potential is left on the table. Interactions among several technologies—and with other organizational capabilities— enable and drive the improvements needed for moving the needle on ESG and sustainability.

Chandranath Dey, Head – Operations,

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Business Development, L&I Consulting & PAGI, Logistics & Industrial, JLL, India: Ground break technology, like the use of pre-cast panels, Integrated Building Management system and IoT not only help in reducing cost and time of construction, but also ensure a clean, comfortable, and optimal working environmental with minimal wastage of resources.

The Chief Sustainability Officer (CSO) role is becoming increasingly crucial. To put ESG at the heart of value creation, how does a CSO and other C Suite leaders collaborate? Which are the top 2-3 elements that they must address?

Prabodha Acharya & Anuna Banerjee: CSOs and C-suite leaders collaborate by aligning ESG goals with business strategy.

Regular communication, data-driven insights, and crossfunctional teams foster integration.

They address sustainability in product design, supply chain, and stakeholder engagement. Key elements include cross-departmental KPIs, continuous improvement frameworks, and fostering a sustainability culture.

Sanjay Desai: The role of The Chief Sustainability Officer (CSO) is indeed becoming not just crucial but under huge limelight now more than ever in last 5 years. In fact, many manufacturing businesses must balance their focus from traditional manufacturing mindset to sustainability and ESG mindset. And the CSO has a major role in this change management. Let us look at the key C level relationships that a CSO needs to collaborate with.

A. Collaborate with the CEO • Work with CEO to gain his/ her support to engrain sustainability goals with overall business strategy.

• Work with the CEO to make sure that these goals are communicated down the line in the entire organization until the last level of the hierarchy.

B. Partner with the CFO • Develop business case for scope 3 emissions reduction, emphasizing long-term financial benefits.

•

Integrate sustainability metrics (KPI) into financial reporting.

C. Coordinate with COO • Validate & leverage supply chain / operational processes to achieve Scope 3 goals.

• Work via COO to inculcate sustainable and ethical sourcing practices across organization.

• Implement energy-efficient warehousing & logistical operations across organization.

D. Collaborate with Chief Risk officer • Identify risks associated with scope 3 emissions and build a risk avoidance plan.

• Build a strawman to Integrate sustainability into risk management.

E. Engage with Legal and compliance officer • Ensure compliance with relevant environmental & legal requirements.

• Assess legal risks and financial liabilities associated with scope 3 emissions and build an avoidance plan.

• Develop and review contracts with suppliers, incorporating sustainability clauses.

Sandeep Chatterjee: To drive real improvement, ESG data and metrics should be embedded into core operations, processes, functions, and workflows. Such integration is key to weaving sustainability into day-to-day tasks and activities. The role of the CSO becomes paramount here in driving this integration. ESG leaders are far more likely to have ESG metrics incorporated into their innovation and digital transformation efforts and integrated into finance functions. The latter echoes recent IBM research highlighting the important role of finance in supporting an organization’s sustainability efforts.

Across all organizations, the integration of ESG metrics into core functions is limited, mostly focused on risk management (44%), brand strategy (40%), and customer service/engagement (39%). Only 20% are integrating ESG metrics into supply chain operations; 26% into procurement and sourcing; and just 11% into real estate and facilities

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COVER STORY management. This offers a window into huge, missed opportunities. Companies pursuing value-driven sustainability must look for change opportunities that will create a ripple effect. Their view should cut across traditional functional silos and processes—unlocking opportunities for rapid improvement at scale.

How can companies monitor and control that their suppliers deliver on what they sign for?

Prabodha Acharya & Anuna Banerjee: Supplier performance is monitored through audits and key performance indicators (KPIs). Contracts include adherence to our Supplier Code of Conduct, and partnerships emphasize shared values. Collaborative technologies facilitate data exchange, ensuring suppliers adhere to agreed-upon standards and contribute to the overall sustainability goals.

Sandeep Chatterjee: When it comes to data, it is all about trust. A good way is to have a platform-based approach where all data can be monitored on a regular basis.

This is where the eco-system view holds paramount. The suppliers should also see some benefit in doing this and hence a risk premium or co-creation of platform are good ways to handle this situation.

Supply chains have a greater role to play in ensuring sustainability in your industry vertical. How are you addressing the same? How do you think the industry players are dealing with it?

Prabodha Acharya & Anuna Banerjee: In our industry, sustainability is addressed by integrating eco-friendly practices, promoting circular economy principles, and collaborating with suppliers committed to reducing environmental impact. Industry players focus on sustainable sourcing, ethical labor practices, and circular supply chain models to align with evolving global sustainability standards.

Sandeep Chatterjee: It is very important to identify the hot spots in supply chain and hence take measures around them. The typical transportation sector is responsible for 14.5% of GHGs and measures like cross-docking, full

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truckload on all legs, load consolidation, multi-modal mixes are useful ways. EVs are not the answer as there are long-term implications around charging stations and lithium-ion batteries. Initiatives like Green Cement, Green Steel, Circularity in Product Design, Increasing the life span of a product, Reusable packaging are some of the measures which are in vogue.

Chandranath Dey: Supply chain sustainability affects a company’s environmental, social, and governance (ESG) efforts on a fundamental level. The supply chain touches nearly every aspect of ESG: environmental sustainability, which includes recycling, lowering the consumption of fossil fuels, and reducing waste; social progress, which includes closing the gender wage gap, using equitable hiring, which includes complying with regulations covering all these practices.

Procuring raw materials from multiple sources is a strategically wise decision. It is beneficial to source raw materials from locations that are closer to manufacturing locations, to beat rising freight costs and overcome the shortcomings of transportation delays.

The activity of maintaining focus on enhancing the efficiency of shipping systems should be of prime importance.

Maximizing container usage and tracking shipment will help overcome some typical transportation-related challenges in addition to reducing costs.

In recent joint research by JLL and IndoSpace, with contribution from International Finance Corporation (IFC), we analysed the concept of sustainable warehousing in the Indian context. It explores the economic, environmental, and social benefits of developing and maintaining sustainable warehouses compared to traditional warehouses without sustainable measures.

This report aims to highlight how incorporating green measures across the life cycle of the project i.e. in the design, construction, and operations of a warehouse has tangible benefits across the asset’s lifecycle, such as: ≥ 40% savings in total energy consumption ≥ 30% savings in water consumption ≥ 35% reduction in total embodied

energy ≥ Three years average payback period for return on investment.

What are the sustainable Supply Chain Initiative taken by your company?

Prabodha Acharya & Anuna Banerjee: We recognise that the success of our business relies on the integral role played by our suppliers and business partners, and firmly believe in establishing mutually beneficial relationships by selecting partners who align with our values, business ethics, and commitment to sustainable practices. Our robust SCoC serves as a guiding framework for our suppliers, ensuring their adherence to our standards at all times. By prioritising compliance management, environmental protection, human rights, labour rights, and business ethics, we strive to create a harmonious and beneficial collaboration.

We have taken proactive steps towards ensuring a sustainable and responsible supply chain through the initiation of a supply chain assessment programme for critical suppliers. Implemented in phases, this program aims to thoroughly evaluate and enhance the sustainability practices of our suppliers and business partners.

By conducting systematic assessments, we can identify areas of improvement, promote transparency, and drive positive change within our supply chain.

Through this ongoing programme, we are committed to fostering a resilient and socially conscious supply chain that aligns with our values and contributes to a more sustainable future.

In your opinion, is it practical to achieve the importance of ‘Net Zero’ pledge and how critical it will be for the organizations to manage their Scope 3 emissions?

Prabodha Acharya & Anuna Banerjee: Achieving the ‘Net Zero’ pledge is practical and critical for organizations. By managing Scope 3 emissions, investing in renewable energy, and adopting circular practices, companies can align with global climate goals. Collaboration with stakeholders, transparent reporting, and continuous improvement are essential for realizing and sustaining net-zero commitments.

COVER STORY Sanjay Desai: The term “net zero” means, temperature at which global warming will reduce / stabilize. The word ‘net’ is critical because we all know it is not possible to reduce all emissions to zero in our everyday life. Hence all of us need to reduce carbon emission and energy consumption as much as possible in our own way. It is indeed extremely critical not just for organizations but the entire mankind to achieve ‘net zero’ pledge so we can achieve the global average temperature of 1.5 degree Celsius. It is exceedingly difficult so all of us have a role to play to make it possible!!

Also, for net zero to be effective, we need to find consistency in a way that the GHG emissions, do not return into the atmosphere over time via practices like burning of agricultural land or deforestation. We need to replace these practices or stop them completely, else our goal in the year 2050 will be a moving post. The industrial sector has a huge role to play in achieving net zero goal by controlling their Scope 3 emissions.

It is high time that these industrial sectors adopt better practices of GHG reduction like, replace fossil-burning power with renewable energy or reducing consumption of emissions-intensive products or inputs, avoiding damage to agricultural land or ecological balance.

Organizations need to monitor their shipments and vehicles in realtime by adopting mobile sensors and tracking devices. Such techniques will allow them to optimize their routes and make better decisions like consolidating their shipments and frequencies. This, in turn, will help reduce the amount of GHG emissions produced by their supply chains. To move towards net-zero energy goals, the 3PL service providers must incorporate low carbon technologies to mitigate and/or remove GHG emissions in their transportation network.

Startling FACTS For climate change, supply chain emissions (upstream Scope 3) are, on average, 11.4 times greater than operational emissions. This is a material impact for most companies, yet many still don’t measure it.

72% of CDP-responding companies reported

operational emissions (Scope 1 and/or 2); only 41% reported emissions for at least one Scope 3 category.

To successfully abate supply chain emissions, companies should incentivize procurement-related teams for the management of climate-related issues.

Currently, only 3% companies do so.

For climate change, one in every 10 companies includes climate-related requirements in supplier contracts. But 1.5°C climate science needs to be built into purchasing as usual.

Only 0.04% of all companies’ report adhering to best practice in this area – that is, requiring suppliers to set science-based targets (SBTs).

Source: CDP Supply Chain Report 2022

Sandeep Chatterjee: First of all, it varies from industry to industry. Mining, Oil and Gas Sector, Real Estate and Financial Sectors have a significant contribution from Scope 3 emissions. Many companies have declared their targets without doing a proper calculation. And in order to win this, it is a collective effort of everyone in the supply chain. No company or industry alone can do it.

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COVER STORY What are the challenges companies are facing towards decarbonization?

Prabodha Acharya & Anuna Banerjee: Decarbonization serves up challenges such as technological limitations, high transition costs, and resistance to change. Balancing environmental impact with operational efficiency is complex.

Collaboration with industry partners, technological innovation, and regulatory support are essential for overcoming these challenges.

Sandeep Chatterjee: It is a profitability vs sustainability battle. Historically, sustainable products are expensive and while consumers may say they will buy these products but there is a mismatch between what they say and do. Finally, it comes to economies. Unless the metric of a CEO changes from profitability only to a balance between profitability and sustainability, this is not going to happen.

Chandranath Dey: The challenges of decarbonization for manufacturers are technical, economic, financial, and social. The strategy that results from this must go hand in hand with the company’s development, in addition to its digital transition, and be part of the decarbonized trajectory of its territory.

In industry, decarbonation is a necessity for all companies to improve their competitiveness and meet environmental challenges. To meet the targets set, the industry sector must generate 20% energy efficiency gains between 2010 and 2030, per ton produced. Three main levers must be activated simultaneously or progressively to decarbonize the activity: Energy efficiency: Optimizing energy sources The energy mix: Integrating renewable and recovered energies Production efficiency and recycling: Using less materials or more recycled ones.

Seema Mohanty, Global Supplier Manager (Associate General Manager) for Fungicides, Bayer India: Let us keep aside the cost aspect and look at the other potential challenges. Scope 1 and

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Scope 2 emissions pertain to one’s own operations, so they are comparatively easier to collect data and monitor improvements. However, unless one is following Science-Based emissions and reduction targets, there is no uniform way of measuring and reporting Scope 1 and Scope 2 emissions as well. Real challenge comes when we speak about Scope 3 emissions. This is because there are several tiers of suppliers, perhaps in different countries, and with their respective maturity levels in their own sustainability journey.

Oftentimes it is important to work together with some of the key Scope 3 suppliers to bring them up to speed in their target setting and in taking actions.

Collaboration, knowledge sharing and learning from one another is the key.

Another important challenge is about Intellectual Property (IP) protection. It is important to find out ways to ensure IP protection, while we, at the same time, encourage suppliers to be transparent and share data.

We must remember that Environmental, Social and Governance (ESG) reporting is a pretty new phenomenon and is still evolving. So, there is no one way of reporting and consolidation of data yet. This is a challenge especially when one works across data of several suppliers. It is a journey we all are taking. There is no playbook to guide us yet. But we will all learn along the way!

sourcing means, when an organization purchases products from suppliers, they consider the impacts those products have on the people and communities who build or create these products. These suppliers do not resort to any non-ethical practices i.e., Child labour, unhygienic infrastructure, or any inhuman practices.

An essential element to note is, the deeper you go down into the verticals of your supply chains, the less visibility you have over ethical risks. Hence, it is extremely important to have complete visibility and responsibility for each phase of your supply chains. Easy to say but exceedingly difficult to achieve and sustain over wider geographical scope.

Ethical sourcing is a particularly valuable tool to ensure that your organization only works with suppliers who do not indulge in any unethical practices. This also helps to evaluate your suppliers based on social and environmental factors as well and not just on financial or relationship factors.

In the last 5 to 6 years or so, there has been a huge mind set change related to sustainability standards and ethical sourcing strategies. There is a clear sign that top class organizations are moving the needle in the right direction insisting on sustainable and ethical sourcing practices with their major vendors and their tier-I and tier-II suppliers as well. The younger cohort (Gen X and Gen Y) make decisions that support environmental and sustainable enterprise in a serious manner.

How do you foresee the scope & expanse of ethical sourcing growing from here, with companies waking up to the cause and taking pertinent measures?

Critical guiding principles of ethical sourcing include: ≥ Enforce a zero-tolerance policy for child or forced labour. ≥ Promote transparent and fair financial / payment system. ≥ Ensure safe and fair working conditions for all workers. ≥ Comply with employee protection laws and regulations that promote ethical labour.

Prabodha Acharya & Anuna Banerjee: Ethical sourcing is poised to expand as companies prioritize social and environmental responsibility. Increased awareness and consumer demand drive companies to adopt transparent supply chains. Measures include supplier codes of conduct, third-party audits, and collaboration with NGOs. Ethical sourcing is becoming a cornerstone of corporate social responsibility.

Sanjay Desai: Let us first understand what is “ethical sourcing”? Ethical

Sandeep Chatterjee: While this definitely enhances the brand image of the company, there are cost implications which does not give a company any incentive to do this. Unless there are regulatory measures and other tangible benefits, it looks good on paper only.

COVER STORY

Saurabh Palsania, Joint President – Strategic Sourcing, Shree Cement: There is a big shift now, which can be foreseen from traditional sourcing to ethical sourcing.

This is possible because of the high availability of services providers and requirement of exchange of information to all stakeholders. Frequent requirement of audit trails of transaction, consistent uncertainty in the market also influenced by geopolitical matter, high competition within and across sector, continuous requirement of innovation for cost control, all the above is pushing for quick shift to ethical sourcing.

rules of ethical sourcing are not defined properly. I foresee, that with so much globalization, companies will make it an important priority that is being discussed openly and widely so that it can be implemented.

Nikhil Puri, Vice President – Sourcing & Planning, Yokohama Off-Highway Tires: Scope is immense of ethical sourcing.

The important thing is to create awareness. Also there are no clear guidelines that are there on this topic.

Every company proclaims and aspires to be an ethical company. Industries should come together and formulate the guidelines around this topic. It is not that companies do not want to do it. It is just that the

Sandeep Chatterjee: India has been slow in adapting this. Currently, top 1,000 listed companies in India are required to furnish a Business Responsibility Report (BRSR) to the stock exchanges as a part of their annual reports. While some of the MNCs have adopted it and the recent tax on all imports into Europe is having implications on small and medium enterprises which do not have the financial muscle to invest in these practices. But as regulations come in, this is going to be an opportunity as historically India has been the pioneers of frugal innovation or ‘Jugaad’.

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How is India gearing up to play a leading role in empowering sustainable supply chains?

Prabodha Acharya & Anuna Banerjee: India is playing a leading role in empowering sustainable supply chains through policy support, technological adoption, and industry collaboration.

Emphasis on renewable energy, circular economy practices, and ethical sourcing align with global sustainability goals.

Investments in sustainable infrastructure and cross-sector partnerships contribute to India’s pivotal role.

Chandranath Dey: Over the last decade,

the world’s perception of India and its capabilities has shifted. For the rest of the world, our nation is becoming an example of a thriving economy. On a world scale, India is regarded as an important factor in the global supply chain, portraying itself as an attractive destination for global corporations. The entire world is waiting for India’s steadfast and consistent efforts to convert the nation into a worldwide leader through its many initiatives.

Because of its quick turnaround time, India became the favoured business location during and after the Covid-19 pandemic. By creating a parallel environment for industrial success and becoming a member of global supply chains, India may benefit from a better legal structure for SEZs (Special Economic Zones) featuring duty-free imports. Expressway access to the National Highway network, harbours, and airlines will boost the SEZs’ desirability as an investment location. India may present itself as an appealing investment location for investors worldwide, thanks to its strong macroeconomic fundamentals, positive demographic dividend, improved Ease of Doing Business (EoDB), and access to resources for expanding manufacturing facilities.

How do you foresee the landscape of Scope 3 emissions reporting as we progress?

Prabodha Acharya & Anuna Banerjee: As we progress, the landscape of Scope 3 emissions reporting is evolving towards standardization, increased transparency, and technology-driven solutions. Integrated platforms, global frameworks, and collaboration among stakeholders will shape the reporting landscape. Continuous improvement in data accuracy and real-time tracking will enhance the reliability of Scope 3 emissions reporting.

Sandeep Chatterjee: Unless all the stakeholders come together and have an incentive to do so, it is likely to be an uncertain situation. Because at the end of day, it is all about the trust factor. If industry sees a value in this platform based eco system approach, this will automatically follow.

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INTERVIEW

ACCELERATING TIME TO MARKET through AGILE SUPPLY an CHAIN “In fashion retail, Speed to Market is of essence whether it is B2B or B2C. Speed becomes a very critical parameter as it allows decision making closer to the season. Earlier logistics was mainly focused on cost, but now speed is as important as cost because there is a significant difference in the customer experience if you are able to deliver them goods in 2 days vs.

5 days. If retailers are able to replenish and deliver faster, then the inventory that they hold at the stores and the warehouses will come down and makes the working capital deployed more efficient. That’s where supply chain comes to optimize the trade-off between doing the last mile delivery by small parcel carrier and express carrier,” elaborates Satish Karunakaran, Director – Transformation, Pepe Jeans India Ltd., during this exclusive interaction…

You have been a part of evolutionary journey of FMCG and Fashion retail sectors. What have been some of the most striking transformations during this phase?

I have been fortunate to play leadership roles in Supply Chain and Technology transformation with leading FMCG, Fashion and Retail companies. When I started my career, the first challenge was to standardize, optimize and digitize the business processes that were already existing in companies. Many business processes were done manually, and process flows were in a batch mode. Over time, these manual processes started getting replaced by SAP ERP systems.

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During that stage, implementing an ERP software and getting the processes streamlined to enhance efficiency and responsiveness was the prime objective of transformation. I was fortunate to have had a direct role in that transformation.

With that transformation, organizations started becoming more tech savvy, and many processes started getting automated. At that time, it was a huge step up as far as efficiency is concerned.

But we have come a long way from there.

If I have to pick two big things that have happened in the recent past, which would affect FMCG, Fashion and Retail, the biggest would be the rapid emergence of e-commerce as an

Satish Karunakaran is passionate about technology transformation in apparel retail and FMCG with an extensive experience of over two decades. At Pepe Jeans, he is enabling business transformation with right supply chain and technology capabilities. He holds B. Tech in Applied Electronics & Instrumentation from College of Engineering, Trivandrum, Kerala and Post Graduate Diploma in Business Management from XLRI, Jamshedpur. His expertise lies in P&L management, business strategy, retail operations, program management of large business transformation programs, general business management, etc.

important sales channel and a critical arm to communicate directly to the customer in a personalized manner. Most of the companies were managing just about 3-5% of their sales through e-commerce channel in the early 2010s. This was especially true as far as fashion industry was concerned, where older season merchandize would be sold through the online channel mostly through deep discounting. In hindsight, this was the first step that led consumers to shop online frequently. Later it evolved into more about promoting certain flagship products and sharing features and attributes to consumers through such platforms. Today we have come a long way, and the biggest transformation has happened in the last 3-4 years mostly necessitated by the constraints imposed during Covid.

Today most B2C brands are reaching out to the customer directly through own D2C websites or apps or marketplaces like Nykaa, Myntra and FlipKart, in addition to physical stores. D2C apps and e-commerce websites are functioning as the prime platform to offer an ultimate brand experience to the customer. To support this trend, there is a proliferation of innovative, cloud based SAAS tech infrastructure has been built up, such as product information management systems (PIM) where multiple images of products and personalized product stories can be presented to the customer, unified CXM platforms, sophisticated catalogue management systems and the logistics tracking apps.

And to top this all, vastly improved data tools that can harvest a vast trove of data and mine for critical customer and business insights has hyper-charged the ROI for these technology interventions.

How should Fashion and Lifestyle companies structure their supply chain to create the required responsiveness and speed?

The biggest step after ERP implementation across all the companies was taken during the early 2010-11 timeframe when companies started realising that they have a lot of data but are not getting actionable insights out of it. Data analytics started becoming a hot topic and various companies are at different stages of harvesting this opportunity

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Indian retail is getting a bigger proportion of its growth coming from tier II & III markets, amid rising disposable income and greater exposure to fashion trends. Today the aspirations of these consumers (tier II & III) are becoming similar to consumers in metro The Pepe Jeans showroom at Brigade Road (Bangalore, India) city. These cohorts have disposable incomes and are willing to buy fashion.

E-commerce as a platform has provided us an opportunity where we can directly reach out to consumers in smaller cities So, accessibility has also become easier. The Indian e-commerce sector holds significant promise and displays substantial potential in the years ahead.

using data strategy, tools and technology.

Omnichannel sales is another big game changer. In many businesses, the physical sales and e-commerce sales, which were competing with each other, but there is a greater realization of the synergistic roles that they can play to enhance the customer experience. Today almost every brand which has physical retail stores are seeing ecommerce becoming an additional asset to curate the customer experience.

Besides, in the last one year, the biggest change that has shaped the fashion landscape is the experimentation with AI to create mood boards or concepts.

More than a few fashion apparel brands are experimenting with digital mock-up samples, which can generate sales from

retailers before the garment is produced.

This reduces the lead time to get a new design to market with less risk of an unsold inventory.

When it comes to digital transformation, most people think about it from a consumer-facing perspective. While the consumer-facing side is very important, the whole value chain has to synchronously evolve or transform to deliver the desired customer experience—right from design to sourcing and logistics.

We launched our own webstore (Pepejeans.in) more than two years back and have seen strong growth. We now have four regional warehouses just servicing the online orders and we do service orders from key stores. The most

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Courtesy-By Guha.arnab2006 Wikimedia

INTERVIEW

INTERVIEW important thing we are focused on is to evolve the value chain also to the next level. For example, currently we have the tech enablement to track our products at various stages of manufacturing on a single dashboard. We are also able to seamlessly track and manage each of our customer shipments from order to delivery using technology.

What have been a few of the greatest learnings during the last few years that will stay with you forever and help you climb the success ladder?

One important learning that I would take from the last few years is the need to be ready for planning for multiple scenarios that may play out. Pre-Covid, most planners would have a single optimal plan and every team member would abide by that plan of action. But now, there are multiple plans with varying probability of any of these plans getting activated.

This makes planning more complex but improves the ability to execute quickly if or when conditions change. We must have cost-effective backup plans in place to ensure that we don't run out of stocks and the consumer consistently gets the desired product experience they expect.

The second important lesson for me is about customer obsession. Customer obsession has generally been taken as something that the sales team would do. But now it is understood that all the stakeholders, be it the technology team, operations team or other functions including finance or supply chain have to be customer centric. Every process and function need to be sharply focused on the customer journey to keep it simple, enjoyable and seamless.

Lastly, there is a lot of intuition inside the organization based on experience and historical data. But if companies are able to add an additional layer of insights through data analytics in the right way, they will win big time. Consumers today are aware of choices and if you don’t solve their needs quickly, they will move to a different brand. For that, it is imperative for fashion retailers need to ace their data strategy and tech execution.

What has been one of the most challenging tasks that you have achieved in supply chain? Please elaborate…

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As Alvin Toffler said more than 50 years ago “The illiterate of the 21st Century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” With all of these changes happening at the same time, one of the most challenging tasks is change management within the organization.

There are people with many years of experience who know intuitively this is how it works. Implementing meaningful change without actually hampering the creativity of the people is an arduous task. To ensure that things go as seamlessly, it is best to engage with the key stakeholders right from the start so that they understand the context, task on hand and need for the change.

Technology deployment shouldn’t be seen as merely replacing human intuition or creativity. If change management is done well, it can lead to a far more agile and motivated high-performance organization.

What does a sustainable fashion supply chain look like? What are the initiatives taken by your company on this front?

To be impactful, sustainability has to be integrated with the largest number of products. Sustainability isn’t just a trend; it’s an important part of how we add value as a business. The importance of sustainability is undeniable. We are focusing on significantly reducing the use of water in denim washing. Through collaborative problem solving and regular third party audit, we support our vendors to maintain sustainable practices.

I would like to understand from you how is the global retail landscape different from the Indian retail landscape? How has the country evolved with the global transformation?

Retail in India also significantly benefited from the tailwind due to the growing young population and strong economic growth trajectory. In many ways, retail industry in India is starting to catch up with the rest of the world, if not a couple of steps ahead especially in retail tech. Many developed countries adopted technology in the 70's and 80s and they have upgraded the technology to some extent but have been slow to migrate

to currently available tech innovations.

In India, we have basically leapfrogged to new technology and business innovations especially in ecommerce.

Some of the most innovative and low cost applications of tech in retail is happening in India.

How do you foresee India growth story unfolding for you?

Retail in India has become a consumercentric industry and is focusing on trends and the digital side of the business.

We have a very clear focus in terms of direct-to-consumer sales. So whether it is through online stores or physical stores, direct to consumer (D2C) is going to be our biggest growth drivers for the years to come.

Indian retail is getting a bigger proportion of its growth coming from tier II & III markets, amid rising disposable income and greater exposure to fashion trends. Today the aspirations of these consumers (tier II & III) are becoming similar to consumers in metro city. These cohorts have disposable incomes and are willing to buy fashion. e-commerce as a platform has provided us an opportunity where we can directly reach out to consumers in smaller cities So, accessibility has also become easier. The Indian ecommerce sector holds significant promise and displays substantial potential in the years ahead.

How do you synchronise or streamline the entire supply chain?

Two factors have to come together to give the customer the right experience that the brand wants to give. Firstly, the supply chain which ensures the physical movement of the goods from place to place and making sure that the right product is available at the right time in the right place. The second critical part is associated with technology that enables us in what is missing and what is selling.

These two need to come together to be able to solve the problem.

Every store today has an electronic PoS system. This PoS generates tremendous amount of data. Coupled with in store video analytics and customer journey mapping, retailers can gauge why a product is selling or not selling and how to upsell and cross sell.

There are AI models available, which

INTERVIEW

One of the criteria for us to choose a partner is how stable is that partner as a company from the perspective of their financial and operations muscle. The other lens that we apply is on their commercial model. It has to be a transparent commercial model and it has to be win-win model, which works in favour of both the stakeholders. Another important criterion is the value add that a 3PL partner brings to the table. Some of the 3PL partners have brought in tech-enabled automation for improving shipping accuracy or reducing order fulfilment lead time.

can read sales data and looking at the data of sales, it can prompt you when styles should be replenished or which style should be taken out of the store and send somewhere else, which new style should I bring back into the same store. There are three actions – Replenish, Remove and Add. Interestingly, Video analytics can predict the heat map of customer traffic to tweak the store layout. I think these two will help a long way in understanding customers’ behaviour better.

Earlier there used to be separate B2B and B2C logistics partners, but that’s not necessarily the case today. Most logistics partners have drastically reduced the lead times for deliveries, which is a big positive for fashion retailers like us and we are able to service customer faster and efficiently.

Second big change that is happening is in the infrastructure space. Companies today are laying tremendous emphasis on locating the warehouse infrastructure from where the customers can be serviced faster.

We have established regional warehouses to realize a better lead time to serve the customer. The infrastructure of the supply chain has to fall into place to support quicker deliveries to the customer and quicker replenishment to the store. And the technology has to be there to tell you where to send what, without which a sound supply chain will not be effective.

What are the criteria on the basis of which you select third part logistics service provider? What are the challenges that you have encountered in partnering with them?

TPL industry is booming in India in India

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and addresses a real need of the hour. It has gone through a consolidation phase in the last couple of years and is well placed to further evolve and mature overtime. Right now, it’s at a stage where there are many TPL’s that are credible partners to businesses.

One of the criteria for us to choose a partner is how stable is that partner as a company from the perspective of their financial and operations muscle.

The other lens that we apply is on their commercial model. It has to be a transparent commercial model and it has to be win-win model, which works in favour of both the stakeholders. Another important criterion is the value add that a 3PL partner brings to the table. Some of the 3PL partners have brought in tech-enabled automation for improving shipping accuracy or reducing order fulfilment lead time.

What are the key trends in Omni channel space?

The primary trend that fuels omni channel model of order fulfilment is technology and that has evolved to a large extent. Earlier the store PoS and the omnichannel orders were not linked to each other in many cases. There was no single view of a customer across channels.

In the early days, to fulfil omni channel orders, store employees had to punch that order into the PoS, do the billing and then again punch it into the order management system to dispatch it to the customer, which used to be an arduous task. This challenge has been solved and the newer systems are working out very well.

Another issue that required creative problem solving as about the internal staffing availability for omni order

fulfilment. Retail staff is extremely busy during certain periods of time such as sale days. During that time, if an omnichannel order comes in, it was a challenge to fulfil the target SLA. Many retailers had to rejig the staffing model to improve Omni channel order fulfilment performance.

What are the key trends likely to shape the fashion retail landscape?

What’s your take on fast shaping up supply chain dynamics in the country?

In fashion retail also, speed to market is of essence whether it is B2B or B2C. Speed becomes a very critical parameter as it allows decision making closer to the season. Earlier logistics was mainly focused on cost, but now speed is as important as cost because there is a significant difference in the customer experience if you are able to deliver them goods in 2 days vs. 5 days.

If retailers are able to replenish and deliver faster, then the inventory that they hold at the stores and the warehouses will come down and makes the working capital deployed more efficient. That’s where supply chain comes to optimize the trade-off between doing the last mile delivery by small parcel carrier and express carrier.

The second one is planning. It’s no longer possible to plan separately for each channel and then arrive at the sum total of all those plans as the masterplan.

Planning has to be company-wide as the inventory visibility also has to be company-wide. We have to make sure that there are alternate mechanisms to service the orders without holding and reserving inventory in the warehouse.

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OPINION

DESTINATION MYANMAR

A Strategic Ally for India-Japan-Australia Trilateral Partnership During the current times of geopolitical flux in this part of Eastern Hemisphere, Myanmar is one country that holds a special status in the geographical, geopolitical and logistical fabric of ASEAN & the Indo Pacific Region, encompassing through the Andaman Sea, Gulf of Thailand, Strait of Malacca (that opens into IOR), Dawei Port on Andaman Sea, cozying close (334nm) to Kra Isthmus - a transit artery that links Gulf of Thailand & Andaman Sea. These, however, will be source of international security repercussions particularly for India, which has a disputed land border with China for decades. Thus, it is the combined power equation of the two that will matter in having an upper hand in influencing the concerned countries, writes Ravi Sinha, Ex-Director, GSI and Consultant Geologist.

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Ravi Sinha possesses over four decades of expertise in diverse domains of Earth Science encompassing extensive experience across government sectors including Coal India & various corporate bodies like EMIL (Aditya Birla Group), JSW, Krishna Mines.

From his tenure at Coal India to his consultancy services for local mining companies, Sinha’s work spans diverse areas, including reconnaissance mapping for mineral potential, conducting mineral feasibility studies in India and Myanmar, flood control projects, and comprehensive river management.

OPINION

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HERE is a significant shift in global geopolitics and economics, particularly in the context of the Indo-Pacific region. As democracies around the world are re-evaluating their reliance on a China-centric world order, there's a growing emphasis on establishing a new, more resilient, and sustainable supply chain. This shift is evident in initiatives like the Japan-India-Australia Trilateral Supply Chain Resilience Initiative (SCRI), which aims to create a more stable and diversified supply network.

The SCRI, focusing on key industries and the exploitation of critical mineral resources, also considers the importance of agriculture and territorial security.

Such initiatives can be synergized with other international platforms or bi-lateral or multilateral initiatives.

Collaborations with entities like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), the Act East policy, the GMS Economic Corridor (Greater Mekong Subregion), and GMC (GangaMekong Cooperation) can further enhance regional connectivity and economic integration.

I have taken up Myanmar due to its unique position in this emerging framework. Its strategic location in the Indo-Pacific, the South China Sea (SCS), and within ASEAN, along with its rich endowment of critical minerals such as tin, tungsten, molybdenum, tantalum, base metals, and rare earth elements (REE), makes it an integral part of the envisioned supply chain network. Moreover, Myanmar's biotic and abiotic resources, along with its anthropogenic assets like a multi-modal transport network and strategically located seaports, including deep-sea ports accompanied by economic zones and corridors, enhance its significance.

Myanmar — a member of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), could be one of the key countries in the Indo-Pacific Region, where the newlyforged partnership of India, Japan and Australia may be robustly developed for a new sustainable supply chain. The safety, national integrity, connectivity, trade of India and some likeminded democracies

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Source: Wikipedia Commons

of Asia, and the South China Sea (SCS) ecosystem cannot be separated from that of the Indian Ocean.

From the Indian perspective, any such venture in Myanmar assumes special significance as it is in the immediate vicinity of the Northeastern Region (NER), and hence fulfils the purpose of two fundamental pillars of India's foreign policy viz the ‘Neighbourhood First’ and ‘Act East’.

Such a step will also be in the interest of Myanmar. On the one hand it is a rich storehouse of critical minerals such as

Titanium, Tin, Tungsten, Molybdenum, Tantalum, Rare Earth Metal (REM) and Lithium, that serve as raw materials for modern-day high-tech industries including solar energy, wind energy, green energy, automobile, military hardware, space science, electronic industry, semiconductor chip, etc., while on other, Myanmar is starved of process technology & downstream application technology. This will certainly synergize the ecosystem of the India-JapanAustralia Trilateral Supply Chain Initiative that stands at the threshold —

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OPINION Myanmar — a member of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), could be one of the key countries in the Indo-Pacific Region, where the newly-forged partnership of India, Japan and Australia may be robustly developed for a new sustainable supply chain. The safety, national integrity, connectivity, trade of India and some likeminded democracies of Asia, and the South China Sea (SCS) ecosystem cannot be separated from that of the Indian Ocean.

of a multilateral new world order, which is transparent, believes in multilateralism, security of the territorial boundaries, connectivity (both physical & digital), employment, secured eco-system, equitable distribution of resources of all hues.

THE STRATEGIC IMPORTANCE At the core of this fast-changing geopolitical drama lies the technology of semi-conductor chips that measures less than five nanometres and are the brains to all our electronics, from mobile to cards to fighter jets in which the U.S and China are nearly evenly matched. It is here that the significance of broad assertiveness of the Dragon across the Indo-Pacific region comes into play. Minerals such as antimony (Sb), germanium (Ge), silicon (Si), arsenic (As), Gallium (Ga), Tin (Sn) and Rare Earth Metals (REM) are key raw materials and are hosted in countries like Myanmar, Malaysia, Cambodia, Thailand, etc & technologically most advanced Taiwan (TSMC). And the most startling fact is that China draws nearly 50% of

its import of rare earth elements (REE) from Myanmar in a clandestine fashion.

With the aforesaid reason in mind, it is abundantly clear that China's power and influence will continue to spread into Indian Ocean, South Asia, Southeast Asia through South China Sea. The Quad members are aware of the crucial position of India in the Indo Pacific region which has the potential to host a new multi-lateral resilient, sustainable supply chain without China in a new world order. If we are to tangibly confront & contain the onslaught of China in ASEAN & Indo Pacific, the Quad nations must act in coherence, align their national interest, military cooperation, transparency, and ensure proliferation of Technology transfer, safe navigation, easy access to critical mineral resources.

If Myanmar is lost then China's ambition of destabilizing the Indian Ocean for its Blue Economy with its Blue Navy, will come closer to reality.

It is important that India-JapanAustralia trilateral resilient supply chain initiative should be strengthened and effectively operationalized keeping

Myanmar in that ambit so that its unique biotic, abiotic, land and marine resources are not plundered by China to keep inflating its economy and resources and succeed in its punctiliously designed route to Western Indian Ocean through the Arabian sea which is the potential theatre of conflict for its Blue economy.

I lay special emphasis on bolstering of the Japan-India-Australia tri-lateral supply chain initiative coupling with BIMSTEC - an inter-regional grouping that seeks to foster regional & economic cooperation among nations adjacent to Bay of Bengal and in littoral areas.

This out-of-the-box thinking may be a solution to check mate the growing hegemony of China which appear to have not only punctiliously clipped India in ASEAN Summit, held at Jakarta on 24th April 2021 but have stolen a march over the Western democracies if you read the fine prints between the lines of the ASEAN Documents. BIMSTEC includes Myanmar and Bangladesh and from our perspective, resource rich and geostrategically located Myanmar holds the key to check mate China from reaching Indian Ocean, smoothly.

SEAPORTS – CRUCIAL LINKAGES

Source: TOI

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Out of the nine seaports in Myanmar, at least the two that are of high strategic & commercial significance for India are: Sittwe in the Southwest corner of Myanmar, hardly 50 & odd kms from Bangladesh border, built with Indian assistance, and the other in the Southeastern corner of Myanmar at Dawei, which is not yet functional but is being built by Italy-Thailand Development (ITD) Public Co Ltd. Both the deep seaports are on Bay of Bengal (Andaman Sea) & thus gateway to IOR.

OPINION

The Dawei Special Economic Zone (Source: worldmaritimenews.com)

Apart from these, Dawei port can be said to occupy the central stage in the scheme of things of the JapanIndia-Australia trilateral resilient supply chain initiative signed in September 2020 to minimize the dependence on China. My purpose of accentuating the significance of Dawei deep seaport is not only the presence of numerous other developmental/ infrastructural projects

by Japan, Thailand, Singapore, South Korea, etc., under the aegis of various agreements, initiatives, protocols, but also emphasizing the critical resources attribute of its Hinterland. In the succeeding couple of paragraphs below, I will stress as to why the attributes in the connectivity links Dawei port or Sittwe port, GMS Economic Corridors, etc., will be crucial for international platforms like

It is important that India-JapanAustralia trilateral resilient supply chain initiative should be strengthened and effectively operationalized keeping Myanmar in that ambit so that its unique biotic, abiotic, land and marine resources are not plundered by China to keep inflating its economy and resources and succeed in its punctiliously designed route to Western Indian Ocean through the Arabian sea which is the potential theatre of conflict for its Blue economy. supplychaintribe.com

India-Australia-Japan Trilateral Supply Chain Initiative.

It would be relevant to mention here that ITD (Italy-Thailand Development) is not an investment corporation, but a development company & hence has allocated projects to investment companies. In other words, though Thailand has been a key motivator in the development of Dawei Deep Sea project in Myanmar, but geomorphologically is a part of Isthmus of Kra & it does not own the entire Dawei project. This has largely intensified the degree of competition among Myanmar’s ASEAN neighbours (including India, China Japan) & other neighbors to invest in the many business opportunities made available by the ITD. So far, there has been keen interest from key Asian powers in the seaport. China has always expressed its enthusiasm for a physical connection with southern Burma as an alternative route to the Bay of Bengal (IOR). It is working on modalities to reduce the distance to Bay of Bengal by 3000km by avoiding Strait of Malacca.

Japan is another potential investor

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OPINION in Dawei. Tokyo has expressed its intent for a key role for itself in the project, particularly in financing. The level of competition between Japan and China for influence in Southeast Asia has intensified, with Japan implementing a proactive foreign policy toward Southeast Asia through investment, aid, and innovative support for regional integration. Fearing the loss of economic activity to China, Japan has moved quickly to secure its position in the Dawei project. The recently signed Trilateral Resilient Supply chain initiative with India & Australia can be said to be a step, in entrenching Japan along with India well, in Dawei Project of Myanmar.

According to Business Federation, Japan has articulated its interest in developing the main infrastructure; including port and roads, as well as the upstream steel project, as part of its policy to promote the Greater Mekong sub-region in Myanmar Indeed, Nippon Steel has already invested in the first phase of the Dawei project as one of ITD's partners.

The Japan Bank for International Co-operation (JBIC) may get involved in the development & provide capital for subsequent phases. Thailand made it clear that it wanted to collaborate with Japan in investing in the Dawei infrastructure project simply because it would help Thai and Japanese companies save on logistic costs when shipping to countries in the region, and it would harmonize the ASEAN Connectivity scheme.

India also hopes to benefit from the Dawei project. As early as 2004, India offered to conduct a feasibility study to develop Dawei as a deep-sea port. India, like China, has not yet invested in any of the available projects in Dawei, but realizes the economic significance of this coastal city which could give it a much quicker access to Southeast Asian markets, therefore enhancing the ASEANIndia Free Trade Agreement (AIFTA) along with an invigorated amalgamation with the said Trilateral Supply Chain Initiative. Since the implementation of its "Look East" policy in the early 1990s, India has actively engaged in Southeast Asian affairs. Delhi's new status as a rising power has reinforced its ambition to elevate its influence in the region, particularly in the economic sphere.

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In the light of the recently pitched-in official statement of the Thai PM about an investment of multi-billion dollars project for encompassing a multimodal transport project in Kra Isthmus, India must ensure a strong foothold in the Isthmus by integrating its strong presence in both Dawei & Kra Isthmus projects to expands its connectivity, commercial, economic footprints.

Based on my on-ground experience in Myanmar and studies of recent developments in the region, I find it important to highlight the significance of Dawei port considering two major factors. Firstly, the Myanmar crisis was notably addressed as a critical geopolitical issue at the G-7 meeting in London on May 12, 2021. This situation has been further complicated by the UK's increased involvement in Asian affairs following Brexit, leveraging its historical colonial ties in the region as it assumes a more prominent role representing Western interests. Secondly, the port's close proximity to the Kra Isthmus Canal and various multimodal transport routes where in October-November 2023, the Thai Prime Minister pitched for a full-fledged multi-billion dollar project development.

DAWEI PORT The Dawei deep-sea port and Special Economic Zone project is located near the Dawei River estuary in the Tanintharyi Region of southeastern Myanmar, part of the Isthmus of Kra, adjacent to the Malay Peninsula in Thailand. This project was first proposed on May 19, 2008, during a special ASEAN Foreign Ministers meeting in Singapore. The plan includes developing an alternative route to the congested and piracy-prone Gulf of Malacca, an idea that Thailand had been considering for decades. At the 2008 meeting, Thai and Burmese foreign ministers signed a memorandum of understanding (MOU) to develop the Dawei deep-sea port. The agreement involved constructing the port, establishing a road link from Dawei to Bangkok, and setting up a border crossing at Dawei-Kanchanaburi.

Although the Dawei deep-sea port is still under construction, its fundamental structure has plans to feature eight container terminals catering to various

imports and exports, including coal, iron ore, petrochemicals, crude oil, steel products, and a range of general goods.

Accompanying the port is the Special Economic Zone (SEZ), covering 196 square kilometers. The project, estimated to cost over $10.7 billion, aims to establish the largest industrial complex in Southeast Asia. The SEZ is designed with distinct zones, such as Information Technology Industrial Zone, Hi-Tech Industrial Zone, Export Processing Zone, etc. The Hi-Tech Industrial Zone may serve as a hub for the upstream or midstream processing of steel and critical minerals. These processed materials could potentially be exported to countries like India, Japan, or Australia for further downstream industrial applications.

The cardinal significance of Kra Canal cutting across Isthmus of Kra is not unknown to the world but remained on paper since the 19th century. It was only in October -November 2023, that the Thai PM officially pitched a multi-billiondollar land bridge project in the Kra Isthmus at the 3rd BRI Summit in Beijing and at the APEC Summit in San Francisco.

The significance of the Kra Isthmus in relation to the Dawei Port project is heightened due to its geographical proximity, being only about 333 nautical miles to the south of the port. This location is particularly noteworthy in the context of China's strategic interests in the Indo-Pacific region. China has long been concerned with the "Malacca Dilemma," which refers to its reliance on the Strait of Malacca for a major portion of its maritime trade, including energy supplies. The strait is a narrow and potentially vulnerable chokepoint, and there is apprehension that it could be interdicted or controlled by the United States and its allies, including India, in the event of geopolitical tensions or conflict.

As I was writing this article, I came to know that Thailand plans to open global bidding for the $29 billion Landbridge Project in Kra Isthmus. This project seeks to substantially cut down shipping time between Indian Ocean and the Pacific Ocean, offering an alternative route that bypasses the Strait of Malacca. The Thai Transport Minister, while addressing Japanese investors in Tokyo, highlighted that the winning consortium for this

OPINION I lay special emphasis on bolstering of the Japan-IndiaAustralia tri-lateral supply chain initiative coupling with BIMSTEC - an inter-regional grouping that seeks to foster regional & economic cooperation among nations adjacent to Bay of Bengal and in littoral areas. This outof-the-box thinking may be a solution to check mate the growing hegemony of China which appear to have not only punctiliously clipped India in ASEAN Summit, held at Jakarta on 24th April 2021 but have stolen a march over the Western democracies if you read the fine prints between the lines of the ASEAN Documents. BIMSTEC includes Myanmar and Bangladesh and from our perspective, resource rich and geo-strategically located Myanmar holds the key to check mate China from reaching Indian Ocean, smoothly.

project would be granted a 50-year concession. This consortium is expected to include a diverse group of stakeholders, such as shippers, logistics operators, port managers, and industrial investors.

The highway alongside the Dawei SEZ will connect Cambodia, Vietnam, & Vietnam to Africa, the Middle East, Europe & India. It would be pertinent to mention here that 1400km long India-MyanmarThailand Trilateral Highway from More in Manipur to Moe-Sot in Thailand would pass through the highway component alongside Dewei SEZ. The highway from Moreh in Manipur( in India) to Moesot in Thailand via Myanmar would open up India’s landlocked Northeast Region to South & South-east Asia In the light of the need of the hour for the development of a new world order with its own sustainable, stable, secure Supply Chain, & a smooth trouble-free connectivity, we should get into the critical mineral resources from neighbouring countries like Myanmar at the earliest, where the ports like Dawei & Sittwe may be holding a vital gateway to the Indo Pacific & East Pacific.

The Dawei deep seaport, when complete, will provide India an alternative sea route to Southeast Asia and reduce dependency on the congested & pirate infested Strait of Malacca and cut transport time & logistic cost. Japan has been active in taking initiatives to maintain & strengthen momentum for the development of the Greater Mekong sub-region which has

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a North-South corridor linking cities of Mekong basin encompassing Cambodia, Laos, Myanmar-Thailand, Vietnam, to China. But India is not keen to join this. However, the southern part of the Mekong India Economic Corridor (MIEC) is of interest to India also and it would be concentrating on this segment because it would connect Ho Chi Minh City in Vietnam to Phnom Penh in Cambodia, Bangkok in Thailand to Dawei in Myanmar. The most prudent thing which I wish to add is that we may get not only access to the technology provider for Nd Magnet located in a country as listed above but also get access to additional areas hosting critical raw materials When Dawei port is ready, India is planning to connect it with Chennai. There will be no need to go through the Strait of Malacca.

plans to link Ho Chi Minh City in Vietnam with Dawei in Myanmar, passing through Bangkok in Thailand, Phnom Penh in Cambodia, and reaching Chennai in India. A significant portion of the required investment is earmarked for developing a port at Dawei and its associated Special Economic Zone (SEZ).

The corridor's focus is on expanding the manufacturing base and enhancing trade not only globally but also specifically between ASEAN countries and the India-Japan-Australia alliance. It may enable ASEAN economies and India to integrate further and collectively emerge as a globally competitive economic block.

STRENGTHENING CROSSBORDER CONNECTIVITY Recently, India's External Affairs Minister, S Jaishankar, held discussions with his Myanmar counterpart, Than Swe. They emphasised the need to expedite projects, particularly the India-Myanmar-Thailand trilateral highway. Additionally, they stressed the importance of maintaining peace and stability in the border regions.

To reiterate, a key project for crossborder connectivity is the Mekong-India Economic Corridor (MIEC), designed to integrate four Mekong countries Myanmar, Thailand, Cambodia, and Vietnam - with India. This corridor

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