By: Venkatraman Narayanan, Managing Director & CFO, Happiest Minds Technologies
#EcoFriendly #Sustainability #Environment #IntergenerationalEquity – beliefs that I hold close. It is of paramount importance that we leave a ‘greener earth’ for the generations to come. There are three important things that I’ve figured:
The ability to rationalize any situation and decide against the ideal course of action – for example, if going electric means more Lithium Mining that in turn causes a lot of damage, there are more than enough lobbies & interest groups to support this view. In fact, there will be all the support one needs to stop what they started.
I have figured it out – A continuation of the ‘rationalisation’, this concept combines finance and economics and referred by me as the LHS (Left Hand Side) = RHS (Right Hand Side) conundrum. We try and understand the finance/economics of the situation and plug in our understanding into the above equation to get an affirmation. What’s missed is the unseen and the unknown, and what’s added is a liberal dose of ignorance.
This behavior of trying to make the right decisions based on a formula but ending up making sub-optimal ones is what I call ‘behavioral finance’. Ask the puritan and he will give you a different definition for the term. However, in the real world, this is one of the main things that supports people who want to postpone, or nix thoughts and ideas which in reality aid sustainability. Again, you have the world to support your view and all you need to do is look.
Fourty years back smoking was fashionable. I have a photo of my parents trying their hand at an Illustrated Weekly photo contest promoting smoking sponsored by a leading cigarette company! Today, they would have been cancelled.
The ICE and oil industries have been around for 100+ years. Will they keep quiet when upstarts are going down the path of EV, Batteries, Fission, Fusion, Hydrogen, Hybrid-EV and so on?, etc? What can you expect other than FUD from the ICE industry which will afford them time to reconfigure? The largest ICE companies are all moving EV.
The concept of LHS = RHS and behavioral finance is explosive. Lobbies, interest groups, social media, politics (left, right and centre), and science, all use it. Philosophy and religion are not far behind. I believe the subject lends itself to a nice essay series and am contemplating putting my thoughts together on it, but that’s for another day.
*The late Parag Parikh of PPFSL, a very successful Mumbai based broker and financial consultant, had a deep interest in this topic and has written a very lucid book on the same. What drives financial decisions has been a subject of deep research and has now become complex and out of reach of the common man. Like all treatises, the subject now needs elucidation.
inertia – Let someone else do it. Why should I bother? Let me prioritize. I am busy.
Sometime back I decided enough was enough. I was being nothing but a hypocrite and was doing nothing but armchair thinking, criticizing & rationalizing. I realized that my decision-making was based on an erroneous application of the LHS = RHS and I was rationalizing this with the views around me, many of which were planted. At that moment, I realized that it all begins with one small step.
So, start small, start around yourself, but for god’s sake, start! Clarify to yourself in simple terms what you can do and how you can execute it. The operative word here is ‘execute’. Draw up a simple plan, it can be a sketchy plan, but that’s still a plan.
Draw up a simple mission statement covering your thoughts on sustainability and the environment. In an ideal world, this should have been straightforward, but you see we are human and confused; non-linear thinking is also acceptable. But think of it this way: all successful enterprises have a mission. The need and advantages of having one are taught as a management lesson. So, I think it’s only fair that we have one for something we hold so close to our hearts, which we plan to pursue for the rest of our life. Sustainability.
Now comes execution. It’s easier around “I” but harder when it comes to “We”. One needs to get rid of the cobwebs in one’s own mind and resolve the excuses that we talked about earlier. Fair warning, the LHS = RHS is a tough one to crack.
Back to myself – I am now a man with a plan and I have started executing on both the level of “I” and am trying to influence outcomes amongst the “We”. While ‘excuses’ are dampers, here is my simple mission, and philosophy on the subject.
Plagiarism and Statutory Warning – this may look like a CCP, but it’s all from my own ruminations. I may have been ‘influenced’ by the readings I have done, and I’m sure I’m allowed some literary transgressions. What follows is easy to write, but difficult to follow.
1. REFUSE – Say No!
Any material addition you make uses energy. That new iPhone, pair of headphones, earpods, car, digital presence, email account, apparel, shoes, A/C, fan, energy is used in their production. You won’t hear the end of why it is important that you consume, from economists and support groups that are in favor of consumer spending. But head back to the LHS = RHS equation and evaluate any purchase based on your determination.
If sustainability and integrational equity are high on your priority, then unnecessary buying may not be in your interest. But trust me, finance is in your favor as you’re saving money and doing what is close to your heart at the same time. You may be mocked for being a so-called Silas Marner, but I warned you that this isn’t an easy equation to solve. Also, let’s just say no to plastics, non-local food, unnecessary logistics, consumption without evaluation, unnecessary travel, water-guzzling foods, and much more. Use the formula to figure it out.
2. REDUCE – Say Enough!
Air, water and food are primary to our survival, but have you noticed that our bodies are trained to say enough when these primordial needs are met? So why are we not able to say enough about our material needs? Apply the formula, evaluate and support your cause and vision by saving enough. This also extends to not buying for a ‘rainy day’ and not hoarding. Buy and consume only what you need, and if it’s too hot, then you can switch on the A/C, but maybe set the temperature to 25C.
3. RE-USE – Just Use It!
Did you know that the expiration date on medicines and many consumables do not mean much? Don’t just take my word, but read up on expiration dates on medicines, you’ll find that the likes of Harvard and other similar institutes telling you why it doesn’t matter. My take is that medicines don’t become poisonous or less potent on the Monday after the expirary date or the Sunday prior. But if this is true, how many days after expiration actually matter? Go figure, and use that in the formula.
4. RECYCLE – Or should you?!
We need to take a harder look at the formula of recycling because addition of matter and energy is required to recycle anything. The formula will need to account for this. Recently, I was planning to cut some bamboo grass at home and was told by many that I should recycle it to make furniture. Some reading later, I figured that the amount of chemicals required to make it pest-resistant was very damaging. Do you know the spray we use to eliminate cockroaches? It lingers on for 10 years while the cockroach dies instantly. So recycling may look cool, but you need to take a hard look and evaluate everything.
5. REPAIR – Extend Life!
On the RHS, by buying a new car you have the ability to drive the economy and create new jobs. But cars are made to run for lakhs of kilometers and manufacturers give you a warranty to cover the same. So why upgrade until it is actually required? Change the tires, and battery, and do some servicing instead. Incidentally, changing tires is a brilliant case of behavioral finance and perfect use of the LHS = RHS formula.
Watch this space.
6. READ – The Stupid Manual!
Read what people don’t want to tell you about a product. Many things look too good to be true, and they often are. So educate yourself to the point where you are able to make a holistic decision. That’s not asking for too much, is it? Learn from my mistake. I recently decided to buy a larger TV at home. After buying it, I read through the entire manual and figured that they never told me about how much power it consumes. 450-600 watts of power in an hour! A quantum step-up from the 65-inch TV that I was using previously. Now I’m stuck with guilt and a lighter pocket, but with the pleasure of watching a bigger TV. The formula failed and that was post facto.
I think I’ve rambled on a bit too much. I realize that this is a process of awakening and needs to be taken in through small and practical doses. But I would like to believe that I have kindled a sense of interest in this topic in all of you. Long writing in the days of microblogging can be counterproductive. Maybe I’ll go check out the new iPhone now!
Views of the author are personal and do not necessarily represent the website’s views.
Venkatraman Narayanan is the Managing Director and Chief Financial Officer of our Company. He is a fellow member of the Institute of Chartered Accountants of India and holds a bachelors’ degree in commerce and another in law. Venkat has been associated with our Company since April 2015 and has over 25 years of experience in the areas of general management, operations, finance, & law.