With 3.7 trillion, India is currently the fifth largest economy. As we are moving towards getting better position in this ranking, India faces significant environmental challenges while chasing this dream. However, innovative technological advancements are paving the way for a sustainable future. Furthermore, government initiatives and private-sector investments are aligning with sustainable technology adoption, fostering a holistic approach towards achieving Net Zero emissions target. The amalgamation of technology and sustainability is not just a solution but a promising future for India's environmental aspirations.
Salesforce is helping organizations to achieve their goals and thrive effectively in the digital age. Rajeev Ranjan, Editor, Digital Terminal, recently spoke to Mr. Arun Rangaraju, Head - Advisory Services & Net Zero Cloud, Salesforce India to understand the market dynamics, their solution offerings and efforts to help organizations achieve Net Zero emissions.
Rajeev: How do you see the concerns around adoption of Net Zero goal among Indian companies?
Arun: I have seen a substantial shift in sustainability as a priority in the last 12 months. A lot more companies are thinking about it. It is also driven by a couple of external factors, one is India as a country has pledged to be net zero by 2070. But more importantly, as an intermediate milestone, we want to have 50% of our total energy coming from renewable sources by 2030. So, at a government level, there is a push on this. And now SEBI has made it mandatory for the top 1000 companies by market cap to produce the sustainability report, which is called the BRSR report.
Now, that reporting has been made mandatory but prior to this, it was optional. So, these two are probably external pushes that are coming in. I see a lot of awareness around sustainability. We are seeing the mess that the planet is in right now. At Salesforce, we always believe that business is the biggest platform for change. And a lot of businesses can drive that change in sustainable use. So, there is a lot of interest now in the last 12 to 18 months and in most cases, it is being driven by the CEO.
Rajeev: How do you see the challenges for CTO/CIO in moving towards sustainability?
Arun: The journey to net zero happens over multiple phases. The basic thing is you need to measure what your carbon footprint is today. If you can't even measure where you are, how do you improve on it or how do you put in place an action plan? The basic really is the carbon accounting. And I think the challenge that most CIOs and CTOs face today is gathering the data to compute the carbon footprint. The carbon footprint is broken into Scope One, Scope Two, and Scope Three. Scope one and scope two are still relatively easy because these are assets and buildings that you own or business travel that your employees are taking up.
Scope three becomes more challenging because that is really computing the carbon footprint coming from your major suppliers and also from activities post the useful life of the product. The challenge really is to get an accurate measure of scope. But it's a process you have to start somewhere. Our net zero cloud offering has a full scope three data hub that actually helps you navigate that journey and start measuring scope three emissions. But that's really where the challenge stands today, especially for manufacturing companies because they are the ones who have complex lighting.
Rajeev: How do you help companies with your cutting-edge solution for net zero?
Arun: We have a few 1000 customers in India. We are doing our bit to inform them that this is a new offering from us. It strictly doesn't fall into the CRM domain. Going to net zero is a very different area. But it is something that we are very passionate about. We ourselves became a net zero company in September 2021 globally. This is a 31 billion dollar company that became net zero almost two years ago. We are passionate about it as a subject. The net-zero cloud is nothing but a packaging of the technology that we used to become net zero on we are now offering it to customers. We are also hoping that as regulatory compliance, tightens and in different countries you need to report on this there will be a greater adoption of tools and technology like.
Rajeev: How do you see the traction and awareness that are pushing your solution in the market?
Arun: You can't intend somewhere that has to come from within. At least now, we have SEBI enforcing the regulations of BRSR reporting for the top 1000 companies by market cap. So, whether they believe in it or not, they have to produce which means they have to do something about it. But for most companies, it is something that comes from within because, either someone on the board or the CEO also passionately believes that being sustainable is also good for the company. Because you have consumers especially young consumers, who will be looking at sustainable companies to buy their products from.
Many of the companies are lost as to where to start. So, there is a bit of consulting that is involved, which is where we work with many of our partners, we have a vast partner ecosystem. Many of them have ESG consulting, which is your business consulting saying, this is the way you need to think about sustainability. These are the areas you need to tackle first. The tool that you use to implement it comes later which is the net zero cloud. So, in many of the companies we are working with, they're either doing this consulting themselves or process consulting or you know, they've engaged in external ESC consulting and we then come in and show them what the tool can help. So I think both need to come together to drive the sustainability chart. That is really how we work and even for zero cloud has a tool. We work with a core set of five or six partners in India, who will then go and implement the solution.
Rajeev: Do you have any criteria or parameter for carbon emission?
Arun: The regulation is you have to submit the report, which is your carbon footprint. I don't think it's coming to a stage where they are imposing fines and penalties. Because the first step is to accurately measure what the carbon footprint is. Right now, not all companies are even doing it. The BRS report is a very detailed report that has multiple sections that the companies need to submit once a year to SEBI and that is completely dictated by them. This is the report you need to produce. What the net zero cloud helps you do is gather the data to file a report. So, in India it's the BRSR report and in Europe and US, they have their own regulatory compliance. So, the net zero cloud actually helps you be compliant from a regulatory viewpoint. So, we are a set of the board, you can Google it and see it has a fixed format. Some of it is subjective some of it is coming out of data.
Rajeev: What are the top three sectors where you see the adoption will happen in the coming years?
Arun: We are seeing the highest interest from manufacturing companies. This is not surprising because they are the ones with the biggest carbon footprint and they are trying very hard to reduce that. Number one is manufacturing, number two is actually professional services companies. We have a surprisingly high number of inquiries and interest from professional services companies. And the third is from financial services companies. A lot of banks and other financial institutions are also actively looking into and evaluating solutions. So those would be the three, manufacturing professional services and finance.
Rajeev: How do you increase awareness for potential customers to adopt the solution? Do you see any offline opportunities?
Arun: We do external events and we do our own physical marketing to select committees. We are also looking at this as an opportunity to work with customers who don't use anything else from us. They may not be using our CRM, but they could still use our net zero. This is a separate thing. It's a standalone solution and we believe it's a very important topic. It's a board-level topic so it also gets us entry into the C suite. A lot of companies are using our CRM. The advantage is we have an existing relationship with all the stakeholders. But we are only looking at this as a standalone trust in the market where we are going even to companies who don't use anything else.
Rajeev: What are your expectations going forward by 2026?
Arun: The net zero cloud was launched globally less than three years ago. It is today one of our fastest-growing clouds globally. And we have a few 100 customers already globally on this. So, it has seen very rapid uptake and rent from many of the largest companies like MasterCard. In India, we believe now that the SEBI regulation has come in and it's made it mandatory for those 1000 companies. Our first target is those 1000 companies as all of them will need a technology solution to do their carbon copy. So that's our first port of call for those 1000 companies but, as a market beyond that, I think the possibilities are limitless. It's really up to us how we execute and how well we partner with our customers and also get our partner ecosystem to invest.
Rajeev: Are the partners also involved in the sales?
Arun: In most of the opportunities we are currently pursuing we have some existing partners or have a new bunch of partners for discovery. We have identified about six or seven core partners in India. Some of them are existing partners, but there are one or two new ones who have demonstrated expertise in this area. So, we work with one of those for each of the opportunities.
Rajeev: What is your message for the CTOs?
Arun: Salesforce's net-zero cloud will be their future-proof partner on their sustainability journey. It can do everything from doing the basic carbon accounting to becoming a fully ESG-compliant enterprise.