global exemplary initiatives in sustainability by itc · global exemplary initiatives in...

54 Emerging Business Trends and Marketing Strategy

4Global Exemplary Initiatives in

Sustainability by ITC

Dr. C.V. Krishna*

ABSTRACT

Over the years, ITC has formulated a great combination oforganizational strengths to serve as a great source of sustainablecompetitive advantage. ITC has a vision to take up larger nationalpriorities by adding sustainability in its core business models. ITCdesigns and implements innovative strategies and creates sustainablevalue chains which are thereby linked to its businesses which createopportunities to some of the most disadvantaged sections of the society.The competitiveness of these value chains are driven by the success ofITC’s major brands and at the same time, unique sources of competitiveadvantage are provided to the Company’s businesses through theselinkages. The Triple Bottom Line performance of ITC shows itscommitment and pro-active action in meaningful contribution toCountry’s pursuit of sustainable and inclusive development. ITC’smulti-dimensional sustainability initiatives are not only limited todevelopment of Indian community but also supports the globalcommunity’s efforts in providing a secure future for the coming

* Associate Professor, Suprabhath Institute for Management &Computer Studies, Hyderabad, Email: [email protected]

Global Exemplary Initiatives in Sustainability by ITC 55

generations ITC’s support to the United Nations Global Compactprinciples is another great achievement. Finally the paper focusescompletely on the Company’s Global exemplary sustainabilityinitiatives with special focus on triple bottom line sustainabilitycontribution.

KeyWords: Sustainabi li ty, Competi tive Advantage, SocialSustainability, Environment Sustainability, Economic Sustainability.

Introduction

ITC is one of the Country’s leading giant conglomerateprivate sector companies, the market capitalization of ITC isUS$ 45 billion and its turnover is over US$ 7 billion. ITC isa conglomerate diversified company with main verticals beingFast Moving Consumer Goods (FMCG), Hotels, Paperboardsand Packaging, Agri Business and Information Technology1.ITC is considered as one of India’s most valuablecompanies.ITC has a vision to sub-serve larger national goals,and it has formulated unique business models by integratingenhancement of shareholder value along with the enhancementof societal and environmental capital. From past 17 years,ITC has focused on diversification by creating world-classflagship Indian brands across various business segments thathave great prospects in the global Indian marketplace. Thus,ITC unleashed focus on multiple drivers of growth for theIndian economy.ITC has embedded societal development inits core businesses, where it works in partnership with farmersand communities for implementing large-scale socialinvestment programs which have enhanced incomes of peopleand improved their quality of life by creating sustainablelivelihood opportunities to the people, through variousbusinesses of ITC. ITC has also helped rural people and


generated more than 5 million livelihoods across various valuechains, and thereby touching the lives of many people whoare living at the margins in rural areas.

The achievements of ITC have been recognizedworldwide and it has been rated among the World’s Best BigCompanies, Business Today rated ITC in Asia’s ‘Fab 50’companies and one of Country’s Most Valuable Companies.Globally, The Boston Consulting Group (BCG) has rankedITC as the world’s 6th largest ‘sustainable value creator’among consumer goods companies.

Harvard Business Review ranked ITC’s Chairman MrY C Deveshwar as the 7th Best Performing CEO in the worldin its January-February edition 2013. ITC’s Chairman MrDeveshwar has also been conferred one of the country’shighest civilian honors, the Padma Bhushan, for his leadershipin transforming the ITC Company into an organization witha long-term commitment towards national priorities ofsustainable and inclusive growth.

Triple Bottom Line Sustainability Contribution ofITC Limited

ITC measures its performance by its triple bottom linecontribution2 to building economic, social and environmentalcapital. Today, ITC is a global exemplar in sustainability. Itsbusiness-linked sustainability initiatives and socialinvestments programs, like the celebrated e-Choupal, Social& Farm Forestry initiatives, Watershed Development, AnimalHusbandry and Women’s Empowerment, have transformedrural India. It is the only enterprise in the world of comparable


dimensions to be carbon-positive (8 years in a row),sequestering one and a half times the amount of carbon itemits; water positive (11 consecutive years), creating 2 timesmore rainwater harvesting potential than it consumes; andsolid waste recycling positive (for the last 6 years). Over 40%of the total energy requirement of the Company is met fromrenewable sources, a testimony to its commitment to adoptinga low carbon growth path. All ITC’s premium luxury hotelshave the unique distinction of being LEED Platinum certified,making it the world’s greenest luxury hotel chain.

1) Environment Sustainability

Economic progress and long-term businesssustainability are today threatened by the real and adverseconsequences of global warming and accelerated climatechange. ITC has responded to the challenges emerging fromthe threat of global warming by aligning its corporate strategywith national priorities. Accordingly, in line with the NationalAction Plan on Climate Change (NAPCC), we have adoptedstrategies to address climate change-related impacts anddeveloped appropriate mitigation and adaptation plans. Ourunique approach has been to integrate these plans with ourbusiness strategies and not as separate activities.

ITC’s Strategies for Environment Sustainability1. Identifying and evaluating climate change risks for each

business.

2. Reducing the environmental impact of our processes,products and services and working towards creating apositive environmental footprint.


• Adopting a low carbon growth path throughreduction in specific energy consumption andenhanced use of renewable energy sources.

• Enlarging our carbon positive footprint throughincreased carbon sequestration by expanding forestryprojects in wastelands.

• Reducing specific freshwater intake and augmentingrainwater harvesting activities both on-site and off-site at watershed catchment areas.

• Working towards minimising waste generation,maximising its reuse and recycling and using externalpost-consumer waste as raw material in our Units.

3. Creating susta inable livelihoods and promotingsustainable agricultural practices.

ITC’s Achievements in Environment Sustainability• Water Positive: 11 years in a row

• Carbon Positive: 8 consecutive years

• Solid Waste Recycling Positive: for the last 6 years

• Soil & Moisture Conservation To 1,16,000 Hectares:ITC’s Watershed Development initiative brings preciouswater to more than 1,16,000 hectares of moisture-stressedareas

• 40% Renewable Energy: More than 40% of ITC’s totalenergy consumption is from renewable sources

• Greenest Luxury Hotel Chain: All ITC’s premiumluxury Hotels are LEED Platinum certified

• 1,42,000 HECTARES GREENED: ITC’s Social andFarm Forestry initiative has greened over 1,42,000hectares


2) Social Sustainability

In pursuit of the Company’s commitment to the TripleBottom Line3, ITC’s Social Investments Programme continuesto be driven by the needs and concerns of two importantstakeholders: The rural communities with whom ITC’s AgriBusinesses have forged a long and enduring partnershipthrough its crop development and procurement activities.These households operate in rain-fed conditions in some ofthe most moisturestressed regions of the country.

The communities residing in close proximity of ourproduction units, who are constrained from enjoying a betterquality of life due to poor social infrastructure especially inthe areas of education and health.

ITC is ideally positioned to respond to these challenges,given its overarching aim of empowering its stakeholdercommunities by promoting sustainable livelihoods throughthe strategic integration of the social investments programmewith its business value chains.

ITC’s Achievements in Social Sustainability• Creating 5 Million Sustainable Livelihoods

• Creating Community Assets: Strengthening the agriproduction base of nearly 4 lakh farmers

• Educating 3,00,000 Children: ITC’s Primary Educationinitiative has educated over 3,00,000 children

• Empowering 4 Million Farmers: ITC’s globallyacknowledged e-Choupal initiative is the world’s largestrural digital infrastructure benefitting over 4 millionfarmers


• 40,000 Sustainable Livelihoods For Rural Women:ITC’s Women’s Empowerment initiative has creatednearly 40,000 sustainable livelihoods

• Animal Husbandry Services To8,00,000 MilchAnimals: ITC’s Livestock Development initiative hasprovided animal husbandry services for over 8,00,000milch animals

3) Economic Sustainability

Continuing with its chosen strategy of creating multipledrivers of growth4, the Company is presently the leadingFMCG marketer in India, a trailblazer in ‘green hoteliering’and the second

largest Hotel chain in India, the clear market leader inthe Indian Paperboard and Packaging industry and thecountry’s foremost Agri business player. ITC’s wholly ownedsubsidiary, ITC Infotech India Limited, is one of India’s fastgrowing Information Technology companies in the mid-tiersegment. ITC is one of India’s most admired and valuablecorporations with a market capitalisation of over ‘ 2,60,000crores and has consistently featured amongst the top 10 privatesector companies in terms of market capitalisation and profitsover the last seventeen years.

ITC’s Achievements in Economic Sustainability• Market Capitalisation: Over $ 45 Billion

• Turnover: Over $ 7 Billion

• 26% Compound Annual Growth In Total ShareholderReturns Over The Last 17 Years


• 30,000 Employees: ITC Group provides directemployment to more than 30,000 people

• Powering Growth With Multiple Business Drivers:Diversified multi-business conglomerate spanningFMCG, Hotels, Paperboards & Packaging, Agri Businessand Information Technology

• Powered By The Vitality Of World-Class Brands

The other economic achievements which are not listedabove are given in the Appendix as Exhibits from 1 to 11.

Conclusion

Societies across the globe can ignore the environmentaland social problems created by industrialisation. Business,as critical organs of society, cannot succeed in societies thatfail. Therefore, they have to be an integral part of the solution.Corporates possess enormous capacity to createtransformational change through innovative business modelsthat deliver significant societal value even as they generateeconomic wealth. Shareholder value creation ought to be areward for societal value creation.

Responsible corporates create societal value by servingtheir consumers through competitively superior valuepropositions, by preserving and replenishing the environmentand by innovating strategies that maximise sustainablelivelihood creation. ITC is one such great Indian companywhich is not only economical and sustainable but it alsocreates sustainability to both society and environment, whichmakes ITC a truly global exemplar in its responsible businesspractices world wide. If all major companies in India and the


world follow the social and environmental initiatives as takenby ITC, then the future generations and their futuregenerations can live happily and everywhere there will beonly prosperity and greener growth.

End Notes1 As given in the Sustainability Report 2013-ITC Limited2 As quoted in the Sustainability Report 2013-ITC Limited3 As quoted in the Sustainability Report 2013-ITC Limited4 As quoted in the Sustainability Report 2013-ITC Limited

References1) Anand, S. and Sen, A.K. (1996) ‘Sustainable human development:

concepts and priorities’, Office of Development Studies DiscussionPaper, No. 1, UNDP, New York

2) Hicks, 1997 D.A. Hicks, The inequality-adjusted humandevelopment index: a constructive proposal, World Development25 (8) (1997), pp. 1283–1298.

3) Hinterberger, F., et al. (1999) Sustainable Human DevelopmentIndex. A suggestion for Greening the UN Indicator of Social andEconomic Welfare, Wuppertal Institute, Wuppertal.

4) ITC Limited (2013), “Sustinability Report 2013 by ITC Limited”,pp 48-120.

5) KLD Research. Environmental, Social and Governance RatingCriteria. 2007

6) Partridge, E. (2005)‘Social sustainability’: a useful theoreticalframework? Paper presented at the Australasian Political ScienceAssociation Annual Conference 2005, Dunedin, New Zealand, 28–30 September 2005

7) United Nations Development Programme (various years) HumanDevelopment Report, Oxford University Press, Oxford.


8) Wor ld Bank (1992) Wor ld Development Repor t 1992:Development and the Environment, Oxford University Press, NewYork.

9) World Commission on Environment and Development (1987) OurCommon Future, Oxford University Press, Great Britain.

10) World Economic Forum (2002) Environmental SustainabilityIndex, Columbia University.

11) www.itcportal.com

AppendixExhibit 1: Direct Economic Impact

Exhibit 2: Revenue And Profit Before Depreciation, Interest And Tax(PBDIT)


Exhibit 3: Distribution of Value Added

Exhibit 4: Contribution to Exchequer

Exhibit 5: Dividend Payout (Incl Dividend Distribution Tax)


Exhibit 6: Return On Assets Deployed

Exhibit 7: Raw Material Consumed

Exhibit 8: Stores and Spares Consumed


Exhibit 9: Employee Benefits

Exhibit 10: Contribution to Provident and Other Funds

Exhibit 11: CSR Spends

Source: The Source of all the Exhibits from 1 to 11are from the websitewww.itcportal.com

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