Sustainability Report 2011

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Key Impacts,
Risks and Opportunities

Report Profile,
Scope and Boundary

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Key Impacts, Risks and Opportunities: Sustainability Challenges

Climate Change and Environmental Degradation

	Given that ITC is largely dependent on agricultural inputs, possible disruptions in agricultural patterns and yields is a significant potential risk arising out of climate change and global warming. Climate change can lead to a decrease in agricultural output due to changed weather patterns and higher temperatures. While this could impact the Company, it will have a debilitating effect on farmers and thereby impact social stability.

	In addition to these direct impacts of climate change, water availability is yet another risk. By 2030, it is estimated that 3 billion people will live in areas of water scarcity.

	The Company is exposed to the physical risks related to climate change since it has 2 large manufacturing plants in the coastal areas.

	Disruption in road and rail traffic caused by such extreme events may also affect an individual Unit’s output.

	Future regulatory regimes may include restrictions on carbon emissions.

	Future competitiveness of businesses will also depend on the ability of companies to minimise their carbon intensity and adopt a low carbon growth path.

	Growing awareness and concern amongst civil society will also demand that businesses chart their growth path with low carbon strategies.

	The need of the hour is to augment natural resources on a large scale vis-à-vis incremental measures that are aimed at minimising environmental damage alone. The absence of policies that encourage the creation of natural resources acts as a constraint to efforts that look at natural resource development. The Government may look at introducing policies and incentives that would encourage businesses to integrate augmentation of natural resources into their business strategy. For eg, the development of a large forest cover, soil and moisture conservation through the establishment of water harvesting structures could be encouraged through a preferential set of incentives.

	We also recognise that wastepaper and other paper products if dumped indiscriminately can lead to immense wastage of resources. This also has an adverse environmental impact, which is caused by the conversion of wastepaper into methane when dumped in municipal landfills.

ITC’s Initiatives

ITC’s response has been to adopt a three-pronged strategy that includes the following:


1.	Identify and evaluate climate change risks for each business.

2.	Reducing the environmental impact of our processes, products and services and work towards creating a positive environmental footprint.

3.	Creating Sustainable Livelihoods and promoting sustainable agricultural practices.

Protection of our assets have been reinforced in the coastal areas in anticipation of increased severity of storms and cyclones which may occur.

ITC has expanded its renewable energy portfolio and more than 35% of our energy consumption is met from renewable sources.

As a part of its low carbon growth strategy, ITC has established iconic green buildings which have set benchmarks in energy efficiency, water conservation and solid waste recycling. All premium luxury Hotels of ITC are LEED Platinum certified.

ITC’s Afforestation Programme has greened nearly 1,14,000 hectares and has led to large scale carbon sequestration besides creating over 51 million person days of employment.

ITC has aligned its objectives in climate change mitigation and adaptation to the Government’s National Action Plan on Climate Change (NAPCC).

ITC’s strategies for natural resource augmentation include the following:


1.	ITC’s Social and Farm Forestry Initiative, is an area where large scale environmental and social capital has been created whilst creating a competitive source of fibre for ITC’s Paperboards business. Afforestation on private wastelands owned by small farmers and tribals generate significantly higher incomes and employment in rural and tribal hinterlands, while restoring ecological balance. ITC invested significantly in Research & Development to create clonal saplings which are disease-resistant, grow faster, have higher survival rates. These are provided to tribals and marginal farmers to enable them to convert their private wastelands into viable pulpwood plantations. Intercropping is encouraged, providing economically vulnerable households with an assured income and a source of nutrition during the gestation period, while loppings and toppings meet their fuel wood requirements. The Forestry Initiative has brought a multiplicity of additional benefits by creating extensive green cover that plays a crucial role in conserving in-situ moisture, groundwater recharge, reducing topsoil losses, increase in soil fertility and carbon sequestration.

2.	One of these social forestry projects of ITC has also been registered as a Clean Development Mechanism (CDM) project under the United Nations Framework Convention on Climate Change (UNFCCC).

3.	Besides continuously minimising the consumption of freshwater per unit of output in all its Units, ITC has created rainwater-harvesting potential, covering over 64,000 hectares in water stressed areas of the country. Adopting a bottom-up participatory approach, the programme facilitates village-based participation in soil and moisture conservation, building, reviving and maintaining micro water harvesting structures and management of water resources to reverse land degradation, provide critical irrigation and raise agricultural productivity. This initiative has transformed the lives of millions of farmers and has brought precious water closer home. ITC is working closely with several state governments including Madhya Pradesh, Andhra Pradesh, Maharashtra, Rajasthan and Bihar for watershed development under different schemes like the MGNREGA, NABARD, Integrated Watershed Development Programme and Integrated Watershed Management Programme.

4.	ITC has made significant efforts in solid waste recycling and nearly 100% of wastes generated by its Units is recycled. Over and above that, ITC have pioneered a special initiative - ‘Wealth out of Waste’ (WOW) initiative aims to raise awareness among the public on the benefits of the reduce-reuse-recycle process and inculcate the habit of source segregation, thereby protecting the environment, conserving scarce natural resources and improving civic amenities, public health and hygiene. This not only caters to the fibre requirements of our Paperboards business but also creates large scale urban employment besides preserving natural resources.

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Key Impacts,
Risks and Opportunities

Report Profile,
Scope and Boundary

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