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India mirrors the world in
the myriad challenges it faces on account of the growing income
inequities and environmental degradation. Economic models that
have led businesses, over many decades, to focus only on the uni-dimensional
objective of creating financial value, with scant attention to
the depletion of natural resources and the increasing
disparities in incomes, have led to an imminent crisis that has
the potential to seriously destabilise growth and progress.
Global warming is a clear manifestation of this reality.
Widespread acts of violence and social unrest arising out of the
growing marginalisation of large populations is yet another
expression of this crisis. As responsible corporates, we cannot
ignore these unfolding threats which can seriously impact the
future of our businesses, the economy and indeed the nation. It
is in our enlightened self-interest to take proactive action,
and to take it now.
Whilst global challenges of
this dimension can be met only by all sections of society
joining and aligning forces, we strongly believe that business
and industry are uniquely positioned to make an invaluable
contribution.
Private
enterprises have created assets and facilities that constitute a
front line engagement with civil society. Their physical
presence in communities around their catchments gives them an
opportunity to directly engage in synergistic business
activities that can create livelihoods and add to preservation
of natural capital. More than financial capital, private
enterprises possess the crucial managerial capability to ensure
efficient delivery of social projects at lower incremental
costs.
ITC has forged unique
business models that synergise long term shareholder value
creation with the superordinate purpose of enhancing societal
capital. Accordingly, we measure our accomplishments not only in
terms of financial performance but also by the transformation we
have consciously triggered to augment the natural and societal
capital of the nation. This aspiration to achieve Triple Bottom
Line benchmarks springs from our vision to contribute to the
national goal of sustainable and inclusive growth. This
commitment finds expression in our sustainable development
philosophy, which recognises the need to not only preserve but
also enrich precious environmental resources while providing a
safe and healthy workplace for our employees.
ITC’s globally acknowledged
e-Choupal initiative enhances farm productivity, provides market
linkages and enables the creation of a virtual co-operative that
empowers small and marginal farmers through higher incomes and
freedom from exploitative intermediaries. Today, 6500 e-Choupals
covering 40,000 villages benefit over 4 million farmers.
Similarly, our Social Forestry initiative has greened over
80,000 hectares and created cumulative employment of 35 million
man days. At the same time, these plantations provide a reliable
source of wood pulp for the long term competitiveness and
sustainability of our Paper business.
Our valued stakeholders will
be happy to know that for six years in a row, ITC has been a
‘Water Positive’ Company, and for three consecutive years todate,
we have sustained our ‘Carbon Positive’ status, notwithstanding
the large growth in our businesses. Today, we have generated
three times more freshwater harvesting potential than what we
consume and sequester almost twice the amount of carbon we emit.
This year, we have also achieved the 100% benchmark in recycling
solid waste in several of our operations. This makes us the only
company in the world, of our size and diversity, to have
achieved these three milestones. We also draw immense pride that
ITC’s businesses today help in generating more than 5 million
livelihoods across value chains that touch the lives of many who
live at the margin. Over the last three years, Total Shareholder
Returns, measured in terms of increase in market capitalisation
and dividends, grew at a compound rate of 34% per annum, placing
ITC among the foremost in the country in terms of efficiency in
servicing financial capital.
Our strategy to embed a
direct linkage between business objectives and societal goals
has received worldwide acclaim, be it in the form of awards
(listed elsewhere in this Report) or in the recognition ITC has
received as an exemplar in the implementation of sustainable
development practices. We believe our efforts to facilitate the
transformation of Rural India by empowering small and marginal
farmers and by improving the quality of life of rural
communities, particularly women and children, will contribute to
achieving many of the Millennium Development Goals enunciated by
the United Nations. ITC’s ‘Mission Sunehra Kal’, which
encompasses our sustainable development initiatives, will
continue to provide thrust to the three identified areas of
intervention, namely, (i) natural resource management, which
includes wasteland, watershed and agriculture development; (ii)
sustainable livelihoods, comprising genetic improvement in
livestock and economic empowerment of women; and (iii) community
development, with focus on primary education, health and
sanitation.
Recognising the need to
encourage more corporates to embrace sustainability, provide
thought leadership and build capacity, ITC together with the
Confederation of Indian Industry, has launched the CII-ITC
Centre of Excellence for Sustainable Development. The Centre
seeks to address the institutional void in developing the requisite
capability among Indian industry to pursue sustainability goals.
This year, ITC joined the United Nations Global Compact, the
world’s largest global corporate citizenship initiative and I am
happy to state that our initiatives and practices support the
principles of the Global Compact.
In an increasingly connected
and global world, stakeholders including consumers and
investors, have raised the bar of expectation from corporates
not only in terms of world-class quality of products and
services, but also in terms of their response to issues of
ethics, transparency and sustainability concerns.
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The cornerstones of
ITC’s governance philosophy are trusteeship,
transparency, empowerment and accountability, control
and ethical corporate citizenship. We believe in setting
exemplary standards of ethical behaviour, both
internally within the organisation, as well as in
external relationships. In addition, given the primacy
of the consumer in our business strategies, ITC has
invested significantly in cutting edge R&D, continuous
technology upgradation, intensive consumer engagements
to gain insights and a relentless focus on quality to
build trusted consumer brands which stand among the
‘best in class’. These will not only enhance the
competitiveness of our businesses, but also create
strong foundations for a secure and sustainable future
for the Company. |
We
believe that we must lead by example, and therefore, are
constantly engaging with stakeholders and communities in India
and abroad to help shape a larger Sustainability Agenda for
Business. Last year, at the Annual General Meeting of the
Company, I had proposed the creation of an institutional
framework to develop, measure and rate the CSR impact made by
companies (see AGM Speech 2007 at www.itcportal.com). This would
not only encourage transparent sustainability reporting, but
would also create a visible rating symbol in the form of
‘Trustmarks’ which would enable consumers to make a preferred
choice for the products and services of companies that have put
in place meaningful corporate action for social development.
Such a strong and positive market response to corporate
sustainability practices will encourage more and more companies
to join the movement. I am happy to see a concerted action by
many organisations to mainstream sustainability practices
through voluntary guidelines, creation of environmental, social
and governance ratings and through the institution of awards to
recognise such efforts.
ITC’s
Sustainability journey has inspired us to renew our commitment
to consciously direct the collective endeavours of our employees
across all businesses, functions and locations to continuously
improve sustainability practices to ultimately attain and exceed
global standards. Viewed from
a global perspective, the sustainability challenges indeed look
daunting. However, they are not insurmountable. Our own
experience gives me the confidence to say that we can all make a
big difference. Every small step in this journey, made
collectively, is a giant stride that will secure our future
generations. Surely, that goal itself makes every bit of this
journey worthwhile. ITC
dedicates this Report as a tribute to our Prime Minister Dr
Manmohan Singh’s vision of building public-private partnerships
for the sustainable and inclusive growth of the nation.
(Y C DEVESHWAR)
Chairman |
