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 I have great pleasure in presenting ITC’s seventh Sustainability Report.
This is a special year for ITC, as it completes a Century. This journey over a 100 years has been inspiring and transformational in many ways. It has witnessed ITC’s evolution from a single product company to one of India’s largest multi-business corporate enterprises. It has been a voyage of leadership to create a sustainable corporation of tomorrow, driven by a commitment to reach new heights in sustainable value creation for all stakeholders, including the Nation.
These 100 inspiring years have been marked by an overarching Vision to serve a larger national purpose, to live by the strong Values of Trusteeship and to nourish internal Vitality to create superior value for all stakeholders. It gives us immense pride that this amalgam of Vision, Values and Vitality has enabled ITC to attain global hallmarks of excellence in sustainability. ITC today is the only Corporation of its size to be carbon positive, water positive and waste recycling positive, even as it has created sustainable livelihood opportunities for over 5 million people.
Many years ago, ITC redefined its Vision inspired by the superordinate goal to serve a larger national purpose. As part of the assessment of the long-term sustainability of our businesses, we took cognizance of two major challenges that would not only threaten future economic progress, but would even put at risk the destiny of the larger society in which we operate. These are global poverty and rising income inequities on the one hand, and the widespread destruction of the environment on the other. Global economic models pursued over a century have been premised on a uni-dimensional pursuit of material wealth creation with utter disregard for sustainability, leaving a deferred social cost burden on future generations. At one level, the iniquitous distribution of wealth has created a vulnerable society, giving rise to social unrest including terrorism. At another level, the apathy towards replenishing natural capital has led to widespread degeneration of the environment, destroying life nurturing eco-systems. These challenges have got further aggravated by the onset of global warming, exposing the planet to unparalleled peril.
ITC’s growth strategy is powered by unique business models that have enabled it to contribute in a larger measure to creating sustainable livelihoods, even as it has nourished natural capital and created shareholder wealth |
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While these global challenges require concerted action from every section of society, we believe that businesses particularly can play an immensely meaningful role to create a more sustainable and inclusive future. With their numerous touch points in society, business and industry can deliver significant social value, given the strength of their financial, human and other strategic resources. It was this belief, together with ITC’s aspiration to contribute to an over-arching national objective, that redefined the Company’s Vision to inspire a more enduring role in building societal capital. To my mind, Shareholder Value ought to be a reward for Societal Value creation. This definition of wealth creation demands a commitment that goes far beyond the market. Committed corporates create societal value by serving their consumers through competitively superior value propositions, whilst simultaneously pursuing innovative strategies that nurtures the environment and maximises sustainable livelihood creation. This Triple Bottom Line approach to creating larger ‘stakeholder’ value is crucially necessary to ensure the perpetuity of our planet. This philosophy and commitment to contribute to the Triple Bottom Line in terms of building economic, environmental and social capital drives ITC’s spirit of innovation and growth. As we complete a century of existence, this abiding commitment to embrace sustainability makes us a “futureready” Corporation.
India’s developmental challenges are rendered tougher by the large incidence of people living in poverty. World Bank estimates that more than 800 million people in the country survive on less than $2 a day. Such widespread economic backwardness makes societies unstable and, in turn, can make business growth unsustainable. Therefore, creation of sustainable livelihoods is a very important economic objective that business strategists can ill-afford to ignore. ITC’s growth strategy is powered by unique business models that have enabled it to contribute in a larger measure to creating sustainable livelihoods, even as it has nourished natural capital and created shareholder wealth.
At the heart of ITC’s innovative strategies lies the creation of unique business models that synergise longterm shareholder value growth with that of enhancing societal capital. ITC’s globally acknowledged e-Choupal initiative is one such example. e-Choupal based customized extension and information services empower small and marginal farmers through sustainable agricultural practices that enhance farm productivity and raise rural incomes. Digital connectivity enables price discovery, provides critical weather information, establishes market linkages and enables the creation of a virtual co-operative ensuring freedom from exploitative intermediaries. Today, e-Choupals cover 40,000 villages and benefit over 4 million farmers. Similarly, our Social Forestry initiative, driven by an extensive research based clonal propagation programme, has greened over 100,000 hectares and created cumulative employment of 48 million person-days. These plantations provide a reliable source of wood pulp for the long-term competitiveness and sustainability of our Paper business. Sustainable forestry practices have secured for ITC the membership of the Global Forest Trade Network of the WWF in a first-of-its-kind achievement for India.
It is our firm belief that by integrating larger societal goals in our business models, we not only build stronger foundations for the future sustainability of the Company but also ensure that societal benefits are more scalable and impactful.
It is our firm belief that by integrating larger societal goals in our business models, we not only build stronger foundations for the future sustainability of the Company but also ensure that societal benefits are more scalable and impactful |
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ITC’s Sustainability efforts are augmented by its dedicated programme ‘Mission Sunehra Kal’, its prime vehicle for implementing social development initiatives. Mission Sunehra Kal empowers rural communities by helping them adopt sustainable practices that enable them to be economically competitive and socially secure. These endeavours are aimed at (a) diversifying farming systems as a strategy for sustainable agriculture and climate change mitigation by broad-basing the farmbased livelihoods portfolio of the poor and (b) expanding off-farm income opportunities to reduce the disproportionate dependence of rural households on land. This deep engagement with rural communities has enabled ITC to contribute to the creation of sustainable livelihoods by building community assets. ITC’s Integrated Watershed Development initiative has helped create freshwater potential covering over 50,000 hectares in water-stressed areas. In addition, the Company’s integrated animal husbandry services have reached out to over 4,00,000 milch animals creating avenues for non-farm based livelihoods. Over 2,00,000 children have attended our rural supplementary education centres, and more than 20,000 women entrepreneurs have been created through 1000 self-help groups. Mission Sunehra Kal is also engaging with several State Governments to deliver quality projects of high social value through intensive public-private-people partnerships.
ITC’s efforts to improve 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. We take pride in our association with the United Nations Global Compact, the world’s largest global corporate citizenship initiative. I am happy to state that our initiatives and practices support the principles of the Global Compact.
ITC’s efforts to improve 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 |
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Going forward, we recognize that businesses must contribute more effectively to efforts that help in mitigating climate change. ITC has already taken several steps towards this objective (please visit www.itcportal.com for a more detailed perspective). While our large-scale afforestation initiatives help in sequestering twice the carbon emitted from the Company’s operations, the propagation of sustainable agricultural practices and watershed development help adapt to the harsh realities of climate change, particularly for the poor in rural India who are more vulnerable to the ill effects of global warming. These actions are complemented by our effort to continuously enhance energy efficiency and conservation as well as invest in cleaner and renewable energy capacity. Nearly 31% of the energy consumed by ITC comes from renewable sources. We plan to further step up our investments in wind energy to enhance our renewable energy portfolio. Investments have also been made in “green boilers” to tap biomass based energy. As a testimony to its low carbon philosophy, ITC has invested in creating benchmarks in green buildings. The ITC Hotel Royal Gardenia in Bengaluru has received the Platinum LEED certification making it the largest hotel in the world to achieve this milestone. We will strive to ensure that all new buildings constructed by ITC will conform to the green norms of excellence.
ITC has 8 registered projects under the United Nations Framework Convention on Climate Change under the Clean Development Mechanism (CDM). These projects have started earning carbon credits. In addition, several other CDM projects are at various stages of registration. ITC’s climate change mitigation and adaptation initiatives support a large majority of the objectives set out in the Government’s National Action Plan on Climate Change. We are well positioned to leverage the opportunities that are expected to emerge in the future as market based mechanisms are introduced globally to encourage low carbon growth strategies.
Going forward, ITC proposes to progressively conduct detailed Life Cycle Analysis of some of its businesses to help enhance its environmental responsibility efforts. It will also examine the possibility of extending its sustainability practices to some of its supply chain network partners in the near future.
ITC’s competitive vitality is manifest in its deep consumer insights, robust brands, trade marketing & distribution organization, world-class manufacturing, vibrant human resources, and deep commitment to society. It is also embedded in strong Values that drive its Corporate Governance based on the abiding principles of trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. Large investments in cutting-edge Research & Development aimed at creating the game-changers of tomorrow are further enriching this wide spectrum of competitive vitality. We recognize that in the years ahead, sustainable business practices will lend an additional source of competitiveness to ITC as civil society and tougher regulations demand increasing contribution to societal goals.
Investing in intensive skill development, training of human resources and inculcating a spirit of responsible citizenship are the other strategic dimensions of building the Corporation of Tomorrow. In order to provide thought leadership in Sustainability, ITC has collaborated with the Confederation of Indian Industry to set up the CII-ITC Centre of Excellence for Sustainable Development to promote sustainability practices amongst a larger universe of corporates.
The growing recognition of ITC’s sustainability efforts, including the global leadership awards and the prestigious national awards, provide us the encouragement to stay the course in this challenging task of building larger societal value.
This Report, prepared in accordance with the G3 guidelines of the Global Reporting Initiative, captures our Triple Bottom Line commitments and achievements. It is independently assured by M/s Ernst & Young.
ITC’s Triple Bottom Line mission 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 attain and exceed global standards.
ITC’s Sustainability philosophy continues to draw inspiration from Prime Minister Dr Manmohan Singh’s vision for sustainable development with social equity through effective public-private partnerships. I have great pleasure in dedicating this Report to that abiding vision.
YC Deveshwar
September 2010 |
