SUSTAINABILITY REPORT 2015 ITC LIMITED FOR ALL OUR TOMORROWS GRI - G4 COMPLIANT: IN ACCORDANCE - COMPREHENSIVE ITC’s Sustainability Report can be downloaded from www.itcportal.com ITC’s Sustainability app can be downloaded from http://www.itcportal.com/app/itc-apps.aspx Follow ITC on Twitter @ITCCorpCom ITC Limited is an Organizational Stakeholder of GRI and supports GRI’s mission to provide widely used standards on sustainability reporting. Contents 126 Category: Social Labour Practices & 128 04 Chairman’s Statement Decent Work and Human Rights 10 Organisational Profile Occupational Health 136 and Safety Supply Chain 24 Social Investments – 144 Certifications, Honours and Awards 30 Mission Sunehra Kal Stakeholder Engagement, Product Responsibility 164 Risks & Opportunities and 34 Materiality Analysis 174 GRI Index Report Profile, Scope 48 and Boundary GRI-G4 Food Processing Sector 193 Supplement (FPSS) 54 Governance Structure 62 Category: Economic Management Approach 64 Economic Performance 65 74 Category: Environment Management Approach 76 Energy 78 Air Emissions 84 Water Management 96 Alignment to BRR Principles Recycling and Waste Management 108 195 Raw Materials 116 196 Annexures Biodiversity 122 Policies and Guidelines 196 Quantification Methodology: 197 Energy and GHG Emissions Memberships and Affiliations 198 Independent Assurance 200 Statements Sustainable Livelihoods n More than 1,95,000 hectares greened Out of this, ITC’s Social Forestry Programme cumulatively covers 69,421 hectares in 3,958 villages, impacting Triple Bottom Line over 72,000 poor households. n Well-being Out of Waste Performance (WOW) The ‘Well-being Out of Waste’ initiative inculcates the habit of source segregation and recycling. The initiative currently extends to Hyderabad, Chennai, Bengaluru, Coimbatore and some towns of Telangana. ITC: Creating 6 Million Sustainable Livelihoods Environment n Carbon Positive: 10 Consecutive years n Water Positive: 13 years in a row n Solid Waste Recycling Positive: for the last 8 years Economic n Soil & Moisture conservation to over 2,00,000 hectares ITC has created multiple drivers ITC’s Watershed Development Programme, of growth by developing a designed to assist farmers in identified portfolio of world-class Indian moisture-stressed areas, increased by an businesses and brands. additional 63,492 hectares in 2014-15 taking the total area covered under the Over the last nineteen years: programme to over 2,12,200 hectares. n Net Revenue grew at a n Use of Renewable Energy compound rate of 15% annually Over 43% of ITC’s total energy requirements n Net Profit grew at 20.9% per was met from carbon neutral sources such annum as biomass, wind and solar. n n Greenest Luxury Hotel Chain Total Shareholder Returns All ITC’s premium luxury Hotels are (measured in terms of increase LEED® Platinum certified (certification in market capitalisation and is in progress for the super premium ITC dividends) grew at a compound Grand Bharat which opened recently). annual growth rate of 24.3%. 02 Triple Bottom Line Performance n Diversified multi-business n Over 45,000 sustainable conglomerate spanning livelihoods for rural women FMCG, Hotels, Paperboards & These women were gainfully employed Packaging, Agri Business and either through micro-enterprises or Information Technology assisted with loans to pursue income generating activities. n Market capitalisation: $ 40 billion n Animal husbandry services n Turnover: Nearly $ 8 billion for nearly 12,00,000 milch animals n ITC Group provides direct The programme for genetic improvement employment to more than of cattle through artificial insemination 32,000 people to produce high-yielding crossbred progenies is implemented through 256 Social Cattle Development Centres covering over 10,000 villages. ITC’s Social Investments n Afforestation programme Programme is spread over generates nearly 90 million 16 states covering 71 districts. person-days of employment n Primary Education Initiative: n ITC’s bio-diversity Benefitting 4,20,000 children programme now covers During 2014-15, a new initiative called the 3,191 hectares ‘Read India Programme’ reached out to 36,000 children. In addition, another 34,000 The objective is to protect native children were covered by Supplementary flora and fauna and providing other Learning Centres, taking the total number eco-system services. of children benefitted to 4,20,000. n ITC’s Vocational Training n ITC e-Choupal: Empowering programme - Training over 4 million farmers 22,000 youth ITC’s globally acknowledged e-Choupal This program played an active role initiative is the world’s largest rural in building and upgrading skills of digital infrastructure benefitting over marginalised youth to better meet the 4 million farmers. emerging needs of the job market. Figures in this section are as on June 2015. Figures in the rest of the Report pertain to the Financial year 2014-15. 03 Chairman’s Statement have great pleasure in presenting ITC’s Sustainability Report 2015. I This is the 12th year of its publication. As in earlier years, this Report, prepared as a pro-active disclosure of ITC’s Triple Bottom Line performance, is independently assured and based on the international guidelines recommended by the Global Reporting Initiative (GRI). It is a matter of great satisfaction that this Report once again conforms to the highest “In Accordance – Comprehensive” level of reporting prescribed in the latest G4 guidelines of GRI. I am also happy to once again reaffirm ITC’s commitment to the principles of the United Nation’s Global Compact. It is indeed heartening that the Company’s large-scale social investments continue to make a meaningful contribution to the country’s progress towards achieving the UN Millennium Development Goals. A World in Peril One of the most enduring images that shocked the world in 2015 was of the “boat people refugees” - thousands of men, women and children desperately fleeing poverty, persecution and conflict in a perilous journey across the Mediterranean to seek asylum in the European Continent. Equally of concern have been the recent events of extreme weather that continue to worsen with every passing year - be it the scorching heat wave in India that has already claimed more lives in any single year in the last decade or the continuing four-year drought in California that has demonstrated the vulnerability of people in even the world’s richest nation. 04 These are vignettes of a world in peril and of a deep-rooted global malaise that threatens the future of mankind. For over a century, the world has witnessed remarkable progress. Man conquered space, eliminated dreaded diseases, and shrunk the globe into a borderless virtual society. World GDP expanded over 60-fold in the last 50 years. Yet, a grossly unequal world got created. Less than 1% of adults in the world own 44% of global wealth, while the bottom 70% own just 3% of the world’s wealth. It is obvious that the economic model pursued by the world for decades failed to deliver growth with equity. The consequences are dangerous. Apart from wide- spread global poverty, an entire generation of 600 million youth today stare at a jobless future. The resultant frustration, disillusionment and despair not only fuel social unrest but make them vulnerable to the lure of crime and even terrorism. Unstable societies cannot foster sustainable economic growth. It negates the tremendous advancements made in science and technology miring the world in a state of constant conflict and uncertainty. The race for material wealth creation over the last century also paid scant attention to the imperative need for environmental replenishment. Today, the world consumes natural resources at a rate that is one and a half times the earth’s capacity to regenerate. At this pace, we will bequeath future generations a barren planet in less than 30 years from now. The spectre of climate change is no longer an issue of the future. It is here and now, posing the greatest threat to poor farming communities who are the most vulnerable to the vagaries of nature. India’s socio-economic challenges mirror the global conundrum. If at all, our problems are even more acute. Nearly 300 million people need critical support to move out of endemic poverty. Every year 12 million young people join the workforce. With gainful opportunities, they will be a source of exponential growth. Without adequate opportunities, they will be a source of explosive disaster. India is set to cross China in 2025 as the world’s most populous nation. How do we ensure food security, water security, energy security and livelihood security for these teeming millions? How will the conflict for food, fuel, feed, forests and fibre be resolved from the scarce land resources? We have 17% of the world’s population, but only 2.4% of arable land, 4% of water and 1% of forest resources. It is obvious that we need a new model of economic growth that will simultaneously fuel economic growth, create sustainable livelihoods and replenish and preserve the environment. And that is indeed a tall order. 05 Sustainable Livelihoods ITC’s businesses The Role of Business and value- No single section of society can enable such transformational change of epic proportions. chains generate A confluence of efforts is therefore required from all sections of society - be it Government, sustainable Business or other sections of Civil Society. livelihoods for It is my strong belief that Business can play an immensely constructive and meaningful role. around 6 million Businesses possess the innovative capability, creative capacity and entrepreneurial vitality to people, many of engender transformational change by harnessing these strengths to co-create much larger whom represent societal value. They are also present in the front-line of economic activity with numerous touch points in society, enabling a synergy of financial and managerial resources to deliver the weakest in impactful solutions. society The seed of unleashing this transformative capacity for the larger good of society lies in defining a super-ordinate purpose of business.