ENTERPRISE OF TOMORROW SUSTAINABILITY REPORT 2018 ITC LIMITED ENTERPRISES OF TOMORROW CAN BRING IN TRANSFORMATIONAL CHANGE BY MAKING SOCIETAL VALUE CREATION A CONSCIOUS STRATEGIC DECISION”. CONTENTS C H A I R M A N ’ S E C O N O M I C 01 S TA T E M E N T 69 P E R F O R M A N C E O R G A N I S A T I O N A L E N V I R O N M E N TA L 07 P R O F I L E 85 P E R F O R M A N C E 23 Sustainable Supply Chain 29 Honours, Awards & Certications S TA K E H O L D E R 35 E N G A G E M E N T R E P O R T P R O F I L E , 57 S C O P E A N D B O U N D A R Y 89 Management Approach 91 Energy & Climate Change C O R P O R A T E 107 Air Emissions 61 G O V E R N A N C E 111 Water Management 125 Waste Management 137 Raw Materials 142 Biodiversity ITC Limited | Sustainability Report 17-18 E N T E R P R I S E O F T O M O R R O W P E O P L E & S A F E T Y P R O D U C T 145 P E R F O R M A N C E 195 R E S P O N S I B I L I T Y 147 Labour Practices and Decent Work & Human Rights 153 Occupational Health & Safety 211 A N N E X U R E S S O C I A L 211 GRI Standards Indicators Index 161 P E R F O R M A N C E 221 GRI G4 Food Processing Sector Supplement (FPSS) 163 ITC Mission Sunehra Kal for 223 Alignment to Business Sustainable & Inclusive Growth Responsibility Report Principles 224 ITC's Vision, Mission, Core Values and Policies & Guidelines 225 Quantication Methodologies 226 Memberships and Aliations 228 Independent Assurance Statement C H A I R M A N ’ S 01 S TA T E M E N T It is a matter of great satisfaction that ITC is presenting the 15th edition of its Sustainability Report this year. The journey to create a global exemplar in Sustainability has been immensely enriching and rewarding. A spark ignited by a Vision to serve a larger societal purpose has now become the very soul of the enterprise, driving every thought and action as well as the strategy and purpose of the organisation. For one and a half decade, this Report has traced the organisation that invests not only in meeting the needs contours of ITC’s performance across all the of the present but also in securing a better, safer and dimensions of the Triple Bottom Line. Though a more inclusive future for the generations to come. At voluntary disclosure, every Sustainability Report has ITC, this commitment to create an enterprise of been subjected to the highest levels of scrutiny with tomorrow resides in its chosen strategy to pursue third-party assurance. It is indeed reassuring that this ‘Responsible Competitiveness’ – a socio-economic Report has been prepared meeting the criteria of construct that underpins the Company’s objective to be “In Accordance – Comprehensive” level of the Global future ready whilst ensuring that growth is sustainable Reporting Initiative (GRI) Standards. and inclusive. The Report’s theme of creating “Enterprises of Recognising that global concerns on sustainability Tomorrow” reflects the aspiration of the Company and require concerted local action, ITC’s initiatives in its commitment to chart a path that will continue to environmental preservation and replenishment create enduring value for its stakeholders. Indeed, an address several of the objectives set out in India’s enterprise of tomorrow is one that goes beyond the Nationally Determined Contribution (NDC) commitment to the market to create larger value for commitments to the United Nations Framework society. It is one that pursues competitive growth even Convention on Climate Change. The Company’s as it enriches the environment and creates Sustainability Initiatives also contribute meaningfully opportunities for sustainable livelihoods. It is an to the UN Sustainable Development Goals. ITC Limited | SR 17-18 E N T E R P R I S E O F T O M O R R O W 02 AT ITC, THE COMMITMENT TO CREATE AN ENTERPRISE OF TOMORROW RESIDES IN ITS CHOSEN STRATEGY TO PURSUE ‘RESPONSIBLE COMPETITIVENESS’ A SOCIO-ECONOMIC CONSTRUCT THAT UNDERPINS THE COMPANY’S OBJECTIVE TO BE FUTURE READY WHILST ENSURING THAT GROWTH IS SUSTAINABLE AND INCLUSIVE. REKINDLING HOPE FOR A SUSTAINABLE WORLD The World Economic Forum at Davos this year and human ingenuity, global warming according to a deliberated on the theme of “creating a shared future in recent UN Report is on course to exceed 1.5 degree a fractured world”. It remains to be seen whether this centigrade, the stringent goal set in the Paris poignant moment in economic history will drive agreement. Estimates also point to the fact that 3.5 collective action in finding comprehensive and billion people, who account for 70% of the world’s pragmatic solutions to address issues of global distress. working age population, own just 2.7% of global wealth. However, it certainly brings into focus what is arguably That the global growth model pursued so far has gone the most critical challenge facing the world today. For amiss is an understatement. It is clear that urgent and long, the alarm bells have rung loud and clear to alert collective action is called for to re-engineer a growth the global community that the planet is in peril, that paradigm where prosperity is widespread not poverty; future generations are threatened by climate change environmental preservation is the norm and not and that rising income inequities are fuelling social destruction; jobs are created and not destroyed. If the unrest. Yet the challenges far outpaced solutions. threat of global warming is to be contained, if Across the globe, extreme weather events are sustainable livelihoods are to be created on an increasingly destroying lives and property, conflict and unprecedented scale, the world must come together wars continue to leave people homeless and children like never before – policy makers, business and other orphaned, people in poverty still constitute a sizeable organs of civil society - to implement a cohesive proportion of developing countries and job seekers far strategy that will perpetuate inclusiveness and outnumber the opportunities created by a tiring world sustainability as an integral part of growth and not as economy. Despite advancements in science, technology an afterthought. And therein lies the challenge. Bolting C H A I R M A N ’ S 03 S TA T E M E N T on sustainability imperatives to the current economic ROLE OF BUSINESS: model, be it by mandate, encouragement, coercion or ITC’S VISION AND STRATEGY regulation, can fuel a few steps forward but not the giant strides required. I am deeply convinced that businesses can bring about transformational change in society. More than financial It is only when sustainability and inclusive resources alone, the strength of their multi-talented growth are an integral outcome of an managerial resources, creative capacity and innovative economic or business strategy, can they capability as well as their presence across numerous touch points in society enable them to contribute very grow to a scale necessary to address the effectively in creating social capital. daunting challenges. When businesses make societal value This requires innovation that simultaneously delivers competitive growth, environmental replenishment and creation a core purpose of business strategy, livelihood creation. It requires government policies that it unleashes innovation and strong drivers encourage and support measurable sustainable that leverage the transformative power of business practices. It calls upon consumers to exercise corporates to make a lasting and sustainable an enlightened choice for enterprises that demonstrate contribution to society. a strong commitment to such societal goals. Unless all these efforts happen in unison and synergy, the results will be sub-optimal. The hope for a secure world lies in By serving society well, corporates create larger value such a synergy of efforts. to make growth more enduring, thereby rewarding shareholders with sustained wealth creation over a India is today the fastest growing major economy in the longer term. world. Global tailwinds from a recovering world economy together with the prospect of a rising Private The inspiration to serve a larger national purpose is at Final Consumption Expenditure and a pick-up in rural the core of ITC’s vision to put Country before demand are expected to keep the economy buoyant in Corporation and the Institution before the Individual. the years to come. Yet challenges abound. India will Making societal value creation the bedrock of its surpass China in population in less than a decade. corporate strategy, ITC has pursued innovation in Providing food security to the estimated 1.5 billion business models that synergise the building of population will be a daunting task even as severe water economic, ecological and social capital as a unified stress continues to impact an estimated 600 million strategy. This multipronged strategy is manifest in people. India’s agri and rural sector, which is the most several ways. In line with its aspiration to be an engine vulnerable to climate change, provides sustenance to of growth for the Indian economy, a portfolio of half the workforce in the country.