VALUE BEYOND BUSINESS Sustainability Report 2010-11 VALUE BEYOND BUSINESS Creating value for business and beyond business forms the ethos of the way we work. In addition to maximising the business value in financial terms, GAIL has always strived for providing value beyond business in economic, environment and social aspect. Since inception in 1984, GAIL has created value through its business by contributing significantly to India’s gas infrastructure and posting a remarkable business growth year on year. We started with an equity of INR 8,450 million that has grown multi-fold to about INR 590,000 million in last 27 years. Alongside our endeavors in ensuring sound value creation through our business, we focus our efforts in creating value beyond business through our interventions in various aspects of our triple bottom-line, whether it is improving efficiencies in our operations, developing the communities around us, or taking initiatives that reduce our impact on the environment. Our first sustainability report, ‘Value Beyond Business’, is an account of our activities, efforts and plans to infuse sustainability into our business to create value that benefit realms beyond business. MMSCMD+ reduction in 170 Gas Transmission capacity 12 % NOx emissions of renewable goods and services energy procured from generated suppliers located in through solar 87% India 31,74 9 GJ and wind projects increase in total growth in turnover training provided in this year 22% to workforce 30% GJ of energy E&P / CBM blocks saved through 28 690,000 efficiency initiatives 2 growth in PAT 7,948 tCO e in this year of GHG emissions reduced 14 % through energy efficiency initiatives CONTENTS Vision & Mission 01 About the Report 02 Chairman and Managing Director’s Message 03 Our Sustainability Approach 05 GAIL - Revisiting the journey 08 Governing the Way We Operate 22 Enhancing the Trust of Our Stakeholders 28 Materiality 32 Our Corporate Strategy 36 Creating Sustainable Economic Value 38 Managing Our Environmental Footprint 42 Creating A Better Workplace 48 Building Value For Our Customers 56 Contributing To Community Development 60 Assurance Statement 68 Glossary 70 GRI Content Index 72 UNGC / IPIECA Reference 78 The Year Ahead 79 VISION & MISSION Vision Be the leading company in natural gas and beyond, with global focus, committed to customer care, value creation for all stakeholders and environmental responsibility. Mission To accelerate and optimise the effective and economic use of natural gas and its fractions to the benefit of national economy. GAIL’s Vision Elements Leading Company Be the undisputed leader in the Natural Gas market in India and a significant player in the global natural gas industry, by growing aggressively while maintaining the highest level of operating standards. 01 Natural Gas and Beyond Focus on all aspects of the Natural Gas value chain and beyond including exploration, production, transmission, marketing, extraction, processing, distribution, utilisation including petrochemicals, power, Natural Gas related infrastructure, products and services. Global Focus Create and strengthen significant global presence to pursue strategic, attractive opportunities that leverage GAIL’s capabilities while effectively managing business risks. Customer Care Anticipate and exceed customer expectations through the provision of highest quality infrastructure, products and services. Value Creation for All Stakeholders GAIL will create superior value for all stakeholders including shareholders, customers, employees, business partners, surrounding communities and the nation. Environmental Responsibility GAIL is committed to operational excellence in all we do with a focus on continuous efforts to improve environmental performance for ourselves and our customers and will be sensitive to the needs of the environment in all our actions. ABOUT THIS REPORT We embark on our Sustainability account for our sustainability developments; most of which are Reporting journey with the theme performance. This performance is beyond our control or cannot be “Value Beyond Business” which based on the data and information predicted by us. While we will has been the guiding principle of collected and collated from strive to achieve progress on GAIL since inception. This report primary sources across our these, we cannot ensure a depicts our sustainability operations. Further, wherever desirable outcome in all cases. performance for the period 01 required, we have used This report is based on Global April 2010 to 31 March 2011. It assumptions, standard equations Reporting Initiative’s G3 guidelines covers our gas processing units at and calculation methodologies for on sustainability reporting. A Gandhar, Pata, Vaghodia, Vijaipur, data estimation and quantification. detailed table showing reference and Usar; petrochemicals unit at We have used an average USD to to reported GRI indicators has Pata, Natural Gas compressor INR exchange rate of 45.57 in this been presented on pages 72-77 of stations at Hazira, Vijaipur, report. Certain information this report. The report is also Vaghodia, Jhabua, Khera and included in this report refers to aligned with the International Dibiyapur; LPG pumping our future plans and intentions, in Petroleum Industry Environmental /receiving stations at Loni, order to present a holistic account Conservation Association Mansarampura, Nasirabad, Abu of our sustainability activities. This (IPIECA) and the American Road, Samakhiali, Jamnagar, Vizag information relates to our strategy, Petroleum Institute’s (API) Oil and and Cherlapally; and regional operations, performance goals and Gas Industry Guidance on pipeline offices at NCR, Agra, targets, business plans, research & Voluntary Sustainability Reporting Baroda, Mumbai and Rajahmundry. development and investments in (2005). This report does not cover the the countries, sectors or markets sustainability performance of our where we operate. By their We engaged KPMG to provide JVs, subsidiaries, and other sub-nature, such information advisory services for developing upstream or downstream entities involves a certain degree of this report and Emergent 02 in the supply chain. uncertainty as the end result is Ventures India Pvt. Ltd. to provide dependent on future market independent external assurance We relied on our internal systems conditions, geo-political on the report. and management processes to GAIL Corporate Office, New Delhi CHAIRMAN & MANAGING DIRECTORS’S MESSAGE apprehend that together with China, it may take two planet Earths just to sustain the booming economies of India and China, if the business-as-usual scenario continues. Fortunately, in India, concept of “sustainability” has always been an intrinsic part of our way of life, which has been reflected even in our ancient scripts. Efficient and innovative uses of natural resources, re-cycling and re-use have always been an integral part of our ethos. As a clean energy company that promotes usage of natural gas, Dear Stakeholders, GAIL is able to contribute in a It is a pleasure to present GAIL humble way to the cause of (India) Limited’s first Sustainability sustainability. Natural gas is fast Report. Being India’s premier emerging as the preferred fuel and natural gas company for over 25 in recent years, its consumption in years, we recognize that our India has increased substantially. maiden Sustainability Report was Clearly, natural gas will be playing 03 indeed overdue but our an increasingly important role in As a clean energy commitment to the concept of securing a sustainable energy “ sustainability has always been future for India and GAIL will company that embedded in our systems, continue to play its role in energy promotes usage of processes and activities. security for India. natural gas, GAIL is We are operating in a vast country, Together with India’s growth whose economy is booming and at story, GAIL’s surging growth is able to contribute in the same time, the benefits of receiving global attention in the a humble way to the which are yet to be distributed gas-utility space. At the same time, equitably. A vast majority of our we are keenly aware of our cause of people still do not even have responsibility to fully integrate sustainability access to any form of commercial environmental and social ” energy. Even today, more than considerations into our growth 400 million of our people do not strategies. Taking cognizance of have access to electricity. The this, our Strategic Plan recently aspirations of more than 1,200 prepared for this decade, million people, with more than envisages sustainable growth 800 million of our population across the gas value chain for the under the age of 30, are driving company and also aims to take sweeping social and economic steps beyond natural gas by changes in the country. This is tapping emerging potential in posing a huge challenge not only renewable power from wind solar, to India, but is also causing ripple unconventional energy sources effects world-wide. Some even like Shale gas and coal gasification.. For promoting a cleaner and preparedness and performance of sustainable economic the company. In our efforts to development in India, Gas Pipeline build a progressive society, GAIL infrastructure development is has been allocating 2% of its PAT crucial. GAIL’s vast gas pipeline of previous financial year for transmission network of more Corporate Social Responsibility than 9,000 kms and its (CSR) projects. This commitment implementation of on-going new was around USD15