Delivering a sustainable energy business Essar Energy Limited Sustainability Report 2014 Contents Company overview 01 Sustainability performance highlights FY2014 Sustainability strategy 02 Message from the CEO 04 About the report A key element of Essar Energy’s strategy 06 Essar Energy at a glance is a strong commitment to being a good 08 Awards and recognition received during the reporting period corporate citizen. In order to build and 08 Significant changes during the reporting period operate oil, gas and power assets over 09 Our stakeholders 11 Materiality their lifespans of several decades, it is 12 Corporate governance critical that we take into account the 15 Our people 19 Health, safety and environment needs of all stakeholders, particularly the 31 Product responsibility people and communities in neighbouring 35 Community 42 Memberships areas. Within this, we have a particular 43 Performance indicators focus on environment, education and 53 GRI G3.1 OGSS, IPIECA/API/ OGP and UNGC index entrepreneurship. We believe that this is 68 Assurance statement 70 Glossary the best way for us to create value in a sustainable, long‑term way. Report application level Standard disclosures C C+ B B+ A A+ G3 Profile Disclosures Report on 1.1, 2.1‑2.10, 3.1‑3.8, Report on all criteria listed for Same requirement for Level B 3.10‑3.12, 4.1‑4.4, 4.14‑4.15 Level C plus: 1.2, 3.9, 3.13, 4.5‑4.13, 4.16‑4.17 G3 Management Not required Management Approach Management Approach Approach Disclosures Disclosures for each Disclosures for each Indicator Category Indicator Category G3 Performance Indicators Report on a minimum of Report on a minimum of Report on each core G3 and & Sector Supplement 10 Performance Indicators, 20 Performance Indicators, Sector Supplement* Indicator Performance Indicators including at least one at least one from each of with due regard to the Materiality from each of: Economic, Economic, Environmental, Principle by either: Social and Environmental Human rights, Labour, Society, Report Externally Assured Product Responsibility Report Externally Assured a) reporting on the Indicator or Report Externally Assured b) explaining the reason for its omission *Sector supplement in final version Essar Energy Limited Sustainability Report 2014 01 Sustainability performance highlights FY2014 Governance • Vadinar refinery saves • Essar Oil and Essar Power 95 million kWh of energy; established Safety and over five times increase in Sustainability Committees the energy saved last year at Board level • 20% reduction in hazardous Safety waste generation at • Zero lost time injury frequency Vadinar refinery rate achieved by power plants • Zero oil spills reported by at Hazira and Vadinar with all sites Bhander Power completing 10 years without lost time • E&P Durgapur certified to incident on 1 April 2014 ISO 14001:2004 • E&P Durgapur certified to CSR OHSAS 18001:2007 • Nearly 127,400 beneficiaries of healthcare initiatives • E&P Durgapur achieves undertaken at various sites; 4.55 million LTI free hours 33% increase from last year on 31 March 2014 • Nearly 90,000 beneficiaries • 62% reduction in overall of community care initiatives process safety event undertaken at various sites; frequency rate marginal increase of 1% • 48% increase in number from last year of contractors trained • Over 28,000 beneficiaries in health and safety by of educational initiatives Power Business Group undertaken at various sites; • 52% increase in contractor 58% increase from last year toolbox talks delivered • Over 157 million INR spent across sites on various initiatives during • Zero occupational disease the year rate achieved at all sites Environment • Essar Oil ranked second in India looking across all sectors and industries in Carbon Disclosure Leadership Index in CDP India Climate Change Report 2013 • Essar Oil recommended by Det Norske Veritas for certification to Energy Management System – ISO 50001:2011 • Essar Oil’s fuel switch project Top to bottom Reverse osmosis plant at registered for carbon credits E&P Durgapur Petcoke catcher pond at Vadinar Educational initiative at Vadinar 02 Essar Energy Limited Sustainability Report 2014 Message from the CEO “ We are committed to minimising pollution, reducing our environmental footprint and optimising resource consumption by planning and carrying out operations through environmentally responsible processes and practices”. Sushil Maroo Chief Executive Officer Introduction We operate oil and gas and power As a signatory to the United Nations assets which have lifespans of Global Compact principles, we are I am pleased to present several decades. Therefore, it is committed to following a clearly to you Essar Energy’s critical that these assets can operate defined way of operating across third Sustainability sustainably for a very long period, all our businesses, with a focus on taking into account the needs of all environment, labour, anti‑corruption Report covering FY2014. stakeholders, particularly the people and human rights. We believe that Essar Energy and communities in the neighbouring acting ethically and responsibly is the areas. Despite continued challenges key to creating long‑term value for all believes that to create in the Oil and Gas, and Power sector, of our stakeholders. This report is our a successful long‑term we continue to optimise and enhance second Communication on Progress business, a strong focus our operations. on the actions taken during the year One of the key elements of the to integrate the Global Compact on sustainability is Company’s strategy is a strong Principles in our business. vital, with a particular commitment to be a good corporate Our employees are our biggest asset emphasis on the citizen. As such, sustainability is a without whom we cannot achieve our boardroom priority and issues are business objectives. Our priorities last communities in discussed and reviewed on a regular year included employee retention, which we operate. basis by the Safety and Sustainability succession planning and nurturing Committee. In addition, the Boards of and growing internal talent. Various our subsidiary companies Essar Oil employee engagement initiatives, and Essar Power have established coupled with an enhanced focus on Safety and Sustainability Committees individual training, helped us to meet to ensure that the welfare of our people our objectives. and their communities sit at the very Managing the health and safety of the heart of our business. people who work for us, both directly and indirectly, continued to be our top priority last year. The focus at most of our sites was to enhance safety culture, contractor safety management, risk assessment and training. Essar Energy Limited Sustainability Report 2014 03 LPG and hydrogen spheres at Vadinar refinery Although our overall safety Leadership Index (‘CDLI’), Essar Oil dedicated jet fuel testing laboratory performance was good and various achieved a score of 92 out of 100, approved by the Directorate General sites won external recognition for and was the only energy company in of Aeronautical Quality Assurance. their safety efforts, there were also India to be featured in the Top 20 list. The laboratory has been designed to key learnings from the incidents that Overall, Essar Oil came second in the cater to the jet fuel demands complying occurred at our sites which we will CDLI list cutting across all sectors. with BIS and DEF STAN 91. use to further improve our safety This score was achieved in spite of the Community engagement projects processes. Regretfully, this included the Vadinar refinery’s enhanced complexity have continued to be a key priority fatalities of two contractual workers at and increase in output, as well as the for us over the past year and these our power plant at Salaya. additional emissions from coal‑based are undertaken through the Essar We are committed to minimising power generation and higher emissions Foundation. We continually strive to pollution, reducing our environmental from the Exploration and Production improve the lives of our communities footprint and optimising resource division’s increased coal bed around our operational sites by consumption by planning and carrying methane production. focusing on activities in the areas of out operations through environmentally During the year, our sites also made healthcare, education, environment, responsible processes and practices. progress in terms of certification to infrastructure and creating sustainable We continually assess environmental international standards. Our refinery livelihoods. In FY2014 there were risks in our operations through risk and at Vadinar was recommended for 245,400 beneficiaries of our initiatives impact assessments, and audits. All certification to energy management across various sites. of our operations have environmental system ISO 50001 and E&P Durgapur We are committed to continuing our management plans which are specific was certified to integrated health and focus on making a positive contribution to each site. safety, and environment management to society and the environment As a responsible global energy systems (OHSAS 18001 and and demonstrating the progress company, Essar Energy recognises ISO 14001). we make each year in our future its obligations with regard to climate As an ISO 9001 certified organisation, sustainability reports. change mitigation and adaptation. Our we deploy stringent measures to approach continues to aim at providing ensure the quality of our products. clean solutions to our customers