tata globalization through sustainability iimb

8/8/2019 Tata Globalization through Sustainability IIMB

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TATAGROUP SUSTAINABILITYSTRATEGY

Leadership with trust

Team MembersAditya Bhargava

Manav Preet Singh

Siraj SinghTushar Sharma

Team ACE IIMBangalore


2/31

AGENDA

Executive Summary

Current Situation

Sustainability Definition and TAPS

THINK Value Creation

Organizational Chart Breakouts

Multi-Local Strategy

Recommended Initiatives

Timeline & Action Plan

Financial Valuation

2


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EXECUTIVESUMMAR

Y

3

Develop a ten year strategy to continue Tatas profitable growth andsustainability leadership while addressing:Tatas growing global presenceEvolving definitions of sustainabilityIncreasing demand for measurement and transparency

Goals

Simplify Tatas internal definition of sustainability and articulate it througha Ten Point Agenda for Sustainability (TAPS)

Create a Separate Subsidiary (THINK) to coordinate, communicate,and expand sustainability efforts across every business unit

Establish a Multi-Local strategy tailored to the unique challenges andopportunities of each country and business

Recommendations


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CURRENTSITUATION

4

As Tata grows globally, how can the company preserve itsunique tension between profit and purpose to meet

evolving definitions of sustainability?

Many independent initiatives andorganizations

Tata Trusts

Tata Relief

Committee

Innometer

TQMS

Innoverse

Annual ManagementWorkouts

Tata Protocol forInternal Assessment

Tata Index forSustainable Human

DevelopmentTata Steel

Tata Power

TataConsultingServices

Indian HotelsTata Motors

Tata Chemicals

Tata TeaTata International

TataNano

CII EnergyMgmt

AwardEMS

standards

EARTHProject

Ongoingcommuni

tyservice

Community

literacy

TataSwach(H20

purifier)

Employee

generation

Animalhusbandr

yCommunity

development

IIPCertificati

onTata

Swach(H20

purifier)

Innovation Center

Carbonmapping

Community

literacyHealth &

wellnessRecyclingprogram

TetleyTea

RainforestCertificati

onEthicalTea

Partnership (ETP)

CombatClimateChange(3Cs)

TCCI

Green

Globecollaborati

on

Sustainability council

ImportedCoal


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SUSTAINABILITYDEF

INITION

&TA

PS

5

Corporate Sustainability is a local, national, and global endeavor for creating long-termeconomic, social, and financial growth for the enterprise and its stakeholders.

1) Everything we do within Tata can be re-examined through a sustainability lens.

2) Sustainable initiatives strive to add valueto Tata's enterprise and shareholders overa reasonable time frame.

3) Social philanthropy and developmentinitiatives are a core competency andshould be treated as an essential output ofthe organization.

4) Sustainable creativity and knowledgeshould be shared across all Tataorganizations and outside of our company.

5) Tata's sustainability development should

be managed with the same rigor, focus,and precision as other Tata business.

6) All sustainable initiatives should betransparent, measurable, and auditable toall stakeholders.

7) Our businesses should inspire newsustainable ideas, and our sustainabilityefforts should inspire new business ideas.

8) Sustainable thinking and implementation isa key skill that every future Tata managershould possess.

9) Tata's companies will encourage theirbusiness partners and stakeholders toachieve sustainable business practices.

10) Our initiatives should lead environmental,economic, and social development in India

and the world. Our efforts go beyond a"compliance" mindset and accomplish whatwas once thought impossible.

Ten Point SustainabilityAgenda (TAPS)

SustainabilityDefinition

Corporate Sustainability (CS) is integral to value-creation in our business through theenhancement of human, natural, and social capital complementing their economic andfinancial growth in order to give the enterprise an enduring future and also help createand serve a larger purpose, at all times. It facilitates accountability to all stakeholders as

a systemic practice.

Simple and easy for employees to understand

Flexible for changing and differing definitions of sustainability

Creates a roadmap for employees and stakeholders

Inspires new thinking for existing businesses and processes

Articulates Tatas aspirations for sustainability


2) Sustainable initiatives strive to add valueto Tata's enterprise and shareholders overa reasonable time frame.

3) Social philanthropy and developmentinitiatives are a core competency andshould be treated as an essential output ofthe organization.

4) Sustainable creativity and knowledgeshould be shared across all Tataorganizations and outside of our company.

5) Tata's sustainability development should

be managed with the same rigor, focus,and precision as other Tata business.

6) All sustainable initiatives should betransparent, measurable, and auditable toall stakeholders.

7) Our businesses should inspire newsustainable ideas, and our sustainabilityefforts should inspire new business ideas.

8) Sustainable thinking and implementation isa key skill that every future Tata managershould possess.


10) Our initiatives should lead environmental,economic, and social development in India

and the world. Our efforts go beyond a"compliance" mindset and accomplish whatwas once thought impossible.

Goals of Tatas corporate communicationon sustainability


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THIN

KVALUECREAT

ION

6

Tata House ofInnovation and

Knowledge(THINK)


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ORG

ANIZATI

ONALCHART

BREAKOUTS

8

Internal Consultants: Facilitation & subject matter expertise Innovation Center: Creates new products or new markets forexisting products

Financial Planning: Funding, budgeting, agreement withshareholders


Knowledge

Create NewMarkets


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ORG

ANIZATI

ONALCHART

BREAKOUTS

9

Management Training: Rotations & developmentClimate Change Task Force: Grow environmental

CSR Innovation Center: Improving business practices


Knowledge

Build IntellectualCapital


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ORG

ANIZATI

ONALCHART

BREAKOUTS

10

Communications: Publicize CSR efforts in receptive

marketsTrust/Endowments: Protect & grow company culture of

hilanthro


Knowledge

StrengthenBrand


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ORG

ANIZATI

ONALCHART

BREAKOUTS

11

Trust/Endowments: Protect & grow company culture ofphilanthropy

Management Training: Rotations & developmentCommunications: Employee engagementFinancial Planning: Employee incentives Innovation Center: Improving business practices

Attract & RetainTalent


Knowledge


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MULTI-LOCALSTRATEGY

12

Growth opportunities should fit Tatas values while stayingsensitive to economic, environmental, and social

considerations in local communities.Tata

Values

Carbonfootprint

Recycling Water

purification

Ethicalsourcing

Humanrights

Genderrights

Educatio

n Literacy Health,

HIV/AIDs Fair

wages

Country

UnitesStates

China

EU

Brazil

Canada

Gulf CC

SouthAfrica

Sri Lanka,Thailand,Vietnam

Challenge &Opportunity

Education, Regulations, Greeninvestments

Gov., Pollution, Human Rights,Economy

Safety nets, GreenMovement

Deforestation, NaturalresourcesSafety nets, Green Movement

Oil rich, Cultural views,Gender roles

HIV/AIDS, Developingeconomy

Developing economy,Government stability, wages


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RECOMMEND

EDINIT

IATIVES

13

END OF LIFE VEHICLES (ELV) PROJECT

Leverage business knowledge in target markets

Measure returns and costs across all businesses

Coordinate business unit interactions

1) Everything we do within Tata can bere-examined through a sustainability

lens.3) Social philanthropy and development

initiatives are a core competencyand should be treated as anessential output of the organization.

4) Sustainable creativity andknowledge should be shared acrossall Tata organizations and outside of

our company.

7) Our businesses should inspire newsustainable ideas, and oursustainability efforts should inspirenew business ideas.

Tata ELVServices

TAPS AlignmentMulti-Local Implementation

THINK Facilitation of Initiative

European Union (EU) standards haveexpanded to include mandatory ELVprocessing for vehicles

Anticipating this trend in other countries, TataMotors should undertake the development ofa complete ELV system in India and Asia

Tata would partner with Tata Chemical andTata International to create this process,splitting the proceeds with consumers

C2C certification for Tata Motors, enhancingthe existing ELV processes

Expand current supply chain managementinitiatives

include additional trucks and trailers ingrowth markets to decrease diesel fuelconsumption

meet carbon footprint, utilizing TataInternational expertise Communication and marketing to

promote initiative

Secure NGO support


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RECOMMEND

EDINIT

IATIVES

14

CSR SOFTWARE CONSULTING

Finance and audit function provides measurement andtransparency

Develop human software in Innovation Center and through inter-company collaboration

5) Tata's sustainability developmentshould be managed with the samerigor, focus, and precision as other

Tata business.6) All sustainable initiatives should be

transparent, measurable, andauditable to all stakeholders.

9) Tata's companies will encouragetheir business partners andstakeholders to achieve sustainablebusiness practices.

10) Our efforts go beyond a"compliance" mindset andaccomplish what was once thoughtimpossible.

Tata CSR Consulting

TAPS AlignmentMulti-Local Implementation


Leveraging Tatas CSR core competency intoa sustainability software consulting practice

Developing Tata Consulting Services group

specializing in Enterprise CarbonAccounting (ECA) software

Test and develop new market for humansustainability software

Future value creation through external CSRconsulting beyond software

The ECA market is estimated to be $7 to $9

billion with the highest concentration inNorth America and the EU

TCS should determine whether the softwareshould be developed internally or purchasedexternally

Climate change group leveraged forCO2 tracking software

Seek out potential clients across

existing business


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RECOMMEND

EDINIT

IATIVES

15

ENERGY EFFICIENCY INITIATIVES

Leverage business knowledge in target markets

Measure savings and costs across all businesses

Coordinate business unit knowledge sharing


2) Sustainable initiatives strive to addvalue to Tata's enterprise andshareholders over a reasonable timeframe.

4) Sustainable creativity and knowledgeshould be shared across all Tataorganizations and outside of ourcompany.

6) All sustainable initiatives should betransparent, measurable, and auditableto all stakeholders.

9) Tata's companies will encourage theirbusiness partners and stakeholders toachieve sustainable business practices

Tata Energy EfficiencyInitiatives

TAPS Alignment


Tata Steel leads group on energy efficiencyprograms and has several innovative pilotprograms

Expand pilot program to reduce carbonfootprint to additional steel plants beyond thePort Talbot plant site

Add five plants per year in order to achieve20% carbon reduction goals by the year2020

Conservation efforts can be rolled out incurrent and emerging markets.

Years 1-5: India and Europe

Years 5-10: Expand to include Asia,Thailand and others

Communication and marketing to promote

initiativesEnsure alignment with Climate Protocol

Secure NGO support


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RECOMMEND

EDINIT

IATIVES

16

COMBATTING CLIMATE CHANGE (3Cs)

Integrate Power Sustainability Council into THINK







Tata PowerInitiative

TAPS Alignment


Diversify energy mix and developstrategies to meet the expanding demand for

power over the next ten yearsWork with government stakeholders to

develop alternative energy technology

Pay-back period for coal alternatives cannotbe addressed in a ten year span due tounpredictable renewable energy technologyimprovements and government regulatory

barriersCarbon footprint reduction opportunities

through the use of nuclear, wind, solar andhydro

Communication and marketing topromote initiative

Secure governmental support


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RECOMMEND

EDINIT

IATIVES

17

STRATEGIC REORGANIZATION FOR TEA GROUP

Integrate Tetley sustainability initiativesthroughout Tea Group



2) Sustainable initiatives strive to addvalue to Tata's enterprise andshareholders over a reasonable timeframe.

4) Sustainable creativity andknowledge should be shared acrossall Tata organizations and outside ofour company.

5) Sustainable creativity andknowledge should be shared acrossall Tata organizations and outside of

our company.9) Our businesses should inspire new

sustainable ideas, and oursustainability efforts should inspirenew business ideas.

Tata TeaGrou

TAPS Alignment


Transparent reporting of ethical sourcingthrough the Rainforest AllianceCertification (RAC) in Western Europeanand North American

Renewable packaging through Life-CycleAnalysis

Competition with industry leaders, such asGreen Mountain Coffee Roasters Life-CycleAnalysis, through their tea product, which issold in a portion pack made from renewablematerials

Emphasis needs to be given to sourcing ofraw materials in an ethical manner

Reassess their supply chain in order to getFair Trade Certification for their products

Will allow Tata to measure, manageand report on the scope of ethicalmethods in their sourcing

Communication and marketing to

promote initiativeShare Tata Chemical competency in

sourcing , packaging, and distributionto Tata Tea


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RECOMMEND

EDINIT

IATIVES

18

TATA GREEN CHEMISTRY INITIATIVE

Integrate Innovation Center into THINK



1) Everything we do within Tata can be

re-examined through a sustainabilitylens.

3) Social philanthropy and developmentinitiatives are a core competencyand should be treated as anessential output of the organization.

4) Sustainable creativity and

knowledge should be shared acrossall Tata organizations and outside ofour company.

7) Our businesses should inspire newsustainable ideas, and oursustainability efforts should inspirenew business ideas.

Tata ChemicalInitiative

TAPS Alignment


Flue gas treatment, carbon absorption andnano glass coating for insulation

Entered into the bio-fuels market in 2007

Fresh produce sourcing, packaging, anddistribution

Setting up ofInnovation Center

Center for Agriculture and Technology

Communication and marketing topromote initiative

Share competency in sourcing ,packaging, and distribution to Tata

Tea


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RECOMMEND

EDINIT

IATIVES

19

HOTEL CONSERVATION INITIATIVE

Work with other Tata companies to discover conservation best practices

Set up conservation measurement system for hotels

Tata Hotel ConservationInitiative

TAPS Alignment


Indian hotels is pursuing an internal projectknown as EARTH

There are best practices from other hotelchains and Tata companies that can beleveraged for near-term immediate savings

Long term goal should be LEEDcertification for new hotels

Immediate conservation steps can andshould be implemented in the targetedhotel locations, with a two year or lesspayback period

Conservation areas include

heating/cooling modification forvacant rooms

warm wash linen cleaning

florescent lighting

water and solid waste conservation

Communication strategy for hotel

customers to get help withconservation efforts

Leverage Climate Change task force


2) Sustainable initiatives strive to add value toTata's enterprise and shareholders over areasonable time frame.

4) Sustainable creativity and knowledge shouldbe shared across all Tata organizations andoutside of our company.

5) Tata's sustainability development should bemanaged with the same rigor, focus, and

precision as other Tata business.9) Tata's companies will encourage their

business partners and stakeholders toachieve sustainable business practices.


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TIME

LINE&ACTION

PLAN

20

Next Steps

Discuss THINK idea with keyleaders

Begin work on standards foremployee equality across countries

If preliminary feedback is positive, an offsite leadershipmeeting to finalize TAPS, THINK plans, budget, and

communication strategy should be held

Investigate initiative feasibility Investigate legal/tax/reportingimplications of subsidiary

Costs and Returns

Initial investment for THINK and initiatives: $52M

THINK assumed to have up to 500 headcountTotal Tata 2009 investment in social initiatives: $159M (Graham, Too Good ToFail, 2010)

Additional expenditures of $20M - $60M per year as staged initiatives roll out

Minimum 10% return projected if Tata brand value increases by $4M per year

CSRTHINTHIN

KK


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FINAN

CIALVA

LUATION

21

THINK

THINK


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THANK YOU!

Leadership with trust


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APPEN

DIX

23


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FINA

NCIALV

ALUATIO

N

24


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FINA

NCIALV

ALUATIO

N

25


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FINA

NCIALV

ALUATIO

N

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27/31

EVAL

UATION

OF

ALTE

RNATEMEANS

27

Alternate FinancialFeasibility

OperationalFeasibility

TechnicalFeasibility

Hydel High initial cost;low running cost

Unavailability ofsuitable locations

Expertiseavailable

Natural Gas High running &maintenance cost

Sources available;transmission losses

Technologyavailable

Solar High costs Low efficiency Technologyunavailable

Evaluation of alternate means of powergeneration

HIGH MEDIUM LOW


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DECISION

AN

ALYSIS

MATRIX

28


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DECISION

AN

ALYSIS

MATRIX

29

Tata House of


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ORGANIZATIONALCHART

BREA

KOUTS

30

Financial Planning: External fundraising

External Audit/Measurement: Outsidecredibility

Innovation andKnowledge

Monetize CSRKnowledge


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CURRENTOR

GANIZA

TIONAL

CHART

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tata globalization through sustainability iimb

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