| OUR APPROACH TO
SUSTAINABLE DEVELOPMENT |
"Every Company has a special continuing
responsibility towards the people of the area in which it is located. The Company should
spare its engineers, doctors, managers to advise the people of the villages and supervise
new development undertaken by cooperative effort between them and the Company".
- JRD Tata (1969)
| Corporate
Sustainability Initiatives |
As global initiatives in promoting responsible business
gathers momentum, Tata Steel stands proud for its social and environmental initiatives,
not just in India, but in the World as well. Tata Steel strides forward in this direction
with renewed commitment by integrating its economic, environmental and social performance.
Tata Steel's commitment to sustainable development and sustainable growth for the company
is amply reflected in its Vision 2007. In keeping with this Vision, Tata Steel has
identified several issues that need to be addressed;
- Economic issues identified by Tata Steel include addressing
constraints on account of commodity nature of steel, sweating of assets to improve capital
output ratio, innovation as a substitute to investment, outsourcing, achieving economies
of scale, increasing vertical and horizontal integration as also consolidation in the
steel sector in global markets, WTO regime impacts and exchange rate impacts.
- Environmental issues include ensuring environmental
sustainability, with particular emphasis on reduction of raw material consumption, energy
consumption and water consumption, ambient air quality management, reduction in global
warming, besides minimizing environmental impacts.
- Social issues include a focus on corporate governance,
ensuring safety of our employees, HR to attract and retain talent, right sizing,
improvement in employee, customers & supplier satisfaction & commitment,
increasing service level expectations of customers, upholding ethical standards,
maintenance of law and order situation in local areas and meeting expectations of
communities we serve to the extent possible particularly in a developing State like
Jharkhand.
The core issue identified by Tata Steel, which underlies
all these, is value balancing / creating partnerships with our stakeholders.
| Identifying
sustainability issues with Stakeholders |
Inputs from stakeholders are taken through several
structured/formal/informal engagement processes and considered in setting strategic
objectives of the company. Further, details on stakeholder engagement are furnished in Section-3.10.
Figure#1.1 & Figure#1.2 indicate how stakeholder concerns
are translated into strategic focus, identification of strategic issues and setting of
strategic objectives.
Stakeholder |
Concerns of the stakeholder |
Strategic Focus |
Indicators and actions proposed to address the stakeholder
concern |
Shareholder |
Stock Price |
EVA positive, EBIT,
Dividends, P/E ratio, Market Share |
Weighted Average Cost of
Capital (WACC), Net realization, Working Capital Efficiency |
| Overall performance and its
implication on market capitalization & creation of sustained shareholder wealth |
Top line growth,
Reserves/Net Worth, Brand Value, Customer Satisfaction, Employee Satisfaction,
Intellectual Capital, Social reputation, cost leadership |
Operating cost, Customer
Satisfaction Index, Corporate Citizenship Index, Employee Satisfaction Index, Patents and
R&D |
| Grievances |
Complaint/grievance
management |
Transfer of shares,
non-receipt of balance sheet and non-receipt of declared dividend |
| Information needs |
Timely availability of
above information |
Quarterly/half
yearly/annual reports and shareholder meets |
| Employees |
Professional growth,
personal growth, health, safety & environment, welfare measures, future business plans |
Enhance culture of
excellence, knowledge based and happy organization, development and retention of talent,
employee satisfaction |
Competency coverage ratio,
training and development, knowledge management index, involvement in Annual Quality
Improvement Plans (AQUIP), number of accidents, work area environment quality |
| Quality of life,
disengagement |
Quality of life in and
around the enterprises |
Corporate citizenship
index, compliance with environmental standards, eco restoration etc., employee
satisfaction index. |
| Suppliers |
Value creating partnership
and timely payment resolution of conflicting goals, supplier satisfaction and material
rejects |
Long-term partnership |
Supplier satisfaction, cost
of procurement |
| Customers |
Value creating partnership,
sensitivity and responsiveness to user needs, quality functionality and satisfaction |
Long-term business
relationship, cost of products, delivery, complaint resolution |
Customer Satisfaction
Index, customer dis-satisfaction, complaint resolution, product development cycle time,
PQI, dispatch compliance |
| Community |
Quality of life, health,
job opportunities, education, environment |
Corporate social
responsibility, quality of life of community |
Corporate citizenship
index, spend on society, pollution control |
| Regulators |
Statutory compliance |
Compliance management |
Percentage compliance and
review under ISO-14001, quality systems and OHSAS-18001 |
Figure#1.1 – Stakeholder concerns and
Sustainability Indicators
Stakeholders |
Issues |
Strategic Objective |
Shareholder |
Corporate Governance
Sweating of assets
Economies of scale
Innovation as a substitute for investment
Forward & backward integration and consolidation
WTO impacts and exchange rate impacts
Outsourcing |
Upholding the spirit of
Tatas & listing agreements
EVA Positive Core Business
Sustainable Growth
Revitalize core business for sustainable future
Continue to be the lowest cost producer of steel.
Outsource strategically
Divest, merge, acquire
Venture into new business |
| Customers |
Increasing service level
expectation of customers
Commodity nature of steel
Ethical standards in business |
Value creating partnership
with customers
Move from commodities to brands
Uphold the spirit of Tatas |
| Employees |
- Attracting and retaining talent
- Employee satisfaction & commitment
- Right sizing and employee cost
- World class developing environment
- Ethical standards in business
|
- Enthused & happy employees
- Continue to be the lowest cost producer of steel
- Unleash peoples potential and create leaders who will build
the future
- Encourage innovation and allow freedom to fail
- Manage knowledge
- Uphold the spirit of Tatas
|
| Supplier |
- Increasing service level expectations of customer
- Outsourcing
- Ethical standards
- WTO issues
|
- Value creating partnership with suppliers
- Strategic outsourcing
- Uphold the spirit of Tatas
- Continue to be the lowest cost producer of steel
|
| Community |
- Lack of understanding of business & industry
- Law & Order situation
- Increasing expectation
- Environment
|
- Uphold the spirit and values of Tatas towards Nation
building
- Improve quality of life of the community
- Ensure safety & environmental sustainability
- Sustainable growth
|
| All Stakeholders |
- Balancing the needs of all stakeholders
- HIV/AIDS Awareness
|
- EVA positive business
- Sustained growth
- Value creating partnership
- Improve quality of life of employees & communities we
serve
- Excel at TBEM
|
Figure#1.2 Stakeholder wise issues and strategic
objectives
|
