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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
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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
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.
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
Tata House ofInnovation and
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
Tata House ofInnovation and
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
Tata House ofInnovation and
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
Tata House ofInnovation and
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
THINK Facilitation of Initiative
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
1) Everything we do within Tata can be re-examined through a sustainability lens.
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
THINK Facilitation of Initiative
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
Measure returns and costs across all businesses
Coordinate business unit interactions
1) Everything we do within Tata can be re-examined through a sustainability lens.
4) Sustainable creativity and knowledgeshould be shared across all Tataorganizations and outside of ourcompany.
5) Sustainable creativity and knowledgeshould be shared across all Tataorganizations and outside of ourcompany.
10) Tata's companies will encourage theirbusiness partners and stakeholders toachieve sustainable business practices.
Tata PowerInitiative
TAPS Alignment
THINK Facilitation of Initiative
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
Measure returns and costs across all businesses
Coordinate business unit interactions
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
THINK Facilitation of Initiative
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
Measure returns and costs across all businesses
Coordinate business unit interactions
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
THINK Facilitation of Initiative
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
THINK Facilitation of Initiative
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
1) Everything we do within Tata can be re-examined through a sustainability lens.
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
26
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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
31