sustainability reporting - beyond disclosures

© 2013 Larsen & Toubro Limited : All rights reserved

By,$Alok%Sharma%

Larsen'&'Toubro'Limited''$

5th$April$2013$


Larsen & Toubro

Construction Hydrocarbon Heavy Engineering Power

Electrical & Automation MIP Infotech

Engineering and Construction Company with annual turnover of USD 13.5 Bn

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Global Challenges

Population Growth

Global Warming

Economic • Subprime crisis • Melt down • Bailouts

•  0.50C- 0.60C global temperature increased over 1991 levels

•  A 2 0C rise will melt arctic ice caps beyond repair –unprecedented damage to marine and coastal life

Current world population – 7 bn and growing

World Population

Global Temp. and CO2

•  World Economy: US$ 71.62 trillion (2012 est.)*

•  GDP (Per Capita): US$ 12,500

•  GDP Growth : 3.3%

*'Reference:'www.indexmundi.com''


“Sustainable Development is to meet the needs of the present without compromising the ability of future generations to meet

their own needs”

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Sustainable Development

Economic'

Environment'

Social'

- Brundtland Commission, 1987

“Sustainability Reporting is …. the practice of measuring, disclosing, and being accountable to internal and external stakeholders for

organizational performance towards the goal of sustainable development”

- GRI Sustainability Reporting Guidelines


History'of'Climate'Change'&'Sustainability'ReporCng'

1993 India ratifies

UNFCCC

1997 Kyoto protocol

adopted

2005 1st commitment phase of Kyoto

2008: India rolls out National Action Plan on Climate Change

2009:$New$$Interna9onal$collec9ve$agreement$at$Copenhagen$$

2010 India

principally agrees to

Copenhagen Accord

2000 1st GRI guidelines

on reporting

2002 2nd GRI

guidelines on reporting

2006 3rd GRI

guidelines on reporting

2000 United Nations

Global Compact

2010 Cancun Summit: Emphasis on developing countries for emissions cuts

2012'Doha:'Second'commitment'period'(2013J2020),'New'Global'Climate'mechanism'from'2020,'encouraged'rich'countries'to'commit'USD'10'billion'every'

year'Cll'2020'towards'Green'Climate'Fund'

Sustainable'Development'Goals'2015'


INDIA’s'Response'&'Alignment'

Kyoto'Protocol'Signed$2002$

!  Copenhagen'Accord'20B25%$emission$intensity$reduc9on$of$2005$levels$by$2020$

!  NaConal'Voluntary'Guidelines'(NVG)'released$by$Ministry$of$Corporate$Affairs$$

NaConal'AcCon'Plan'on'Climate'Change'(NAPCC)'8$Missions$

2002$

2008$2009$

2011$

!  NVG$on$Social'Environmental'&'Economic'ResponsibiliCes'of'Business'released$

!  Annual$Business$Responsibility$Report$(ABRR)$framework$released$

2012$

!  Company'Bill'2012'with'CSR'clause'Proposed$'

!  SEBI$Mandate$for$Top$100$Companies$(Market$Cap)$to$publish$Business'Responsibility'Report'as$part$of$annual$Report$

2006$

GRI'–'G3'Guidelines'released$


Increasing demand for Non financial disclosures

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Regulators'&'Stock'exchanges'

Countries'

Corporates'

Stakeholders'

Investors'

Emerging$trend$for$nonBeconomic$repor9ng$

Regula9ons$for$listed$companies$to$disclose$ESG$performance$(Sweden,$Norway,$$

South$Africa,$UK)$

Large$organiza9ons$see$benefit$other$than$ESG$disclosures$$

Seeking$transparency$and$responsible$business$

prac9ces$

Disclosures$$&$ESG$performance$


Global'Trend':'Sustainability'ReporCng'

Denmark:'Mandatory'for'Large'Companies'(1996)'

Sweden:'Mandatory'for'Govt.'Companies'(2009)''

South'Africa:'Integrated'Reports'for'listed'companies'2010'

onwards''

:SEBI'mandate:'Top'100'companies'to'disclose'Business'Responsibility'report'as'per'NVG,'MoCA'(2013)'

Working'towards'integrated'Reports'by'2020'

Source:(Global(Repor/ng(Ini/a/ves(


'''''''''''''''''$

India

Global Context

•  Business Ethics

•  Transparency

•  Climate Change

•  Conservation of Natural resources

Drivers

Added Dimensions •  Social cause

•  Inclusive Development

•  Energy Security

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© 2013 Larsen & Toubro Limited : All rights reserved 10

Sustainability'ReporCng:'Our'Journey''

All'Reports'are'‘GRI'Checked’'A+''

1st'Indian'Company'in'Engineering'&'ConstrucCon'Space''to'report'''

1st'Indian'Engineering'&'ConstrucCon'Company'to'do'organizaCon'wide'carbon'footprint'mapping''

Project “Prithvi”

Sustainability'Report'2012'

Sustainability'Report'2008$





Name of Indicator Core Additional Total

Economic 7 2 9

Environmental 17 13 30

Social

Product Responsibility 4 5 9

Labor Practices 9 5 14

Human Rights 6 3 9

Society 6 2 8

TOTAL 49 30 79

Indicators as per GRI – G3 Guidelines

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Sustainability Executive Board

supported by Corporate core team

Sustainability Council Corporate Centre, Environment, Social, Finance and

business verticals

Sustainability Team Responsibility – Unit-in-charge and

members

At Corporate

Level

At IC

Level

At Unit Level

Corporate Core Team IC Head

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Sustainability Organization Structure


Social''

Governance' Environment'

•  Attrition Rate •  Capacity Building •  Employee Health

& Safety •  Inclusive

Development

•  Sustainability Disclosure

•  Transparency

•  Carbon Footprint •  Resource

Conservation •  Energy Efficiency •  Renewable Energy •  Product Innovation

Environment Governance Social

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Stakeholder Engagement


Sustainability Thrust Areas'

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Climate'Change'•  Carbon'footprint'mapping'of'L&T'OperaCons'

Energy'ConservaCon'•  Energy'audits'of'manufacturing'locaCons'

•  Improve'energy'conservaCon'metric'

•  Increase'use'of'renewable'energy'

Water'ConservaCon'•  AdopCng'zeroJdischarge'approach'

•  Reducing'per'capita'water'consumpCon'

•  Rain'Water'HarvesCng'(RWH)'


Sustainability Thrust Areas'

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Waste'Management'•  Material$waste$reduc9on$

•  Reduce,$Recycle/Reuse,$Recover$

Safety'• Enhance'level'of'safety'training'

•  Improving'Safety'performance'at'workplace'

Social'• Mother'and'Child'Health'care'

• EducaCon'• Skill'Building'


Green'Building'

Renewable'Energy'Tele'Presence'/'Video'Conference'

Carbon'Management'

Avoided$more$than$27,000$Tons$of$CO2$

emission.$$Increase$of$>$12%$in$energy$conserva9on$$

Carbon'SequestraCon'

2007J08' 2008J09' 2009J10' 2010J11' 2011J12'

10.59'8.69' 8.3' 7.82' 7.57'

GHG'emissions'from'Direct'energy'consumpCon'(Tons/employee)'

28.5%'

2007J08' 2008J09' 2009J10' 2010J11' 2011J12'

170.49'133.12' 128' 122.36'116.73'

Energy'consumpCon'(GJ/employee)'

31.5%'

2007J08' 2008J09' 2009J10' 2010J11' 2011J12'

'15,099'''35,632'' '51,072''

'97,783'''123,417''

Energy'ConservaCon(GJ)'

Renewable$Energy$over$10$%$

1.6$Million$Sq.$b$inBhouse:$$Six$Green$Buildings.$

25.2$Million$Sq.$b.$for$clients$

CO2'Sinks'•  GIS$based$mapping$•  Completed$at$6$loca9ons$•  16,309$tons$9ll$date$

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L&T’s'Solar'Energy'407'KW'Grid'Connected'Plant'$

Renewable Energy

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L&T’s'Wind'Energy'Farm'of'8.7'MW'–'South'India'$


Chennai'

Talegaon'

Ahmednagar''

Hazira'

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1.6'million'sq.'j.'of'L&T'

owned'Green'Building'space'

Green Buildings

Chennai''


Water'Management'

Implement''3R'(Reduce,'Recycle,'Reuse)'Principle'

Watershed'development:'Check'dams'

Rain'Water'HarvesCng'

State'of'Art'Technologies'Awareness'Campaign'

Overall'

6.3%'ReducCon'in'water'consumpCon'

Check'dams:'CollecCng'

191'million'liters'of'water'

Harvested'more'

than'22.9'million'liters'of'rainwater'

16'campuses'have'achieved'Zero'wastewater'discharge'status'out'of'22'

'2,515,592''

'2,445,181''

'2,384,681'''2,356,219''

2008J09' 2009J10' 2010J11' 2011J12'

Water'consumpCon'(m3/year)'

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Corporate'Policies'&'Framework'


Environment'&'Business''Case'

Climate'Change' Energy'ConservaCon' Natural'Resources'ConservaCon$

Water'ConservaCon'16$Campuses$$of$L&T$achieved$Zero$wastewater$Discharge$

Green'Buildings:$Consuming$lesser$natural$resources$&$Energy$Efficient$$25'million'Sq.'j'of$green$space$constructed$for$clients$

Recycled'Material:''Use$of$Fly$Ash,$Crush$Sand$in$construc9on$

Solar'Energy'Largest$Solar$PV$EPC$player$with$114$MW$of$capacity$execu9on$in$one$year$

Energy'Efficiency''Conserved$34.3$million$units$and$avoided$27,000$tons$of$CO2$emissions$

Carbon'emission'reducCon'Reduc9on$in$GHG$emission$per$

employee$B$31%'of$2007B08$level$

Energy'reducCon'Reduc9on$in$Energy$consump9on$per$employee$B$28'%$of$2007B08$level$

Renewable'Energy'Green$Energy$usage$

more$than$10'%$across$Company$

Super'CriCcal'Power'plants,'Fuel'Switch'&'DHDS'Projects'


Advantages of Sustainability Reporting

Internal'Controls'!  CollaCon'of'non'financial'parameters''(environmental'&'social)'

!  Helps'to'improve'performance'with'strong'data'management'!  ProacCvely'addresses'environmental'&'social'regulatory'requirements''

CommunicaCon'!  Involving'stakeholders'!  More'interacCve''and'a'vehicle'to'promote'best'pracCces'!  Brand'management'

Risk'MiCgaCon'!  ProacCve'assessment'of'

environmental'and'social'risks'!  Addressing'environmental'and'

social'risk'in'the'preJbid'stage'of'projects'''

Business'Need'!  Emerging'preJqualificaCon'

requirement'!  SelecCon'criteria'by'internaConal'

clients'specially'from'Europe'and'InsCtuConal'Investors''

!  Focused'community'engagement'programs''

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Corporate Social Initiatives


Thrust Areas

Mother & Child Health Care

Education

Skill Building

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Over half million benefited in 2012


Health

L&T’s Community Health Centres

-Currently at Mumbai, Hazira, Surat, Coimbatore, Chennai, Ahmednagar & Kansbahal

-Provides health services to L&T employees and Communities

-2/3rd of the patients are from the Community$

L&T’s Mobile Health Van

-It provides access to health care at the doorstep for marginalized communities.

-The focus during these health camps is on health education, promoting health seeking behaviour, early diagnosis and referral.

Reproductive & Child Health services -Diagnostic and curative gynecological services, prenatal, postnatal services & immunization

-HIV/AIDS awareness, detection and counseling .

-Counselling services for childcare, nutrition & family planning


Education

147 schools supported and reaching out to 1,00,000+ underprivileged children across India

Support to pre-schools.

Infrastructure development, Teaching aids, uniforms, computers.

Flag ship programmes in schools (Maths, Science, English, Health, Hygiene and Safety).

Teacher’s training prorgammes (Yoga sessions, Personality development, English classes, etc).

Summer camps, sports activities and toy libraries as recreation centres.

School visits to institutions and places of educational interest.

School health checkup camps.


Skill Building

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8: CSTIs, Tie ups: 30 ITIs, 10 NGOs

12: Construction trades, 3 months course with stipend

Promoting employability & Business Connect

Target: Rural youth / school dropouts

Tailoring, computer training, beautician training, teachers’ training, food processing, home nursing for women from underprivileged backgrounds

Opportunities to generate livelihood for self-help groups/ individuals

Women Empowerment

Construction Skill Training Institutes (CSTI)


Project Neev : Enriching Lives of the Specially Abled

'''''''''''''''''$ Leprosy cured patients at Ahmednagar

Exposition of products

Vocational training for specially abled

•  Encouraging skills of the "Differently

Abled by way of expositions through

NGOs

•  Training programmes & formation of

self help groups

•  Specially abled engaged in the value

chain

•  Aiming to mainstream the specially

abled


Alignment'with'Millennium'Development'Goals'(MDGs)'

'•  VocaConal'&'Life'skills'training'•  NutriConal'supplement'to'children'in'

Pre'–Schools'•  Income'generaCon'for'underprivileged'

youth'&'migrants''

•  Improve'quality'of'educaCon'•  Providing'early'childhood'educaCon'•  Providing'educaCon'in'community'•  School'infrastructure'development'&'

learning'aids,'enhancing'curriculum'&'classroom'learning'

•  Skill'development'programme'•  Empowering'women'in'communiCes'•  Livelihood'opportuniCes'for'women'

•  ImmunizaCon'•  Access'to'paediatric'care'•  Regular'health'check'ups'in'schools'&'

preJschools'•  PromoCon'of'breast'feeding'

•  Pre'&'postnatal'care'•  Health'awareness'•  Family'planning'measures'•  Anaemia'control'

•  IntegraCon'with'NaConal'Health'programmes'

•  Awareness'drives'&'medical'care'for'malaria'and'other'diseases'

•  Counselling,'tesCng'&'ART'for'HIV/AIDS'

•  Developing'and'enlarging'L&T’s'Green'Product'Poroolio,'

•  ImplementaCon'of'3R'(reduce,'recycle,'reuse)'principles'

•  Water'shed'development'in'rural'areas'&'large'scale'tree'plantaCon'drives'

•  Skill'building'programmes''in'Middle'East'

•  Sharing'of'best'pracCces'with'stakeholders'

•  CollaboraCon'&'partnership'with'NGOs'


Recognition

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Among'Top'10'in'S&P'ESG'India'Index'2012'

‘Corporate'Governance'&'Sustainability'Vision'Award’'by'Indian'Chamber'of'Commerce,'2012'

Newsweek'ranks'L&T'4th'Globally'in'list'of'Greenest'Industrial'Companies'

L&T'Ranks'among'Top'10'in'Carbon'Disclosure'Leadership'Index'(CDLI'2012)''

AIMA’s'best'CSR'case'study'award'2012'

Golden'Peacock'Award'for'Excellence'in'Corporate'Governance'

in'2011$

L&T'Ranks'the'worlds'9th'Most'InnovaCve'Company'by'Forbes'

L&T'Conferred'‘Caring'Company'Award’'By'World'CSR'Congress'2013'

L&T'Ranks'as'the'Corporate'Sustainability'leader'in'the'ConstrucCon'&'Materials'

Sector'2012'(Emerging'Markets)'


Thank'You'

sustainability reporting - beyond disclosures

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