TATA GROUP SUSTAINABILITY STRATEGY

Team ACE – IIM

Bangalore
Team Members
Aditya Bhargava
Manav Preet Singh
Siraj Singh Leadership with trust

Tushar Sharma
 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
 EXECUTIVE SUMMARY
Goal
s
Develop a ten year strategy to continue Tata’s profitable growth and
sustainability leadership while addressing:
Tata’s growing global presence
Evolving definitions of sustainability
Increasing demand for measurement and transparency

Recommendat
ions
 Simplify Tata’s internal definition of sustainability and articulate it through
a 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 and
opportunities of each country and business

3
 Many independent initiatives and
Innometer

CURRENT SITUATION
organizations
Annual Management Tata Power
TCCI Tata Trusts Tata Motors
Workouts Indian Hotels

TQMS Tata Chemicals Tata Relief

Committee Tata International
Innoverse
Tata Index for Tata Tea
Sustainable Human Tata Steel Tata Protocol for
Development Tata Internal Assessment
Consulting
Services

Ongoing Commun Tetley Employe Commun EARTH Tata Combat Innovatio

communi ity Tea e ity Project Nano Climate n Center
ty literacy Rainforest generati literacy CII Energy Change
Animal IIP Carbon
service Health & Certificati on Green Mgmt (3C’s)
Recyclin husbandr Certificati Sustainabil mapping
wellness Ethical
on Globe Award
g y on ity council
Tea Communit Tata collaborati EMS Tata
program Partnersh y Swach on standard Imported Swach
ip (ETP) developm (H20 s Coal (H20
ent purifier) purifier)

As Tata grows globally, how can the company preserve its

unique tension between profit and purpose to meet
evolving definitions of sustainability?
4
 Goals of Tata’s corporate communication
 on sustainability

& TAPS
SUSTAINABILITY DEFINITION
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 Tata’s aspirations for sustainability

Sustainability
Definition
“Corporate Sustainability is
(CS) is integral
a local, to value-creation
national, in our for
and global endeavor business through
creating the
long-term
enhancement of human,
economic, social, natural,
and financial and for
growth social
the capital complementing
enterprise their economic and
and its stakeholders.”
financial growth in order to give the enterprise an enduring future and also help create
and serve a larger purpose, at all times. It facilitates accountability to all stakeholders as
a systemic practice.”
Ten Point Sustainability
1) Agenda (TAPS)
Everything we do within Tata can be re- 6) All sustainable initiatives should be
examined through a sustainability lens. transparent, measurable, and auditable to
all stakeholders.
2) Sustainable initiatives strive to add value 7) Our businesses should inspire new
to Tata's enterprise and shareholders over sustainable ideas, and our sustainability
a reasonable time frame. efforts should inspire new business ideas.
3) Social philanthropy and development 8) Sustainable thinking and implementation is
initiatives are a core competency and a key skill that every future Tata manager
should be treated as an essential output of should possess.
the organization. 9) Tata's companies will encourage their
4) Sustainable creativity and knowledge business partners and stakeholders to
should be shared across all Tata achieve sustainable business practices.
organizations and outside of our company. 10) Our initiatives should lead environmental,
5) Tata's sustainability development should economic, and social development in India
be managed with the same rigor, focus, and the world. Our efforts go beyond a
and precision as other Tata business. "compliance" mindset and accomplish what 5
was once thought impossible.
 THINK VALUE CREATION
Tata House of
Innovation and
Knowledge
(THINK)

6
 Tata House of
Innovation and
Knowledge

BREAKOUTS
ORGANIZATIONAL CHART
7
 Tata House of
Innovation and
Knowledge

BREAKOUTS
ORGANIZATIONAL CHART
Create New
Markets
 Internal Consultants: Facilitation & subject matter expertise
 Innovation Center: Creates new products or new markets for
existing products
 Financial Planning: Funding, budgeting, agreement with
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shareholders
 Tata House of
Innovation and
Knowledge

BREAKOUTS
ORGANIZATIONAL CHART
Build Intellectual
Capital
 Management Training: Rotations & development
 Climate Change Task Force: Grow environmental
CSR 9
 Innovation Center: Improving business practices
 BREAKOUTS
ORGANIZATIONAL CHART
Tata House of
Innovation and
Knowledge

Strengthen
Brand
 Communications: Publicize CSR efforts in receptive
markets
 Trust/Endowments: Protect & grow company culture of 10
philanthropy
 BREAKOUTS
ORGANIZATIONAL CHART
Tata House of
Innovation and
Knowledge

Attract & Retain

Talent
 Trust/Endowments: Protect & grow company culture of
philanthropy
 Management Training: Rotations & development
 Communications: Employee engagement
 Financial Planning: Employee incentives
11
 Innovation Center: Improving business practices
Growth opportunities should fit Tata’s values while staying

MULTI-LOCAL STRATEGY
sensitive to economic, environmental, and social
considerations in local communities.
Tata Country Challenge &
Values Opportunity
 Carbon Unites Education, Regulations, Green
footprint States investments
 Recycling China Gov., Pollution, Human Rights,
 Water Economy
purificati EU Safety nets, Green
on Movement
 Ethical
Brazil Deforestation, Natural
sourcing
resources
 Human Canada Safety nets, Green Movement
rights
 Gender
Gulf CC Oil rich, Cultural views,
rights Gender roles
 Educatio
South HIV/AIDS, Developing
n Africa
 Literacy economy
Sri Lanka, Developing economy,
 Health,
Thailand, Government stability, wages
HIV/AIDs
Vietnam
 Fair
wages

12
END OF LIFE VEHICLES (ELV) PROJECT

RECOMMENDED INITIATIVES
 European Union (EU) standards have TAPSImplementation
Multi-Local Alignment
expanded to include mandatory ELV 1) Everything we do within Tata can be
processing for vehicles re-examined through a sustainability
 Anticipating this trend in other countries, Tata lens.
Motors should undertake the development of 3) Social philanthropy and development
a complete ELV system in India and Asia initiatives are a core competency
 Tata would partner with Tata Chemical and and should be treated as an
Tata International to create this process, essential output of the organization.
splitting the proceeds with consumers
 C2C certification for Tata Motors, enhancing 4) Sustainable creativity and
the existing ELV processes knowledge should be shared across
all Tata organizations and outside of
 Expand current supply chain management
our company.
initiatives
7) Our businesses should inspire new
 include additional trucks and trailers in sustainable ideas, and our
growth markets to decrease diesel fuel sustainability efforts should inspire
consumption new business ideas.
THINK Facilitation
 meet carbon footprint, utilizing Tata of Initiative
International
 Leverage expertise
business knowledge in target markets  Communication and marketing to
 Measure returns and costs across all businesses promote initiative
 Coordinate business unit interactions
 Secure NGO support

Tata ELV 13
Services
CSR SOFTWARE CONSULTING

RECOMMENDED INITIATIVES
 Leveraging Tata’s CSR core competency into Multi-Local
TAPS Implementation
Alignment
a sustainability software consulting practice 5) Tata's sustainability development
 Developing Tata Consulting Services group should be managed with the same
specializing in Enterprise Carbon rigor, focus, and precision as other
Tata business.
Accounting (ECA) software
6) All sustainable initiatives should be
 Test and develop new market for “human” transparent, measurable, and
sustainability software auditable to all stakeholders.
 Future value creation through external CSR 9) Tata's companies will encourage
consulting beyond software their business partners and
stakeholders to achieve sustainable
 The ECA market is estimated to be $7 to $9 business practices.
billion with the highest concentration in 10) Our efforts go beyond a
North America and the EU "compliance" mindset and
 TCS should determine whether the software accomplish what was once thought
impossible.
should be developed internally THINKorFacilitation
purchased of Initiative
externally
 Finance and audit function provides measurement and  Climate change group leveraged for
transparency
 Develop “human” software in Innovation Center and through inter- CO2 tracking software
company collaboration
 Seek out potential clients across
existing business

Tata CSR Consulting

14
 ENERGY EFFICIENCY INITIATIVES

 Tata Steel leads group on energy efficiency
programs and has several innovative pilot
programs
 Expand pilot program to reduce carbon
footprint to additional steel plants beyond the
Port Talbot plant site
 Add five plants per year in order to achieve
20% carbon reduction goals by the year
2020
 Conservation efforts can be rolled out in
current and emerging markets.
 Years 1-5: India and Europe
 Years 5-10: Expand to include Asia,
Thailand and others
THINK Facilitation of Initiative
 Leverage business knowledge in target markets
 Measure savings and costs across all businesses
 Coordinate business unit knowledge sharing
RECOMMENDED INITIATIVES
TAPS Alignment
1) Everything we do within Tata can be re-
examined through a sustainability lens.
2) Sustainable initiatives strive to add
value to Tata's enterprise and
shareholders over a reasonable time
frame.
4) Sustainable creativity and knowledge
should be shared across all Tata
organizations and outside of our
company.
6) All sustainable initiatives should be
transparent, measurable, and auditable
to all stakeholders.
9) Tata's companies will encourage their
business partners and stakeholders to
achieve sustainable business practices
 Communication and marketing to promote
initiatives
 Ensure alignment with Climate Protocol
 Secure NGO support

Tata Energy Efficiency 15

Initiatives
 COMBATTING CLIMATE CHANGE (3C’s)
 Diversify energy mix and develop
strategies to meet the expanding demand for
power over the next ten years
 Work with government stakeholders to
develop alternative energy technology
 Pay-back period for coal alternatives cannot
be addressed in a ten year span due to
unpredictable renewable energy technology
improvements and government regulatory
barriers
 Carbon footprint reduction opportunities
through the use of nuclear, wind, solar and
hydro
THINK Facilitation of Initiative
 Integrate Power Sustainability Council into THINK
 Measure returns and costs across all businesses
 Coordinate business unit interactions
RECOMMENDED INITIATIVES
TAPS Alignment
1) Everything we do within Tata can be re-
examined through a sustainability lens.
4) Sustainable creativity and knowledge
should be shared across all Tata
organizations and outside of our
company.
5) Sustainable creativity and knowledge
should be shared across all Tata
organizations and outside of our
company.
10) Tata's companies will encourage their
business partners and stakeholders to
achieve sustainable business practices.
 Communication and marketing to
promote initiative
 Secure governmental support
Tata Power 16
Initiative
 STRATEGIC REORGANIZATION FOR TEA GROUP
 Transparent reporting of ethical sourcing
through the Rainforest Alliance
Certification (RAC) in Western European
and North American
 Renewable packaging through Life-Cycle
Analysis
 Competition with industry leaders, such as
Green Mountain Coffee Roasters’ Life-Cycle
Analysis, through their tea product, which is
sold in a portion pack made from renewable
materials
 Emphasis needs to be given to sourcing of
raw materials in an ethical manner
 Reassess their supply chain in order to get
Fair Trade Certification for their products
THINK Facilitation
 Will allow Tata to measure, manage of Initiative
and
 Integrate report
Tetley on theinitiatives
sustainability scope of ethical  Communication and marketing to
methods
throughout in their sourcing
Tea Group
 Measure returns and costs across all businesses
 Share Tata Chemical competency in
 Coordinate business unit interactions
Tata Tea
Group
RECOMMENDED INITIATIVES
TAPS Alignment
2) Sustainable initiatives strive to add
value to Tata's enterprise and
shareholders over a reasonable time
frame.
4) Sustainable creativity and
knowledge should be shared across
all Tata organizations and outside of
our company.
5) Sustainable creativity and
knowledge should be shared across
all Tata organizations and outside of
our company.
9) Our businesses should inspire new
sustainable ideas, and our
sustainability efforts should inspire
new business ideas.
promote initiative
sourcing , packaging, and distribution
to Tata Tea
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 TATA “GREEN CHEMISTRY” INITIATIVE

RECOMMENDED INITIATIVES
TAPS Alignment
1) Everything we do within Tata can be
 Flue gas treatment, carbon absorption and re-examined through a sustainability
nano glass coating for insulation lens.
 Entered into the bio-fuels market in 2007 3) Social philanthropy and development
initiatives are a core competency
 Fresh produce sourcing, packaging, and
and should be treated as an
distribution essential output of the organization.
 Setting up of Innovation Center
 Center for Agriculture and Technology 4) Sustainable creativity and
knowledge should be shared across
all Tata organizations and outside of
our company.
7) Our businesses should inspire new
THINK Facilitation of Initiative
sustainable ideas, and our
sustainability efforts should inspire
 Integrate Innovation Center into THINK new business
 Communication and ideas.
marketing to
 Measure returns and costs across all businesses
promote initiative
 Coordinate business unit interactions
 Share competency in sourcing ,
packaging, and distribution to Tata
Tea

Tata Chemical 18
Initiative
 HOTEL CONSERVATION INITIATIVE

RECOMMENDED INITIATIVES
 Indian hotels is pursuing an internal project TAPS Alignment
known as EARTH
 There are best practices from other hotel 1) Everything we do within Tata can be re-
chains and Tata companies that can be examined through a sustainability lens.
leveraged for near-term immediate savings 2) Sustainable initiatives strive to add value to
 Long term goal should be LEED Tata's enterprise and shareholders over a
certification for new hotels reasonable time frame.
 Immediate conservation steps can and 4) Sustainable creativity and knowledge should
should be implemented in the targeted be shared across all Tata organizations and
hotel locations, with a two year or less outside of our company.
payback period 5) Tata's sustainability development should be
 Conservation areas include managed with the same rigor, focus, and
 heating/cooling modification for precision as other Tata business.
vacant rooms 9) Tata's companies will encourage their
 warm wash linen cleaning business partners and stakeholders to
 florescent lighting achieve sustainable business practices.
 water and solid waste conservation
THINK Facilitation of Initiative
 Work with other Tata companies to discover conservation best practices  Communication strategy for hotel
 Set up conservation measurement system for hotels
customers to get help with
conservation efforts
 Leverage Climate Change task force

Tata Hotel Conservation 19

Initiative
 TIMELINE & ACTION PLAN
CS
THIN R
K

Costs and Returns

 Initial investment for THINK and initiatives: $52M
– THINK assumed to have up to 500 headcount
– Total Tata 2009 investment in social initiatives: $159M (Graham, “Too Good To
Fail”, 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
Next Steps
 Discuss THINK idea with key  Investigate initiative feasibility
leaders  Investigate legal/tax/reporting
 Begin work on standards for implications of subsidiary
employee equality across countries
If preliminary feedback is positive, an offsite leadership
meeting to finalize TAPS, THINK plans, budget, and
communication strategy should be held
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FINANCIAL VALUATION
21
THINK

THINK
THANK YOU!

Leadership with trust

APPENDIX
23
FINANCIAL VALUATION
24
FINANCIAL VALUATION
25
FINANCIAL VALUATION
26
 ALTERNATE MEANS
EVALUATION OF
Evaluation of alternate means of power
generation
Alternate Financial Operational Technical
Feasibility Feasibility Feasibility
Hydel High initial cost; Unavailability of Expertise
low running cost suitable locations available
Natural Gas High running & Sources available; Technology
maintenance cost transmission losses available

Solar High costs Low efficiency Technology

unavailable

HIGH MEDIUM LOW

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DECISION ANALYSIS MATRIX
28
DECISION ANALYSIS MATRIX
29
 Tata House of
Innovation and
Knowledge

BREAKOUTS
ORGANIZATIONAL CHART
Monetize CSR
Knowledge
Financial Planning: External fundraising
 External Audit/Measurement: Outside
credibility 30
CURRENT ORGANIZATIONAL
CHART
31