TATA GROUP SUSTAINABILITY STRATEGY
Mathew Ashley
Bill O’Brien
Rachel Reiter
Kevin Richards
Leadership with trust
EXECUTIVE SUMMARY
Goal
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
Recommendations
 Simplify Tata’s internal definition of sustainability and articulate it through a credo
 Create a separate subsidiary 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
2
Innometer
TCCI
Annual Management Workouts
Tata Trusts
Tata Power
Indian Hotels
Tatacan
Chemicals
AsTata
TataMotors
grows globally, how
the company
its unique tension
Tatapreserve
Relief Committee
TQMS
Tata International
Tata Index forbetween
Sustainable
profit and purpose to meet evolving definitions of sustainability?
Human Development
Innoverse
Tata Tea
Tata Steel
Tata Consulting Services Tata Protocol for Internal
Assessment
CSR silos are usually the norm
Steel
TeleCom
Tea
International
Consulting
Hotels
Motors
Power
Chemicals
Ongoing
community
service
Community
literacy
Tetley Tea
Rainforest
Certification
Employee
generation
Community
literacy
EARTH
Project
Tata Nano
Innovation
Center
Animal
husbandry
IIP
Certification
Combat
Climate
Change (3C’s)
Community
development
Tata Swach
(H20 purifier)
Recycling
program
Health &
wellness
Ethical Tea
Partnership
(ETP)
Green Globe
collaboration
CII Energy
Mgmt Award
EMS
standards
Sustainability
council
Carbon
mapping
Tata Swach
Imported Coal (H20 purifier)
The status quo has risks
 Future funding is loosely defined
 Employee standards inequity
 Measurement and transparency
 Inadequate stakeholder
communication
 Role clarity
 Overlapping efforts
3
CURRENT SITUATION
Many independent initiatives and organizations
 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 (CS)
is integral
to value-creation
in our business
through
the enhancement
of human,
is a local,
national,
and global endeavor
for creating
long-term
economic, social,
and
natural,
social
complementing
their economic and financial growth in order to give the enterprise
financial and
growth
forcapital
the enterprise
and its stakeholders.”
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.”
The Tata Credo
1)
2)
3)
4)
5)
Everything we do within Tata can be re-examined through
a sustainability lens.
Sustainable initiatives strive to add value to Tata's
enterprise and shareholders over a reasonable time frame.
Social philanthropy and development initiatives are a core
competency and should be treated as an essential output
of the organization.
Sustainable creativity and knowledge should be shared
across all Tata organizations and outside of our company.
Tata's sustainability development should be managed with
the same rigor, focus, and precision as other Tata business.
6)
All sustainable initiatives should be transparent,
measurable, and auditable to all stakeholders.
7) Our businesses should inspire new sustainable ideas, and
our sustainability efforts should inspire new business ideas.
8) Sustainable thinking and implementation is a key skill that
every future Tata manager should possess.
9) Tata's companies will encourage their business partners
and stakeholders to achieve 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 what was
once thought impossible.
4
SUSTAINABILITY DEFINITION & CREDO
Goals of Tata’s corporate communication on sustainability
TSS VALUE CREATION
5
ORGANIZATIONAL CHART BREAKOUTS
6
ORGANIZATIONAL CHART BREAKOUTS
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 shareholders
 Internal Audit: EVA in collaboration with TQMS
 Climate Change Task Force: Internal conservation across all business units
7
ORGANIZATIONAL CHART BREAKOUTS
Build Intellectual Capital
 Management Training: Rotations & development
 Climate Change Task Force: Grow environmental CSR
 Innovation Center: Improving business practices
8
ORGANIZATIONAL CHART BREAKOUTS
Monetize CSR Knowledge
 Financial Planning: External fundraising
 External Audit/Measurement: Outside credibility
 External Consultants
9
ORGANIZATIONAL CHART BREAKOUTS
Strengthen Brand
 Communications: Publicize CSR efforts in receptive markets
 Trust/Endowments: Protect & grow company culture of philanthropy
 External Audit & Measurement: Company-wide CSR report
10
ORGANIZATIONAL CHART BREAKOUTS
Attract & Retain Talent
 Trust/Endowments: Protect & grow company culture of philanthropy
 Management Training: Rotations & development
 Communications: Employee engagement
 Financial Planning: Employee incentives
 Innovation Center: Improving business practices
11
A silo mentality develops
(Robert Sutton)
TSS is under-resourced &
overcommitted
Hiding place for ineffective
managers
Corporate culture diluted
IMPLEMENTATION
If managed properly, TSS can address and overcome traditional barriers to
implementation and common CSR challenges.
Make TSS part of BU
strategic plan &
operating review
Incentivize BU managers
Project prioritization
committee
Budgeting process
Financial
Planning
Management rotations
HR training/retraining
Recognize & reward success
Continue to support innovation
from “ground up”, everyone
part of success
Tata’s
Stars
12
Tata Values
 Carbon
footprint
 Recycling
 Water
purification
 Ethical
sourcing
 Human
rights
 Gender
rights
 Education
 Literacy
 Health,
HIV/AIDs
 Fair wages
Country
Unites States
China
EU
Brazil
Challenge & Opportunity
Education, Regulations, Green investments
Gov., Pollution, Human Rights, Economy
Safety nets, Green Movement
Deforestation, Natural resources
Canada
Safety nets, Green Movement
Gulf CC
Oil rich, Cultural views, Gender roles
South Africa
Sri Lanka,
Thailand,
Vietnam
HIV/AIDS, Developing economy
Developing economy, Government
stability, wages
13
MULTI-LOCAL STRATEGY
Growth opportunities should fit Tata’s values while staying sensitive to economic,
environmental, and social considerations in local communities.
 ELV processing is already mandatory in the EU
Multi-Local
Implementation
Tata Credo
Alignment
1)
 By combining expertise across businesses, Tata can
create an ELV initiative in the EU and new markets
3)
 The estimated value of an ELV-processed vehicle is
$267, which could be split between Tata and the
customer
4)
7)
Everything we do within Tata can be reexamined through a sustainability lens.
Social philanthropy and development
initiatives are a core competency and should
be treated as an essential output of the
organization.
Sustainable creativity and knowledge should
be shared across all Tata organizations and
outside of our company.
Our businesses should inspire new
sustainable ideas, and our sustainability
efforts should inspire new business ideas.
TSS Facilitation of Initiative
 Leverage business knowledge in target markets
 Measure returns and costs across all businesses
 Coordinate business unit interactions
Steel
International
 Communication and marketing to promote
initiative
 Secure NGO support
Motors
Tata ELV Services
Power
Chemicals
14
INITIATIVE EXAMPLE
END OF LIFE VEHICLES (ELV) PROJECT
 Leveraging Tata’s CSR core competency into a
sustainability software consulting practice
Multi-Local
Implementation
Tata Credo
Alignment
5)
Tata's sustainability development should be
managed with the same rigor, focus, and
precision as other Tata business.
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.
10) Our efforts go beyond a "compliance"
mindset and accomplish what was once
thought impossible.
 Developing Tata Consulting Services group specializing
in Enterprise Carbon Accounting (ECA) software
 Test and develop new market for “human” sustainability
software
 Future value creation through external CSR consulting
beyond software
TSS Facilitation of Initiative
 Finance and audit function provides
measurement and transparency
 Develop “human” software in Innovation Center
and through inter-company collaboration
Consulting
Steel
 Climate change group leveraged for CO2
tracking software
 Seek out potential clients across existing
business
Power
Tata CSR Consulting
Telecom
International
15
INITIATIVE EXAMPLE
CSR SOFTWARE CONSULTING
EXTERNAL RISKS
If implemented correctly, our recommendations can create value by anticipating outside
change and giving Tata the structure and capability to continue profitable sustainability.
External Risk
Credo
TSS
Multi-Local
Strategy
Continued Global
Recession


Market Indifference





Stakeholder
Obstructions

Evolving Definition
of Sustainability

16
TIMELINE & ACTION PLAN
Costs and Returns
 Initial investment for TSS and initiatives: $52M
– TSS 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 TSS idea with key leaders
 Begin work on standards for employee
equality across countries
 Investigate initiative feasibility
 Investigate legal/tax/reporting implications of
subsidiary
If preliminary feedback is positive, hold an offsite leadership meeting to
finalize credo, TSS plans, budget, and communication strategy.
17
QUESTIONS?
THANK YOU
Leadership with trust
 Tata Steel leads group on energy efficiency programs
and has several innovative pilot programs
Tata Credo Alignment
1)
 Reduce its carbon footprint in existing and new markets
2)
 Projected to save $3.1 million in fuel costs, savings from
other energy programs $17.9 million with initial roll out
in India, EU, China and expanding to other markets
4)
6)
9)
Everything we do within Tata can be re-examined
through a sustainability lens.
Sustainable initiatives strive to add value to Tata's
enterprise and shareholders over a reasonable
time frame.
Sustainable creativity and knowledge should be
shared across all Tata organizations and outside of
our company.
All sustainable initiatives should be transparent,
measurable, and auditable to all stakeholders.
Tata's companies will encourage their business
partners and stakeholders to achieve sustainable
business practices
TSS Facilitation of Initiative
 Leverage business knowledge in target markets
 Measure savings and costs across all businesses
 Coordinate business unit knowledge sharing
Steel
International
 Communication and marketing to promote initiatives
 Ensure alignment with Climate Protocol
 Secure NGO support
Motors
Power
Tata Energy Efficiency Initiatives
Tea
19
INITIATIVE EXAMPLE
ENERGY EFFICIENCY INITIATIVES
 Diversify energy mix and develop strategies to meet the
expanding demand for power over the next ten years
Tata Credo Alignment
1)
4)
 Work with government stakeholders to develop
alternative energy technology
5)
 Carbon footprint reduction opportunities through the
use of nuclear, wind, solar and hydro
10)
Everything we do within Tata can be re-examined
through a sustainability lens.
Sustainable creativity and knowledge should be
shared across all Tata organizations and outside of
our company.
Sustainable creativity and knowledge should be
shared across all Tata organizations and outside of
our company.
Tata's companies will encourage their business
partners and stakeholders to achieve sustainable
business practices.
TSS Facilitation of Initiative
 Integrate Power Sustainability Council into TSS
 Measure returns and costs across all businesses
 Coordinate business unit interactions
Steel
Consulting
 Communication and marketing to promote
initiative
 Secure governmental support
Motors
Tata Power Initiative
Power
Chemicals
20
INITIATIVE EXAMPLE
COMBATTING CLIMATE CHANGE (3C’s)
 Transparent reporting of ethical sourcing through the
Rainforest Alliance Certification (RAC) in Western
European and North American
Tata Credo Alignment
2)
 Renewable packaging through Life-Cycle Analysis
4)
 Fair Trade certified products and standards
5)
9)
Sustainable initiatives strive to add value to
Tata's enterprise and shareholders over a
reasonable time frame.
Sustainable creativity and knowledge should
be shared across all Tata organizations and
outside of our company.
Sustainable creativity and knowledge should
be shared across all Tata organizations and
outside of our company.
Our businesses should inspire new
sustainable ideas, and our sustainability
efforts should inspire new business ideas.
TSS Facilitation of Initiative
 Integrate Tetley sustainability initiatives
throughout Tea Group
 Measure returns and costs across all businesses
 Coordinate business unit interactions
Tea
International
 Communication and marketing to promote
initiative
 Share Tata Chemical competency in sourcing ,
packaging, and distribution to Tata Tea
Power
Tata Tea Group
Chemicals
21
INITIATIVE EXAMPLE
STRATEGIC REORGANIZATION FOR TEA GROUP
 Flue gas treatment, carbon absorption and nano glass
coating for insulation
1)
 Entered into the bio-fuels market in 2007
3)
Tata Credo Alignment
 Fresh produce sourcing, packaging, and distribution
4)
 Innovation Center
7)
 Center for Agriculture and Technology
Everything we do within Tata can be reexamined through a sustainability lens.
Social philanthropy and development
initiatives are a core competency and should
be treated as an essential output of the
organization.
Sustainable creativity and knowledge should
be shared across all Tata organizations and
outside of our company.
Our businesses should inspire new
sustainable ideas, and our sustainability
efforts should inspire new business ideas.
TSS Facilitation of Initiative
 Integrate Innovation Center into TSS
 Measure returns and costs across all businesses
 Coordinate business unit interactions
Steel
International
 Communication and marketing to promote
initiative
 Share competency in sourcing , packaging, and
distribution to Tata Tea
Tea
Tata Chemical Initiative
Power
Chemicals
22
INITIATIVE EXAMPLE
TATA “GREEN CHEMISTRY” INITIATIVE
 Indian hotels is pursuing an internal project
known as EARTH
 There are best practices from other hotel chains
and Tata companies that can be leveraged for
near-term immediate savings
 Long term goal should be LEED certification for
new hotels
 Total annual savings/profit for 8 targeted hotels =
$1M
Tata Credo Alignment
1)
2)
4)
5)
9)
Everything we do within Tata can be re-examined
through a sustainability lens.
Sustainable initiatives strive to add value to Tata's
enterprise and shareholders over a reasonable time
frame.
Sustainable creativity and knowledge should be shared
across all Tata organizations and outside of our company.
Tata's sustainability development should be managed
with the same rigor, focus, and precision as other Tata
business.
Tata's companies will encourage their business partners
and stakeholders to achieve sustainable business
practices.
TSS Facilitation of Initiative
 Work with other Tata companies to discover
conservation best practices
 Set up conservation measurement system for hotels
Tea
Consulting
 Communication strategy for hotel customers to
get help with conservation efforts
 Leverage Climate Change task force
Hotels
Tata Hotel Conservation Initiative
Power
23
INITIATIVE EXAMPLE
HOTEL CONSERVATION INITIATIVE
FINANCIAL VALUATION
24
FINANCIAL VALUATION
25
FINANCIAL VALUATION
26
FINANCIAL VALUATION
27
DECISION ANALYSIS MATRIX
28
DECISION ANALYSIS MATRIX
29
CURRENT ORGANIZATIONAL CHART
30
TQMS INNOVATION MATRIX
31
TQMS COMMUNICATION STRUCTURE
32
TQMS COLLABORATIVE RESEARCH
33
TQMS FACILITIES FOR LEARNING
34
TIME, DIFFICULTY, IMPACT, & RISK
Implementation Difficulty
Medium/ Medium
Medium/ High
Low/ Low
ELV
Recycling
$1.4M
Hotel
Conservation
$3.9M
Truck/ Trailer
Expansion
$6.9M
Tata Tea
Certification
$12.5M
Low/ Low
Sustainability
Software
Consulting
$71.6M
Steel Plant
Energy
Efficiency
$23.6M
Low/ Medium
Medium/ High
Estimated Break-Even Timing
Size =
Profit
Impact
Market Risk
Economic/ Political
35