A Study On ITC Limited With Reference

To Its Stakeholders & CSR Activities

BUSINESS AND SOCIETY

GROUP PROJECT PART – I & II
Industry – FMCG
Group No- 4

SUBMITTED TO:
Dr. Jacob George
Assistant Dean and Professor

SUBMITTED BY:
MBA (2018-20) BATCH – B

Emil Mathew Joseph

Febin Simon
Geethu Krishna S
Govind N V
Grinna Jolly K
Harishma Hari

DATE OF SUBMISSION: 25/09/2018

1
Introduction

Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (F.M.C.G.). F.M.C.G. products are those that get replaced within a
year. Examples of F.M.C.G. generally include a wide range of frequently purchased
consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving
products and detergents, as well as other non-durables such as glassware, bulbs,
batteries, paper products, and plastic goods. F.M.C.G. may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue
paper, and chocolate bars. India’s F.M.C.G. sector is the fourth largest sector in the
economy and creates employment for more than three million people in downstream
activities. Its principal constituents are Household Care, Personal Care and Food &
Beverages.
Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the
Indian economy with Household and Personal Care accounting for 50 per cent of FMCG
sales in India. Growing awareness, easier access and changing lifestyles have been the
key growth drivers for the sector. The urban segment (accounts for a revenue share of
around 55 per cent) is the largest contributor to the overall revenue generated by the
FMCG sector in India However, in the last few years, the FMCG market has grown at
a faster pace in rural India compared with urban India. Semi-urban and rural segments
are growing at a rapid pace and FMCG products account for 50 per cent of total rural
spending.

The industry is highly competitive due to presence of multi-national companies,

domestic companies and unorganized sector. A major portion of the market is captured
by unorganized players selling unbranded and unpackaged products. More than 50 per
cent of the total revenues of FMCG companies come from products worth Rs 10 or
less1 .This has made the proliferation of localized brands which are offered in loose
form in small towns and rural part where brand awareness is low. In last 10 years
domestic players are giving tough com-petition to multinationals; in fact they have
outstripped many MNCs in growth and market cap. Between 2005- 2014 the profit of
domestic companies increased by 24% against 14% increase of multinational
companies. Urban India accounts for 66% of total FMCG consumption, while rural
India accounts for the remaining 34%. However, rural India accounts for more than
40% of the consumption in major FMCG categories such as personal care, fabric care
and hot beverages. As per the analysis by ASSOCHAM, companies like Hindustan
Unilever Ltd and Dabur India generate half of their sales from rural India while Colgate
Palmolive India and Marico constitute nearly 37% respectively.

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Fast Moving Consumer Goods

Fast Moving Consumer Goods are inexpensive products that require little shopping
efforts these are non-durable products which are sold in packaged forms. These products
are
Purchased by the end-consumer in small quantities and frequently. The main FMCG
segments can be classified as Personal Care, Household care, Branded and Packaged
food and Tobacco.

 Personal Care: It consists of oral care; hair care; skin care; personal wash (soaps);
cosmetics and toiletries; deodorants; perfumes; paper products (tissues, diapers,
sanitary); shoe care etc.
 Household Care: It comprises of fabric wash (laundry soaps and synthetic
detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet
cleaners, air fresheners, insecticides and mosquito repellants, metal polish and
furniture polish).
 Branded and Packaged Food and Beverages: It consists of health beverages;
soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food;
chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy
products; bottled water; branded flour; branded rice; branded sugar; juices etc.
 Spirits and Tobacco

History of F.M.C.G. in India

In India, companies like ITC, H.U.L., Colgate, Cadbury and Nestle have been a
dominant force in the F.M.C.G. sector well supported by relatively less competition and
high entry barriers (import duty was high). These companies were, therefore, able to
charge a premium for their products. In this context, the margins were also on the higher
side. With the gradual opening up of the economy over the last decade, F.M.C.G.
companies have been forced to fight for a market share. In the process, margins have
been compromised.

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 COMPANY OVERVIEW:

ITC is one of India's foremost private sector companies with a market capitalization of
nearly US $ 15 billion and a turnover of over US $ 4.75 billion. ITC is rated among the
World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable
Companies by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by Business Today. ITC
also ranks among India's top 10 `Most Valuable (Company) Brands', in a study
conducted by Brand Finance and published by the Economic Times.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,
Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. While
ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its
nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting
Cards.

As one of India's most valuable and respected corporations, ITC is widely perceived to
be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of
inspiration "a commitment beyond the market". In his own words: "ITC believes that
its aspiration to create enduring value for the nation provides the motive force to sustain
growing shareholder value. ITC practises this philosophy by not only driving each of
its businesses towards international competitiveness but by also consciously
contributing to enhancing the competitiveness of the larger value chain of which it is a
part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested core competencies: unmatched
distribution reach, superior brand-building capabilities, effective supply chain
management and acknowledged service skills in hoteliering. Over time, the strategic
forays into new businesses are expected to garner a significant share of these emerging
high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is

one of the country's biggest foreign exchange earners (US $ 2.8 billion in the last

4
decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture
significantly enhance its competitiveness by empowering Indian farmers through the
power of the Internet. This transformational strategy, which has already become the
subject matter of a case study at Harvard Business School, is expected to progressively
create for ITC a huge rural distribution infrastructure, significantly enhancing the
Company’s marketing reach ITC's wholly owned Information Technology subsidiary,
ITC InfoTech India Limited, is aggressively pursuing emerging opportunities in
providing end-to-end IT solutions, including e-enabled services and business process
outsourcing.

ITC's production facilities and hotels have won numerous national and international
awards for quality, productivity, safety and environment management systems. ITC was
the first company in India to voluntarily seek a corporate governance rating.

ITC employs over 21,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalizing
environment to consistently reward more than 4,46,000 shareholders, fulfill the
aspirations of its stakeholders and meet societal expectations. This over-arching vision
of the company is expressively captured in its corporate positioning statement:
"Enduring Value. For the nation. For the Shareholder.”

History and Evolution

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company
of India Limited. As the Company's ownership progressively Indianised, the name of
the Company was changed from Imperial Tobacco Company of India Limited to India
Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition
of the Company's multi-business portfolio encompassing a wide range of businesses
- Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and
Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety
Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and
Information Technology - the full stops in the Company's name were removed effective

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September 18, 2001. The Company now stands rechristened Limited, ‘where ‘ITC’ is
today no longer an acronym or an initialised form.

VISION » Sustain ITC's position as one of India's most valuable corporations

through world class performance, creating growing value for the
Indian economy and the Company's stakeholders

MISSION » To enhance the wealth generating capability of the enterprise in a

globalising environment, delivering superior and sustainable
stakeholder value

Board OF Directors

6
ITC Ltd - Business Segments

 Cigarettes
ITC Ltd sells 81% of the cigarettes in India, where 275 million people use tobacco
products and the total cigarette market is worth close to $11 billion
ITC's major cigarette brands include Wills Navy Cut, Gold Flake Kings, Gold Flake
Premium lights, Gold Flake Super Star, Insignia, India Kings, Classic (Verve,
Menthol, Menthol Rush, Regular, Citric Twist, Ice Burst, Mild & Ultra
Mild), 555, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players,
Flake and Duke & Royal.
 Other businesses

 Foods: ITC's major food brands include Kitchens of India; Aashirvaad, B natural,
Sunfeast, Candyman, Bingo! And Yippee! ITC is India's largest seller of branded
foods with of over Rs. 4,600 crore in 2012-13. It is present across 6 categories in the
food business including, snack foods, ready-to-eat meals, fruit juices, and dairy
products and confectionary.
 Personal care products include perfumes, haircare and skincare categories. Major
brands are Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage.
 Stationery: Brands include Classmate, PaperKraft and Colour Crew. Launched in
2003, Classmate went on to become India's largest notebook brand in 2007.
 Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety matches and
the Mangaldeep brand of agarbattis (Incense Sticks).
 Hotels: ITC's Hotels division (under brands including WelcomHotel) is India's
second largest hotel chain with over 90 hotels throughout India. ITC is also the
exclusive franchise in India of two brands owned by Sheraton International Inc.
Brands in the hospitality sector owned and operated by its subsidiaries include
Fortune Park Hotels and WelcomHeritage Hotels.
 Paperboard: Products such as specialty paper, graphic and other paper are sold
under the ITC brand by the ITC Paperboards and Specialty Papers Division like
Classmate product of ITC well known for their quality.
 Packaging and Printing: ITC's Packaging and Printing division operates
manufacturing facilities at Haridwar and Chennai and services domestic and export
markets.
 Information Technology: ITC operates through its fully owned subsidiary ITC
Infotech India Limited,.

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ITC has several firsts to its credit:

 ITC is the first from India and among the first 10 companies in the world to publish
its Sustainability Report in compliance (at the highest A+ level) with the latest G3
guidelines.
 ITC is the first Indian company and the second in the world to win the prestigious
Development Gateway Award.
 ITC has won the inaugural 'World Business Award’, The award has been instituted
jointly by the United Nations Development Programme (UNDP), International
Chamber of Commerce (ICC) and the HRH Prince of Wales International Business
Leaders Forum (IBLF).
 ITC is the first Corporate to receive the Annual FICCI Outstanding Vision
Corporate Triple Impact Award in 2007 for its invaluable contribution to the triple
bottom line benchmarks of building economic, social and natural capital for the
nation.
 ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility
(Asia)' in 2007, the Award for 'CSR in Emerging Economies 2005' and 'Excellence
in Corporate Governance' in the same year.
 ITC Hotel Gardenia, Bengaluru is the first Indian Hotel and world's largest, to get
the LEED Platinum rating - the highest green building certification globally.
 The Company's Green Leaf Threshing plants at Chirala and Anaparti in Andhra
Pradesh are the first units of their kind in the world to get ISO 14001environment
management systems certification.
 ITC's cigarette factory in Kolkatais the first such unit in India to get ISO 9000quality
certification and the first among cigarette factories in the world to be awarded the
ISO 14001 certification.
 ITC Maurya in New Delhi is the first hotel in India to get the coveted ISO
14001 Environment Management Systems certification.
 ITC Filtrona is the first cigarette filter company in the world to obtain ISO 14001.
 ITC's Green Leaf Threshing plant in Chirala is the first in India and among the first
10 units in the world to bag the Social Accountability (SA 8000) certification.
 ITC's R&D Centre at Peenya, Bengaluru has the distinction of being the first
independent R&D centre in India to get ISO 9001 accreditation and certified
with ISO 14001 for Environment Management Systems by DNV. The R&D Centre
is also certified for the standard ISO/IEC17025:2005, by National Accreditation
Board for Testing and Calibration Laboratories (NABL). "

8
 ITC’s Process of Stakeholder Engagement

As a large corporation, with a diverse business portfolio and units spread over 60
locations, ITC has a large number of stakeholders - the Government and its statutory
bodies, shareholders, customers, employees, suppliers, contractors, local communities,
and the society at large - who are affected by the Company's operations.

ITC and all its units consistently strive to anticipate emerging stakeholder expectations.
The Company's various businesses have evolved and institutionalized structured
systems to formally review and update their understanding of stakeholder expectations.

ITC is committed to the timely disclosure of relevant and reliable information on its
financial performance, its entire gamut of activities relating to Environment,
(Occupational) Health and Safety (EHS), and its social initiatives. ITC believes that the
disclosure of all appropriate and useful information with regard to Company activities
that can have an impact on stakeholders is at the heart of good governance.

In line with the Company’s Board approved policy on stakeholder engagement, ITC
has a structured framework to engage with stakeholders and address their key concerns.
The framework is based upon established long-term relationships with key stakeholders
such as shareholders, farmers, customers, suppliers, employees, local communities,
regulatory bodies and the media. With the firm belief that stakeholder engagement is an
integral part of enriching and enduring partnerships, ITC has institutionalized these
processes grounded on transparency and accountability

Consultation with Key Stakeholders

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 Stakeholder Consultation Mechanism
 Annual General Meeting

Providers of Financial  Exclusive section in Corporate Website on ‘Shareholder

Capital Value’ which serves to inform and service shareholders

 An exclusive e-mail id: isc@itc.in for direct interaction with

shareholders  Regular interactions with institutional
investors

 Representations on policy issues through industry

associations and other bodies
Government and
Regulatory Authorities  Participation in policy advocacy discussions at various
forums

 Market surveys

 Personal contacts/ visits

Customers  Personalised lifestyle privilege programme

 Customer satisfaction surveys  Key account management

 Induction programmes/ training workshops

 Individual performance appraisal

Employees  Employee engagement survey

 Grievance handling processes

 Trade union meetings

 Regular formal/ informal talks

Farmers  Farmer training programmes and workshops

 Agreements for all procurement activities

 e-Choupal and Choupal Pradarshan Khets (demonstration

farms)  Participatory rural appraisals to identify needs and
challenges

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 Manufacturers’ meets

 Vendor meets

Supply Chain Partners  Pre-agreement negotiations

 Agreements for all procurement activities

 One-on-one Media interactions

Press conferences/Press releases

Media  Advertisements/Promotions

 Interviews with Senior Managers

 Partnership in implementation of CSR Programmes under

Mission Sunehra Kal
Civil Society
 Discussions on community issues with Civil Society
Organisations

 Community needs assessment activities undertaken in

collaboration with independent parties/ Civil Society
Organisations
Local Communities
 Formation and regular meetings of village institutions

 Public hearings during greenfield/ expansion projects

 Assessment of direct and indirect impacts of ITC’s social

investments on communities

ITC Limited Corporate Citizenship

ITC Limited (ITC) is one of India's foremost private sector companies having a diverse
portfolio of businesses. The company has been undertaking several CSR initiatives over
the years and been appreciated for them globally.
ITC Limited (ITC) is one of India's foremost private sector companies having a diverse
portfolio of businesses. The company has been undertaking several CSR initiatives over
the years and been appreciated for them globally. The case discusses ITC's CSR
initiatives and focuses on its approach. The company's innovative ways and heavy
investments to achieve the 'triple bottom line' are discussed.

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ITC is one of India's foremost private sector companies with a market capitalisation of
over US $ 30 billion and a turnover of US $ 6 billion. ITC has a diversified presence in
Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business,
Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal
Care, Stationery, Safety Matches and other FMCG products. While ITC is an
outstanding market leader in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its
nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal
Care and Stationery.
As one of India's most valuable and respected corporations, ITC is widely perceived to
be dedicatedly nation-oriented. Chairman Y. C. Deveshwar calls this source of
inspiration "a commitment beyond the market". In his own words: "ITC believes that
its aspiration to create enduring value for the nation provides the motive force to sustain
growing shareholder value. ITC practices this philosophy by not only driving each of
its businesses towards international competitiveness but by also consciously
contributing to enhancing the competitiveness of the larger value chain of which it is a
part."

CSR philosophy of ITC

Inspired by the overarching vision of making a contribution to the national goals of

sustainable development and inclusive growth, ITC has innovatively crafted unique
business models that synergise long-term shareholder value creation with enhancing
societal capital. This commitment is reflected when ITC measures accomplishments not
only in terms of financial performance but also by the transformation ITC has
consciously engendered to augment the social capital of the nation. in ITC's 'Triple
Bottom Line' approach of contributing to the economic, environmental and social
capital of the country. Envisioning a larger societal purpose has always been a hallmark
of ITC. The company sees no conflict between the twin goals of shareholder value
enhancement and societal value creation. The challenge lies in fashioning a corporate
strategy that enables realisation of these goals in a mutually reinforcing and synergistic
manner.
As a corporate citizen with enduring relationships in rural India, ITC has a history of
collaboration with communities and government institutions to enhance farm
productivity and the rural resource base. ITC's commitments in agricultural R&D and
knowledge sharing have spanned vital aspects of competitiveness - efficient farm
practices, soil and water management.
ITC is committed to a national agenda of raising agricultural productivity and making
the rural economy more socially inclusive. ITC believes that the urgency and scale of
these tasks make market linked solutions and innovations more effective and
sustainable than capital intensive approaches.

12
13
14
ITC Limited CSR Initiatives

 ITC e-Choupal – the world’s largest rural digital infrastructure -

Empowering 4 million farmers

The ITC e-Choupal initiative is a powerful illustration of a unique and innovative model
that delivers significant societal value by co-creating markets with rural communities.
A network of village internet kiosks – e-Choupals – enable even small and marginal
farmers in rural India, who are de-linked from the formal market, to access real-time
weather and price information, and relevant knowledge and services to enhance farm
productivity, quality and command better prices – improving their competitiveness and
capacity to manage risk. Complementing this digital infrastructure is Choupal
Pradarshan Khet – customised agri-extension services, demonstration plots and training
programmes that promote best practices and assist farmers to diversify crop portfolios.
The ITC e-Choupal initiative has emerged as an efficient twoway channel for a variety
of goods and services, raising farm incomes and making farming more profitable. In
line with ITC’s commitment to the triple bottom line philosophy, the Company is
leveraging the e-Choupal platform to support holistic development of rural communities

15
in and around e-Choupal catchments through a number of initiatives – agarbatti
manufacturing, dairy management and skills development – aimed at stimulating non-
farm incomes and creating sustainable livelihood opportunities. This endeavour also
includes the Swasthya Choupal initiative that focuses on enhancing awareness on
maternal and child care through a network of Village Health Champions.

 ITC’s Afforestation Programme Greening nearly 6,90,000 acres &

generating 125 million person-days of employment

Afforestation a key plank in ITC’s natural resource management strategy and a

pioneering venture in wasteland development, ITC’s Social & Farm Forestry
Programme brings multiple social and environmental benefits. It enables farmers who
own wastelands and lands with low levels of productivity to grow commercially viable
pulpwood plantations, thereby turning an unproductive asset into a profitable one. To
ensure the commercial viability of these plantations, ITC invested in extensive R&D to
develop fast-growing clonal saplings that are disease-resistant and have a higher rate of
survival in harsh conditions. Under the Social Forestry component of the Programme,
tribals and marginal farmers are assisted with loans, subsidised clonal stock and
extension services. Farm Forestry targets farmers with investible incomes. On harvest,
farmers are free to transact at will and sell to whoever they choose. ITC could have
chosen the easier route of importing pulp, rather than the more difficult option of
mobilising tribal and marginal farmers which required long gestation and substantial
investment exposure. However, adopting the more challenging route has not only
created a source of sustainable livelihoods for a large number of poor families, but has
generated large-scale green cover that contributes significantly to groundwater
recharge, soil conservation and carbon sequestration. Adopting the agro-forestry model
that combines tree growing with crop production, the Programme ensures both food and
wood security as well as helps in the conservation of precious natural resources. ITC
has been conferred the Forest Management certification from the Forest Stewardship
Council, which confirms compliance with the highest international benchmarks of

16
plantation management in terms of being environmentally responsible, socially
beneficial and economically viable

 ITC’s Soil & Moisture Conservation Programme Covering over

9,30,000 acres

Recognising the vital role played by water and irrigation in the rural economy, ITC’s
Soil & Moisture Conservation Programme supports watershed development projects in
water-stressed areas, providing precious water resources for agriculture, rural
communities and livestock. The focus is on building, reviving and maintaining water
harvesting structures as well as implementing other measures which help to reverse land
degradation, provide critical irrigation and increase agricultural productivity. Adopting
a participatory approach, ITC works with NGOs to mobilise local communities to form
water user groups. These groups are trained to carry out the entire spectrum of activities
from planning to execution, including monitoring of work and future maintenance of
structures. The groups are also trained to formulate regulations and fix water user
charges which go towards creating a fund used to maintain existing structures and build
new ones. ITC has also entered into public-private-people partnerships with several
state governments and NABARD, bringing together government and corporate
resources to undertake watershed development projects with considerably greater scale
and impact. Currently, these projects are targeting to cover over 5,09,000 acres in some
of India’s most droughtprone regions.

 ITC’s Livestock Development Programme Covering over 16,60,000

milch animals

Animal husbandry plays an important role in the economy of rural India with over 70%
of households owning milch animals. Adopting an integrated animal husbandry services
approach, ITC’s Programme aims to assist cattle-owners to increase the productivity of

17
their animals and improve milk quality. Targeting marginal households, comprehensive
services, including artificial insemination, animal feed and healthcare management, are
provided right at the doorstep through village Cattle Development Centres managed by
trained local community members. Milk yields from cross-bred progeny are
significantly higher, generating substantial supplementary incomes from surplus milk
sales, paving the way for dairying to emerge as a viable livelihood option. This income
also acts as a cushion in times of crop failure.

 ITC’s Women Empowerment Programme Economically empowering

over 61,000 women

Specifically designed for women from economically weaker sections of rural

communities, ITC’s Women Empowerment Programme aims to provide them with
sustainable economic livelihood opportunities through financial assistance as well as
skills training. Women are motivated to form micro-credit self-help groups so that they
can build up small savings, finance self-employment and micro-enterprises. ITC is also
working towards making agriculture more inclusive by enabling marginal women
farmers to enhance their knowledge and skills in modern agricultural practices. Farmer
field schools exclusively for women agriculturalists cover a wide range of best
practices, such as improved seeds and balanced fertilisers, as well as techniques for
scientific land use and water conservation. Assisted by ITC, women’s self-help groups
have recently started farm mechanisation equipment hire centers and tree sapling
nurseries. Acting collectively, women have also formed solid waste management
groups that undertake door-to-door garbage collection, segregation of waste as well as
making and selling organic manure. These small ventures have the potential to grow
into successful and profitable independent enterprises in the future. One of ITC’s
interventions targets Ultra Poor women with the objective of mainstreaming them
socio-economically over a period of time. ITC assists these women with productive
income generating assets, supported with intensive handholding, counseling, on-job

18
assistance, training and local level facilitation with the aim of bringing them into the
financial mainstream. Enabling women to earn independent incomes has a positive
impact on their families and communities as it is spent largely on their children’s
education, health and nutrition and is a powerful catalyst for gendering development
and supporting social inclusion.

 ITC’s Primary Education Programme Educating over 5,70,000

Rural children

ITC’s Primary Education Programme addresses the lack of quality primary education
in rural communities. Aiming to strengthen the government primary schools’ vast
network by stemming drop-outs, increasing enrolments and improving learning
outcomes, the Programme puts in place mutually reinforcing interventions that are
coordinated to support a move towards child friendly schools. Infrastructural assistance
is provided to government schools, ranging from books, teaching aids and furniture to
classrooms, separate toilets for boys and girls, libraries, cooking/kitchen facilities and
playground /sports equipment. Focusing particularly on sanitation and health, students
and teachers are trained on WASH (Water, Sanitation, Hygiene) principles, and students
are motivated to form WATSAN (Water and Sanitation) Committees and Child
Cabinets to take ownership of WASH areas in schools, helping to promote behavioural
change among children in their formative years. The Read India Plus initiative, in
partnership with the NGO, Pratham, was introduced in 2013. Utilising an innovative
pedagogy, it is geared towards helping children between the ages of 6-14 to achieve all
five competencies – Listening, Speaking, Reading, Writing and Doing. The Programme
also works to strengthen school management committees and build capacity among
teachers to ensure that infrastructure can be sustainably maintained in the long run.
Active engagement with parents is encouraged, towards developing collaborative
partnerships in building the community’s stake in ensuring that more and more children
are able to complete their schooling

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  ITC’s Skilling & Vocational Training Initiative Over 62,000
Youth benefitted

ITC’s skilling initiative for boys and girls focuses on employability and employment
linkages with the larger purpose of empowering rural communities and creating
sustainable livelihood opportunities. The initiative aims to build market relevant skills
so as to make potential job seekers industry-ready and employable in the manufacturing
and service sectors. It focuses on the most marginalised sections of communities,
including women. As part of ITC’s affirmative action plan, it also targets Scheduled
Castes and Scheduled Tribes – among the most socially and economically
disadvantaged. The initiative offers training in market-linked skills for the hospitality,
automotive, electrical, retail, and computer and construction sectors as well as in a range
of trades and services – tailoring, beautician, bedside nursing and security. Courses run
for 4 to 12 weeks, depending on the skill. On completion, placement camps are
organised to facilitate employment opportunities.

 ITC’s Health & Sanitation Initiative Over 32,000 low-cost sanitary

units constructed

Open defecation remains a persistent and pervasive problem across the country. It is
particularly acute in rural areas where there is a lack of awareness regarding the
causality between open defecation and health related issues, especially of diarrhoeal
diseases which are a major cause of child mortality in India. ITC’s Health & Sanitation
initiative seeks to address this serious issue by supporting the building and usage of
low-cost family-owned toilets in the catchments of its manufacturing units, the majority
of which are located in rural areas. ITC’s strategy is centred on galvanising a people’s
movement and mobilising empowered grassroots institutions that take the lead in
building family-owned toilets. Intensive awareness generation programmes customised
to target men, women and children combined with a mandatory financial contribution
from participating families help to ensure high and sustained usage levels of the

20
constructed toilets. Wherever possible, the initiative works in active collaboration with
government sanitation schemes.

 ITC’s Well-being Out of Waste ( WOW ) Initiative 77 lakh citizens across

10 states benefitted by ITC’s Solid Waste Management Programme

In line with its commitment to creating larger environmental and societal value through
collaborative action, ITC launched its Well-being out of Waste (WOW) initiative a few
years ago to promote resource conservation and recycling. WOW creates awareness
about the importance of “Reduce-Reuse-Recycle” in protecting and restoring the
environment among the general public, school children, corporates and people from
every walk of life. It also inculcates the habit of source segregation and provides
recyclables for a number of industries, eg. Paper, glass, plastic, etc. Implemented in
collaboration with municipal corporations, today WOW is operational in 562 municipal
wards of Hyderabad, Chennai, Bengaluru, Coimbatore, Delhi, Muzaffarpur and major
districts in Andhra Pradesh. Over 77 lakh citizens, 33 lakh school children and 2,000
corporates are supporting WOW, which helps augment green cover, conserves scarce
natural resources, and makes surroundings clean and healthy. The initiative has also
created livelihood opportunities for 14,500 rag pickers and waste collectors. Similar
community-managed projects are also operational in several villages and towns in 13
districts across 8 states.

 Renewable Energy at ITC Over 43% of ITC’s total energy

consumption is met from renewable sources

In line with its conscious strategy to lower its carbon footprint, ITC has steadily
enlarged its clean energy portfolio. Currently, renewable sources and carbon neutral
fuels provide over 43% of the Company’s total energy consumption. Several of the
Company’s factories, facilities and premium luxury hotels, including its iconic property

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in Chennai, ITC Grand Chola, as well as the ITC Infotech Park are powered by wind
energy. Renewable energy sources in ITC comprise the following: Black liquor waste
from the pulping process and waste wood biomass from chipping operations in the
Bhadrachalam Unit of ITC’s Paperboards & Specialty Papers Business. Locally sourced
chip/sawdust and deoiled bran as boiler fuel in the Kovai Unit. Wind Energy farms for
Packaging & Printing, FMCG, Hotels and Paperboards & Specialty Papers Businesses.
Improved utilisation of carbon neutral biofuels in the Paperboards & Specialty Papers
Business and the year round year operations of wind power projects in Maharashtra and
Tamil Nadu contribute to increased utilisation of renewable energy.

ITC e-Choupal has won numerous awards:

 United Nations Industrial Development Organisation (UNIDO) Award at

the international conference on Sharing Innovative Agribusiness Solutions
2008 at Cairo for ITC's exemplary initiatives in agri business through the e-
Choupal.
 The Ashoka - Changemakers 'Health For All' Award 2006 for the Rural
Health Services model for delivery of health services through the e-Choupals.
 The Stockholm Challenge 2006 award for leveraging information technology
for the economic development of rural communities.
 Innovation for India Award 2006 for ITC e-Choupal in the Social
Innovations category for business organisations. The first-of-its-kind in India
that was based on parameters like the number of lives impacted, degree of impact
on organisation and environment, uniqueness, leverage of resources and level of
scalability and sustainability. ITC e-Choupal was declared as one of 'India's
Best Innovations'.
 The Development Gateway Award 2005 (previously known as the Petersberg
Prize) for the trailblazing e-Choupal initiative. ITC is the first Indian
company and the second in the world to win this prestigious award.

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 The 'Golden Peacock Global Award for Corporate Social Responsibility
(CSR) in Emerging Economies for 2005'. The Company received this award
for its ITC e-Choupal and social and farm forestry initiatives that have
transformed lives and landscapes in rural India.
 The Corporate Social Responsibility Award 2004 from The Energy and
Resources Institute (TERI) for the e-Choupal initiative. The Award provides
impetus to sustainable development and encourages ongoing social
responsibility processes within the corporate sector.
 The inaugural 'World Business Award', instituted jointly by the International
Chamber of Commerce (ICC), the HRH Prince of Wales International
Business Leaders Forum (IBLF) and the United Nations Development
Programme (UNDP). This award recognises companies that have made
significant efforts to create sustainable livelihood opportunities and enduring
wealth in developing countries.
 The 'Enterprise Business Transformation Award' for Asia Pacific (Apac),
instituted by Infosys Technologies and Wharton School of the University of
Pennsylvania.
 PC Quest's IT Implementation Award in the 'Best Project' category.
 The Golden Peacock Innovation Award 2004.
 The NASSCOM award for 'Best IT User in FMCG' in 2003. The Award is a
recognition of ITC's successful integration of its IT usage with its business
processes.
 The Seagate Intelligent Enterprise of the Year 2003 Award, for the most
innovative usage of Information Technology

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24
Oversight, Implementation and Audit of Economic, Environmental, Social
and Related Policies

The Corporate Management Committee (CMC) of the Company approves the relevant
Financial, Environmental, Occupational Health and Safety, and Social policies of ITC.

The Corporate Internal Audit Function audits implementation of all systems and
policies in all Company businesses and Corporate Headquarters.

The Corporate EHS Department, headed by an Executive Vice-President, is responsible

for laying down ITC's standards, preparing EHS Guidelines, ensuring implementation
and, at least annually, auditing the EHS Performance in each of the
Units/Factories/Hotels to ensure conformity to statutory requirements, Corporate EHS
Guidelines and Standards.

The Corporate Human Resources (CHR) Department similarly coordinates all activities
relating to the Company's social performance.

Reports relating to Economic, EHS and Social performance are provided to the
Corporate Management Committee on a monthly basis. In addition to the above,
periodic presentations are made to the CMC to ensure performance in accordance with
specified targets.

All Management Systems and standards in ITC conform to relevant national and
international standards and benefit from internationally accepted Best Practices. Quality
Management Systems in various businesses are certified in accordance with ISO 9001,
International Quality Rating System (IQRS), Hazard Analysis and Critical Control
Point (HACCP), TQM/TPM, Six Sigma and other internationally renowned standards
as applicable to the respective businesses.

Environment Management Systems in all ITC manufacturing units, major hotels and
Corporate EHS Department are certified in accordance with ISO 14001.

Occupational Health & Safety Management Systems in all manufacturing units

including Corporate EHS Department are certified in accordance with OHSAS 18001.

ITC's social responsibility goals and targets are aligned with stakeholder needs and
India's national priorities, which are in line with the UN Millennium Development
Goals.

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Management Approach

Policy: ITC endeavours not only to minimise its environmental footprint but wherever
possible create a positive environmental footprint. The Corporate Management
Committee of the Company has issued an Environment, Health & Safety Policy
(available in the 'Annexure' section of this Report). ITC's EHS Policy extends to all sites
of the Company.

Goals & Performance: The Company has adopted 4 goals in the area of Environment:

 Performance Beyond Compliance

 Carbon Positive Footprint
 Water Positive Footprint
 Zero Solid Waste (reduction, reuse and 100% recycling of all solid wastes)

Responsibility: It is the overall responsibility of the Divisional/Strategic Business Unit

(SBU) Chief Executives,
through the members of their Divisional Management Committees, General Managers
and Unit Heads, to ensure implementation of this Policy and Corporate Standards on
EHS, including formation of various committees and designating individuals for
specific responsibilities in respect of their Division/SBU.

The Corporate EHS Department is responsible for reviewing and updating Corporate
Standards on EHS, and for providing guidance and support to all concerned.

Management: All the manufacturing units, large hotels & Corporate EHS Department
are certified to ISO 14001 Environment Management Systems. Additionally, the
Corporate EHS Department has laid down detailed guidelines and standards for all ITC
businesses/units. Experts from the Corporate EHS Department audit each unit at least
once annually to ensure implementation and provide assistance for further improving
EHS performance.

Awards: A large number of awards and certifications listed in Annexures to this report
are a testimony to ITC's commitment to create positive environmental footprints.

Context: ITC businesses have identified and adopted a number of initiatives where
environmental performance provides significant financial, strategic and sustainability
benefits and complement national priorities.

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