CORPORATE SUSTAINABILITY WORKOUT

APRIL 30, 2010

TEN YEAR SUSTAINABILITY PLAN

PREPARED BY: NICHOLAS ANASINIS MARIA ISMAIL PATRICIA JURCA LEI YANG

expansion

Impact Identity measurable Tata Way

Change Accountability

stakeholders

community

Trust

Global
values

Growth Purpose Profit reputation leadership

tension

philanthropy

Conflict

Culture

Corporate Sustainability (CS) is integral to valuecreation in our businesses through the enhancement of human, natural and social capital complementing their economic and 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.

HOW ARE WE GOING TO GET THERE?

Establish a whole system approach to sustainability Stay true to the Tata values throughout the supply chain Capitalize on sustainability as a value driver Meet & exceed regulatory and industry standards in target markets Manage externalities effectively

Action Plan
Product Differentiation, Product Development & Innovation Governmental Initiatives & Industry Standards

Supply Chain Initiatives

ACTION PLAN
Establishing business practices that dictate a holistic approach to sustainability. PRODUCT DIFFERENTIATION, PRODUCT DEVELOPMENT & INNOVATION Identify companies within the Tata group which are leaders in sustainability oriented product and process differentiation and innovation Identify strengths/capabilities that make that differentiation and innovation possible Develop a replicable model for product differentiation and innovation which includes a filter for being mindful of possible externalities from different perspectives when articulating solutions to unmet social/environmental needs in target markets Utilize this model to improve product differentiation, development and innovation GOVERNMENT INITIATIVES & INDUSTRY STANDARDS Understand regulatory environment and industry standards in target markets Establish business practices to exceed the most stringent regulatory requirements and industry standards Apply these superior Tata standards consistently across different Tata companies Identify and leverage opportunities to partner with government for policy development incorporating Tata's superior environmental and social standards SUPPLY CHAIN INITIATIVES Identify best practices across sector Develop criteria for supply chain audit Supply chain mapping: identify all suppliers 0 1 2 3 4 5 6 7 8 9 10

Conduct supply chain audit

Encourage suppliers to adopt best practices Mandate suppliers to adopt best practices

HOW ARE WE GOING TO GET THERE?

Apply a sustainability lens to acquisitions Acquisitions are a major part of Tatas growth strategy Lower integration costs Reduce risk to reputation

Action Plan
Criteria to evaluate sustainability fit of target acquisition Post acquisition sustainability implementation

ACTION PLAN
Incorporating sustainability into Tatas acquisition strategy. CRITERIA TO EVALUATE SUSTAINABILITY FIT OF THE TARGET ACQUISITION Find sustainability exemplars by sector Identify strengths/capabilities that make that sustainable model work Compare these strengths/capabilities with the strengths of an equivalent Tata company Identify the gaps to highlight the strengths needed by the Tata company to improve Develop and implement benchmarked practices in the company Identify challenges faced in implementation In hindsight, identify what features/characteristics of the company played a key role in making this implementation challenging Use these features/characteristics as a screening criteria for future acquisitions in that industry Learn with each subsequent acquisition and refine 'sustainability fit' criteria POST ACQUISITION SUSTAINABILITY IMPLEMENTATION Implement post-acquisition TQMS and TCCI processes/initiatives to the acquired company e.g. established frameworks to measure sustainability impacts such as the Tata Index for sustainable human development or abatement strategies for climate change 0 1 2 3 4 5 6 7 8 9 10

HOW ARE WE GOING TO GET THERE?

Build a global brand

Create a shared vision Be known

Action Plan
Leadership Initiatives

Effectuate change

External Initiatives

Internal Initiatives

Leadership with trust

ACTION PLAN
Building a global Tata brand that embodies the Tata values. LEADERSHIP Identify successor to Ratan Tata to take the Tata group global while embodying its values 0 1 2 3 4 5 6 7 8 9 10

Continue to have commitment to sustainability and embodiment of the leadership protocol as key criteria in succession planning for all key positions Develop and execute sustainability training programs for key executives that promote a holistic approach to sustainability and address the implications and opportunities of truly making Tata a global brand from learnings of the initial sustainability strategies
EXTERNAL Identify a major issue within each target market and focus on which issue can be addressed with current Tata capabilities (utilize model for product/process innovation and differentiation) Identify and engage strategic partners (business, NGO, government) to affect change by providing access to required resources/capabilities in the target market Celebrate success of sustainability initiatives in the target markets through brand building advertising campaigns INTERNAL Design 'Employee Sustainability Program' aimed at the local community of different target markets to engage Tata employees there and achieve cultural alignment and shared value entrenchment in Tata's global employee base Provide employees opportunities to work on self-identified sustainability projects, on paid company time, which are aligned with their unique technical skills and competencies Celebrate employee success stories

WHY EVA?
EVA adopters deliver greater shareholder value Useful to analyze value driver

Creates an ownership mindset in employees

Better tool for strategic resource allocation

HOW IS VALUE CREATED?

Revenue Increase
Government Initiatives & Industry Standards Product Differentiation, Development & Innovation Strategic Markets

Cost Reduction

Supply Chain Initiatives Employee Sustainability Programs Sustainability Acquisition Criteria

Higher EBIT Margin

Lower WACC
Government Initiatives & Industry Standards

Wider Access to Capital

Strategic Markets

HOW DOES IT LOOK OVER 10 YEARS?

9.00 ($ billion) 8.00 Aggressive Conservative Expected 7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00 -3
Year 0 = 2009

-2

-1

10

WHAT ARE THE CHALLENGES?

Implementation

Organizational structure
Access to capital

External factors

SO DO THIS TOMORROW
Discuss implementation with TQMS and TCCI Identify your sustainability champions

Q&A