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TATA GROUP SUSTAINABILITY STRATEGY
Leadership with trust
Mathew AshleyBill O’Brien
Rachel ReiterKevin Richards
EXECUTIVE SU
MM
ARYGoal
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
CURREN
T SITUATIO
N
3
The status quo has risks Future funding is loosely defined Employee standards inequity
Role clarity Overlapping efforts
As Tata grows globally, how can the company preserve its unique tension between profit and purpose to meet evolving definitions of sustainability?
Steel TeleCom Tea
International Consulting Hotels
Motors Power Chemicals
CSR silos are usually the norm
Many independent initiatives and organizations
Tata Trusts
Tata Relief Committee
Innometer
TQMS
Innoverse
Annual Management Workouts
Tata Protocol for Internal Assessment
Tata Index for Sustainable Human Development
Tata Steel
Tata Power
Tata Consulting Services
Indian HotelsTata Motors Tata Chemicals
Tata Tea
Tata International
Tata Nano
CII Energy Mgmt Award
EMS standards
EARTH Project
Ongoing community
service
Community literacy
Tata Swach (H20 purifier)
Employee generation
Animal husbandry
Community development
IIP Certification
Tata Swach (H20 purifier)
Measurement and transparency Inadequate stakeholder
communication
Innovation Center
Carbon mapping
Community literacy
Health & wellnessRecycling
program
Tetley Tea Rainforest
Certification
Ethical Tea Partnership
(ETP)
Combat Climate
Change (3C’s)
TCCI
Green Globe collaboration
Sustainability council
Imported Coal
SUSTAIN
ABILITY DEFIN
ITION
&
CREDO
4
“Corporate Sustainability is a local, national, and global endeavor for creating long-term economic, social, and financial growth for the enterprise and its stakeholders.”
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.
3) Social philanthropy and development initiatives are a core competency and should be treated as an essential output of the organization.
4) Sustainable creativity and knowledge should be shared across all Tata organizations and outside of our company.
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.
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.
The Tata Credo
Sustainability Definition“Corporate Sustainability (CS) is integral to value-creation in our business 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.”
Goals of Tata’s corporate communication on sustainability 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
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.
3) Social philanthropy and development initiatives are a core competency and should be treated as an essential output of the organization.
4) Sustainable creativity and knowledge should be shared across all Tata organizations and outside of our company.
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.
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.
TSS VALUE CREATIO
N
5
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
6
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
7
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
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
8
Build Intellectual Capital Management Training: Rotations & development Climate Change Task Force: Grow environmental CSR Innovation Center: Improving business practices
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
9
Monetize CSR Knowledge Financial Planning: External fundraising External Audit/Measurement: Outside credibility External Consultants
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
10
Strengthen Brand Communications: Publicize CSR efforts in receptive markets Trust/Endowments: Protect & grow company culture of philanthropy External Audit & Measurement: Company-wide CSR report
ORG
ANIZATIO
NAL CH
ART BREAKO
UTS
11
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
IMPLEM
ENTATIO
N
12
If managed properly, TSS can address and overcome traditional barriers to implementation and common CSR challenges.
A silo mentality develops (Robert Sutton)
Make TSS part of BU strategic plan & operating review
Incentivize BU managers
TSS is under-resourced & overcommitted
Project prioritization committee
Budgeting process
Hiding place for ineffective managers
Management rotationsHR training/retrainingRecognize & reward success
Corporate culture diluted Continue to support innovation from “ground up”, everyone part of success
Tata’s Stars
Financial Planning
MU
LTI-LOCAL STRATEG
Y
13
Growth opportunities should fit Tata’s values while staying sensitive to economic, environmental, and social considerations in local communities.
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
Canada
Gulf CC
South Africa
Sri Lanka, Thailand, Vietnam
Challenge & Opportunity
Education, Regulations, Green investments
Gov., Pollution, Human Rights, Economy
Safety nets, Green Movement
Deforestation, Natural resources
Safety nets, Green Movement
Oil rich, Cultural views, Gender roles
HIV/AIDS, Developing economy
Developing economy, Government stability, wages
INITIATIVE EXAM
PLE
14
END OF LIFE VEHICLES (ELV) PROJECT
Leverage business knowledge in target markets Measure returns and costs across all businesses Coordinate business unit interactions
1) Everything we do within Tata can be re-examined through a sustainability lens.
3) Social philanthropy and development initiatives are a core competency and should be treated as an essential output of the organization.
4) Sustainable creativity and knowledge should be shared across all Tata organizations and outside of our company.
7) Our businesses should inspire new sustainable ideas, and our sustainability efforts should inspire new business ideas.
Tata ELV Services
Tata Credo AlignmentMulti-Local Implementation
TSS Facilitation of Initiative
Steel International Motors
Power Chemicals
ELV processing is already mandatory in the EU
By combining expertise across businesses, Tata can create an ELV initiative in the EU and new markets
The estimated value of an ELV-processed vehicle is $267, which could be split between Tata and the customer
Communication and marketing to promote initiative
Secure NGO support
INITIATIVE EXAM
PLE
15
CSR SOFTWARE CONSULTING
Finance and audit function provides measurement and transparency
Develop “human” software in Innovation Center and through inter-company collaboration
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.
Tata CSR Consulting
Tata Credo AlignmentMulti-Local Implementation
TSS Facilitation of Initiative
Leveraging Tata’s CSR core competency into a sustainability software consulting practice
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
Climate change group leveraged for CO2 tracking software
Seek out potential clients across existing business
Consulting Steel Power
Telecom International
EXTERNAL RISKS
16
External Risk Credo TSS Multi-Local Strategy
Continued Global Recession ü üMarket Indifference ü üStakeholder Obstructions ü üEvolving Definition of Sustainability ü ü ü
If implemented correctly, our recommendations can create value by anticipating outside change and giving Tata the structure and capability to continue profitable sustainability.
TIMELIN
E & ACTIO
N PLAN
17
Next Steps Discuss TSS idea with key leaders Begin work on standards for employee
equality across countries
If preliminary feedback is positive, hold an offsite leadership meeting to finalize credo, TSS plans, budget, and communication strategy.
Investigate initiative feasibility Investigate legal/tax/reporting implications of
subsidiary
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
QUESTIONS? THANK YOU
Leadership with trust
INITIATIVE EXAM
PLE
19
ENERGY EFFICIENCY INITIATIVES
Leverage business knowledge in target markets Measure savings and costs across all businesses Coordinate business unit knowledge sharing
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
Tata Energy Efficiency Initiatives
Tata Credo Alignment
TSS Facilitation of Initiative
Steel International Motors
Power Tea
Tata Steel leads group on energy efficiency programs and has several innovative pilot programs
Reduce its carbon footprint in existing and new markets
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
Communication and marketing to promote initiatives Ensure alignment with Climate Protocol Secure NGO support
INITIATIVE EXAM
PLE
20
COMBATTING CLIMATE CHANGE (3C’s)
Integrate Power Sustainability Council into TSS Measure returns and costs across all businesses Coordinate business unit interactions
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.
Tata Power Initiative
Tata Credo Alignment
TSS Facilitation of Initiative
Steel Consulting Motors
Power Chemicals
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
Carbon footprint reduction opportunities through the use of nuclear, wind, solar and hydro
Communication and marketing to promote initiative
Secure governmental support
INITIATIVE EXAM
PLE
21
STRATEGIC REORGANIZATION FOR TEA GROUP
Integrate Tetley sustainability initiatives throughout Tea Group
Measure returns and costs across all businesses Coordinate business unit interactions
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.
Tata Tea Group
Tata Credo Alignment
TSS Facilitation of Initiative
Tea International
Power Chemicals
Transparent reporting of ethical sourcing through the Rainforest Alliance Certification (RAC) in Western European and North American
Renewable packaging through Life-Cycle Analysis
Fair Trade certified products and standards
Communication and marketing to promote initiative
Share Tata Chemical competency in sourcing , packaging, and distribution to Tata Tea
INITIATIVE EXAM
PLE
22
TATA “GREEN CHEMISTRY” INITIATIVE
Integrate Innovation Center into TSS Measure returns and costs across all businesses Coordinate business unit interactions
1) Everything we do within Tata can be re-examined through a sustainability lens.
3) Social philanthropy and development initiatives are a core competency and should be treated as an essential output of the organization.
4) Sustainable creativity and knowledge should be shared across all Tata organizations and outside of our company.
7) Our businesses should inspire new sustainable ideas, and our sustainability efforts should inspire new business ideas.
Tata Chemical Initiative
Tata Credo Alignment
TSS Facilitation of Initiative
Steel International Tea
Power Chemicals
Flue gas treatment, carbon absorption and nano glass coating for insulation
Entered into the bio-fuels market in 2007
Fresh produce sourcing, packaging, and distribution
Innovation Center
Center for Agriculture and Technology
Communication and marketing to promote initiative
Share competency in sourcing , packaging, and distribution to Tata Tea
INITIATIVE EXAM
PLE
23
HOTEL CONSERVATION INITIATIVE
Work with other Tata companies to discover conservation best practices
Set up conservation measurement system for hotels
Tata Hotel Conservation Initiative
Tata Credo Alignment
TSS Facilitation of 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
Communication strategy for hotel customers to get help with conservation efforts
Leverage Climate Change task force
Tea Consulting
Hotels Power
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.
5) Tata's sustainability development should be managed with the same rigor, focus, and precision as other Tata business.
9) Tata's companies will encourage their business partners and stakeholders to achieve sustainable business practices.
FINAN
CIAL VALUATIO
N
24
FINAN
CIAL VALUATIO
N
25
FINAN
CIAL VALUATIO
N
26
FINAN
CIAL VALUATIO
N
27
DECISIO
N AN
ALYSIS MATRIX
28
DECISIO
N AN
ALYSIS MATRIX
29
CURREN
T ORG
ANIZATIO
NAL
CHART
30
TQM
S INN
OVATIO
N M
ATRIX
31
TQM
S COM
MU
NICATIO
N
STRUCTU
RE
32
TQM
S COLLABO
RATIVE RESEARCH
33
TQM
S FACILITIES FOR LEARN
ING
34
TIME, D
IFFICULTY, IM
PACT, & RISK
35
Estimated Break-Even Timing
Impl
emen
tatio
n D
ifficu
lty
Size = Profit Impact
Sustainability Software
Consulting $71.6M
Tata Tea Certification
$12.5MELV Recycling
$1.4M
Truck/ Trailer Expansion
$6.9M
Hotel Conservation
$3.9M
Steel Plant Energy
Efficiency $23.6M
Low/ Low
Market RiskEconomic/ Political
Medium/ High
Medium/ High
Medium/ Medium
Low/ Low
Low/ Medium