ITC reaps growth benefits from its green capital - Business Standard
December 07, 2009
When US Secretary of State Hillary Clinton said on her visit to ITC's Green Centre in Gurgaon that it was a "monument to the future", she was emphasising what ITC had seen long before most of the world did.
Clinton's visit to the centre in July was a symbol of green collaboration between the US and India, the centre being the globe's first largest green building.
Twelve years on, and an unspecified amount of investment, ITC's green initiatives labelled as sustainability goals have translated into 24 per cent total shareholder returns, measured in terms of increased market capitalisation and dividends, at a compounded rate of growth.
The initiatives are embedded in each of the company's business models.
Consider this: The paper business of ITC, which was bleeding 12 years ago, turned around with the help of a clonal propagation programme covering 100,000 hectares, that is Mumbai and Pune put together.
ITC's paperboards business is critically dependent on wood pulp for raw material. Instead of opting for imports, the company took a strategic decision to source its fibre by mobilising tribals to plant trees on their private wastelands and encouraging small and marginal farmers to undertake farm forestry programmes in the vicinity of the mill. The tribals are given saplings at break-even cost. Of the 100,000 hectares, around 3,000 is a registered CDM (clean development mechanism) project. The whole initiative improved profit margins from 15 per cent to 30 per cent over a period, while mitigating external risks.
The forestry programme is just one of the eight CDM projects already registered.
ITC Sonar in Kolkata is the first hotel in the world to earn carbon credits. "All our future hotels will be green hotels," said an ITC spokesperson.
The cigarettes-to-hotels major has many green accolades under its triple bottomline, which is mainly augmentation of economic, ecological and social capital. Three major global distinctions for the only company of its size to achieve so are carbon positive (for four years in a row), water positive (seven years in a row), and solid waste recycling positive (since last year).
From its commitment to the triple bottomline, ITC has chosen wind energy as a focus area for enhancing its positive environmental footprint.
The company's total investment in wind energy will soon touch Rs 250 crore when it commissions wind turbines in Maharashtra and Karnataka. ITC has already invested close to Rs 100 crore in wind energy generation in Tamil Nadu to meet the requirements of its packaging business in Chennai.
| FIRST GREEN INITIATIVE |
| * Large-scale green projects started with afforestation programme. |
| * R&D for clonal propagation started in 1993 |
| * Plantations started in 1997 |
| CARBON CREDITS |
| * Has earned 57,000 carbon credits for 3,000 hectares of plantations, a CDM-registered project |
| * The money will go to tribals, who own the plantations |
| CSR ACTIVITIES |
| * e-Choupal - world's largest rural digital infrastructure, empowering over 4 million farmers |
| * Afforestation - greening over 100,000 hectares and providing 45 million person-days of employment |
| * Watershed development - irrigating nearly 47,000 hectares of dryland |
| * Primary education - educating around 2,00,000 rural children |
| * Women's empowerment - economically empowering over 20,000 women |
| * Women's empowerment - economically empowering over 20,000 women |
Currently, 30 per cent of energy consumed in ITC is from renewable sources, but by the time it completes 100 next year, about half of ITC's energy consumption would be from renewable sources.
At ITC's annual general meeting this year Chairman Y C Deveshwar reiterated his vision, "It is my belief that by embedding larger sustainability goals in its business strategies, ITC has consciously invested in the future. A promising future, by creating competitive and sustainable businesses of tomorrow that will continue to enhance long-term stakeholder value."
