Tata Group Sustainability Strategy

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Tata Group Sustainability Strategy

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Mathew Ashley
Bill O’Brien
Rachel Reiter
Kevin Richards

April 12, 2010

EXECUTIVE SUMMARY

Our consultancy recommends that Tata Group (Tata):
• Refine its internal definition of sustainability,
• Create a separate subsidiary to coordinate, manage, communicate, and expand sustainability efforts across every business unit, and • Establish a market-specific global strategy tailored to the unique challenges and opportunities of each country and business.

These changes will allow Tata to optimally position its economic, social, and environmental sustainability efforts while addressing the company’s growing global presence, the evolving definitions of sustainability, and the increasing demand from stakeholders for measurement and transparency. Internally, the company will develop a concise definition of sustainability and a “Sustainability Credo” to guide corporate innovation and evaluation efforts. A key element of the ten year sustainability strategy recommendation is the creation of Tata Sustainable Solutions (TSS), a wholly-owned subsidiary that will allow the company to centralize disparate initiatives and provide role clarity, financial and measurement transparency for all Tata companies. While the structure of TSS will allow the company to raise additional capital and expand its sustainability efforts, TSS will be closely integrated with every Tata company, ensuring that the culture of corporate social responsibility continues and that the unique perspective and innovations from each company are nurtured and strengthened. This subsidiary will allow Tata to formalize specific initiatives and goals, putting a formal framework in place for leadership and organizational continuity. The organizational structure and operating processes of TSS will be outlined in detail in our recommendations.

The sustainability strategy includes a number of voluntary initiatives tailored to the unique circumstances of Tata’s diverse businesses and its global areas of focus. Our recommendations include a ten year timeline, valuations, and specific implementation strategies for Tata’s core lines of business. Key elements of the strategy include entry into sustainability software consulting, coordination between the Chemical, International, and Motor companies to create End of Life Vehicles (ELV) and Cradle to Cradle (C2C) processes, and expanded and increased measurement of company efficiency efforts.

SITUATION ANALYSIS

Known as progressive and forward thinking in its Corporate Social Responsibility (CSR) initiatives for over 140 years, the Tata Group’s past CSR initiatives have fallen under four pillars: 1) Philanthropy, 2) Emergency Response, 3) Specific Community Initiatives, and 4) Quality Management Practices. Supporting these pillars are a variety of programs that have organically developed over the years to create an internal structure for executing the organization’s sustainability efforts. This situation occasionally creates challenges in measuring effectiveness and economic benefits of CSR, which obscures the return on investment (ROI) and could diminish future funding.

The ten year sustainability strategy is designed to complement the business growth of the organization. This global growth will focus on the following industries: hotels, automobile, steel, software consulting, energy, chemicals, tea, engineering, and communications. It will target the following markets: Brazil, Canada, China, Gulf Cooperation Council (United Arab Emirates, Saudi Arabia, Oman, Bahrain, Kuwait, and Qatar), Germany, the Netherlands, South Africa, Sri Lanka, Thailand, the United Kingdom, United States, and Vietnam. To continue its global growth while maintaining its practiced sustainability, Tata needs to address creating and capturing value, while addressing uncertainty in its global sustainability strategy.

Defining Sustainability for Tata’s Future...
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