The carbon growth path. Renewable energy consumption has

long-term sustainability of several of ITC’s Businesses depends on natural
capital, which includes soil, underground and surface water and biodiversity. A
‘sustainable agriculture area’ incorporates ecological and biodiversity
concerns and supports livelihood improvements. ITC has, accordingly, taken up
biodiversity conservation as a major intervention in its operational areas
through various initiatives. ITC has developed 308 biodiversity plots involving
farmers and community members covering a total area of 11,803 acres in 15
districts. The initiative has also helped in conserving myriad species of
floral and faunal diversity, including birds, butterflies, reptiles and
amphibians. In 2016, the company had established around 43 toxic waste
collection centres in 43 villages (Andhra Pradesh and Karnataka) by involving
local community, village panchayat and farmers. The toxic wastes collected in
the centers are scientifically disposed and safely incinerated at the state
pollution approved facilities. ITC has adopted a low-carbon growth strategy
through reduction in specific energy consumption and increased usage of
renewable energy sources. At the same time, it seeks to enlarge its positive
footprint through increased carbon sequestration by expanding forestry projects
on wastelands. Over 48% of the total energy requirement of the company is today
met from renewable sources, a testimony to its commitment to a low carbon
growth path. Renewable energy consumption has increased from 10375000 GJ
(47.3%) to 10420000 GJ (48.2%) in 2017. As a result of implementation of energy
conservation measures, a total saving of 44.7 TJ in energy consumption was
achieved in 2016-17. In 2016-17, 8,104 tonnes of GHG emissions (Scope 1 & 2)
were avoided by the implementation of energy conservation measures leading to
savings in both direct and indirect energy. The company has a Life Cycle
Product for selective products and services. In 2016-17, ITC units consumed
21,600 Terra Joules (TJ) of energy. Out of the total energy consumed, 48.2% was
from renewable energy sources. Compared to the 21,946 TJ consumed in 2015-16,
there was a significant reduction of 1.6% during 2016-17. ITC has also been
able to increase the share of renewable energy in its overall portfolio which
has increased year-on-year from 47.3% to 48.2%. Both scope 1 and scope 2 GHG
emissions have registered a decline over the previous year, mirroring the
reduction in overall energy consumption, together with the growing contribution
from renewable energy. The reduction in GHG emissions is primarily attributable
to the following factors:

in direct GHG (Scope 1) emission

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in fossil fuel utilization in cogeneration plants due to increased utilization
of wind electricity in the units of Paperboards and Specialty Papers Division.
Decrease in energy consumption through various energy savings initiatives.

in Indirect GHG (Scope 2) emission

of grid electricity by captive wind electricity at several Units of ITC and in
2016-17, ITC reduced its total NOx and SO2 emissions but there was an increase
in total PM emissions. Reduction in overall NOx emissions was due to better
control of processes and among others, Tribeni unit contributed significantly in
the reduction. Tribeni unit also contributed significantly in reduction of
total SOx emissions due to improvement in coal quality. Sulphur in coal, which
is the major source of ITC’s SO2 emissions, had reduced leading to lower
emissions and here also Tribeni unit contributed significantly in the

2016-17, ITC’s total water intake was 31.29 million (kl), a decrease of 7.43%
over the previous year (33.80 million kl in 2015-16). This performance is
primarily attributable to the on-going initiatives undertaken towards water
conservation across ITC units. Of the 31.29 million kl of total water intake,
78.79% of water resources was sourced from surface water, 18.71% from ground

Risk In various Areas

Policies and Regulations- Several of
ITC’s Businesses are intrinsically linked to agriculture. The regulatory
framework therefore plays a critical role in the viability of sourcing
agri-commodities. Regulations like the Essential Commodities Act (ECA), which
impose stock limits and restrict movements from time to time, create
uncertainty in business operations. The legal cigarette industry continues to
face challenges from the growing incidence of smuggled and illicit cigarettes.
Over the last five years, the incidence of excise duty and vat on cigarettes,
at a per unit level, has gone up cumulatively by 131% and 157% respectively,
thereby exerting severe pressure on legal industry volumes. The Government has
issued a notification last year increasing the size of graphic health warnings
from 40% of the surface area on one side of the cigarette package to 85% of the
surface area of both sides of the package. Such measures, including the tax
increases and excessive regulatory regime provide a large arbitrage and
opportunity to tax-evaded and contraband suppliers. As a result, the share of
legal cigarettes has reduced from 21% in the 80s to 11% today, while at the
same time illegal and contraband cigarettes have proliferated exponentially,
making India one of the largest markets for contraband products. These policies
have led to a significant shift in tobacco consumption to lightly taxed or
tax-evaded tobacco products like bidi, khaini, chewing tobacco, gutkha and
illegal cigarettes, which presently constitute over 89% of total tobacco consumption
in the country.

capital and well-being- ITC operates
in a diversified, ever-changing, highly competitive global landscape. This
necessitates the development of a strong, customer responsive world-class human
capital base. The challenge of meeting the growing needs of an organization
with the requisite skills co-exists with the challenge of attracting and
retaining the best talents given the multitude of options available to skilled

of Local Population- Lack of proper
education and inadequate availability of requisite skills in local population,
especially from disadvantaged sections of society in the catchment areas is a
challenge faced by most of ITC’s manufacturing Units.

Satisfaction – Customer feedback is
one of the vital inputs for any organization to modify or update the product/
service in order to better address the requirements and sentiments of its
customers. Growing options for customers, increased customer awareness on
quality, health and safety, consumers’ expectation on continual innovation,
aggressively low price offer from competition, are some of the key challenges
encountered by businesses today in achievement and maintenance of high levels
of customer satisfaction.

management- Inadequate solid waste
management systems result in a large amount of wastes being generated today
ending up in landfills. Heaps of unattended waste, foraged by cattle and
rag-pickers alike, has become a common sight both in urban and rural areas of
the country. New regulations such as the Solid Waste Management Rules 2016 and
the Plastic Waste Management Rules 2016 have been promulgated to address this
challenge with responsibility allocated to industry too for post-consumer
plastic waste, based on the Extended Producer Responsibility principle.




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