ITC - CSR

ITC (company)

ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal. Its

diversified business includes five segments: Fast Moving Consumer Goods (FMCG), Hotels,

Paperboards & Packaging, Agriculture Business and Information Technology.

Established in 1910 as the Imperial Tobacco Company of India Limited, the company was

renamed as the Indian Tobacco Company Limited in 1970 and further to I.T.C. Limited in

1974. The periods in the name were removed in September 2001 for the company to be

renamed as ITC Ltd. The company completed 100 years in 2010 and as of 2012-13, had an

annual turnover of US$8.31 billion and a market capitalization of US$45 billion. It employs

over 25,000 people at more than 60 locations across India and is part of Forbes 2000 list.

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ITC - CSR

Products and Brands

Cigarettes

ITC Ltd sells 80 percent of the cigarettes in India, where 275 million people use tobacco

products and the total cigarette market is worth close to $6 billion (around Rs.65,000 crore)

ITC's major cigarette brands include W.D. & H.O. Wills, Gold Flake Kings, Gold Flake

Premium,Gold Flake Super Star, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol,

Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555, Silk Cut, Scissors, Capstan,

Berkeley, Bristol, Lucky Strike, Players, Flake and Duke & Royal.

Other businesses

Foods: ITC's major food brands include Kitchens of India; Aashirvaad, Mint-o, gum-o, B

natural, Sunfeast, Candyman, Bingo! & Yippee!. ITC is India's largest seller of branded foods

with sales of over Rs. 4,600 crore in 2012-13. It is present across 5 categories in the Foods

business namely Staples, Snack Foods, Ready-To-Eat Foods, Juices and Confectionery.

Lifestyle apparel: ITC sells its products under the Wills Lifestyle and John Players brands.

Wills Lifestyle was accorded the ‘Superbrand’ status and John Players was included in the

top 10 ‘Most Trusted Apparel Brands 2012’ by The Economic Times.

Personal care products: include perfumes, haircare and skincare categories. Major brands

are Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage.

Stationery: Brands include Classmate, PaperKraft and Colour Crew. Launched in 2003,

Classmate went on to become India's largest notebook brand in 2007.

Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety matches and the

Mangaldeep brand of agarbattis (Incense Sticks).

Hotels: ITC's Hotels division (under brands including WelcomHotel) is India's second largest

hotel chain with over 90 hotels throughout India. ITC is also the exclusive franchise in India

of two brands owned by Sheraton International Inc. Brands in the hospitality sector owned

and operated by its subsidiaries include Fortune Park Hotels and WelcomHeritage Hotels.

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Paperboard: Products such as specialty paper, graphic and other paper are sold under the

ITC brand by the ITC Paperboards and Specialty Papers Division like Classmate product of

ITC well known for their quality.

Packaging and Printing: ITC's Packaging and Printing division operates manufacturing

facilities at Haridwar and Chennai and services domestic and export markets.

Information Technology: ITC operates through its fully owned subsidiary ITC Infotech

India Limited, which is a SEI CMM Level 5 company.

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ITC - CSR

Introducing CSR world of ITC“CSR world has a vision to create a vibrant and all encompassing platform for CSR

(corporate social responsibility) thought and action. CSR world has multiple dimensions -

showcase CSR practices and case studies of corporate, highlight NGOs and projects which

need support and funding from CSR budgets, listing of companies whose products and

services will be utilized in implementing CSR projects, showcase social enterprises that

combine the best of entrepreneurship and social good, news and views related to CSR and

more. Be part of CSR world, get noticed and benefit yourself and others.”

ITC Limited Corporate Citizenship

ITC Limited (ITC) is one of India's foremost private sector companies having a diverse

portfolio of businesses. The company has been undertaking several CSR initiatives over the

years and been appreciated for them globally.

ITC Limited (ITC) is one of India's foremost private sector companies having a diverse

portfolio of businesses. The company has been undertaking several CSR initiatives over the

years and been appreciated for them globally. The case discusses ITC's CSR initiatives and

focuses on its approach. The company's innovative ways and heavy investments to achieve

the 'triple bottom line' are discussed. The question to be look forward "Is it taking the right

initiatives and setting standards to follow?"

About ITC’s social responsibility

ITC is one of India's foremost private sector companies with a market capitalization of over

US $ 30 billion and a turnover of US $ 6 billion. ITC has a diversified presence in Cigarettes,

Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods &

Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety

Matches and other FMCG products. While ITC is an outstanding market leader in its

traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is

rapidly gaining market share even in its nascent businesses of Packaged Foods &

Confectionery, Branded Apparel, Personal Care and Stationery.

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ITC - CSR

As one of India's most valuable and respected corporations, ITC is widely perceived to be

dedicatedly nation-oriented. Chairman Y. C. Deveshwar calls this source of inspiration "a

commitment beyond the market". In his own words: "ITC believes that its aspiration to create

enduring value for the nation provides the motive force to sustain growing shareholder value.

ITC practices this philosophy by not only driving each of its businesses towards international

competitiveness but by also consciously contributing to enhancing the competitiveness of the

larger value chain of which it is a part."

CSR philosophy of ITC

Inspired by the overarching vision of making a contribution to the national goals of

sustainable development and inclusive growth, ITC has innovatively crafted unique business

models that synergize long-term shareholder value creation with enhancing societal capital.

This commitment is reflected when ITC measures accomplishments not only in terms of

financial performance but also by the transformation ITC has consciously engendered to

augment the social capital of the nation in, ITC's 'Triple Bottom Line' approach of

contributing to the economic, environmental and social capital of the country. Envisioning a

larger societal purpose has always been a hallmark of ITC. The company sees no conflict

between the twin goals of shareholder value enhancement and societal value creation. The

challenge lies in fashioning a corporate strategy that enables realization of these goals in a

mutually reinforcing and synergistic manner.

As a corporate citizen with enduring relationships in rural India, ITC has a history of

collaboration with communities and government institutions to enhance farm productivity

and the rural resource base. ITC's commitments in agricultural R&D and knowledge sharing

have spanned vital aspects of competitiveness - efficient farm practices, soil and water

management.

ITC is committed to a national agenda of raising agricultural productivity and making the

rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks

make market linked solutions and innovations more effective and sustainable than capital

intensive approaches.

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ITC - CSR

“Let's put India First”ITC's philosophy revolves around goal congruence with the national goals of sustainable

development and inclusive growth. Various environmental & social initiatives are taken by

ITC to ensure sustainable growth. Some of the key initiatives taken by ITC for improvement

of livelihood of disadvantaged sections of society and the reach of initiatives in mentioned in

table below:

 

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Initiatives Milestones

e - Choupal4 million farmers empowered,6,500 e - Choupals installed

Social & Farm Forestry114,428 hectares greened,generating 51.48 million person - days of employment

Watershed Development56,951 hectaresbrought under soil and moisture conservation

Women's Empowerment15,378 women members1183 self - help groups

Livestock Development176 Cattle Development Centres3,520 villages covered annually

Primary Education252,329 children coveredthrough 2,334 Supplementary Learning Centres

E-Choupal: Rural digital-physical infrastructure

In 2000, harnessing the empowering force of information technology and its

scalability, ITC launched e-Choupal - a knowledge portal providing farmers with a range of

information and services. Designed to enable them to bargain collectively and enhance their

transactive power, e-Choupal became the much needed and easily adoptable tool farmers had

been waiting for. Today e-Choupal is a vibrant and rapidly growing zone of business and

interaction for over 4 million farmers.

Today 4 million farmers use e-Choupal to advantage - bargaining as virtual buyers'

co-operatives, adopting best practices, matching up to food safety norms. Being linked to

futures markets is helping small farmers to better manage risk. e-Choupal has been specially

cited in the Government of India's Economic Survey of 2006-07, for its transformational

impact on rural lives.

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ITC - CSR

ITC's strategic intent is to develop e-Choupal as a significant two-way

multidimensional delivery channel, efficiently carrying goods and services out of and into

rural India. By progressively linking the digital infrastructure to a physical network of rural

business hubs and agro-extension services, ITC is transforming the way farmers do business,

and the way rural markets work.

The network of 6,500 e-Choupal centres spread across 40,000 villages has emerged as

the gateway of an expanding spectrum of commodities leaving farms - wheat, rice, pulses,

soya, maize, spices, coffee and aqua-products. The reverse flow carries FMCG, durables,

automotives and banking services back to villages.

Social & Farm forestry

ITC's social & Farm forestry program emerged in response to its challenge to source

effective pulp wood from sustainable sources to enhance its competitiveness. Instead of

taking easier route to importing pulp, ITC innovatively leveraged its pulpwood requirements

to provide sustainable livelihood opportunities to poor and tribal marginal farmers, by

assisting them to convert their private wastelands into productive pulpwood plantations. High

yielding, disease resistant and site specific clones are developed in ITC's research center.

This program has not only created sustainable source of livelihood for a large no. of

disadvantaged sections of society but has also bought in a multiplicity of benefits by creating

a large green cover that contributes significantly to groundwater recharge, soil conservation

and carbon sequestration.

Integrated Watershed Development

Recognizing the vital role that role plays in the rural economy, ITC promotes

watershed projects in water stressed areas providing precious water resources for agriculture

and rural communities and livestock. Based on a participatory approach, the programme

facilitates building, reviving and maintaining water harvesting structures as well as

management of water resources to reverse land degradation, provide critical irrigation and

increase agricultural productivity.

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ITC - CSR

The phenomenal example of this was the Ranjangaon area near Pune district in

Maharashtra, it was under severe draught during kharip season of 2009 with virtually no rains

in the project area, farmers and cattle were adversely affected. ITC's watershed program

became the only source of livelihood for more than 350 farmers who participated daily in the

work.

In another first of its kind agreement in the country, ITC signed MOU with the

government of Maharashtra to implement NREGA in 2 blocks of Jalna district on an

integrated watershed program basis covering 50 villages.

Integrated Agricultural Development

The program promotes a combination of solutions for optimizing water management

and enhancing farm productivity. Farmers are motivated to form agri-business centers,

enabling them to pool knowledge and resources, have access to quality inputs on time and

improve productivity and quality.

A total of 20 agri-business centers provided timely agri-inputs to around 1077

members.

To help farmers capture additional value from their holdings, ITC promoted crop

diversification with good market linkages. Organic specs, medicinal and aromatic plants were

promoted under this initiative.

Livestock Development

The program assists small landless farmers to upgrade livestock quality through cross-

breeding by artificial insemination to boost milk productivity by a factor of 6 to 9 times,

leading to a threshold increase in household incomes and thereby an improvement in their

economic status.

The program also provides integrated animal husbandry services that include pre and

post natal interventions. Vaccinations and health services are provided to more than 1.7 lakh

cattle.

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ITC - CSR

Women Empowerment

ITC's initiative provide sustainable economic opportunities to poor women in rural

areas by assisting them to form self help groups that enable them to build small savings and

finance self employment and micro-enterprise. The program has demonstrated that extra

incomes in the hands of women lead to positive changes in human development since it is

largely invested in children's education, health and nutrition.

The total turnover of women managed micro enterprises was Rs. 61.14 lakh, the bulk

of which was accounted by the sale of raw agarbattis and chikankar garments.

Universal Education

The program is aimed at increasing chances of employability either through imparting

training in skills or better education. The program provides infrastructure support to

government run primary schools and coaching through Supplementary learning centers to

stem drop-outs and enable more children to complete school and move on to higher classes.

In order to increase enrolment, poor children receive school uniforms and

text/exercise books. A network of rural libraries and resource centers enrich the process of

learning for these children. An innovative initiative of roaming laptop program is also

provided to government schools in rural area.

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ITC - CSR

ITC responsibilities towards its stakeholders

Internal stakeholders

1. Employees

2. Providers of financial capital

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External stakeholders

1. Customers

2. Supply chain partners

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3. Farmers

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4. Government and regulatory authorities

5. Local communities

6. Civil society

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7. Media

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ITC - CSR

Awards and Recognitions

1. The inaugural Worlds Business Award in 2004

Recognizes companies which have made significant efforts to create sustainable

livelihood opportunities and enduring wealth in developing countries. Sponsored by UNDP,

ICC and Business leaders forum jointly.

2. The development Gateway award in 2005

For trailblazing e-Choupal. ITC is first Indian company and second in the world to

receive this award for its contribution towards development initiatives.

3. The Stockholm Challenge Award

For using information technology in economic development of rural areas: e-Choupal

4. The corporate social responsibility Crown award

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ITC - CSR

For water practices from UNESCO and water digest

5. TERI corporate award for social responsibility 2008

For integrated watershed program implemented in 7 states.

6. Golden Peacock Awards for 'Corporate Social Responsibility (Asia) in 2007

7. Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007

8. United Nations Industrial Development Organization (UNIDO) Award

9. Readers' Digest Pegasus Award

Key CSR related decision-makers in the company

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Y. C. Deveshwar Chairman

S. Banerjee Member

H. G. Powell Member

A. Ruys Member

B. Sen Member

B. Vijayaraghavan Member

B. B. Chatterjee Secretary

ITC - CSR

ITC: An Exemplar in Triple Bottom Line Performance

Environment (Planet)

1. Water positive: 12 years in a row.

2. Carbon positive: 9 consecutive years.

3. Solid waste recycling positive: For the last 6 years.

4. Soil & moisture conservation to 1,16,000 hectares: ITC’s Watershed Development

initiative brings precious water to more than 1,16,000 hectares of moisture-stressed areas.

5. 40% renewable energy: More than 40% of ITC’s total energy consumption is from

Renewable sources.

6. Greenest luxury hotel chain: All ITCs premium luxury hotels are LEED platinum

certified.

7. 1,42,000 hectares greened: ITCs social and farm forestry initiative has greened over

1,42,000 hectares.

Social (People)

1. Creating 5 million sustainable livelihoods.

2. Creating community assets: Strengthening the agri production base of nearly 4 lakh

farmers.

3. Educating 3,00,000 children: ITCs primary education initiative has educated over

3,00,000 children.

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ITC - CSR

4. Empowering 4 million farmers: ITCs globally acknowledged e-choupal initiative is the

World’s largest rural digital infrastructure benefitting over 4 million farmers.

5. 40,000 sustainable livelihoods for rural women: ITCs women’s empowerment initiative

has created nearly 40,000 sustainable livelihoods

6. Animal husbandry services to 8,00,000 milch animals: ITCs livestock development

initiative has provided animal Husbandry services for over 8,00,000 milch animals.

Economic (Profit)

Market capitalization: Over $ 45 billion.

Turnover: Over $ 7 billion.

26% compound annual growth in Total shareholder returns over the last 17 years.

30,000 employees: ITC group provides direct employment to more than 30,000 people.

Powering growth with multiple Business drivers: Diversified multi-business conglomerate

spanning FMCG, Hotels, paperboards & packaging, agri business and Information

technology.

ITC fraud caseITC, Chitalia

Company Involved (Year of Scam Expose'): ITC - Chitalia's Fera Violation(1996)

Amount Involved: FERA violations were estimated at around $80 million.

Type of Fraud: In June 1996, ED started FERA investigation into the export transactions

between ITC and the Chitalia group of companies (EST Fibres) during 1990- 1995.

Impact: The Chitalias and several directors of the company including ITC Chairman KL

Chugh were detained but later released on bail. ITC in turn slapped a suit on Chitalias for $15

million; Chitalias in turn sued ITC for $55 million, which they claimed ITC owed them.

ITC's celebrated 'e-Choupal' initiative has won the first World Business Award instituted

jointly by the Intemational Chamber of Commerce, the United Nations Development

Programme and the HRH Prince of Wales International Business Leaders Forum. The 'e-

Choupal' was selected from 64 nominations across 27 countries. The award, instituted in

support of the United Nations Millennium Development Goals, honours business-driven

initiatives that make a difference to society at a national level, by helping reduce poverty and

creating sustainable livelihood opportunities.

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ITC - CSR

ITC's 'e-Choupal' initiative is an impactful model for fulfilling these objectives. It empowers

farmers with expert knowledge by innovatively leveraging information technology. ITC

provides farmers real time access to customised knowledge on specially designed websites in

their own languages -helping them align farm output to market demands and secure better

quality, productivity and improved price discovery.

The 'e-Choupal' is already empowering over 2.4 million farmers through 4,100 installations

covering 21,000 villages across six states of India. Over the next decade, ITC plans to cover

100,000 villages, representing 1/6th of India's villages to create more than 10 million e-

farmers. ITC takes this opportunity to thank the Central Government, the various State

Governments, District authorities, Panchayats, NGOs, trade and industry organisations for

their immense support in enabling ITC take forward the 'e-Choupal' movement.

ITC accepts this award on behalf of millions of Indian farmers whose lives and landscapes

the 'e-Choupal' seeks to transform. For lTC, this is a celebration of a small beginning -the

first step in a long journey which will not end till every Indian farmer is reached.

The 'e-Choupal' is yet another expression of lTC's commitment beyond the market. Of a

conviction that country must come before corporation. Of a true pride in being Citizen First.

Conclusion

Business cannot succeed in societies that fail. Businesses must play a more meaningful,

involved and active role in the creation of a more sustainable and inclusive future.

ITC is pursuing innovative business strategies that synergize the creation of sustainable

livelihoods and the preservation of natural capital with the building of shareholder value.

ITC investing $3 billion and return on investment is $6 billion.

ITC is the only corporate body which is water positive for last 11years, carbon positive for 8

years and solid waste recycling positive for last 6 years in a row.

The FERA violations was the biggest scam reported in the history of ITC which was around

$100 million (INR 350 crores approx).

The total spending of itc on corporate social responsibility is INR 106.63 crores.

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ITC - CSR

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