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Role of corporates towards SDGs

Published

6 years ago

September 30, 2018

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The Millennium Development Goals (MDGs) were the eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millennium Declaration. Member States of United Nations Organization (UNO) agreed to assist each other in achieving these MDGs, and this also led to global funding projects, which resulted in assistance and support to certain member States.

MDG 1: Eradicate extreme hunger
MDG 2: Achieve universal primary education
MDG 3: Promote gender equality and empower women
MDG 4: Reduce child mortality
MDG 5: Improve maternal health
MDG 6: Combat HIV/AIDS, malaria and other diseases
MDG 7: Ensure environmental sustainability
MDG 8: Develop a global partnership for development
Once again in September 2015 the member States of UNO, adopted the 2030 Agenda for Sustainable Development, that includes 17 Sustainable Development Goals (SDGs) and 169 targets with an objective of transforming the world and these are:
SDG 1: End poverty in all its forms everywhere
SDG 2: End hunger, achieve food security and improved nutrition, and promote sustainable agriculture
SDG 3: Ensure healthy lives and promote well-being for all at all ages
SDG 4: Ensure inclusive and equitable quality education and promote life-long learning opportunities for all
SDG 5: Achieve gender equality and empower all women and girls
SDG6: Ensure availability and sustainable management of water and sanitation for all
SDG 7: Ensure access to affordable, reliable, sustainable, and modern energy for all
SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
SDG 9: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
SDG 10: Reduce inequality within and among countries
SDG 11: Make cities and human settlements inclusive, safe and sustainable
SDG 12: Ensure sustainable consumption and production patterns
SDG 13: Take urgent action to combat climate change and its impacts (in line with the United Nations Framework Convention on Climate Change)
SDG 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development
SDG 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
SDG 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
SDG 17: Strengthen the means of implementation and revitalise global partnership for sustainable development
While the emphasis of MDGs were more towards healthcare apart from also looking at hunger (i.e. food), primary education, gender issues and environment. However, building on the principle of "leaving no one behind’, the new agenda of SDGs emphasises a holistic approach to achieve sustainable development for all covering every facet of living for individuals. This is an excellent effort by UNO in identifying areas of development for all individuals.

Many enterprises world over recognise the need on undertaking efforts at achieving sustainable development and also contributing towards SDGs
-The World Business Council for Sustainable Development (WBCSD) is a CEO-led, global advocacy association of some 200 international companies dealing with business and sustainable development. They target the realisation of the SDGs through five work programmes – (a) cities and mobility (b) energy and circular economy (c) food, land and water (d) people (e) redefining value to achieve systems transformation. They are presently working on three sector projects (a) cement sustainability initiative (b) forest solutions group (c) tyre industry.
?The Dow Jones Sustainability Indices (DJSI) are a family of best-in-class benchmarks launched in 1999 for investors who have recognised that sustainable business practices are critical to generating long-term shareholder value and who wish to reflect their sustainability convictions in their investment portfolios. DJSI benchmarks and tracks the stock performance of the world’s leading companies in terms of economic, environmental and social criteria. DJSI selects the most sustainable companies from across 60 industries. The indices serve as benchmarks for investors who integrate sustainability considerations into their portfolios, and provide an effective engagement platform for investors who wish to encourage companies to improve their corporate sustainability practices.
?Financial Times Stock Exchange (FTSE)4Good Index Series’ is a series of ethical investment stock market indices launched in 2001 by the FTSE Group to measure performance of companies that meet globally recognised corporate responsibility standards. The FTSE4Good criteria are applied to FTSE Emerging Indexes, which covers over 20 emerging countries, and was launched in 2016. A number of stock market indices are available, for example covering UK shares, US shares, European markets and Japan, with inclusion based on a range of corporate social responsibility criteria. Research for the indices is supported by the Ethical Investment Research Services. The index excludes companies due to their involvement in tobacco production, nuclear weapons, conventional weapon systems, or coal power industry and rates companies for inclusion based environmental sustainability, relationships with stakeholders, attitudes to human rights, supply chain labour standards and the countering of bribery.

Ministry of Labour & Employment role in SDGs
In India, NITI Ayog has been given the task of overseeing the implementation of 17 SDGs. NITI Ayog has been periodically collecting data, having meetings with the Central Government Ministries, to improve monitoring, reporting and facilitating capacity building of each of these, so as to achieve 17 SDGs in specified timeframe. The Ministry of Statistics and Programme Implementation (MoSPI) has undertaken a parallel exercise of interaction with the ministries to evolve indicators reflecting the 17 SDG goals and targets. For each of the 17 SDGs, a nodal Ministry under the Central Government has been identified. Centrally-sponsored schemes and relevant interventions, which are available for achieving the 17 SDGs, have been spelled out. NITI Ayog has listed each of the 169 targets as specified by UNO, at the same time identifying, which of the Central Government ministries will be responsible for implementation.

The Ministry of Labour & Employment (MOLE) is the nodal agency for SDG 8, which is to ?promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all?. The inclusion of ?Decent Work? in SDG 8 comes from International Labour Organization (ILO), which defined ?decent work? as ?work that is carried out in conditions of freedom, equity, security and human dignity?. Presently, the Government has identified three centrally-sponsored schemes , (i) National Service Scheme (ii) Skill Development Mission (iii) Social Security for Unorganised Workers, including Rashtriya Swastya Bima Yojana and two relevant interventions , (a) Deendayal Upadhyaya Antodaya Yojana and (b) National Urban Development Mission as interventions to facilitate working on achieving the specified targets under SDG 8.

There are 10 targets as specified by UNO under SDG 8 and against each of the targets the Government has specified, which are the ministries that will facilitate in achievement of these targets:
1.Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent GDP growth per annum in the least developed countries. Relevant ministries are Labour & Employment, Finance, MoSPI, Rural Development, Housing & Urban Poverty Alleviation (HUPA), Urban Development, and Tribal Affairs.
2.Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value-added and labour-intensive sectors , Relevant ministries are Labour & Employment, MoSPI, Ministry of Small Medium Enterprises (MSME), and Science & Technology.
3.Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage formalisation and growth of micro-, small- and medium-sized enterprises, including through access to financial services. Relevant Ministries are Labour & Employment, and Tribal Affairs.
4.Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead. Relevant ministries are Ministry of Environment, Forest and Climate Change (MoEF&CC).
5.By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. Relevant ministries are Labour & Employment, Women & Child Development (WCD), Tribal Affairs, Youth Affairs & Sports, Social Justice.
6.By 2020, substantially reduce the proportion of youth not in employment, education or training. Relevant ministries are Labour & Employment, Skill Development & Entrepreneurship, Youth Affairs and Sports, Tribal Affairs.
7.Take immediate and effective measures to secure the prohibition and elimination of the worst forms of child labour, eradicate forced labour and, by 2025, end child labour in all its forms including the recruitment and use of child soldiers. Relevant ministries are Labour & Employment, WCD.
8.Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment. Relevant ministries are Labour & Employment.
9.By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products. Relevant ministries are Tourism, Textiles.
10.Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all. Relevant ministries are Finance.
The efforts being made by the Central Government is in a direction of trying to achieve 169 targets dealing with the 17 SDGs. However, these efforts also need the active involvement of not only the ministries in each of the States and union territories but also of the local self government plus all other stakeholders.

Role of corporates in India towards SDGs
The Companies Act, 2013 has made it mandatory for companies that have a net worth of Rs 5 billion or more, or a turnover of Rs 10 billion or more, or a net profit of Rs 50 million or more in the last three years to constitute a CSR Committee and spend at least 2 per cent of the average profit of three preceding years on Corporate Social Responsibility (CSR) activities. The projects which may be included by companies in their CSR Policies as initially listed in Section 135 under Schedule VII of the Rules of The Companies Act, 2013 were from MDGs, but later included some from SDGs plus other areas in which the Government of India is interested and the list is given below.
?Eradicating hunger, poverty and malnutrition; promoting health care including preventive health care and sanitation including contribution to the "Swachh Bharat Kosh’ set-up by the Central Government for the promotion of sanitation and making available safe drinking water;
?Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;
?Promoting gender equality and empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
?Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the "Clean Ganga Fund’ set-up by the Central Government for rejuvenation of river Ganga;
?Protection of national heritage, art and culture including restoration of building and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
?Measures for the benefit of armed forces veterans, war widows and their dependents;
?Training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports;
?Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the scheduled castes, scheduled tribes, backward classes, minorities and women;
?Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
?Rural development projects; and
?Slum area development
There are presently many companies in India that over the last several years had been involved in CSR activities in certain identified fields of interests chosen by the promoters/top management of the company. These companies have continued/modified/added projects to comply with the mandatory requirement of CSR as per the Companies Act, 2013. Also quite many companies in India that were not involved in CSR in the past, on being covered under the mandatory requirement of CSR from 2014 have identified CSR projects and implemented them. There are companies that have undertaken a mapping exercise by building a matrix on the X axis of the seventeen SDGs and on the Y axis the eleven CSR areas listed under Schedule VII of the Companies Act, 2013 and identified each of the company CSR activities that have been undertaken. This helps the companies to also report on their contribution towards SDGs.

The Ministry of Corporate Affairs, in July 2011, had come out with the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business. These guidelines contained nine principles to be adopted by companies as part of their business practices and a structured business responsibility reporting format requiring specified disclosures, demonstrating the steps taken by companies in implementing the said nine principles.

These nine principles are (i) Businesses should conduct and govern themselves with Ethics, Transparency and Accountability,(ii) Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle,(iii) Businesses should promote the wellbeing of all employees,(iv) Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized, (v) Businesses should respect and promote human rights,(vi) Business should respect, protect, and make efforts to restore the environment, (vii) Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner, (viii) Businesses should support inclusive growth and equitable development, (ix) Businesses should engage with and provide value to their customers and consumers in a responsible manner. Security and Exchange Board of India (SEBI) has made it mandatory with effect from 01 January 2016 for the top 500 listed companies in India, that their annual report shall contain a Business Responsibility Report (BRR) in a specified format describing the initiatives taken by the listed entity towards the nine principles enumerated by "National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’. The BRR is also mandatory for top 500-listed entities based on market capitalisation at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). CSR projects implemented by the companies and working on the nine principles reported under BRR are a contribution by corporate sector in meeting the efforts of the Government in achieving some of the SDGs. There are over 80 companies in India that voluntarily subscribe and annually report based on Global Reporting Initiative, which encourages the company for disclosure related to activities of sustainable development undertaken by them and the targets set and achieved.

Of late, Sustainable Development Reporting has assumed new dimensions for many companies in India. Though certain companies have been reporting for a long time, there are today three types of reporting required of many companies. The first is the CSR Report mandated by the CSR Rules, 2014 following the provision of Section 135 in the Companies Act, 2013 for specified companies. The second is the Securities and Exchange Board of India (SEBI) mandated Business Responsibility Report (BRR) for the top 500 companies in India which is to be included in the companies’ Annual Report and the third is the voluntary disclosure under GRI Reporting if a company undertakes. These do help the citizens of the country to know the efforts of a company towards some of the SDGs. The best way to publicise sustainability-related performance of corporate sector in India would be to have an Annual Sustainability Report format to be compulsorily reported by companies, which would identify their contribution towards one or more of the 17 SDGs.

Conclusion
A commentary in The Economist in 2015 argued that one hundred sixty nine targets for the 17 SDGs are too many and the goals are said to ignore local context. All other sixteen goals might be contingent on achieving SDG 1, ending poverty which should have been at the top of a very short list of goals. The Economist estimated that alleviating poverty and achieving the other sustainable development goals will require about $2-$3 trillion USD per year for the next 15 years, which they called ?pure fantasy?, as to who would fund it.

The 17 SDGs call upon each country to strive for inclusive economic development with sustainability. Hence, each of these countries needs to have the capacity to generate the revenue required for achieving each of these goals. Reality is that each country is at varying levels of economic and technological development, at the same time with varying capacities on improving revenue generation and hence may require aid flows from donor countries. At the same time most donor countries are selective in giving aid.

We in India will have to generate the resources within our country and make all out efforts in achieving the seventeen SDGs, so as to have a better life for the future generations of our country.

– Published earlier in Current Labour Reports , July 2018

ABOUT THE AUTHOR:
Dr Rajen Mehrotra is an immediate Past President of Industrial Relations Institute of India (IRII), Former Senior Employers’ Specialist for South Asian Region with International Labour Organization (ILO) and Former Corporate Head of HR with ACC Ltd. and Former Corporate Head of Manufacturing and HR with Novartis India Ltd. He can be contacted at: Email: rajenmehrotra@gmail.com.

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

Published

3 years ago

October 21, 2021

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

Published

3 years ago

October 21, 2021

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

ETBrandEquity

Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

Published

3 years ago

October 21, 2021

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Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.