After succeeding in his initiative to reduce emission of harmful greenhouse gases at the Tata group companies in India and Europe, Ratan Naval Tata has set his sight on a more challenging goal. He now wants the group firms to work with their vendors and dealers to reduce their carbon emissions to widen the impact of the group’s $83.3 billion green initiatives. The rollout of phase II of the group’s climate change initiatives, follows the successful completion of phase I in 2011.
Phase I saw firms such as Tata Steel, Tata Power, Tata Chemicals and Tata Motors and Tata Consultancy Services, among others, put programmes in place to reduce, or, if possible, stop, emission of harmful gases per unit of output.
The gray-to-green objective was designed to give Tata firms a competitive advantage, avoid future risks in a carbon tax regime and explore new green business opportunities.
“We have now embarked on phase II of this programme by going beyond the organisational boundaries of our constituent companies to our supply chain partners. We are working on measuring the amount of carbon embedded in the value chain and then we can come up with initiatives on its mitigation,” said a senior Tata group official involved with the process.
“The focus on climate change is part of our sustainability initiatives which have been drawn up keeping in mind the goal of Jamsetji and JRD Tata that businesses should generate well-being and be a force for good,” said Anant G Nadkarni, vice-president, group corporate sustainability at Tata Council for Community Initiatives.
Unlike phase I, which saw the group use the services of consultancy firms McKinsey & Ernst & Young, phase II is being led by the group’s in-house consultancy wing Tata Quality Management Services. “As a group, we have decided that we will partner with suppliers not just based on the lowest cost but also their ecological savviness,” said the senior official.
Already several group firms such as Tata Chemicals are using a green filter to decide whether or not to go ahead with research and development of new offerings. Firms such as Tata Motors have been working with their dealers in India and overseas to help reduce carbon footprint through use of energy efficient solutions, reduce and recycle waste, and generate renewable power.
“We have identified a list of top eight companies to start phase II of this project. The firms include the likes of Tata Steel, Tata Power, Tata Motors and Voltas,” said the official. TQMS is being helped in its endeavour by Tata Steel Europe, which has developed some expertise in measuring and mitigating the carbon footprint through the supply chain, from raw material suppliers to dealers and customers.
“We have started training our important suppliers to show our commitment to ensure a better world tomorrow. We are confident that once other vendors see success with these leaders they too will emulate them. At a later stage we may even make it a pre-requisite to do business with us,” Hemant Nerurkar, managing director with Tata Steel told Financial Chronicle.
As part of phase II, group firms will work with their supply chain partners to curtail carbon emission and generation, and also on abatement projects to compensate for emission of greenhouse gases. “Ultimately, we want to look at the full lifecycle of the products we produce using a cradle-to-grave approach to see how we can reduce carbon emissions in the lifetime of the product,” said a top Tata group official who’s familiar with the plans.
Tata Motors, for instance, has developed special pipe nozzles that allow its dealer workshops to significantly reduce water usage in washing vehicles while achieving optimal results. “On an average, each of our workshops receives 40-50 vehicles which need to be washed before any maintenance work is undertaken,” said a senior Tata Motors official.
The company has also recommended different kinds of lights for its 1,200 domestic dealerships and workshops that will allow its partners to reduce electricity consumption while maintaining luminance. “We have also worked with architects to come up with a green design for workshops which use natural light optimally so as to reduce usage of electricity for lighting. Similarly, we have identified workshops which are ideally suited to generate wind power and recommended which wind turbine designs would be appropriate for those partner outlets,” said the Tata Motors official.
The company has also been able to use its buying clout to negotiate special rates for the wind turbines and attractive finance schemes for dealerships, which are willing to invest in generating renewable power. Tata Motors has also developed an electronic workflow process system that enables workshops to reduce the use of paper in tracking performance during vehicle servicing.
“We have created a training programme for the workshops which leads to a green drive certification. After auditing such a workshop will be able to display a specially-created green logo,” said the official involved with the exercise. By working with some large dealers in successfully going green and disseminating videos on their achievements, among other dealerships, the company has been able to get almost all of its 500 workshops in overseas markets such as Ukraine, Thailand, Turkey and Sri Lanka interested in implementing the green drive certification.
At TCS, the focus is on crafting and delivering green offerings to clients. The company has a business unit that advises customers on setting up green infrastructure and reducing emissions by greening business processes and supply chains, providing smart facilities and factories, helping with energy planning and management, and with green engineering and product design.
Mjunction, a 50:50 joint venture between Tata Steel and SAIL, offers e-procurement services to assist companies in carbon mitigation strategies, vendor sourcing and in selection of green product or service switch, purchase and ordering of green products, or service and assistance in preparation an annual sustainability report.
Tata Power, which is working on bringing carbon capture and storage technologies from the research and pilot stages into large scale commercial application, is working with its end users such as residential consumers to reduce consumption of electricity via the Eenerji Club program-me, which it runs in schools educating children on energy conservation tips.
In phase I, Tata Sons had set a target for all its key group firms to achieve the least emissions level per unit of output in the industries that they operate. After becoming the Indian benchmark, the companies will try to beat the global benchmarks over a period of time.
The Tata Business Excellence model, which is used to evaluate how group firms are doing across multiple parameters, too now includes climate change performance while M&A targets are also screened using the green filter.
