Mother Nature has bestowed us with rich natural resources. Today, most of the basic and modern amenities we cherish, contain natural resources as a core ingredient. At Vedanta, we believe that the natural resources industry must have purpose and positive contribution towards the environment than just extracting these reserves for human betterment. It has the potential to substantially contribute towards critical investments in education, employment generation, healthcare and nutrition. And also, mine the earth's reserves with a sense of care, responsibility and respect so as to sustain these resources for future generations.
We have proactively assessed the global threat of the climate change and have developed our own initiatives to contribute in managing the impact.
India and other developing countries have different issues and challenges in comparison to the developed economies. Vedanta is sensitive to these differences and will work closely with the governments of the developing economies and make efforts to address climate change.
We understand that focused and sustained actions are required to reduce
the effects of the problem and to foster adaptability to its impacts. We already have our Sustainable Development Framework in place, which includes an Energy and Carbon Policy, and an Energy and Carbon Management Standard.
As responsible stewards of sustainable development, we report our GHG emissions as per the requirements of the World Business Council for Sustainable Development (WBCSD), World Resource Institute (WRI) and Carbon Disclosure Project (CDP).
In FY 2016-17, we instituted the Carbon Forum – a group-level body led by the CEO-Power and comprising business COOs and representatives from Corporate HSE and Sustainability. During the reporting period, the Forum has revised the Vedanta Carbon Policy and formulated Carbon Strategy for the Group companies. Further, we have established 2012 as the greenhouse gas emission baseline year, as this was the first year of audited reporting.
Vedanta is committed to addressing the challenges posed by climate change.
Our energy management approach hinges on a two-pronged strategy:
FINDING THE RIGHT TALENT
We top the natural resources industry with regards to gender diversity and offer uniform entry level wages for all. The wages strictly meet or exceed the local legal requirements. We employ local people in order to provide the local communities with employment opportunities, while leveraging their knowledge to carry out our operations in a smooth and sustainable manner.
Investment and development of our employees at every stage of their career is an integral part of our ethos. We also foster employee growth and skill enhancement, by providing job rotations, mentoring and coaching and several such career enrichment opportunities while they work with us. Our focus has always been on promoting and encouraging internal talent to leadership roles.
We continuously work with our employees to provide them with a platform to function effectively, constantly learn and upgrade, challenge themselves and grow along with us. All this has earned Vedanta a place as a preferred employer globally.
MAKING THE ODDS EVEN
The disparity between the haves and have-nots in terms of income and status deters the social and economic progress of the society, as well as the nation. As a natural resources company, we function in areas which are deprived in multiple ways. We relentlessly intervene in an efficient manner to combat poverty through creation of direct and indirect employment; empower local communities through initiatives to enhance education, health and living standards; and add value to the economy. Furthermore, we continue to uphold the principle of Free, Prior and Informed Consent (FPIC) with the indigenous communities across all our initiatives.
We ensure local hiring in majority of our senior management and other positions to ensure employment opportunities leading to economic progress of the region. Our Community interventions primarily fall under the following areas:
COMMODITY MARKET RETURNING TO BALANCE
We saw an altogether better environment for our business in FY2016-17. The commodities sector benefited from a combination of positive global economic activity, coupled with a progressive tightness of commodity supply. This resulted in the World Bank Commodity Price Index for minerals and metals showing a healthy increase of 10.8% over the year.
When we look at the key demand drivers, there was much concern a year ago about China. Despite a continuing growth rate that was the envy of most economies, the debate was whether China would go through a hard or soft landing. The analysts across the globe are more confident of a soft landing trajectory, and this has certainly been our view in the specific area of metals. Equally significant is that the strong improvement in the US economy has given the sense that, for the first time in a long time, there is a positive synchronous improvement globally. This was shown by how the market absorbed the considerable political and economic shocks that came from the polls and the markets during the year.
This augurs well for commodities, which for the first time in five years, closed the year higher than they were at the outset. In addition to the more benign global environment, this was due to supply-side expansions of the last 10 years starting to run their course. This led to emergence of supply pressures not seen since 2011 and, in the case of zinc, absolute shortages. Notwithstanding the positive points, most of our markets remain well below price levels of several years ago. So we don't see current levels to be an over-heated market. However, we are under no illusions: volatility is evident in our sector, recent declines in oil and metal prices are a reminder that our focus never wavers from exerting tight fiscal discipline and maintaining a robust balance sheet. The resource sector is beginning to open up to attract investments for organic and inorganic growth opportunities.
At Vedanta, we complemented the benefits of better market conditions by maintaining tight financial discipline. Our savings programme continued to drive down costs intelligently and safely, through optimising our plant and through achieving material efficiencies in across the supply chain.
Against a target of 1.2 BN saving programme in 4 years, we have delivered a milestone of US$ 800MN saving in 2 years.
INNOVATION - A STRATEGIC DRIVER FOR BUSINESS
We believe organisations that foresee and proactively act upon the opportunities and possibilities for change through innovation in the current volatile and uncertain business environment, will not only survive; they will successfully compete and even flourish in the face of emerging adverse and fluctuating business and economic conditions.
This year we introduced
a web-based technology platform for Innovation and R&D efforts.
Eureka is an open innovation web-based platform to enable people to submit and rate ideas and suggestions openly. The plan is to start and develop a ‘social innovation community’ which creates and incubates innovative thinking in a most sustainable manner. Vedanta's innovation effort is focused on the entire value chain of business starting with operational excellence and sustainable development in areas of cost reduction, energy efficiency, value added product development, waste reduction and recycling and improved HSE practices leveraging the best-in-class technology.