For such an important corporate presence, both domestically and globally, Tata Motors shows a surprisingly nonchalant approach to its sustainability reporting

There seems to be no stopping India’s Tata Motors. The company grew sales of commercial vehicles by 22% in fiscal 2010-2011, and in 2010, made the Fortune 500 list for the first time. Tata Motors has a 62% share of the domestic car market in India and is the fourth largest truck and bus company in the world, claiming to have almost six million vehicles on the road. Headquartered in Mumbai, Tata Motors has revenues of $27bn and employs over 26,000 staff.

Influenced perhaps by a culture of car assembly manufacture, Tata’s GRI A+ Level report reads much like a production log. Carefully addressing sustainability performance areas in sequence, the entire narrative of this 56-page report comprises short, concise sentences, many of which start with the words “This year we…” or “Our…” .

No marks for creativity or story-telling for Tata in this seventh sustainability report. Few contextual insights and almost no stakeholder voices make this report rather drab. Nonetheless, Tata does have a good basic performance record to relate.

Innovative on environment

In terms of the environment, Tata has made breakthroughs in use of recycled metal scraps and forgings, reducing waste and massively increasing the amount of recycled material in vehicles produced. Tata has driven a reduction in packaging materials for items bought from external vendors.

Overall energy consumption and water use per vehicle produced have reduced, while water recycling and use of renewable energy have increased. Two areas of innovation that aid this performance are vendor parks and reconditioning operations.

Tata has established near-site vendor parks at two plants enabling real-time supply of production parts in a way that reduces logistics and packaging requirements. Tata’s reconditioning business offers allows customers to replace failed parts, which enables Tata to reuse the returned materials while offering an improved service to customers.

As regards human rights, employee practices and community involvement, Tata’s good performance is equally well logged, and demonstrates commitment to the main indicators of performance that might be expected in a sustainability report.

A key area in which Tata is not so forthcoming is diversity and inclusion. The company has an all-male board and an all-male senior executive management team.

Of the total 26,000 workforce, 700 are women. The company reports being proud of these 700 women that populate Tata shop floors and other functions, but obviously not proud enough to create a platform of gender equality. Just 2.5% of Tata’s total 800 senior managers are women.

The near-exclusion of half of India’s potential labour pool is questionable. Interestingly, Tata’s response to the GRI Indicator LA14, which requires disclosure of the male/female salary ratio is: “Everything else being equal, the ratio of the basic salary of men to women is 1:1”. Hardly a satisfactory response to a GRI core indicator.

The other issue that Tata does not quite explain is the use of contracted labour. In the reporting period, Tata had 26,000 employees and, in addition, 18,000 contracted employees. It is not clear why Tata requires such a high proportion of contracted labour, or what might be the challenges of managing such a large contracted labour force.

One challenge is safety, where there are much higher injury and lost day rates among the contractor workforce. Tata discusses efforts to improve contractor safety management, but what remains unanswered is why the solution is not to reduce the use of contractors.

Finally, the Tata report fails to give the broader picture of Tata’s impacts in India and in the world.

The Nano car, “the people’s car” does not appear to have excited “the people”, reaching sales of only 100,000 units, reported in the press to be about 40% of the target, an issue not addressed in this report.

Tata’s priorities are surprisingly low-key for such a major manufacturer – fuel efficient vehicles, supply chain efficiency, optimising material use, health and safety and community stewardship represent a daily-log approach to sustainability but hardly a strategic breakthrough.

Broader impacts on the empowerment of society through Tata’s core business and total life-cycle thinking are less in evidence in this report, and no goals or targets are recorded for any of the Tata performance areas. Having established a good platform for well-managed performance, Tata should shift gear and move beyond a factual log of activity towards a more impact-oriented sustainability disclosure.

Snapshot:

Follows GRI?    Yes, GRI A+ 

Assured?   Yes, full assurance by DNV. 

Materiality analysis:  No matrix, but a list of priority issues is provided.

Goals?    No

Targets?   No

Stakeholder input?   No

Seeks feedback?   Yes

Key strengths?   Thorough and detailed narrative of performance.

Chief weakness?  No materiality focus or targets.

Pleasant surprise?  Two-page management approach section, a concise summary of all the key messages in the report.



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