The giant Indian conglomerate is working to value natural and social capital as it moves beyond materiality issues
The Tata Group, which has long enjoyed a reputation for corporate good works, was one of India’s first movers on sustainability. Now, says Shankar Venkateswaran, chief of Tata Sustainability Group, “we feel we’re on top of the basic materiality issues, and we’re starting to think more about valuing natural and social capital.”
Set up by Parsi industrialist Jameshedji Tata in 1868, Tata has a market capitalisation of $116bn and is active across huge swathes of the Indian economy, with interests in steel, transport, chemicals, power, IT and tourism, among others.
Several of the group’s companies are piloting valuation methods with the Natural Capital Coalition, and it’s working with the World Business Council for Sustainable Development on a social capital tool. Tata’s also starting a product-by-product inventory, Venkateswaran says. “Is it going to save water, is it going to save energy, and so on. It’s about looking at sustainability benefits without getting bogged down in jargon.”
One example is the Tata Motors initiative around remanufacturing. It has committed to buying back used parts such as engines, alternators and gearboxes, from its commercial fleet customers. These are then remanufactured and resold with a warranty guaranteeing good performance. It’s also working on improving efficiency via its Econodrive programme to curb fuel consumption. But as Venkateswaran admits, such initiatives beg the question: “Do our customers know about it? Do drivers know how to use it properly? Do we talk enough about it? There are lots of these conversations happening …”
Tata has had its failures, too. Its no-frills Nano – the “one lakh car” (priced initially at 100,000 rupees, hence the sobriquet) which was aimed at bringing motoring within reach of families who could previously only afford a scooter, has struggled to appeal to customers because its marketing wasn’t aspirational enough to entice India's burgeoning middle class.
In an interview in 2014, Prodipto Ghosh, distinguished fellow at The Energy and Resources Institute, explained the problem. “When an Indian family moves up from a scooter to a car, they want to show the world that they are now people to contend with. Tata’s mistake was pitching this as the cheapest car in the world.”
This is one article in our in-depth India briefing. See also: India turns its face to the sun, Beyond philanthropy to real impact, Infosys's passively cooled campus sparks green building bonanza, and Circling back to make do and mend to cut emissionsIndia transport CSR World Business Council for Sustainable Development Natural Capital Coalition