ITC Sustainability Report 2014

ITC's approach to stakeholder engagement is based on the long term stable relationships that it has fostered with key stakeholders such as shareholders, farmers, customers, suppliers, employees, local communities, regulatory bodies and media.

In line with ITC's philosophy of creating enduring value for all its stakeholders, ITC has adopted a structured approach to building partnerships in sustainable business practices. ITC's approach to stakeholder engagement is based on the long term stable relationships that it has fostered with key stakeholders such as shareholders, farmers, customers, suppliers, employees, local communities, regulatory bodies, media etc. Recognising that stakeholder engagement is an integral part of partnership building, ITC has endeavoured to institutionalise these existing relationships through a formal process that includes:

Identification of key stakeholders
Consultation with the key stakeholders
Identification and prioritisation of concerns and needs
Addressing the prioritised concerns and needs in a consistent and transparent manner

ITC identifies and profiles stakeholder groups as well as individual stakeholder representatives who are directly/indirectly impacted by its business activities as well as those who can directly or indirectly exert influence on its business activities. While selecting stakeholder representatives, attempts are made to ensure that they genuinely represent the views of their constituents, and can be relied upon to faithfully communicate the results of the engagements with ITC, back to their constituents.

Stakeholders' identification is guided by the attributes of stakeholders such as:

DEPENDENCY
Groups or individuals who are directly or indirectly dependent on the organisation's activities, products or services and associated performance, or whom the organisation is dependent on for operations e.g. shareholders, employees, farmers, suppliers, service providers and local communities.

Stakeholder consultation at ITC is a continual process both at the business as well as at the corporate level, depending on the target stakeholder being engaged with.

RESPONSIBILITY
Groups or individuals to whom the organisation has, or potentially envisaged to have, legal, commercial, operational or ethical responsibilities e.g. customers; providers of financial capital.

IMMEDIACY
Groups or individuals who need immediate attention from the organisation with regard to economic, social or environmental issues.

INFLUENCE
Groups and individuals who can have impact on the organisation's or a stakeholder's strategic or operational decision-making e.g. Providers of financial capital; Government and Regulatory Authorities.

Therefore, broadly the key stakeholders identified by ITC include,

Providers of financial capital
Customers
Employees

Supply chain members
Farmers
Government and Regulatory Authorities

Local Communities
Civil society
Media

G4-21, G4-24, G4-25, G4-26

For each of these identified key stakeholders, the context for stakeholder consultation is established through creation of generic awareness about the organisation's activities and immediate future plans through press releases, website, advertisements & other public presentations and social networking. Stakeholder consultation at ITC is a continual process both at the business as well as at the corporate level, depending on the target stakeholder being engaged with. Targeted consultation processes are conducted on a regular basis, giving due weightage to each stakeholder's nature of engagement with the organisation. The consultative process includes the following:

Existing relationship with the organisation e.g. close relationship like that of the employees against more distant international civil society organisations, formal relationships like that with shareholders against more informal relationships with local communities, etc.
Reliance on the organisation, which would necessitate that the stakeholder group should be able to express its views independently and freely without any fear of negative influence of its existing relationship with the organisation. This is especially applicable in the context of supply chain members who have direct business relationships with the organisation;
Willingness to engage;
Level of influence as applicable in cases of civil society, media and regulatory authorities

The following diagram highlights the consultation mechanisms with these respective stakeholders, together with key concerns, requirements and expectations identified through them, and ITC's response.

G4-21, G4-24, G4-25, G4-26

G4-21, G4-27

G4-21, G4-26, G4-27

During the process of stakeholder engagement, ITC also identifies the degree of sensitivity of a particular concern or expectation. The sensitivity of an issue to a stakeholder, in terms of high/ low importance forms the basis of inputs provided for the materiality analysis of the organisation to the extent feasible. (Please refer to the Materiality Matrix explained in the subsequent section).

ITC's engagement practices with the different identified stakeholders are now being formalised in line with the Board approved Policy on Stakeholder Engagement. In line with this Policy, ITC's stakeholder engagement process is thus being strengthened to ensure,

A two-way arrangement to exchange views and information and to address relevant issues
Transparency and accountability
Monitoring and tracking those who have been consulted and the key concerns expressed
Timely reporting back to those consulted, with clarifications on ITC's action plan
Periodic review of actions taken
Periodic redressal of key concerns
Continued integration with ITC's materiality analysis, business operations and social development initiatives as far as feasible.

Materiality Analysis

ITC's materiality analysis is based upon the following three pronged approach:-

IDENTIFICATION OF MATERIAL ASPECTS
For each GRI-G4 defined aspect, ITC assessed its relevance in terms of the boundary of the impacts. In addition to the GRI-G4 defined aspects, ITC also cognised for business sector specific topics based on GRI Sustainability Topics for Sectors. Each of ITC's businesses evaluated the applicability of an aspect for the business and also for the key stakeholders of that business. For each business, the result was a list of material aspects considering the significance to the business and a matrix of aspects identified to be material for its key stakeholders.
PRIORITISATION

In order to prioritise the material aspects so identified, each ITC business further assessed the degree of importance for each material aspect to its key stakeholders and itself.

The analysis of high or low importance of a particular aspect for a stakeholder group included evaluation of the stakeholder's perception of ITC's impact with respect to that material aspect and also expectations of the group regarding ITC's action and response against the impact. The key concerns, needs and expectations of stakeholders identified through past as well as on-going engagement constituted the basis of this evaluation (as detailed in pages 34-40).

On the other hand, the degree of significance of a material aspect to a particular ITC business was assessed based on ITC's Corporate Strategies, policies and most importantly risks and opportunities for the business.

Final aggregation of the degree of importance of a material aspect to the key stakeholders of businesses and also level of significance to the business was done at the Corporate level in order to arrive at the materiality matrix.

The materiality matrix also facilitated ITC in designing the report content so as to provide a reasonable and balanced picture of the organisation's Triple Bottom Line impacts and its performance.
VALIDATION
Illustrated below is the structure of review followed for validation of the materiality analysis at ITC:

G4-21, G4-18, G4-26

G4-19

Disclosure on Material Aspects

Sl. No.	Material Aspects	Details available in Sections
1	Economic Performance	Economic Performance
2	Sustainable Livelihoods	Economic Performance Social Investments - Mission Sunehra Kal
3	Procurement from Local Suppliers	Economic Performance
4	Climate Change	Energy Air Emissions Water Management
5	Material Usage Efficiency	Resource Conservation Raw Materials
6	Product Packaging	Product Responsibility Resource Conservation
7	Transportation	Energy Air Emissions
8	Sustainable Forest Management	Raw Materials Biodiversity
9	Sustainable Supply Chain	Supply Chain
10	Statutory Compliance	Product Responsibility
11	Employment	Labour Practices and Decent Work
12	Learning and Development	Labour Practices and Decent Work
13	Labour Management Relations	Labour Practices and Decent Work
14	Human Rights	Human Rights Significant Investments
15	Local Community Development	Economic Performance Social Investments- Mission Sunehra Kal
16	Social Infrastructure	Economic Performance Social Investments- Mission Sunehra Kal
17	Anti-corruption	Governance Structure
18	Public Policy Advocacy	Responsible Advocacy
19	Employee/ Customer Health and Safety	Occupational Health and Safety Product Responsibility
20	Product Labelling	Product Responsibility
21	Marketing Communication	Product Responsibility
22	Customer Privacy	Product Responsibility