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GRI - G4 COMPLIANT
In Accordance - Comprehensive

Social Performance

Human Rights, Labour Practices and Decent Work| Occupational Health & Safety| Social Investments - Mission Sunehra Kal| Product Responsibility

Product Responsibility

Management Approach

Customer Health and Safety

As a Company engaged in the FMCG and Hospitality sectors, its products and services reach out to a large number of consumers. The Company has stringent processes and systems to ensure that all products and services are in compliance with relevant regulatory requirements. In addition, product and service attributes are constantly evaluated against international standards and best practices.

ITC's commitment towards ensuring compliance with relevant standards of health and safety commences at the design stage. Appropriate health and safety elements across procurement, manufacturing and delivery are identified and evaluated, based on which control measures are implemented as necessary. Global developments in health and safety are also reviewed constantly to provide appropriate insights. This is supported by comprehensive research and testing facilities at the ITC Life Sciences & Technology Centre, whose laboratories conform to ISO/IEC 17025 and are certified by National Accreditation Board for Testing and Calibration (NABL). Manufacturing units and hotels have state-of-the-art facilities and technology as well as internationally benchmarked quality management systems. These are constantly reviewed to keep them contemporary and relevant. The quality performance of third party manufacturing facilities is also monitored on a daily basis.

The summary of systems and initiatives across some of ITC's businesses is presented below:
Business Initiatives for improvement of health and safety impacts of products/ services
Agri - Business

The Business primarily engages in sourcing of agri-commodities like Wheat, Coffee, Potato, Shrimps, Soya and Processed Fruits. These commodities are sourced and supplied based on customer requirements of quality, quantity and packaging. Stringent process control and quality inspection norms have been established to ensure compliance with customer requirements. Systems and processes are in place to ensure the hygiene of the stored stocks. Products are shipped after meticulous testing either in-house, or at accredited labs or agencies, if required by the customers. For organic and sustainable farm practices in the processed fruits business catering to specific customer segments, the Business has received the following international certifications:

  • Fairtrade certification endorsing that its products meet certain environmental, labour, and developmental standards.
  • Demeter Certification for Biodynamic Farming, a holistic method of agriculture
  • USDA Organic Certification for Organic Farming
  • Bio-Suisse Certification for Organic Farming
Branded Packaged Foods

61 out of 69 manufacturing locations, including third party manufacturing units, are Hazard Analysis and Critical Control Point (HACCP)/ ISO 22000 certified, ensuring that products use the best quality ingredients and utilise the highest quality processes. The objective is to continuously provide consumers with products that not only "Taste Good" but also "Do Good". Consequently, large investments have been made in R&D to deliver relevant functionalities based upon specific formulations for identified health needs, like reducing salt, sugar and oil across all products. These investments are likely to show results over the medium to long term. Products like 'Sunfeast Oats Marie' and 'Sunfeast Farmlite' attempt to seamlessly integrate healthy ingredients like oats and fibre into consumer snacking preferences. Market surveys for determining customer preference for products with specific functionalities were completed in 2014-15 and the market release for such products will be determined based on production viability. As on date, 90% by volume of ITC's biscuits are trans-fat free.

In 2014-15, daily staple food products like multigrain atta and fortified atta started reaching larger areas of the country. Smaller packs of these products also helped in gaining access to a wider section of society.

Cigarettes The Business uses proprietary software to regularly monitor and review product specifications of all raw materials. With consistent focus on product innovation, new product development in the Business involves consideration of global developments and is supported by comprehensive research and testing facilities at the ITC Life Sciences & Technology Centre.
Leaf Tobacco Product hygiene standards in tobacco cultivation are accorded the highest importance. Accordingly, awareness among tobacco farmers on the importance of sustainably producing residue-free quality tobacco is constantly reinforced during field-level trainings and seminars in ITC's operating regions. For frequent assessment on product integrity, farm-level and packed-level toxicant audit studies are undertaken wherein all leaf samples from farmlands and packed cases of finished products are closely monitored for toxic residues. Several additional measures were implemented across the value chain during the year towards minimisation of Non Tobacco Related Matter.
Personal Care Products

The Business follows a comprehensive approach for improving the health and safety impacts of its products in each of the life cycle stages including R&D, certification as well as manufacturing and production.

All safety tests from prototype development to final product are conducted in accordance with standard international guidelines.

Ingredients used in products undergo rigorous analysis, based on existing scientific literature, for their toxicity and skin sensitisation prior to clearance for use in product development.

Product safety and efficacy is certified through external accredited laboratories.

Products are manufactured in a highly automated environment under strict hygienic conditions.

Documented Quality Management System, including procured material checks, in-process checks and finished goods quality checks, ensures that the manufactured products are consistent and of high quality.

Hotels ITC Hotels have established food safety management systems certified as per HACCP/ ISO 22000. In addition, ITC Hotels R&D endeavours to adhere to GHP & GMP (Good Hygiene Practices & Good Manufacturing Practices). The Hotels Business also conforms to relevant applications of PAS 220 (Prerequisite programmes on food safety for food manufacturing). ITC has elaborate fire safety guidelines which all hotels comply with. These guidelines are based on National Fire Protection Association (NFPA) Codes and other international best practices. They supplement the general EHS Guidelines applicable to all ITC businesses, the compliance of which is audited by the Corporate EHS Department on a regular basis.
Education and Stationery Products The Business uses only approved non-hazardous materials like ECF (Elemental Chlorine Free) paper, ink, dyes, etc. Since the primary consumers of these products are children, stringent processes and quality control measures are in place to ensure their safety.
Lifestyle Retailing All raw materials and garments are tested at the in-house laboratory for post usage experience and conformance to quality standards. The standards and product specifications are periodically validated by international testing agencies. Quality is monitored through an internal Product Quality Rating System (PQRS) together with the external Acceptable Quality Level (AQL) norm that is followed internationally by apparel businesses. The Wills Lifestyle range (excluding the Wills Signature garments) has received the "Oeko-Tex" certification (w.e.f. January 2012), becoming the first brand in the domestic apparel retail segment in India to obtain such a recognition. The certification has been conferred by Hohenstein Textile Testing Institute GmbH & Co. KG, Germany. It guarantees that the products are free from more than 100 harmful substances and ensures that Wills Lifestyle garments are completely safe for consumers, without compromising on relevant style quotient of its products.
Packaging and Printing Various initiatives have been undertaken in developing packaging solutions that use environment friendly raw materials such as water-based varnishes and reduction in material usage in terms of mass and thickness of products. The Business engages with customers on a continuous basis to provide solutions that help protect functional needs like product integrity and visual imagery, whilst providing scope for use of alternate materials. The bulk of board packaging is already being done with non-toluene based inks. In the area of flexibles packaging, joint projects with customers have been undertaken to promote sustainable flexibles and printing with non-toluene and non-ketone based inks. In order to strengthen the health & safety requirement of products (Quality and Hygiene), all key operations at Haridwar and Tiruvottiyur factories have been certified as per British Retail Consortium (BRC) Global Standard for Packaging and Packaging Material.
Paperboards and Specialty Papers

ITC has been the pioneer in manufacturing Elemental Chlorine Free (ECF) pulp in India. This ensures that the levels of dioxins and furans in the pulp are less than 1 PPT (Parts Per Trillion). The global migration test is conducted periodically on all food-grade paper and paperboards for compliance with the US FDA standards and to adhere to prescribed limits for presence of heavy metals. All manufacturing ingredients for applications involving direct / indirect food contact are procured from reputed suppliers and conform to US FDA and equivalent standards.

The Business ensures that the components of food allergens listed in the EC directive 2003/89/ EC and the US FDA Act are not used in any virgin grade boards and papers. The Bollaram Unit, which manufactures food grade board for direct food contact, is 'third party' certified in accordance with BRC/IoP (British Retail Consortium/Institute of Packaging) standards. Smithers Pira, a renowned testing and consultancy firm, certifies ITC's 'Indobarr' and 'Cyber Propac' brands to be compliant with German BFR standards for Food Packaging.

Matches and Agarbatti Chemicals approved by IFRA (International Fragrance Resource Association, Geneva) are used to prepare fragrances, which are required in the manufacture of dipped Mangaldeep agarbattis. The manufacturing processes of the Matches and Agarbatti Business are designed to ensure product safety and consistency.

Product Information and Labelling

As an organisation committed to high standards of transparency and good governance, ITC's business operations comply with every relevant law of the nation. Systems have also been put in place to ensure compliance before the launch of any new category or product.

A regular customer feedback system forms an integral part of ITC's businesses where there is direct interface with customers. The process followed by ITC's Hotels Business with respect to consumer feedback is illustrated below:

In the case of FMCG products, consumers are provided several communication channels like email, telephone number, website address and feedback forms to enable them to contact the relevant business. Processes are laid down to ensure that consumers are provided with responses on their feedback in a timely manner. For food products, all information about ingredients and nutrition of products is published on the product packaging as per relevant statutory requirements.

In the Information Technology Business formal mechanisms are in place to measure customer experience. The Customer Service Satisfaction Survey is an annual check on the robustness of the engagement, culminating in a Customer Experience Index. The survey is conducted amongst Chief Executives and Senior Management, and is based on a structured questionnaire customised for the stakeholder. Multiple parameters and business outcomes are measured including satisfaction, loyalty, advocacy and value for money. The outcomes and insights from the survey drive customer engagement and service delivery improvement initiatives at the organisation, geography, Business, Unit and account level.

Customer feedback for B2B businesses like Agri Business and Packaging and Printing, is obtained through different activities. For example, Agri Business has pre-season engagement with customers, client visits and engagement of the Divisional Management Committees with major customers. Given the nature of the business, claims due to rejections on account of quality are a valuable indicator of customer dissatisfaction. During the year under review, no such claims were made to the Business.

In addition, an independent survey "Nielsen Corporate Image monitor 2014-15," which tracks the reputation of 42 leading Indian companies, rated ITC well ahead of competition in various product parameters like "products or services - high quality & reliable" and "customer service levels/CRM". This is an outcome of our dedicated efforts towards continuously improving the product quality and service delivery, based on the insights from interactions with customers and independent surveys.

Traceability in the Foods Supply Chain

In Foods Business, wheat constitutes around 40% of the total raw material procurement value and is sourced through the e-Choupal platform of ITC's Agri Business thereby ensuring 100% traceability to the origin. For vendors of other raw materials including generic and actively traded commodities like maida, sugar, oil etc. sourced outside the aforesaid platform, ITC has a robust system of due diligence. In addition Board approved policies of ITC supplemented by a 'Code of Conduct for Vendors and Service providers' provide the structure for addressing traceability within the supply chain and also the sustainability aspects therein, which are detailed in the "Supply Chain" section of this Report. Monitoring of compliance against the above mentioned Code and also performance of Foods Business's supply chain partners based on identified material aspects will be done in a phased manner.

Marketing Communications

All Businesses/Divisions of ITC have established rigorous systems, procedures and review mechanisms to identify and comply with the laws and regulations concerning marketing communications. In addition, ITC has put in place a dedicated consumer response cell in order to answer any queries on products.

ITC follows standard operating procedures to ensure that its marketing communications are in accordance with voluntary codes adopted by each business as well as applicable statutes. These are vetted by the internal legal team and compliance is ensured by the internal audit department.

Marketing and Advertising Communications of all ITC's businesses are subjected to stringent internal checks by the Legal Department. The Company's consumer goods businesses adhere to voluntary and legal codes of conduct and follow the ASCI (Advertising Standards Council of India) Code for all marketing communications. Marketing communications for ITC's Hotels Business is governed by self-regulation and guided by the Indian Society of Advertisers (ISA) rules and guidelines.

Customer Privacy

Maintenance of customer privacy is relevant primarily for ITC's Information Technology and Hotels Businesses, both of which have well established systems and procedures for ensuring zero non-compliance.

Network Architecture and Information security controls of the Company's Information Technology Business under ITC Infotech Limited are driven by industry best practices. The Business has drafted a privacy policy in line with the IT Act, 2000, that covers all aspects of data privacy with respect to sensitive information. The Business has also formulated an Information Management policy, which caters to the IT security aspects of the ISO 27001 ISMS framework. The IT operations arm of ITC Infotech Limited is ISO 27001 certified for its business processes to deliver IT services and projects. Documented procedures are available and practised to grant physical access to information, e.g. the defined and restricted access rights to IT Room/Server Room and User Access Management based on ISO 27001 and as agreed with customers. The Business has also put in place measures at various control areas in order to meet customers' requirements for data security. These include desktop access, server access, network access, operating system, application security, data transfer, penetration testing, etc. Clear guidelines are provided for data backup, retention periods, the media on which backups have to be maintained and storage at remote location.

In addition, stringent risk assessments are carried out to identify vulnerabilities and threats to assets and the controls that need to be put in place.

ITC's Hotels and Information Technology Businesses received no complaints regarding breach of customer privacy or loss of customer data in 2014-15. For the year the average WoW Ratio (Guest Satisfaction Index) for the Hotels Business was 91.5%.

Compliance

All Businesses/Divisions of ITC have well established systems, procedures and review mechanisms to identify and comply with the laws and regulations concerning its products and services. Particular care is accorded to tobacco products, taking into account the regulatory framework.

ITC has established systems wherein every Business and Corporate Department has to submit a periodic statutory compliance report to the CMC/Board on all business, regulatory, product specific, finance/revenue related, personnel related, technical/process related and environment related statutes and other applicable laws and regulations. This is done on the basis of updated checklists that have to be mandatorily maintained by each reporting Unit/Business/function as well as monitoring and controlling systems that the Business/Corporate function must have in place.

As per this system, no incidents of non-compliance were reported during 2014-15.

The Road Ahead

Recognising the unique construct of ITC in terms of its strong presence in agriculture, Branded Packaged Foods and Personal Care Products Businesses, a convergence of R&D capabilities is being leveraged to deliver future products aimed at nutrition, health and well-being. In this context, Life Sciences & Technology Centre (LSTC) has created a Biosciences R&D team to design and develop several long-term research platforms evolving multi-generation product concepts and associated claims that are fully backed by scientific evidence for the Branded Packaged Foods and Personal Care Products Businesses. Multiple value propositions have been identified in the area of functional foods, which are being progressed to products of the future with strong scientifically validated claims via clinical trials. Similar advances have been made in the area of personal care products. In addition, LSTC has evolved a strategy in building a new value chain called, 'Nutrition' with a special focus on 'Indianness' and 'health and well-being' founded on the basis of Value Added Agriculture (VAA) and Medicinal and Aromatic Plants. The initial activities related to VAA have already commenced with a focus on soya.

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