Given the essential ecosystem services that nature provides, especially to rural households, ITC recognises that the preservation and nurture of biodiversity is crucial for the long-term sustainability of farming communities. Biodiversity provides varied ecosystem services to agriculture including recycling of nutrients, control of local micro-climate, regulation of local hydrological processes and regulation of the quantum of undesirable organisms. Decoupling of agriculture from ecosystem services rendered by biodiversity may result in overdependence on external inputs and ever-increasing economic and environmental costs, as well as impacting nutrition and health of consumers at various trophic levels.

The long-term sustainability of several of ITC's Businesses depend on natural capital, which includes soil, underground and surface water and biodiversity. A 'sustainable agriculture area' incorporates ecological and biodiversity concerns and supports livelihood improvements. ITC has, accordingly, taken up biodiversity conservation as a major intervention in its operational areas through various initiatives. This will not only preserve the nation's rich biodiversity, but also ensure a sustainable future for communities residing in the Company's Agri Business areas.

ITC has successfully established biodiversity conservation plots as part of its Natural Resources Management projects to enhance floral and faunal biodiversity as well as ensure adequate livelihood and employment generation to local communities. The focus was broadly on two aspects: (a) To revive ecosystem services provided to agriculture by nature, which has witnessed considerable erosion in recent decades; and (b) To motivate the communities to make productive use of degraded common lands through biodiversity conservation. Till now, under this programme, ITC has developed 308 biodiversity plots involving farmers and community members covering a total area of 11,803 acres in 15 districts. The initiative has also helped in conserving myriad species of floral and faunal diversity, including birds, butterflies, reptiles and amphibians. Regular biodiversity indexing is also being carried out in biodiversity conservation plots, to measure the extent of success of the programme in terms of enhancing the species' diversity and dominance.

The Biodiversity Risk and Opportunity Assessment (BROA), is being implemented by the Agri Business Division in the crop growing regions covering Karnataka (Mysuru district) and Andhra Pradesh (West Godavari, Prakasam and Guntur district). The BROA tool provides a method to identify impacts and dependencies of business operations on biodiversity of a given agricultural landscape, followed by an assessment of the various risks and opportunities that emerge, based on which plans are made and actions undertaken to address them. Over the past two years it has helped the Business in building strategy and action plans to embed biodiversity conservation in agriculture and plantation practices.

The Company's aim in biodiversity management is on embedding biodiversity conservation across its business value chain and helping farmers to adopt best agricultural practices for sustainable agriculture. The focus is not just on species conservation for addressing biodiversity concerns, but the identification of any potential negative impact on ecosystem services and mitigate them in agriculture. Consequently, the following key initiatives were implemented in 2016 towards biodiversity conservation in agriculture practices:

• Soil Conservation: The Business provides inputs to farmers on sustainable agriculture techniques that address physical, chemical and biological health of the soil in order to protect valuable soil resources. In 2016, around 14,307 acres were covered under the soil conservation programme in the states of Andhra Pradesh, Karnataka, Telangana and Rajasthan.
• Toxic Waste Management to Protect the Ecosystem: Farmers were educated on safe disposal of empty pesticide containers by setting up toxic waste collection centres in villages. In 2016, the Company had established around 43 toxic waste collection centres in 43 villages (Andhra Pradesh and Karnataka) by involving local community, village panchayat and farmers. The toxic wastes collected in the centres are scientifically disposed and safely incinerated at the state pollution approved facilities.

A significant proportion of ITC's pulpwood plantations and procurement is registered under the Forest Stewardship Council™ (FSC™) certification wherein risks associated with biodiversity are identified and monitored. The FSC audit report found that documentation of High Conservation Value Forests and Environmental Impact Assessment studies were in place, which showed no rare, threatened and endangered species within the Forest Managed Units (FMU) considered under the scope of certification. Methods for enhancing biodiversity potential of the planted areas like retention of old growth/ snag trees, retention of large woody debris, creation of water bodies, etc., were practiced. Native trees (like neem, nauli) were retained and encouraged.

Apart from biodiversity conservation in selected plots, ITC has embarked on a watershed level biodiversity conservation aimed at improving biodiversity in a larger area. Assessment of current status and plans for improvement was completed in Kothegala and Nanjanayakanahalli watershed areas in Mysuru (Karnataka), Ramnagar, Bilkisganj, Kolans-Kalan watershed in Sehore district and Atarikhejda watershed of Vidisha district, both in Madhya Pradesh and Potlapadu watershed in Prakasam (Andhra Pradesh) spread over 65,000 acres. These assessments were done by Kalpataruvu and Vidarbha Nature Conservation Society (VNCS), which have considerable experience in the areas of biodiversity conservation and satellite mapping. Based on the study recommendations, biodiversity conservation action plans were prepared in all the watersheds and work has been initiated. Interventions included largescale awareness generation and community participation, protection and conservation of existing old trees in the area, plantation of native species on farm-field bunds and in situ conservation of commons.

A partnership was launched during the year with International Union for Conservation of Nature (IUCN) to develop 'Sustainable Agriscapes for Future' in Munger (Bihar). The main objectives of this study are to establish linkages between services provided by the neighbouring ecosystems and natural resource based local livelihoods. This would provide crucial insights into priority ecosystem services that need to be revived, managed and conserved. The concept works around ecologically responsible agriculture with focus on Biodiversity and Ecosystem Services (BES) of surrounding ecosystems and their linkages with Agriculture and NRM based livelihoods. To identify the linkages between ecosystem services prevailing in Munger landscape, three distinct clusters - Sadar, Kharagpur and Asarganj - have been identified. Each of the cluster is dominated by a distinct ecosystem such as riverine, forest and lake and pond (lacustrine) ecosystems.

To ensure that such an approach is not restricted to only the project area but can be replicated elsewhere, the study findings and the proposed plan of action will be used to develop a template for implementation of ecologically responsible agriculture in diverse landscapes.