Practices at

TEAM MEMBERS:
Animesh Anora Bhaskar Vishal 2013B06 2013B10

Chandan Kumar
Nukhil Kolthankar Prathamesh Sawant

2013B12
2013B35 2013B39

CONTENTS
About Company:................................................................................................................................................................ 4 Sustainability Structure ................................................................................................................................................. 6 Sustainability Genesis ..................................................................................................................................................... 6 Performance Measurement and Review Mechanisms: ..................................................................................... 7 THE SUSTAINABILITY JOURNEY ............................................................................................................................... 8 AWARDS & RECOGNITION ........................................................................................................................................... 9 Performance of Sustainability initiatives ............................................................................................................ 10 Economic performance: .............................................................................................................................................. 10 Environmental Performance: ................................................................................................................................... 11 Social Performance ....................................................................................................................................................... 13 Preparing for the Future............................................................................................................................................. 15 Conclusion: ....................................................................................................................................................................... 15

LARSEN & TOUBRO LTD.

ABOUT COMPANY:

L&T is the largest and one of the most respected engineering company in Indias private sector. The company has business interests in various fields like engineering, construction, manufacturing goods, information technology and financial services. L&T was recognised as the Company of the Year in 2010 and is considered as the "bellwether of India's engineering sector". It has more than seven decades of strong, customer-focused approach and the consistent quest for world-class quality have allowed it to realize and sustain leadership in all its major lines of business. The engineering Constructions and contracts division of L&T is ranked at 19th among international contracts. Also the hydrocarbon wing of L&T is one of the largest oil rig constructor of India. It has got many first to its credit like building the worlds highest viaduct in Kashmir to designing the hull of Chandrayan. It currently employees 35000 employees with the turnover of almost USD 13 Billion. L&T has an international presence, with a global range of offices. A thrust on international business has seen overseas retributions grow significantly. It continues to grow its global footprint, with offices and manufacturing facilities in multiple countries. L&T has always believed that progress must be achieved in harmony with the environment. Thus commitment to community welfare and environmental protection has always been an integral part of the corporate vision. The companys philosophy on corporate governance is built on a rich legacy of fair and transparent governance and disclosure practices, many of which were in existence even before they were mandated by legislation. L&T has always tried to align its business plan with nation needs. From Imagineering cost competent indigenous technologies to setting up business that meet the growing infrastructure demand of a growing nation, from investing in key catalysts of social well-being to fostering a safe and healthy work environment, its belief in responsible practices is steadfast. They are the first engineering and construction company in India to report on its corporate sustainability performance and among the prime mover to announce its resonance with eight mission enshrined by Prime Minister in the NAPCC.

Sustainability in Infrastructure Sector

Infrastructure is defined as the underlying foundation or basic framework; the system of public works of a country, state, or region; the resources (such as personnel, buildings, or equipment) required for an activity. The infrastructure of a region includes the built-environment, transportation networks, and public works. Infrastructure alone is rarely of interest in discussions of sustainability, although it is a crucial aspect of sustainable development because of its inextricable ties with areas of primary concernhuman health, environmental systems, air and water quality, and economic vitality. The infrastructure of a region determines how people can satisfy basic needs, which in turn affects the material and energy they consume in providing for those needs. Infrastructure can either provide for those needs in a sustainable or unsustainable manner. The development of infrastructure, be it a new highway or expansion of sewer lines, alters environmental attributes through the infrastructure use of materials, energy, and land. The alteration of these attributes can be seen immediately in runoff patterns, sedimentation in streams and rivers, and increased temperature due to the heat island effect of impervious surfaces, defined as hard surfaces that precipitation does not infiltrate. This alteration also has enduring long-term effects including climate shifts, hydrological changes, nutrient cycles, and a decline in biodiversity. Thus, the alteration of environmental attributes is of great concern as these major natural shifts have a direct effect on human health.

SUSTAINABILITY STRUCTURE

The precept and practice of sustainability at L&T is strengthened through commitment from top management. The company embraces a top down approach that optimizes these efforts. The Sustainability Executive Board (SEB), steered by a member of the Executive Management Committee (EMC), ensures effective formulation and implementation of our sustainability strategy. The Board decides on policies to be implemented across the company and reviews the sustainability performance. A well-defined framework of IC heads, Sustainability Councils and Unit Level Sustainability Teams cascade the initiatives across hierarchies.

SUSTAINABILITY GENESIS

L&T's sustainability initiatives have a long history. In 2007 the Company set up a task force to report on the environmental and social performance, and to implement sustainability initiatives. It continues to drive sustainability practices across the organisation and helps streamline the process of measuring, monitoring, documenting and reporting our triple bottomline performance as per Global Reporting Initiatives (GRI) guidelines. L&T's sustainability initiatives are also helping businesses drive innovation, improve internal processes and build accountability and transparency. Projects and practices instituted for internal measurement and enhanced environmental performance have been turned into emerging businesses with significant revenue potential.

PERFORMANCE MEASUREMENT AND REVIEW MECHANISMS:

L&T have a corporate audit department consisting of chartered accountants, engineers & system experts. The department has in-depth knowledge about our businesses, systems & procedures. The Company's Internal Audit function is ISO 9001:2008 certified. The Head of Corporate Audit Services reports jointly to the Executive Chairman and the Chief Executive Officer & Managing Director. The staff of Corporate Audit Services is rotated periodically. Best-in-class information technology has been deployed to enhance our compliance with organisational systems, eliminate redundant processing, maximise productivity and reduce costs. Qualitative data on performance indicators is collated from diverse sources such as:

THE SUSTAINABILITY JOURNEY

Satisfactory progress has been achieved in most of the goals that was set for the company - from initiating carbon footprint mapping to conducting energy audits across locations, from adopting a zero wastewater discharge approach to, most importantly, integrating sustainability into businesses.

AWARDS & RECOGNITION

The NDTV Profit Business Leadership Award Affirming L&T's stature in building infrastructure, the Company was honoured with NDTV Profits Business Leadership Award. Ranked 3rd in the Greenex L&T was ranked third in Greenex - a first-of-its-kind Green Index constituted by Bombay Stock Exchange that assesses the carbon performance of companies drawn from the top 100 companies listed by BSE. Among the top 5 Thought Leader Brands in India L&T stood among the top 5 in a Thought Leaders in India index published by a London based communications agency. Among the top 5 in RepuTex ESG ratings L&Ts sustainability practices and disclosures are ranked amongst the top in Asia in the Environment, Social L& Governance (ESG) 2011 ratings by RepuTex, Hong Kong - a leading ESG,carbon advisory and independent research organisation. L&T is also the only Indian company listed among the top 5 in Asia in the Industrial segment rating. Laurels for excellence in quality systems from FICCI Platinum Awards for Excellence in Quality Systems from FICCI were won by L&T Heavy Engineering, Powai campus - Mumbai and by L&T Komatsu, Bangalore Works. Institutional Investor magazine honours team L&T with high rankings L&T ranked 'Second' in India and Fifth' in Asia in the All Asia (excluding Japan) Investor Relations (IR) Perception Study conducted by the prestigious Institutional Investor magazine. The Company, its leadership team and senior executives also scored high in other rankings. ABCI awards for L&T L&Ts communications bagged a total of 11 awards at Association of Business Communicators of India (ABCI) Awards. The tally includes awards secured across the spectrum of In-house Magazines, Brochures, Calendars, Photographs and Sustainability Report. The number of awards received was among the highest secured by any company, qualifying L&T for the coveted 'Champion of Champions Award' Among the top 10 Best Companies to Work For, India L&T ranked among the top 10 in a Best Companies to Work For listing published by Business Today, India. The ICC Corporate Governance and Sustainability Vision Award 2012 The Indian Chamber of Commerce (ICC) awarded L&T with the Corporate Governance and Sustainability Vision Award 2012 in the Sustainability Reporting category. ICSI The Golden Peacock Global Award L&T bagged the Golden Peacock Global Award for Excellence in Corporate Governance - 2011, constituted by the Institute of Directors (IoD) and the World Council for Corporate Governance.

PERFORMANCE OF SUSTA INABILITY INITIATIVES

The performance is measured on three basic factors of sustainability which are Economic, Environmental and Social.

ECONOMIC PERFORMANCE:
The volatile macro environment and difficult to predict market is a real test scenario for sustainability practices. L&Ts strategic vision and ability harness sectorial opportunity has paid rich dividends. PAT shown 20% CAGR growth in last 5 years. Economic value add is an important performance factor and L&T has maintain the growth rate of EVA to around 20%.

Economic benefits are always linked with employees, clients, investors, suppliers and management. L&T focused on adding value to each of the stakeholder and hence EVA is distributed to every related entity. Distribution of EVA is as shown in the following figure: (Values in Bn)

Indirect economic benefits: Building strong relationship with suppliers is a key to success. L&T has improved the share of locally supplied material and improved relationship has helped them in following areas:

Improved response and delivery time Cost effective and efficient logistic Development of local economy: The business of the size of L&T has a great driving force to grow and develop the economy beyond their compounds. By improving local supplies, giving them efficient transportation, improving logistic fundamentals L&T is continuously improving the entire ecosystem around them.

This is a very important step towards sustainability. A symbiotic relationship between economy and the business creates a win-win situation and accelerates the sustainable growth.

ENVIRONMENTAL PERFOR MANCE:

L&T has set clear goals for environmental initiatives in the organization. The five focus areas defined are:

As a specific target set in the sustainability roadmap, L&T has achieved their first target by recording positive progress across all the five environmental parameters. Energy conservation has significantly decreased over the last five years. The attitude set by the organization has shifted from Can do to Must do and data supports the argument

To achieve this feat L&T has taken following initiatives: Process redesign Operational optimization Conversion and retrofitting of equipment Use of CFLs Personal training Water cooled air conditioning system

Green campus is an innovative and environment supporting idea. L&T has adopted self-sufficient, nature friendly green campus technique for their own campuses and helped other construct and take green initiatives.

Power distribution and transmission efficiencies are improved under cautious efforts. Thermal power equipments are designed for lower CO2 emission. Water balance sheet is an initiative taken to track the efforts for water conservation and reduced usage. Water losses are reduced by 75% i.e. 161 ltr/hr. Solar power generation is continuously progressing and technology is improving at a very fast rate. L&T in this reporting year commissioned a 40MW solar power plant, Indias largest. L&T is continuously enabling use of unconventional power sources. Green initiatives includes reducing greenhouse gases emission

SOCIAL PERFORMANCE
L&T is focused to work on healthcare, particularly mother and child health. The efforts are directed in such a way that it will reach to the underprivileged class and impact at the grassroots.

Key initiatives and their performance is mentioned in brief: Science on wheel: the travelling science popularization Van with volunteers showing basic models and educating students in small villages. It has tie up with 41 schools and reach out to 13,500 students every year. Project Vidyaa: Larsen and Tubro Public Charitable trust supports this project in Maharashtra and Gujrat. Project focuses on all round development of students. This includes health check-up, GK, IQ test, career guidance, library etc. It is included in 56 schools. Women empowerment: L&T has started women empowerment centres which gives women vocational training and further offer them jobs to make them self-sufficient. Child-mother Health centres has treated 374000 patients in the reporting year. Blood donation camps are supported across country and funded blood banks are run in more than 15 locations in India. Specially abled people are part of the society which need special attention and supporting hand. L&T supports schools for such schools and offers entry level jobs for such youths and women.

PREPARING FOR THE FU TURE

L&T has laid a blueprint for the future considering Risk and Opportunities in all the sectors it is working in. Future risks are identified, documented and action plan is laid to mitigate the same. L&T can leverage on its current strength to take opportunities for the firm and for the betterment of the entire ecosystem. The objectives are set for each of the sector construction, hydrocarbon, Heavy engineering, electricals, materials and industry and Infotech.
Sample plan for Infotech unit is given as follows:

Risks & Opportunities

Strategic & Operational Initiatives

Slowdown in global economies Establishing partnerships in key areas and growth in emerging Set up operations in South Africa through a joint geographies venture Increasing operational efficiencies Changing business model Technology challenges Potential early mover advantage in cloud, mobility, big data and enterprise social collaboration Launched Smart Retail 2.0 in the manufacturing business space Developed frameworks for warranty, rights and service management Investment in building proprietary touch-based and mobile-enabled banking solutions Unified various centre-wise CSR initiatives (such as Sparsh, ACE, Samvedna, Care 2 Connect and Vidiyal) Initiative to tie up with NGOs and involvement of employees for CSR activities

Enriched focus on CSR

CONCLUSION:
From the planning documentation L&T looks ready for the upcoming challenges and opportunity. The strategic sustainability process, professional documentation, clear objectives and profound base to apply and execute the plan are key highlights of the L&T sustainability practice. The L&T group, a huge entity in indian industry is an example to follow for sustainability.

Reference: www.larsentoubro.com www.moneycontrol.com L&T Sustainability Report 2012 report City Infrastructure KPMG report