Case study: How Hindalco creates economic value for its stakeholders
Hindalco Industries Limited, a flagship company of the Aditya Birla Group (ABG), is an industry leader in the aluminium and copper business, with a global footprint that spans 50 units in 11 countries. Hindalco aims at value creation for all its stakeholders, through robust mechanisms and a well-defined business model. Tweet This!
This case study is based on the 2019-20 Sustainability Report by Hindalco, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Hindalco believes in all-inclusive growth and seeks to bring changes in the lives of its people and stakeholders, through its economic contributions. In order to create economic value for its stakeholders Hindalco took action to:
- contribute towards the economic growth of the geographies in which it operates
- support trade, industry and business associations
- offer employees benefits
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With this case study you will see:
- Which are the most important impacts (material issues) Hindalco has identified;
- How Hindalco proceeded with stakeholder engagement, and
- What actions were taken by Hindalco to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2019-20 Sustainability Report Hindalco identified a range of material issues, such as compliance management, occupational health and safety, water management, product stewardship, energy & GHG emissions management. Among these, creating economic value for its stakeholders stands out as a key material issue for Hindalco.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Hindalco engages with:
| Stakeholder Group | Method of engagement |
| Employees
| · Emails and meetings · Intranet portals · Employee satisfaction surveys · Training programmes · Performance appraisal reviews · Grievance redressal mechanism |
| Customers | · Emails and meetings · Customer satisfaction surveys · Grievance redressal mechanism |
| Suppliers | · Emails and meetings · Vendor assessment & review · Supplier audits · Training workshops and seminars · Stakeholder engagement surveys |
| Communities
| · Stakeholder engagement surveys · Training and workshops · Regular meetings · Need assessment and satisfaction surveys · CSR reports |
| Investors and shareholders
| · Board meetings · Annual reports · Newsletters · Regular business interaction |
| Regulatory bodies
| · Annual reports · Communication with regulatory bodies · Formal dialogues |
| Media | · Social media · Press releases · Interviews · Website |
| Industry associations | · Meetings |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Hindalco engaged with its stakeholders through a stakeholder engagement survey.
What actions were taken by Hindalco to create economic value for its stakeholders?
In its 2019-20 Sustainability Report Hindalco reports that it took the following actions for creating economic value for its stakeholders:
- Contributing towards the economic growth of the geographies in which Hindalco operates
- Through its operational activities, Hindalco seeks to bring in change in the lives of its communities by providing them with livelihood opportunities. Providing fair compensation to its employees, procuring locally manufactured resources for its operations (wherever feasible), investing in community-centric initiatives and timely payment of statutory taxes are some of the ways in which Hindalco seeks to contribute towards the economic growth of the geographies it operates in.
- Supporting trade, industry and business associations
- During the reporting period Hindalco contributed INR 36 lakhs towards various trade associations, industry associations and business associations in the form of their membership fees. Donations of INR 29 crore (which includes INR 10 crore paid to AB General Electoral Trust and INR 19 crore through Electoral Bond) were also made towards political contributions during FY 2019-20. Additionally, with an aim to serve society through its contributions, Hindalco takes efforts to fulfil all its regulatory obligations in a timely manner and ensures regular payment of taxes and procures benefits as a result of various governmental schemes and policies.
- Offering employees benefits
- Hindalco offers its employees various benefits through a number of initiatives. Medical benefits, post retirement and provision for liabilities towards earned leaves are some of the benefits Hindalco provides its employees with. Hindalco’s contributions are also made towards the provident fund through the government and approved trusts. Hindalco contributes a certain percentage of salaries for all managerial employees in superannuation funds, such as the National Pension Scheme (NPS).
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Hindalco, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
http://www.hindalco.com/upload/pdf/sustainability-report-2019-20.pdf
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