Case study: How Vedanta creates economic value for its stakeholders
Vedanta Limited is India’s largest natural resources conglomerate with leading positions in seven key business segments, producing aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy, with operations in India, South Africa, Ireland and Australia. Vedanta’s business strategy is focused on delivering sustainable, long-term returns to its shareholders and also creating value for its wider stakeholder fraternity. Tweet This!
This case study is based on the 2020-21 Sustainability Report by Vedanta, 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
Vedanta’s continued success depends on its ability to establish and maintain positive relationships not only with its customers and shareholders but also with its business partners, suppliers, and the communities across its value chain, shaping people’s well-being, generating employment opportunities and enhancing the economic prosperity of regions through shared value. In order to create economic value for its stakeholders Vedanta took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for governments
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Vedanta has identified;
- How Vedanta proceeded with stakeholder engagement, and
- What actions were taken by Vedanta to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2020-21 Sustainability Report Vedanta identified a range of material issues, such as energy and climate change, community development, ethical business practices, water management, health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for Vedanta.
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 s 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 Vedanta engages with:
To identify and prioritise material topics Vedanta engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Local Community
| · Community group meetings · Village council meetings · Community needs/social impact assessments · Public hearings · Grievance mechanisms · Cultural events · Engaging with communities via various community initiatives of Vedanta Foundation |
| Employees
| · Chairman’s workshops · Chairman’s/CEO’s town hall meetings · Feedback sessions · Performance management systems · Various meetings at plant level · V-Connect mentor programme · Event management committee and welfare committee · Women’s club |
| Shareholders, Investors, & Lenders
| · Regular updates · Investor meetings · Site visits (put on hold in the last year due to COVID) · AGM and conference · Quarterly result calls · Dedicated contact channel – Vedantaltd.ir@vedanta.co.in and sustainability@vedanta. co.in |
| Civil Societies
| · Partnerships with, and membership of international organisations · Working relationships with organisations on specific projects · Engagement with international, national, and local NGOs · Conferences and workshops · Dedicated contact channel – sustainability@vedanta.co.in |
| Industry (Suppliers, Customers, Peers, Media)
| · Customer satisfaction surveys · Vendor scorecards · In-person visits to customers, suppliers, and vendor meetings (put on hold during COVID) |
| Governments
| · Participation in government consultation programmes · Engagement with national, state, and regional government bodies at business and operational level |
What actions were taken by Vedanta to create economic value for its stakeholders?
In its 2020-21 Sustainability Report Vedanta reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In FY 20-21, Vedanta paid INR 28,610 million for employee wages and benefits.
- Creating economic value for providers of capital
- In FY 20-21, Vedanta paid INR 88,670 million to providers of capital.
- Creating economic value for governments
- In FY 20-21, Vedanta paid INR 21,800 million to governments.
- Creating economic value for communities
- In FY 20-21, Vedanta spent INR 3,227 million in community investments.
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 Vedanta, 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:
https://www.vedantalimited.com/VedantaDocuments/Vedanta_SDR_2021.pdf
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