Case study: How TTE creates economic value for its stakeholders

Talawakelle Tea Estates (TTE)’s tea plantations, spread across 6,491 hectares in the picturesque High Grown and Low Grown regions of Sri Lanka, produce 6.24 Mn kilogrammes of premium quality tea and account for over 2.1% of the national tea production. TTE believes that the only way to create long-term value for all its stakeholders is through its own sustainable growth.  Tweet This! TTE does this by engaging with its stakeholders to understand their requirements better, and thereafter adopting a triple bottom line (TBL) approach to creating shared value.

This case study is based on the 2020/21 Integrated Annual Report by TTE, 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

Spanning tea estates and processing factories across high and low grown areas along with bought leaf operations, the economic value TTE creates for its stakeholders is extensive and significant. In order to create economic value for its stakeholders TTE took action to:

• create economic value for employees
• create economic value for the government
• create economic value for lenders of capital
• create economic value for shareholders

What are the material issues the company has identified?

In its 2020/21 Integrated Annual Report TTE identified a range of material issues, such as product quality, environmental compliance, occupational health and safety, emissions, freedom of association and collective bargaining. Among these, creating economic value for its stakeholders stands out as a key material issue for TTE.

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:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

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 TTE engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics TTE engaged with its stakeholders through workshops and in-depth interviews.

What actions were taken by TTE to create economic value for its stakeholders?

In its 2020/21 Integrated Annual Report TTE reports that it took the following actions for creating economic value for its stakeholders:

• Creating economic value for employees
• In 2020/21, TTE paid Rs. 2,373.9 million for employee salaries, wages & other benefits.

• Creating economic value for the government
• In 2020/21, TTE paid Rs. 108.4 million in income tax and other taxes.

• Creating economic value for lenders of capital
• In 2020/21, TTE paid Rs. 5.3 million in interest on loan outstanding and minority interest.

• Creating economic value for shareholders
• In 2020/21, TTE paid Rs. 160.3 million in dividends and Rs. 710.5 million retained for reinvestment and future growth.

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

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

References:

This case study is based on published information by TTE, 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.talawakelleteas.com/content/annualReport/2020-21.pdf

Note to TTE: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.