Case study: How NALCO creates economic value for its stakeholders
National Aluminium Company Limited (NALCO) is one of the largest integrated primary producers of aluminium in Asia, operating in the non-ferrous metals and mining sector and primarily dealing with the manufacturing and sale of Alumina and Aluminium products. NALCO’s core values are based on Benefitting Stakeholders, Excellence and quality, Sustainability, Trust and Integrity (BEST), which help NALCO provide sustainable value to consumers and its various other stakeholders.
This case study is based on the 2019-20 Sustainable Development Report by NALCO, 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
NALCO’s philosophy is to create value for all its stakeholders Tweet This!, which includes its employees, shareholders, customers, suppliers, creditors, regulatory authorities, government departments and society at large. In order to create economic value for its stakeholders NALCO took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for the government
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With this case study you will see:
- Which are the most important impacts (material issues) NALCO has identified;
- How NALCO proceeded with stakeholder engagement, and
- What actions were taken by NALCO to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2019-20 Sustainable Development Report NALCO identified a range of material issues, such as effluents and waste, procurement practices, anti-corruption, occupational health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for NALCO.
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 NALCO engages with:
| Stakeholder Group | Method of engagement |
| Government and regulators
| · Meetings with different Central and State Government Bodies, such as: Ministry of Mines, Ministry of Corporate Affairs, Ministry of Environment, Forests and Climate Change · Different circulars, office orders, letters and information · Submissions of various returns and compliances to statutory authorities · Email Communication |
| Shareholders and Investors
| · Annual General Meetings, Periodic financial and performance reports to shareholders and investors · Reports, Memorandum and Press release of SEBI, CAG, Banks and Financial institutions · Shareholder surveys and meets |
| Employees
| · Official communications like office order, notice, circular and handouts · E-newsletters, Intranet and web hosting · Bipartite and tripartite meetings with labour unions · Collective bargaining · Interaction with officers’ associations · Employee satisfaction surveys · Grievance redressal forums |
| Customers and Consumers
| · Regional and national customer meets · Customers’ plant visits and management interactions · Advertisements in print and audio-visual media · Feedback, satisfaction surveys and grievance resolution · Product information and enquiries |
| Suppliers and Vendors
| · Tender and contract · Periodic vendor and supplier meet · Regional, National and International trade fairs · Supplier relationship management |
| Community/ Civil Society Organisations
| · Gram-Sabha and public hearing · RPDAC meetings · Cultural, religious and social functions · Need assessment interactions for CSR projects · Local community events |
| Industry Associations
| · Conference, workshops and seminars · Trade Fair, exhibitions and industrial expo · Membership in different industrial and professional association, confederation, etc. |
| Contractors/ Other Service Providers
| · Tender enquiries and RFQ · Meetings and discussions · Training, skill development, work instruction · On the job supervision · Techno commercial discussion for award of work |
| Business Partners/ New Ventures | · Review of business · Technology and feasibility |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics NALCO engaged with its stakeholders through a workshop and a questionnaire survey.
What actions were taken by NALCO to create economic value for its stakeholders?
In its 2019-20 Sustainable Development Report NALCO reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- NALCO believes in creating a work environment for its employees that is zestful, inspiring, action driven, and committed to excellence. In FY 2019-20, NALCO spent INR 1,994.07 Crores in employee wages and benefits.
- Creating economic value for providers of capital
- In FY 2019-20, NALCO paid INR 513.04 Crores to providers of capital.
- Creating economic value for the government
- In FY 2019-20, NALCO paid INR 151.40 Crores in Corporate Tax and INR 105.46 Crores in Dividend Distribution Tax.
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 NALCO, 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:
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