CSR ASSIGNMENT

AMBUJA CEMENT
GROUP # 9

Ayushi Agrawal (C005)

Swati Garg (C024)
Aman Gupta (C027)
Ragini Gupta (C029)
Nitish Kumar (C039)
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 Index

Sr No. Topic Page

No
1 Introduction to ACL 3
2 Sustainable Development Model 3
3 CSR interventions with regard to people and planet 4
4 Business Model 5
5 Impact on Stakeholders 7
6 Analysis of Sustainable Activities 9
7 KPMG True Value 11
8 References 12

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Ambuja Cements Ltd, a part of the global conglomerate Lafarge Holcim, is one of the leading
cement companies in the Indian cement industry.

VISION
To be the most sustainable and competitive company in their industry.

MISSION
CREATE VALUE FOR ALL
Delighted customers
Inspired employees
Enlightened partners
Energised society
Loyal shareholders
Healthy environment

The Ambuja Cement Foundation (ACF) in 1993, Ambuja Cements Ltd. established as its
Corporate Social Responsibility wing with the mission to "energise, involve and enable
communities to realize their potential". The Foundation is engaged in a variety of people-
centric development projects for the rural communities surrounding Ambuja's manufacturing
sites. They have come a long way to being functional in 928 villages, in 12 states covering a
population of 1.5 million people across India today. The company spent Rs 52.57 crores
during the year 2013 on CSR activities alone,which accounts for over 4% of the company’s
net profit.

Ambuja’s Sustainable Development Model includes:

 Sustainability Policy - The objective is to strike a proper balance between

environment protection and social well-being to gain a competitive advantage which
in turn ensures long term economic growth. This involves mapping of sustainability
risks with opportunities and commitment towards adopting eco-friendly technologies
in plants and mining operations, using resources judiciously and substituting them
with eco-friendly alternatives including wastes like fly ash, co-processing of waste
materials, applying OH&S standards and guidelines to provide necessary resources,
training, education and performance measures in order to ensure Zero Harm to our
employees, visitors and contractors, working with local communities around the
plants for capability building and ensuring all activities are undertaken in compliance
with applicable legislation.

 Climate Change Mitigation Policy - They recognise the significant global threat
caused by high concentration of Green House Gases (GHG) in the atmosphere.Hence,
this policy involves commitment towards minimizing GHG emissions and reducing
carbon footprints by inventorisation of carbon emissions throughout
processes,increasing production of blended cement,retrofitting energy efficient
technology, exploring/implementing alternative sources of energy, offsetting carbon
emissions through plantation and reducing travel emissions, creating awareness
amongst employees and their families on the benefits of energy efficiency and
rewarding employees who achieve reduction of GHG emissions,conducting
awareness program on energy efficiency for suppliers and using energy consumption
and environmental considerations as mandatory criterion in procurement decisions.

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  Green Procurement Policy - It involves commitment towards choosing environment
friendly equipment,utilizing reusable & recyclable materials, promoting
environmental awareness amongst suppliers/contractors and supporting them in
improving their environmental performance through sharing of best practices,
ensuring legal compliance on environmental matters and labour laws and
institutionalising environmental considerations in all procurement decisions.

 Corporate Environment Policy - It involves commitment towards adopting

ecologically sound mining and process technologies along with best practices for
prevention & control of emissions, effluents and wastes;ensuring
rehabilitation,optimizing use of key resources, implementing sound waste
management solutions ;monitoring, reporting and continually improving
environmental performance through environmental management systems and
propagating environmental awareness amongst employees and other stakeholders.

 Corporate Social Responsibility Policy - They have also launched the True Value
project with support from KPMG. It is a unique measurement tool that takes into
account the financial, environmental and social performance.ACL is proud to be the
first company to estimate its True Value.

Corporate Social responsibility interventions with regard to people and planet:-

1. People:- Ambuja strives its best to create value for all its stakeholders.

• The policy of ‘Zero Harm’ is relentlessly pursued. It turns out a happy employee is a
more productive worker and the team demonstrated how the ‘I Can’ spirit empowers
people, making them their own agents of change.
• Community engagement is an important part and the Community Advisory Panel
comprises of the Company and community leaders. It is a platform to discuss issues
faced by the community and achieve a consensus to implement programmes for them.
All programmes are rigorously monitored through the Social Engagement Scorecard
which, through detailed group discussions and interviews with community
representatives, maintains a score on activities and programmes of the Foundation. In
2013, all locations scored between 75% to 100%, reflecting positive reviews.
• The ‘People Power’ initiative involves 16 Skills and Entrepreneurship Development
Institutes (SEDI) across 10 states and have trained more than 14000 people in 45
different vocational trades with placement rates of 75%.
• Ambuja began surface mining at Ambujanagar, which helped the farmers and
the entire community to stay closer to the mining operation. This wouldn’t have been
possible had they followed the conventional way of blasting operations

2. Planet:-

WATER POSITIVE:-
 Water is a key component of cement production. While it is an unavoidable part of
manufacturing, one cannot ignore the threat of water shortage.
 Through rainwater harvesting large quantities of water were collected that would have
otherwise gone unused. Even used quarries were given a new life by converting them
into manmade lakes and wetlands.
 16.6% of total water was recycled and reused in dust suppression, gardening and other
purposes, after treatment in water plants.
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ENERGY EFFICIENCY AND WASTE MANAGEMENT:-
 CO2 emissions cannot be avoided in the manufacture of cement, so Ambuja Cement
tries to ensure a carbon conscious growth.
 Sea transport is the most environment-friendly method for material movement. To
harness this, Ambuja has set 5 Captive Ports to transport cement from
Ambujanagar and import fuel and raw materials.
 8 Grinding Stations are set close to the Thermal Power Plants to use waste materials.
 At Darlaghat Plant, an Overland belt conveyor is used to transport limestone from
mines to plant. It is more environment friendly compared to transporting large
volumes by road.
 Ambuja has invested in Waste Heat Recovery System (WHRS) of 6.5 MW at
Rabriyawas and 7.5 MW of Wind Energy. Waste management is done under the name
of Geocycle.
 Nearly 4% of the power needs were generated using Biomass and Wind in 2013.
 To minimize blasting effect / noise pollution,vibration and fly rock generation ‘Digital
Energy Control System’ has been introduced.
 From 1990 till 2013 Ambuja managed to reduced CO2 emissions by 28%.
 The plastic equivalent to used in making cement bags is used in kilns which is approx
36,876 tons.

BUSINESS MODEL

Water Management Business Model

All the plants of ACL track withdrawals and consumption of water. Plants send monthly Water
Management Reports to Corporate Office for information and discussion in Regional as well
as National Executive Committees of top management. Water Key Performance Indicator is
used to compare performance of different plants and also with respect to improvement over
past performance. These measures helps in utilising water effectively.

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Surface Mining

Ambuja Cement uses two types of mining methodologies. The soft limestone is scratched by
using Surface Miners whereas the harder limestone is extracted through advanced hi-tech
controlled drilling blasting techniques with in built arrangement of providing dust free
operation. To minimize blasting effect and noise pollution, vibration and fly rock generation
‘Digital Energy Control System’ has been introduced.

Waste Management

Ambuja aims at reducing the negative impact of the waste on the environment and reduce its
overall ecological footprint which in turn leads to reduction of cost for the company. Ambuja
consumed about 1.74 lakh tonnes of waste in 2013 as compared to 1.5 lakhs in 2012.

Waste Consumption in 2013

Driving Safety program:

The logistics department of Ambuja identified the trucking fleet as an operational risk. The
trucks were generally owned by subcontractors and they were driven dangerously through
villages and an accident could potentially halt trucking operations. So ACF launched a driving
safety program, which was later expanded to include health education on alcohol, tobacco, and
HIV/AIDS. Here a supply chain requirement made ambuja foundation develop a business
model that could help their business and also add to their CSR.

Labour Practice

The practice of the company is to try and curb child labour and hence it only engages with an
employee once he/she has attained the minimum age of 18 years. Ambuja Cement also ensures
that the contractors strictly comply with the guidelines. The Company ensures that the wage
payment to its contract employees is in accordance to the Minimum Wage Rules. The minimum
wage paid during the year was Rs 13,456 while the statutory minimum was Rs 7,200
maintaining a ratio of almost 2:1.

Combating Health Issues

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Ambuja Cements focusses on the health issues of its employees in its business model and it
aims at retaining the employees on which the company has invested. In 2006, a workplace
policy for HIV/AIDS was adopted to safeguard the fundamental rights of any employee.It
should also be noted that Ambuja cements set up the first Anti Retroviral Treatment Centre in
Wadi in Karnataka in its largest cement plant.

Sustainability Principles in Procurement

The company has set minimum requirements of sustainability to be followed by any supplier,
contractor and third party service provider. These requirements include environment
management, safety standards and social accountability. Thus with this business model ACL
ensures that the supply chain is as clean and transparent as possible.

Supplier Code of Conduct to be followed

Environment Sustainability Model

The Plant Environment Profile is the Company's internal annual environment performance
assessment system which includes atmospheric emissions, energy and material consumption,
water, waste and quarry management. At the end of the assessment, Environment Performance
Index Score is calculated which is used for rating plants internally, as well as to benchmark
against other operating plants globally. This helps in keeping the carbon footprint low and also
effective utilisation of raw materials and other resources.

Customer Support ( Griha Shilpi)

ACL is implementing a model through which it imparts hassle-free housing solutions to give
the customer an access to branded and certified construction materials, trained contractors and
technical assistance. Thus ACL is trying to position itself as a one stop solution for everything.

IMPACT ON STAKEHOLDER

ACL believes in creating value for all its stakeholders. It communicates with its stakeholders
through multiple channels, from speaking regularly to workers at factories, to organizing
meetings with their suppliers, as well as participating in global industry initiatives and expert
conferences.

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STAKE- ENGAGEMENT METHOD OUTCOME
HOLDER

Shareholder & Annual General Meeting * Increased investor confidence

Investors Investor Grievance Cell * Shareholders better aligned with the
Board Meetings/ vision and mission
Communications Annual Report of ACL

Dealers & Grihalakshmi Conference * Elimination of child labour in the

Suppliers Annual Meet supply chain
Marketing Meets * Increased dealer/supplier support
Channel Satisfaction Survey * Transparency in procurement
Project Procure process

Customers Customer Support Group Camps, * Increase in customer satisfaction

Workshops, Seminars, Individual * Right product and service solution
Site Visits * Better understanding of the
ongoing construction by the
customer
* healthy interaction with the
customer

Employees Employee Engagement Survey * Better trained and skilled

Magazines - I CAN, I SIGHT employees
Department specific e- * Improved health of the employees
newsletter, Departmental specific * Job satisfaction of employees
MEETS, Induction * Overall development employees

Community & Ambuja Cement Foundation * Integrated development

Society Social Engagement Scorecard

Government & Compliance To Laws * Healthy relation between the

Regulatory Representations to proposed company and government
Authority legislations * Increased support from the
government

Media Press Briefing * Transparency between the

Invitation to events company’s mission and media
* Increased confidence of media on
the company

Construction Ambuja Knowledge Initiative, * Exchange of Knowledge

Professionals Ambuja Technical Literature * Professionals understand the use of
Series materials and methods for
sustainable construction

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 ANALYSIS OF THE SUSTAINABLE ACTIVITIES

In our analysis of Ambuja Cement we found that the firm has worked towards
implementing its vision to be the most sustainable company in the industry in many
ways.. The break up of the company’s spend on CSR activities is depicted in the
following chart.

MILLENNIUM DEVELOPMENT GOALS

ACL through its CSR activities has tried to achieve various MDGs. We have tried to map
the CSR activities with the MDGs.

MDG 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

ACL has greatly tried to promote education in its surroundings by introducing a number of
programmes to make study interesting and meaningful for children. Balmitras in school are
appointed as children’s friend for joyous learning. ACF also runs the Ambuja Manovikas
Kendra, a special school for intellectually challenged children. Though these interventions
help to achieve MDG 2, this can also be seen as a strategic CSR where the company is trying
to train their future workers. The children living in areas where factories are located would
be willing to work with ACL in future. Thus through this intervention on which the company
is spending 32% of its CSR fund is a smart way to look at the company’s future need of
skilled employees and labour.

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MDG 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN

ACF helps women to develop soft skills and provides them with small funding and
encourages women to start their own entrepreneurial venture. This can be seen as a pure
philanthropy. ACF has changed the lifestyle of numerous young girls by providing them an
opportunity to be skilled and support their families.

MDG 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES

Creating awareness about HIV has always been of major importance to ACL. Regular
programmes are held with truckers raising awareness on HIV & AIDS. Though this looks
as pure philanthropy but we think that these steps are taken so that the employees who are
already trained and on whom money have been spent are not infected with the deadly virus.
The company wants to retain their skilled workers.

MDG 7: ENSURE ENVIRONMENTAL SUSTAINABILITY

ACL has tried to ensure MDG 7 through various initiatives. Be it use of green fuels,
reduction of CO2 emissions or reduction of water usage. ACL invested in Waste Heat
Recovery System (WHRS) of 6.5 MW at Rabriyawas and 7.5 MW of Wind Energy.
Nearly 4% of ACL power needs was generated using Biomass and Wind in 2013.
These are part of strategic CSR as they help in minimizing the overall cost for the company.
ACL aims to reduce its power and raw material consumptions through all these initiatives
and thus gain greater profits in future.

Apart from these CSR activities with which Ambuja Cement has been associated, there are
a few cases and controversies which show the shortcomings of Ambuja. These shortcomings
are as follows:

1. An industrial incident at Ambuja Cement’s plant in Balodabazar district,

Chhattisgarh, had claimed the lives of five factory workers. Local press reported that
the fatalities occurred due to a fly-ash hopper situated on the fifth floor which was
allegedly overloaded during a maintenance operation. It thus collapsed and crashed
four floors below. Thus though there is a policy of Zero harm in ACL, we can see
negligence on part of the company.

2. At Vadnagar Village in Gujrat, Out of 171 acres, Government allotted 141 acres to
Ambuja Cement for mining, 10 acres was Government plot, and 20 acres reserved.
Ambuja Cement illegally used this reserved land for mining. Because of this, farmers
had less land and animals had no place to graze. Gir Somnath mines and mineral
department had put a fine of 3.5 crores on Ambuja Cement. But, according to media
reports, this fine was very less for such crime. There were also reports saying that
ambuja cement may have bribed the mines and mineral department.

3. ACL portrays surface mining as an advanced way of sustainable development, but

surface mining can have adverse effects on environment as it can severely erode the
soil and reduce its fertility. It pollutes water and drains underground water reserves and
dust particles from mining are a significant source of air pollution, drains underground
water reserves and dust particles from mining are a significant source of air pollution.
4. At Kodinar, Junagadh, ACL took out a lot of water for its own use because of which
water level went down a lot and the eco-system got disturbed. Even farmers were

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 affected because of this. ACL aims at becoming 5 times water positive by 2020 but
we can clearly see that it is using excess water for making cement.

5. Bhekeshwar Dam in Gujarat was completed in 2013, the cost for which was shared
40% by Ambuja Cement and 60% by Gujarat Govt. The creation of dams disturbs
the ecology in the area. People get relocated and aquatic loss is incurred. It is believed
that Ambuja Cement did not pay appropriate compensation and did not provide
proper relocation to the people living in those areas.

KPMG TRUE VALUE

Ambuja Cement took a bold step and integrated with KPMG to get the true value of its
company. It used the tool to get a holistic idea of its CSR activities and its wider impact on
the society.
The true value analysis of Ambuja Cement revealed a net-positive social value and a
negative overall environmental impact. The three major sources of environmental
negatives identified by KPMG were Greenhouse Gases, water extraction and land
disturbances. In the sustainability report ACL has mentioned that its total water withdrawal
reduced by about 15.3% in 2013 as compared to 2012. Also ACL mentions that from 1990
to 2013 it has reduced CO2 emissions by 28%. But
KPMG reports mentions things otherwise. The true value analysis clearly indicates that
Ambuja Cement lacks in major areas of environmental sustainability and all the figures
provided by ACL in its sustainability report might not be true. In Societal values ACL
lacks in human health. Thus the zero harm policy of ACL seems to be a whitewash against
facts.

KPMG also found that for every rupee invested by Ambuja Cement Foundation in 2012,
8.5 rupees were generated in socio-environmental benefits. Thus the CSR activities of
ACF and ACL are carefully chosen and is a great strategy to maximize their profits. It
shows that all the CSR activities of ACL are a part of strategic CSR.

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References

• V. Kasturi RanganLisa Chase and Sohel Karim (2015), THE TRUTH ABOUT CSR

URL: https://hbr.org/2015/01/the-truth-about-csr
• VtvGujrati (2014), GUJARAT AMBUJA CEMENT COMPANY AGAIN IN
CONTROVERSY, GIR – VTV
URL: https://www.youtube.com/watch?v=h-PdDqy103w
• Ambuja Cements (2014), Sustainability development report 2013
• VtvGujrati (2014), GUJARAT AMBUJA CEMENT COMPANY AGAIN IN
CONTROVERSY, GIR – VTV
URL: https://www.youtube.com/watch?v=VZgoN_Gslcs
• The Strip Mining Handbook (2009), THE ENVIRONMENTAL EFFECTS OF
STRIP MINING
URL: https://sites.google.com/site/stripmininghandbook/chapter-2-1

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