ITC LTD: TOWARD A TRIPLE BOTTOM LINE PERFORMANCE CASE

Setting: Geographic: India Industry: Tobacco Event Year Begin: 2010 Antony Jeffrey Felicita Florence C Manideep Mugata Sabyasachi Sahu Vishnu S 13MBA1004 13MBA1021 13MBA1038 13MBA1054 13MBA1079

Abstract:

Opportunities and challenges in the cigarette industry in India. Tremendous opportunities for growth in the cigarette industry. Challenges Due to the health hazards associated with cigarette smoking, distortion in the tax system as applied to the cigarette industry, and restrictions on smoking placed by new legislation. Challenges in the market due to smuggling, contraband products, and other issues. ITC Limited as a dominant player in the industry with a significant dependence on tobacco and tobacco products promising to pursue the triple bottom line approach by focusing on economic, environmental and social value. There is a need for the company to decide on some directions for the future to live up to the promise of a triple bottom line approach. Any decision to stop producing and selling cigarettes has negative implications for the business. How does ITC Limited arrive at the right balance?

Learning Objective:

Raise awareness of issues regarding corporate social responsibility. The triple bottom line approach that argues that corporation should pursue economic, environmental and social value simultaneously is a perspective located somewhere in the middle of these two positions. No corporation works in an environment in which societal norms of corporate social responsibility are unambiguous and accepted by all without contest. As a result, organizations that want to pursue corporate social responsibility have to constantly engage with relevant stake-holding groups to arrive at a working consensus that allows the corporation to obtain the right balance among the various demands put on it.

ITC'S TRIPLE BOTTOM LINE - DEFINED

Enduring Value. For the nation. For the shareholder. ITC has always believed in creating enduring value through its businesses, and as such, focused on creating sustainable businesses and livelihood opportunities. Our efforts are to constantly achieve higher levels of Triple Bottom line performance - measured on our performance in economic, environmental and social terms.

Economic:

ITC is one of India's foremost private sector companies with a market capitalization of over US $ 22 billion and a turnover of US $ 6 billion ITC is rated among the "World's Best Big Companies", Asia's 'Fab 50' and the "World's Most Reputable Companies" by Forbes magazine, among India's "Most Respected Companies" by BusinessWorld and among India's "Most Valuable Companies" by Business Today. ITC ranks among India's "10 Most Valuable (Company) Brands", in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.

Total No. of Shareholders as on 25th January 2013: 4,22,223No. of shareholders in dematerialised form :3,84,819No. of shareholders in physical form :37,404

Social:
ITC employs over 26,000 people at more than 60 locations across India.

The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 4,22,223 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations.
ITC's businesses generate livelihoods for over 5 million people, and its globally recognized e-Choupal initiative is the world's largest rural digital infrastructure benefiting over 4 million farmers. ITC's Watershed Development initiative brings precious water to nearly 90,000 hectares of dry lands and moisture-stressed areas.

Environmental: Carbon Positive 7 years in a row Sequestering twice as much carbon as it emits. Water Positive for 10 consecutive years - Creating more rainwater harvesting potential than its net consumption. Solid Waste Recycling Positive Reusing/Recycling more solid waste than generated.

FMCGS, HOTELS,PAPERBACKS, AGRI, IT

PRESUMPTIONS

Yes he should progressively work towards winding down the cigarette business, he should narrow down the selling for clinical help. It should be sold to rehab centres. There should be certified dealers to sell the tobacco. The rules for the implementation of this should be made very stringent. The implications would be other cigarette manufacturers will take over the market but this also would give the company a good image. The company must stick to negative marketing of tobacco consumption in any form, thereby playing a role in reduction of its consumption.

There is no need to engage in counteracting the negative marketing, as the company is trying to reduce the production of tobacco. Yes, the focus must be shifted to profit earned from the export of tobacco.

THANK YOU