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GOVERNANCE |
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| We run our business with a high degree of transparency and advocate strict adherence to ethical standards in all stakeholder interactions. With operations in multiple countries, a business that is built around diverse natural resources and a team drawn from several nationalities, we realise that we run a business of great complexity. That is why, our Board of Directors emphasises on the importance of a robust governance framework that is both locally responsive and internationally compliant. We have well-defined reporting structures with clearly allocated responsibilities and responsive feedback mechanisms to ensure that we operate transparently, efficiently and with integrity. |
| Our Board complies with the UK listing requirement according to which, at least half of the Board, excluding the Chairman, should comprise independent Non-executive Directors. At the date of this Report, the Board includes eight members comprising three Executive Directors and five independent Non-executive Directors. As a result, there are adequate safeguards for the protection of minority shareholder interests. The Board comprises Directorsfrom diverse international backgrounds combined with a wide range of professional and sector-specific experience. This ensures that we have a balanced Board with the right skills and experience to contribute fully to effective decision-making. The Board is responsible to shareholders for ensuring that the Company is appropriately managed and achieves its objectives. |
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| COMPOSITION OF GOVERNANCE BODIES |
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AGE GROUP |
EMPLOYEE FROM
MINORITY GROUP |
EMPLOYEE FROM
NON-MINORITY GROUP |
|
LESS THAN
30 YEARS |
BETWEEN
30-50 YEARS |
ABOVE
50 YEARS |
| 0 |
1 |
7 |
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| The details of the Board's responsibility, composition, training and evaluation is detailed in our Annual Report. |
| We abide by internationally accepted standards and good practices such as ICMM, IFC and OECD guidelines. Our ‘Code of Business Conduct and Ethics’ provides a set of principles to guide our employees, while our Sustainable Development Framework outlines best practice standards and policies that encourage consistent improvement across functional areas. |
| Our governance philosophy is steered by a ‘looking beyond compliance’ approach. This helps us plan, design, operate and close operations in a manner that enhances sustainable development. We regularly engage international consultants to audit our sustainability practices and provide feedback on areas where we are doing good, and areas where we need to improve. |
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CODE OF BUSINESS CONDUCT AND ETHICS
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| Our Code of Business Conduct and Ethics meets and exceeds the laws of the land and is rigorously followed by all employees across the organisational hierarchy. Our listing and reporting requirements in the UK raises the bar on various governance aspects such as: |
| Human Rights | Insider Trading | Political Contributions
Conflicts of Interest | Confidentiality | Fraud, Bribery & Corruption |
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| 131 |
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whistle blower cases
reported & resolved |
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| 'Ethics and Integrity' is a material issue for both, our management team and stakeholders. We are committed to a zero tolerance approach towards fraud, bribery and corruption. |
| The Code was updated to comply with the UK Bribery Act, which prohibits payment and receipt of bribes directly or indirectly through associated persons. |
| We plan to review and update the Code again in the forthcoming period to reflect the recently introduced UK Modern Slavery Act 2015, where appropriate. Other relevant policies like our Insider Trading Prohibition Policy and Antitrust Guidance Notes relating to Disclosure of Sensitive Information etc., are publicly available on our website and are incorporated into contracts where relevant. |
| There is zero tolerance towards breach of code of business conduct & ethics. Employees are expected to adhere to the highest standards of integrity and even minute violations are responded with external investigation and prompt action. The Audit Committee assists the Board in maintaining and monitoring the integrity of the Group’s financial statements, assessing the effectiveness of the Group’s risk management system and internal controls, and the independence and objectivity of the external auditor. In order to carry out its duties effectively, the Audit Committee receives high quality and detailed information from management, and internal & external auditors, which is reviewed and discussed by the Audit Committee as required. All business units are periodically reviewed for risks related to corruption and bribery. |
| Under our Whistle Blower Policy, employees and external stakeholders are provided a mechanism (toll free number, email id and a reporting portal) to anonymously report inappropriate behaviour. Between January and December 2015, 131 whistle blower cases were reported and resolved, of which 58 were upheld and found correct, resulting in appropriate disciplinary actions against our employees, contract workforce and vendors including separation, warning, counselling and transfer. |
| To ensure that all employees are well-versed with our Code, mandatory training is provided for new recruits, and refresher workshops for anti-corruption policies and procedures are conducted for relevant employees. |
| This year, we provided more than 42,200 hours of training on Code of Conduct including Human Rights aspects. |
| As we lead by good governance in our areas of operation, we also prescribe the same standards of ethics to our associates across the value chain. Suppliers & contractors being significant contributors to our performance footprint, we have institutionalised a dedicated accountability mechanism for them. |
| Supplier Code of Conduct, Supplier and Contractor Management Policies, and Supplier Screening Checklist encourage business partners and suppliers to adopt principles and practices comparable to our own. |
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FRAMEWORK & IMPLEMENTATION
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| The Framework |
| We rolled out our Sustainable Development Framework in FY 2012-13. Since then, it has continuously evolved to remain in step with emerging global standards, varying local contexts and evolving stakeholder expectations. |
| Over the years, it has served as an effective tool to unify Vedanta's sustainability approach across diverse geographies and businesses. While the framework works as a standard, it also allows us the flexibility to fine-tune responses in dealing with local challenges and sensitivities. |
| The Framework governs conduct of all our businesses. Every decision we take, is sieved through the indicators of the Framework to ensure that we remain safe, ethical and transparent at all times. To ensure compliance with the Framework, we have put in place an internal risk management tool namely Vedanta Sustainability Assurance Programme (VSAP). As a result of a follow-up audit process, review and implementation of action plans, all businesses have charted sustainability objectives in line with our Framework requirements and monitor performance at regular intervals. |
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| Our Sustainable Development Framework is aligned with major global guidelines including International Finance Corporation and International Council on Mining & Metals (ICMM) guidelines. It is an integral part of our business strategy and helps ensure we conduct business in line with our Company values of trust, entrepreneurship, innovation, excellence, integrity, respect and care - whatever the jurisdiction. |
| The Implementation |
| Our accountability towards sustainable development runs deep within the organisation. Our Board of Directors provides strategic perspective and steers the business in line with the commitments made to various stakeholders. Our Sustainability Committee and Executive Committee regularly review the sustainability objectives, strategy and performance of the Company. These committees are ably supported by our Corporate Sustainability Team. Complementing these principal committees, are our additional committees as well as dedicated functions at the business and location level. |
| The implementation of the Framework will not just advance our business
outcomes, but also enable sustainable development of our neighbouring
communities. We therefore fully recognise the principles of sustainable
development as a material driver of good practice, sustainable business
and stakeholder satisfaction. |
| Sustainability training has been institutionalised across the Group. HSE and CSR modules are part of the training calendar for each employee. Over and above this, training on sustainability framework is offered to employees as and when required. Various e-learning modules and refresher training courses are also offered round-the-year. Last year, we provided 805,324 man-hours of HSE training out of which 175,034 man-hours were slotted for employees and 630,290 man-hours were dedicated for contract workforce. |
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| Our Board comprises eight Directors, and more than 50% of them are independent. |
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| 805,324 |
| man-hours of HSE training provided |
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 |
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| No. of People with Sustainability Responsibilities across the Group |
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| Ensuring sustainable development is a key business responsibility at Vedanta and specific resources have been dedicated across businesses towards this purpose. Expected outcomes are clearly defined at the beginning of a financial year. Monitoring and management mechanisms ensure continuous improvement. Continuous internal auditing offers a quantitative view of achievements against objectives and keeps our sustainability development programmes on track. |
| The Framework is taking us closer to our goal of keeping sustainability inherent in all our business decisions. |
| Membership and Attendance |
| The Sustainability Committee comprises the following Directors and met on four occasions during the year. |
| Directors |
Euan Macdonald
Chairman |
Tom Albanese |
Kishore Kumar |
Katya Zotova |
Roma Balwani
Member Secretary |
No. of
meetings
attended |
4/4 |
3/4 |
4/4 |
1/1 |
4/4 |
| Percentage
attendance |
100% |
75% |
100% |
100% |
100% |
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THE SUSTAINABILITY COMMITTEE REPORT
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THIS REPORT PROVIDES DETAILS OF THE ROLE
AND RESPONSIBILITIES OF THE SUSTAINABILITY
COMMITTEE AND THE WORK IT HAS UNDERTAKEN
DURING THE YEAR. |
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EUAN MACDONALD |
| Chairman, Sustainability Committee |
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| The resources that are mined not only contribute to the growth of nations, but are essential for developing host communities. Sustainable development is a core element of Vedanta's strategy and supports its growth as a diversified natural resources Company. Vedanta's Sustainable Development Model and Framework embedded in the operations, are helping the Company ensure a sustainable future of our business operations, meeting our growth targets, and creating long-term value for all stakeholders. |
| I am saddened to report that we lost 12 of our colleagues this year. There is no excuse for this and management is very committed to eliminating fatalities. We have shown good improvement towards controlling both leading and lagging indicators, and I assure the Board that we are committed to do much more to achieve zero fatalities. Vedanta has implemented and put forward behaviouralbased and technical programmes such as implementation of safety standards, job risk assessment and training workshops, personal commitment to not ignore any unsafe act or condition, among other initiatives, which I believe will show good results. |
| This year, the Company maintained its focus on reducing its environmental impact on air, water and land use. The significant improvements and adoption of best practices in resource management, biodiversity and site closure practices along with awards like CII - Sustainable Plus platinum label, National Energy Conservation Award and Global IOD Awards for Excellence in Corporate Governance and Sustainability are testament to the focus and improvement Vedanta has towards environment sustainability. |
| Vedanta believes in the free, prior and informed consent right of the
community and the Sustainability Committee believes that transparent
communication with civil society is essential to enlighten all stakeholders
on Vedanta's business operations and community expectations. I am
delighted to see that the Company, upon the Committee's suggestion, is
engaging with wider groups both at corporate and business levels, and
organised its maiden Sustainable Development Day in London, and NGO
and partners meet in India and Africa implementing the local stakeholder
engagement plans at businesses. |
| I continue to be inspired by the dedicated efforts of the Vedanta team; listening to their ideas is invaluable. Vedanta's success has been built not just by executives in boardrooms but by talented people across the Group who are eager to use innovation and technology to showcase their mettle. |
| Climate change is a rapidly growing concern globally, and recent record temperature trends will likely accelerate this concern. We feel this will require multiple solutions, including the innovative technology to improve energy efficiency and find more carbon neutral solutions. It is vitally important that every country provides the right incentives for the development and diffusion of climate-friendly processes and practices. Vedanta has met its energy savings target this year and is on a continuing journey to improve all aspects of sustainable development. I look forward to reviewing the Company's enhanced approach toward climate change. |
| I would also like to welcome Katya Zotova, who joined the Vedanta Sustainability Committee this year. She brings a wealth of oil & gas sector experience and her perspective will be invaluable as we go forward on this journey. |
| Summarised below are key areas of intervention of the Sustainability Committee: |
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| FRAMEWORK |
SAFETY &
OCCUPATIONAL HEALTH |
ENVIRONMENT |
SYSTEM DEVELOPMENT &
PERFORMANCE REPORTING |
COMMUNITY RELATION
& ENGAGEMENT |
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Review progress made
on Sustainable
Development Model
and Framework |
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Review progress made
on Sustainable
Development Model
and Framework |
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Review progress made
on Sustainable
Development Model
and Framework |
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Review Group safety
incidents and
performance |
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Oversee implementation
of action plans with
respect to fatal accidents |
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Ratification of Group's
safety performance
standards |
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Review of Safety &
Occupational Health
interventions |
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Oversee the Group's
initiatives to reduce
specific water and
energy consumption |
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Review carbon
benchmarking and
renewable purchase
obligation |
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Review fly ash
management plans
and statistics |
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Review biodiversity
initiatives and action
plans |
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Review performance
evaluation of the
Sustainability Committee
and terms of reference |
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Review and approve the
Group's Sustainable
Development Report |
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Update on Sustainable
Development Goals and
UK Modern Slavery Act |
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Oversee implementation
of strategic CSR projects |
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Review progress on the
Group's Human Rights
initiatives |
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Review important
stakeholder engagements |
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To view the complete Sustainability Committee Report,
refer our Annual Report FY 2015-16 |
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RISK MANAGEMENT
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| Our Risk Management Framework has been designed to identify, enumerate, monitor and address diverse and complex risks that challenge the sustainability of business. |
| We use a Turnbull Risk Methodology to identify potentially significant business risks and detail them at the site or location-level. These risks are then collated and reviewed first at the company level, and then at the corporate level. Business priorities are determined at the corporate level, taking into account all three dimensions of sustainability i.e. economic, social and environmental. |
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| OUR RISK MANAGEMENT FRAMEWORK |
| The risks that we monitor include those with the potential to cause significant environmental, social and economic impact, dilute reputation/ brand equity, trigger litigation, contravene statutory principles and impact the interests of our stakeholders. Each quarter, our Risk Management Committee formally reviews risks, examines the suitability of the mitigation measures and advises the Board-level Audit Committee on the same. |
| Key sustainability risks, in no order of priority, associated with our businesses are detailed below. These risks also form part of our principal risks and uncertainties identified by the board through Risk Management Committee. The impact may vary by location and business. |
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| Fluctuating Commodity Prices |
| The current year witnessed price volatility in several commodities that we produce. While our diversified portfolio helped us maintain a relatively stronger position, we continue to rationalise capital and operating costs across the company to regain some of the economic ground eroded by falling prices. We recognise that the sustainability measures are in the long-term interests of the company and thus they remain undiluted across this cost reduction drive. |
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| Political, legal and regulatory risk and advocacy |
| Change in policy or laws of the land can impact our businesses. While these are difficult to predict, we keep our ear to the ground and continually monitor regulatory and political developments. We engage with local communities, industry bodies and the government to communicate and demonstrate our commitment to responsible business conduct. |
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| License to Operate |
| Establishing and maintaining strong and lasting relationships with stakeholders is essential to our acceptance and growth as a sustainable business. We do this by integrating sustainability objectives into long-term business planning. Our teams work with local communities to establish relationships based on trust and mutual benefit. In keeping with prevailing legal and government requirements, we seek local consent and in principle acceptance for our operations that require us to access natural resources. |
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| Talent Shortage |
| Any significant loss of key personnel due to attrition or other causes, or reduction in the pool of expertise within the company could have a material effect on our businesses. We continue to invest in initiatives to widen our talent pool and seek ways to continually enrich our cumulative skill base in line with technology developments. |
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VEDANTA SUSTAINABILITY ASSURANCE PROGRAMME
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| Following the launch of the Vedanta Sustainable Development Framework, we recognised a need to regularly review and measure the way in which our diverse businesses implement the Framework. To ensure consistent and objective assessments in this regard, we launched the Vedanta Sustainability Assurance Programme (VSAP). Developed
in-house with the help of external consultants in FY 2012-13, VSAP has been instrumental in making sustainable development intrinsic to every activity across the Company. |
| VSAP is now an annual assurance process led by Management Assurance Team with the help of external consultants, with clear tracking of results by the Sustainability Committee and the Executive Committee, which in turn report to Board. The respective businesses define and implement action plans to address any gaps that are identified, and the progress with respect to those action plans is periodically reviewed, evaluated and documented. |
| We periodically review and update the VSAP scoring methodology to give more weight to some priority aspects. For example, as part of this year's VSAP process, we have modified the scoring methodology to give special consideration to the six Safety Performance Standards, reflecting our focus on Group's safety performance. We use a scoring system and allocate a score to each operation for every aspect like environment, health, safety, community and human rights. Success stories are also identified and highlighted, as part of creating opportunities for cross-learning and shared across businesses via HSE and CSR forums, meetings, and other channels. |
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| Over the years, VSAP has evolved with marked effectiveness in below areas: |
| Accountability Enhancement |
- VSAP scores are discussed at Sustainability &
Executive Committees' meetings
- VSAP and safety performance is linked
to the remunerations of all employees
including business leaders
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| Standardised Process across Businesses
and Geographies |
| Robust Process of CAPA Validation |
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| For more information visit our group companies |
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