“Sustainability is no longer just about minimizing our risks: it is about maximizing our potential. Birla Carbon’s sustainability journey has been all about realizing this potential."
The importance that Birla Carbon places on sustainability is signified by its presence as an integral part of our stated vision, which is “to be the most respected, dynamic and sustainable global carbon black business.”
With every passing year, we are able to further explore the finer nuances of sustainability, both as Birla Carbon, the world’s largest carbon black producer and as the Aditya Birla Group, its parent organization. Sustainability is no longer just about minimizing our risks - it is about maximizing our potential. The Birla Carbon sustainability journey is all about realizing this potential and creating new opportunities.
Birla Carbon was the first business in the Aditya Birla Group to establish the role of Chief Sustainability Officer (CSO), who drives the sustainability agenda at Birla Carbon. Similarly, Birla Carbon has been the first in its sector to passionately formulate a sustainability agenda and publish the first Sustainability Report. No wonder, therefore, Birla Carbon is now recognized by its customers and is invited to engage in dialog and joint development programs to address industry issues around sustainability. We have taken part in several such exercises to help define materiality strategies in FY2016 with leading global customers. Industry forums are also taking note of our sustainability commitment.
Our employees too, play a vital role in recognizing and meeting sustainability challenges. For example, our employees are beginning to embrace substantive changes to our approach to safety. We can see the results with Birla Carbon’s recording its best year ever for safety performance. Furthermore, our employees are getting younger – 30% are currently under 40 years-old. The younger generations are more open to embracing change and are more conscious of their responsibility towards the environment and the larger community. They will drive our move towards greater sustainability, speeding the adoption of newer standards within Birla Carbon. We are making necessary investments to make them the Champions.
We continue to work to develop better relationships and connect with the communities we operate in. Birla Carbon’s corporate social responsibility (CSR) programs vary depending on where we operate and the needs of the relevant community; we do not have a cookie-cutter approach to our community engagement, but deploy tailor-made initiatives, involving local stakeholders to make these projects sustainable.
By being part of the Aditya Birla Group, Birla Carbon is able to share resources and best practices across sustainability issues. We both draw on and contribute to the Group’s sustainability vision as characterized by our Chairman, Mr. Kumar Mangalam Birla: “By 2017, the Aditya Birla Group endeavors to become the leading Indian conglomerate for sustainable business practices across its global operations, balancing its economic growth with environmental and societal interests.”
Birla Carbon, together with the industry at large, is facing serious headwinds due to low oil prices, new regulatory environmental standards, currency instability, and political uncertainty. Nonetheless, we are committed to harnessing our passion and expertise to enable us to better serve our customers. We will continuously innovate our manufacturing practices and business process to create unique value for our stakeholders. This innovation also allows us to meaningfully contribute to the 17 Sustainable Development Goals (SDGs) set by the United Nations (UN). We are committed to supporting the outcomes of COP21; our continuous improvement in converting carbon to carbon black is just one example of how we are working in this area.
I invite you, as you go through our fourth Sustainability Report, to identify opportunities where we can contribute more and be more effective.
“We continue to make good progress on our sustainability goals while refining our approach, even though the global business environment has changed dramatically.”
We have been reporting on our sustainability efforts for several years and, over this time, Birla Carbon has evolved: we continue to make good progress on our goals while refining our approach. However, the global business environment has changed dramatically, which has had a big impact on our operations, as well as the pricing of our product. FY2017 is the right time for us to reassess where we are and in which direction we are going to make our business more sustainable.
The biggest external impact has been instability in the oil market, with prices falling dramatically over the last year. This has affected us in a number of ways, such as restructuring our operations in Europe and North Africa to adapt to new conditions. We have also been affected in ways which are not necessarily obvious. For example, although our plants use a lot of oil, we also generate electricity, which we use in our own operations or sell to local utility companies. In some parts of the world, such as India, local power boards are requesting that we no longer produce as much energy as we have, because they have reached capacity. This has an impact on what we do – on how we run our operations, and in how and where we invest.
This poses a lot of questions for us. In general, low energy prices tend to spur consumption, while high prices hinder it. Energy conservation tends not to be a priority when prices are low. Should we try to sell more energy or is there an alternative? Should we just be looking at how to be more efficient - or is it time to look ahead? We are reassessing our sustainability targets for the longer term – and how we are trying to meet them.
Adapting our Business to Market Changes
Although markets are in a state of flux, we can predict steady growth for our industry. As long as vehicle demand grows, there will be demand for carbon black. We continue to ensure that we can produce carbon black by investing in our business: we currently spend US$50-70 million per year on our facilities. However, around the world, more attention is increasingly being paid to environmental issues, such as smog, pollution and greenhouse gases.
One such place is China, where new regulations should be in effect for all companies by 2018/19. This has had an immediate impact on our new greenfield plant in Jining, which, when it starts operations in FY2017, will be fully compliant with the new regulations and have the lowest environmental footprint of any carbon black facility in the world.
Our Achievements in FY2016
Best Safety Year
Operating safely and driving safety are core values for Birla Carbon and FY2016 was the safest year in our almost 170-year history. Safety is more than just a company value: it is a personal initiative and commitment that each individual at Birla Carbon is expected to make.
Embedding Ethical Business
Another personal commitment that we ask our employees to make is to ethics. Our continued aim is to ensure that our employees are trained in our Code of Ethics and they understand the behavior that we expect. In FY2016, 100% of our employees were trained in the Code of Ethics. We have also updated our Terms and Conditions for working with suppliers, to include a paragraph on our Code of Ethics and the behavior that we expect our partners to comply with. The new Terms and Conditions will be rolled out early in FY2017.
Minimizing our Environmental Impact
We have made good progress on the environmental front, such as continuing to reduce the CO2 emission intensity of our operations by a couple of percentage points; we have also made progress on recovering the energy we generate. Furthermore, while we have had success producing fewer air emissions, we have also generated greater quantities of associated waste. In terms of water, we’ve made significant investments in ensuring that all employees have access to clean drinking water in our facilities by 2018 through the WASH pledge.
Good Relationships, Sustainable Operations
We have aligned our sustainability strategy to the Aditya Birla Group’s three-step agenda for ensuring long-term sustainability, which focuses on responsible stewardship, stakeholder engagement and future-proofing.
Responsible stewardship is an approach that we have adapted across our focus areas. We continue to seek efficient product development that can meet our customers’ needs, while minimizing our environmental and enhancing our social impact.
We seek to enhance our stakeholder engagement by more closely aligning to our customers’ sustainability strategy and by building better relationships with other groups that we impact. This is an area we are still working on.
We need to start looking at future-proofing, or how we prepare for coming changes to the market. We are working to ensure our sustainability over the long term by assessing the impact of wider megatrends on our business and industry.
It’s one thing to talk about goals and it’s quite another to present demonstrable, continued progress. I would like to thank you for taking the time to read our Sustainability Report, our opportunity to show you how far we have come on our sustainability journey.
“By continuing to take proactive steps, we can ensure that Birla Carbon is the preferred supplier for our customers – and the preferred employer for our people.”
At Birla Carbon we are committed to remembering our past and building our future. We have been in business for over 170 years and there are many reasons why – particularly our committed focus on our customers, employees and shareholders. We want to be here in the long term and we are actively working toward this goal. By continuing to take proactive steps, we can ensure that Birla Carbon is the preferred supplier for our customers, – and the preferred employer for our people.
As a key member of the Aditya Birla Group, we are fortunate to be part of a wider organization that has focused on being better since it came into existence. This focus has influenced our own efforts; Birla Carbon’s corporate social responsibility (CSR) activities are designed to bring positive change to the lives of many around the world. On a personal level, I find it rewarding to see the communities in which we operate change for the better, thanks to our involvement and leadership.
Engagement: a Preferred Partner
Sustainability is a journey for us all. As we proceed on our path to sustainable operations, we are constantly learning and sharing what we learn – not only with other companies within the Group, but also with our peers, who we engage with in platforms such as the Sustainability Leadership Forum and the World Business Council on Sustainable Development (WBCSD).
One of the most rewarding aspects of this journey has been the opportunity to engage with our customers in new and interesting ways. Together, we are developing mutually beneficial approaches to problems that can have a major impact on our shared world. For example, Birla Carbon’s product lifecycle assessment enables us to share concepts and information that can help mitigate not only our own impact on the environment but that of our customers as well. We want our customers to think of us as a supplier who they engage with on sustainability, now and for many years to come. We hope that our customers will see us as more than a preferred supplier: a preferred partner.
Protecting and Inspiring our People
We are very proud of the impact that our sustainability initiatives have on the lives of our employees. It is our goal to make sure that each and every employee returns home safely every day. We are making giant strides in this area; safer employees and our record safety indicators are the tangible result, but it is the underlying work and mindset that is truly impacting the lives of our employees. The individual commitments to safety that we promote apply not only at work but at home.
Furthermore, through our community outreach programs we are able to help our employees participate in the joy of helping others. It is our hope that our employees react positively to the commitment, effort and resources that we at Birla Carbon and the Group devote to our communities. We also want to remain the employer of choice; we believe that our sustainability initiatives show that we are as committed to sustainability as our employees are.
We intend to be here for our customers for many years. That requires intelligent forethought and a commitment to action. As an organization, our sustainability efforts are designed to reflect the better side of ourselves – as a company and as people. Birla Carbon has a proven track record of performance, driven by a constant desire to be and do better. We hope that our Sustainability Report shows the progress that we have made.