Integrated Thinking at Vedanta
Vedanta at a glance
Board of Directors
Stakeholder Engagement
Operationalising ESG within Vedanta
Market Review
Standalone Financials
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OPPORTUNITIES
A MULTI-FACETED APPROACH TO FUTURE-PROOFING
Global metal and mining industry is reshaping with rapidly-evolving externalities centred on decarbonisation, digitalisation, supply chain disruptions and market volatility. While necessitating change in the business model, these trends are expected to open up enormous potential and unleash mega opportunities. We are evaluating these trends to stay ahead of the curve and shape the future of our business.
ESG as a gateway to unlocking value
Globally, markets and stakeholders are increasingly prioritising ESG alignment. This presents an opportunity for companies, especially those in the natural resources sector, to think holistically, embed ESG in their strategy and allocate capital in accordance with their commitments. Such a strategic approach can help the Company to stay ahead of the competition and evolving expectations, besides creating long-term value for all stakeholders.
Vedanta response
ESG has long been a priority at Vedanta, and we continue to make sustained investments in it. Last year, we introduced a repurposed ESG strategy – ‘Transforming for Good’, based on the pillars of communities, the planet and the workplace. We have defined various goals and roadmaps as part of our ESG strategy, including net carbon zero, water positivity and a greener business model, which are contributing to scalable results and making our business more sustainable in the long term. Continuing this journey, in FY 2023, we have proposed a more holistic theme, ‘Transforming Together’, to initiate collective action for shared value creation.
Mapping benefits of circular economy
Global economies are gradually transitioning from linear to circular models, and metals and mining companies have a unique opportunity to lead this change. By building new capabilities and reconfiguring business models to incorporate circular initiatives like metals reprocessing, recycling or urban mining, early adopters stand to gain preferential access to responsible sourcing markets and investors. This strategic shift can also empower market players to influence downstream, lower costs and improve ESG scores.
Vedanta response
Progressing to greener business models with circular economy activities is part of our ESG strategy. We are undertaking R&D to identify newer ways to convert operational by-products into raw materials for application in other industries and internal consumption. We have partnered with Runaya, an emerging manufacturing start-up offering circular economy solutions, to improve aluminium recovery from dross up to 90%, and convert the residue into raw material for the steel industry. We are executing recycled copper projects using fire-refined high-conductivity technology. We are further working with cement companies and NHAI with an aim to increase HVLT waste utilisation to 100%.
Multiple safety layers for greater sustainability
Safety in mining has evolved, with four aspects – physical, psychological, cyber and cultural – becoming prerequisites for sustainable mining activities. While physical safety has improved, others are also gaining importance to ensure people feel valued and included to achieve job satisfaction. By prioritising all four aspects, natural resources companies can attract, engage, and retain diverse talent to drive their success.
Vedanta response
We have robust physical safety mechanisms in place supported by world-class practices, digital initiatives and regular training and campaigns. This is being further enhanced with the launch of HSE digital, an incident management module, to automate and improve working with incident records. A critical risk management (CRM) module is being rolled out covering three major risks.
We are also undertaking initiatives to target other safety areas. Psychological safety is being notched up by implementing initiatives to provide greater opportunities and an improved work environment for all, along with ensuring a zero-discrimination workplace. Cultural safety is ensured through complying with local regulations, standards and cultural practices. A security community of practice has been instituted that will work towards improving the connect with local communities.
Building an agile business model
Metal and mining companies depend on supply chains for various input raw materials to enable production, processing and services for daily operations. Supply chain security is therefore imperative to ensure the availability of inputs at the right costs. However, under the shadow of the COVID-19 pandemic and the Russia-Ukraine conflict, there are heightened challenges due to high transportation and logistical costs, labour and material shortages and increased prices.
Companies taking the initiative to fortify their supply chain by reassessing risks and implementing innovative practices and digital technologies, stand to benefit. Besides improved access to raw material supplies, these players can also unlock productivity gains to manage commodity volatility and increased costs. Such reassessment can open opportunities to sustainably reduce costs with measures like transitioning to renewable energy, innovations that make for a sustainable portfolio and implementation of strategic joint ventures for economies of scale.
Vedanta response
We are mitigating supply chain risks by undertaking vertical integration projects including acquiring coal mines and securing linkages to reduce import dependence. We are also strengthening inbound logistics. These efforts stand to reduce production costs.
We are further undertaking periodic vendor life cycle assessments to evaluate risks at every stage, and accordingly implement necessary actions.
To unlock productivity, we are focussed on achieving full capacity utilisation and improving operational efficiencies. Towards this goal, we have initiated the implementation of phase 2 digitalisation, which will make Vedanta a 100% automated and data-driven organisation. These initiatives will contribute to significant savings and productivity gains.
Employer of choice as a differentiator
Labour markets around the world have evolved following the COVID-19 pandemic. New ways of work have become a key job requirement for employees globally, as they now seek more flexibility, purpose, complete well-being, personalised career opportunities and inclusiveness. Companies that are investing in innovative ways to fulfil these value propositions are well-positioned to become an attractive employer. This is especially true for mining and manufacturing companies, where physical presence and conventional ways of working have ruled the roost for a long time.
Vedanta response
Transforming the workplace is a top ESG priority at Vedanta. We have increased our focus on diversity, equity and inclusion, health and safety, besides skill development for employees. We are aligning our business with the nation’s interest and the global exigency for addressing the issue of climate change, thereby creating opportunities for employees to contribute to nation-building and the betterment of communities and even the planet. We are breaking the gender barrier by encouraging women and LGBTQ+- friendly workplaces. We are also undertaking multiple programmes that support their career growth, in addition to using digital technologies to enrich their experiences.
Social impact for sustainable success
Globally, the indigenous communities have growing expectations for greater accountability and responsibility from corporates in exchange for the social licence to operate. They seek newer ways to connect with corporate and assign responsibilities for not only contributing to the local economy but also addressing social and environmental issues. Natural resources companies, operating near these communities, have an opportunity to unlock business value and establish themselves as a socially and environmentally responsible corporate. By establishing novel ways, these players can forge a deeper connect with the communities for a better understanding of their operations. By ensuring sustained engagement with communities and aligning priorities, their needs and expectations can be identified and fulfilled.
Vedanta response
Vedanta is proactively bringing meaningful development in the communities where it operates with multi-dimensional efforts to address their most urgent needs. Our programmes for healthcare and hygiene, livelihood creation, women empowerment, environmental protection and child well-being and education while uplifting the community, are also enabling us to fortify our relations with them. Vedanta strives to be the preferred developer of choice in most regions of its core operations. We are embedding their welfare at the core of business decisions and continue to seek innovative ways to empower 2.5 million families with enhanced skillsets and uplift 100 million women and children. We are further strengthening our connect with them, by adhering to globally accepted human rights practices. We have also established a dedicated community of practice with defined key results areas.
Digital leadership to unleash the potential
Automation, digitalisation and big data are revolutionising the way metals and mining companies operate. These methods are improving decision-making and the exploration and development of minerals with real-time information and a huge database. The ability to leverage the data using advanced technologies can help in many ways to unlock value across the mining life cycle, including better cost and asset utilisation and minimising environmental impact.
Vedanta response
Innovation is a key element of our strategy aimed at productivity, safety and sustainability. We are undertaking an organisation-wide digital transformation project, currently in phase-2, to become smarter and data-driven with a focus on smart operations and asset optimisation, workplace safety, logistics optimisation and enabling functions automation. Multiple tools like advanced process control, predictive analytics, asset performance monitoring and digital twin are being used towards these goals.
