April 2016

'Fostering an ethical environment begins at the top'

Tata Power has been named one of the World’s Most Ethical Companies for 2016 by the Ethisphere Institute, USA, for the third successive year. Anil Sardana, CEO and MD of Tata Power, shares his views on how the company inculcates a culture of ethics that translates into transparency, integrity, compliance and ethical conduct across all levels within the organisation, and on the company’s renewable energy portfolio. 

Tata Power has been honoured by the Ethisphere Institute for the third time in a row. How do you continue to raise the bar on ethical practices and corporate behaviour in an environment of competition and regulation?
Tata Power constantly works towards fostering an ethical environment through senior leadership involvement, training and communication. We not only adopt best practices from other companies, but also participate in the ‘group ethics summit’, as well as the Global Ethics Summit and Ethics Quotient survey conducted by the Ethisphere Institute. We also undertake the ‘leadership of business survey’ conducted by the Tata Business Excellence Group. The annual employee engagement survey is also a yardstick to monitor ethical practices.

Notwithstanding competition and regulation, we believe that dealing ethically with stakeholders is the best policy and affirm to the adage, ‘honesty is the best policy’, and our stakeholders — be they consumers or government regulators — have applauded us for it.

What have been Tata Power’s key tenets in building corporate character, trust in the marketplace and business success?
Business ethics, corporate governance, sustainability, community relations and becoming an employer of choice, along with providing clean, competitive, abundant and uninterrupted power supply are Tata Power’s key tenets in building corporate character and trust in the marketplace.

How does the company foster a culture of ethics and transparency at all levels, especially given Tata Power’s geographical spread across continents?
At Tata Power, fostering and sustaining a culture of ethics starts right at the top. The senior leadership exhibits integrity of purpose and encourages a culture of honouring agreements and of being fair, open and transparent in business dealings. Employees and associates make a commitment to adhere to the Tata Code of Conduct, which is followed in letter and spirit.

The company has a framework in place to foster ethical values. The CEO and MD is the chief ethics officer, who is supported by the chief ethics counsellor and head of ethics. In each division and important location, an employee is designated as the local ethics counsellor. This structure helps to cascade the ethics message to the last rung in the organisation.

Our whistle-blower policy and process audits enable immediate corrective or preventive action against violations of ethical conduct. Concerns and complaints are registered and the investigation is monitored centrally. The outcome is published as knowledge sharing for the benefit of stakeholders. During annual appraisals for promotion, an employee’s ethical conduct is an important assessment parameter. Every year, the company observes Ethics Week from March 3-9 to create awareness about the importance of ethics in the workplace.

By when do you envisage energy consumption in the country to tip in favour of clean energy?
Currently, thermal power is predominantly used in the Indian power sector. With feed-in tariff reaching parity with the grid, distribution companies (discoms) are expected to procure a greater amount of clean power. As net metering guidelines of state regulators promote power from renewable sources, the sector will witness significant increase in renewable energy consumption in the next 5-10 years.

What are the challenges faced in generating renewable energy?
Some of the major factors that create hindrances in the generation of renewable energy are payment delays due to poor financial health of discoms; inconsistent policies across states for wind, solar and biomass power generation; delays in land acquisition and obtaining forest land use approval; and ‘right of way’ issues. Environmental concerns, rehabilitation and resettlement of project affected, and gaps between investigations and field realities are other factors impeding renewable energy projects.

Could you spell out some of the initiatives undertaken by the company to combat climate change and reduce its carbon footprint?
Tata Power’s sustainability model is based on ‘leadership with care’. The four elements of the model are care for the environment, community, customers/ partners and people. The company has launched the ‘Greenolution’and ‘Be Green’ campaigns to encourage and implement green and sustainable actions through stakeholder and public participation.

The ‘green manufacturing index’ introduced by the company monitors environmental quality parameters — statutory and non-statutory — at its operating divisions. It has also developed the ‘corporate sustainability protocol’, applicable to all operating divisions, communities and offices, to address environmental and social issues.

Tata Power is also working on a clean technology interface with American Electric Power and the European energy major Vattenfall — a leader in the Combat Climate Change global initiative. The long-term goals are to augment the installed capacity of no-carbon power sources and reduce carbon dioxide intensity.

Exploring options to expand its solar portfolio through greenfield projects and acquisitions within and outside the country, Tata Power invested in an Australian company [Sunengy Pty] to build the first floating solar plant in India, which is operational.

In 2015, to further strengthen its green energy portfolio, the company restructured its renewable assets to carve out 500MW to Tata Power Renewable Energy and its subsidiaries.

What are Tata Power’s future development plans in the clean energy sphere?
Today, Tata Power’s total installed capacity from clean power stands at 1,630MW, which includes energy from hydro, solar, wind, geothermal and waste gas generation. The company acquired a 30MW wind power project in Maharashtra’s Sangli district and is in the process of acquiring land in Maharashtra, Rajasthan, Gujarat, Andhra Pradesh and Karnataka to develop solar and wind projects.