TATA STEEL - Integrated report & annual accounts 2021-22

MATERIALITY

Prioritising issues key to value creation

We have been constantly working on improving and delivering on the ESG priorities identified by us through the findings of the pan-India materiality exercise that we conducted in FY 2018-19. The findings have been indicative of the future trends, potential business risks, and new business opportunities, and have been collated with inputs from stakeholders viz. customers, investors, suppliers, shipping and logistics partners, media, industry associations, government and regulatory bodies, employees including contract employees and union leaders and community representatives.

The findings of our materiality exercise have been classified into ‘Focus’ (high priority), ‘Track’ (medium priority) and ‘Discuss’ (low priority) categories, based on stakeholder impact and contribution to business success in the short, medium, and long terms. The senior leadership has revisited the material economic issues through various stakeholder engagement processes and business reviews. These ESG priorities are integral to our vision of being the ‘global steel industry benchmark in value creation and corporate citizenship’.

Addressing ‘Focus’ issues

Tata Steel’s strategic planning process incorporates the economic, environmental, social, and governance material issues relevant for the long-term growth and financial success of the Company. These issues are critical in defining and executing our strategic objectives. We strengthen stakeholder engagement and maintain a comprehensive track of their opinions and business concerns. Strategies and progress against these issues are reviewed periodically by the respective owners, senior management and the Board.

Our material issues along with linked Strategic Objectives/Strategic Enablers and Capitals are mentioned in the tables below:

Economic

S01 S02 S03

Material issues	Measures	Linked Key Performance Indicators (KPIs)
Business growth	Focus on organic and inorganic growth Scaling of adjacent businesses Entering into new market segments	Crude steel production capacity Revenue from the New Materials Business, Service & Solutions, commercial mining business Revenue from high-end and downstream products and solutions
Long-term profitability	Attain and retain leadership in chosen segments Raw material security Enhance operational efficiency Shikhar25 cost management initiatives	Market share in chosen segments Captive coal (%) and captive iron ore (%) EBITDA Savings through Shihkar25 initiatives
Product and service quality	Product and process innovation Value engineering and customer service teams Innovative routes to market	Number of new products and services Customer Satisfaction Index Quality complaints Revenue from sales on digital platforms

Environmental

S02 S04 SE

Material issues	Measures	Linked KPIs
CO₂ emission	Initiated the first-of-its-kind trial for continuous injection of coal bed methane (CBM) gas in one of the blast furnaces at Jamshedpur Works Successfully completed trial use of biofuel in ship to transport cargo (~1,60,000 tonnes of coal) from Gladstone, Australia to Dhamra, India Commissioned 5 TPD CO₂ capture plant at Jamshedpur, a first in India by a steel company to extract CO₂ directly from blast furnace gas Flagged off the first batch of electric vehicles at our Pilkhuwa stockyard, for transportation of steel	GHG emission intensity Total GHG emissions for all major geographies
Air pollution	Upgradation of existing air pollution control equipment and installation of state-of-the-art dust control technology, e.g., technology amendments and augmentation in coke oven batteries through implementation of de-dusting and pushing emission control systems	Dust emission intensity SOx emission intensity NOx emission intensity
Water consumption and effluent discharge	Jamshedpur Works declared water positive based on a third-party water balance study 3,000 KLD (kilolitres per day) water treatment plant commissioned at Noamundi	Specific freshwater consumption Effluent discharge intensity
Energy efficiency	Achieved higher oxygen supply to blast furnaces and gas recovery from steel melting shops Increased power generation by higher utilisation of by-product gases to power plants	Specific energy consumption
Renewable and clean energy	25-year power purchase agreement signed with Tata Power to develop grid-connected solar plants (41 MW) in Jharkhand and Odisha	Renewable purchase obligation Power generated through renewable sources
Waste management	First steel company in India to export steel melting shop (SMS) slag to Bangladesh for cement making LD¹ (steel melting shop) slag utilisation at Jamshedpur andKalinganagar sustained at 100% Tata Aggreto, the processed LD slag, achieved highest ever sales of 275 KT in FY 2021-22 as against previous best of 195 KT in FY 2020-21. Tata Aggreto has been extensively used as a replacement of natural aggregates in construction of national highways and city roads	LD slag utilisation Solid waste utilisation Revenue from by-products
Supply chain sustainability	Completed third-party assessment of 406 critical supply chain partners (including both upstream and downstream) on the Responsible Supply Chain Policy and opportunities for improvement identified for corrective action	Number of supply chain partners made aware on Tata Steel Responsible Supply Chain Policy Number of supply chain partners assessed on Tata Steel Responsible Supply Chain Policy Number of vendor partners engaged in specific projects
Biodiversity	Biodiversity Management Plans (BMPs) for Jamshedpur and Kalinganagar developed (BMPs developed for 13 locations cumulatively till FY 2021-22) Over 5.37 lakh saplings of native species planted across locations in FY 2021-22	Total sites covered under BMPs
Circular economy	Achieved highest ever end-of-life steel (clean) scrap charging in steel melting shops Steel Recycling Business (SRB): - The first year of full-scale operations from Rohtak unit completed - First-of-its-kind FerroHaat mobile application, developed to onboard suppliers for scrap supply	Capacity of SRB Clean steel scrap charging in steel melting shops

¹LD : Linz-Donawitz

Social

Material issues	Measures	Linked KPIs
Occupational Health and Safety (OHS)	Build safety leadership capability at all levels to achieve zero harm Improve competency and capability for hazard identification and risk management Achieve zero harm to contract employees by strengthening deployment of Contractor Safety Management Standard Reduction in safety incidents on road and rail to ensure zero fatalities inside plant premises Excellence in Process Safety Management (PSM) Establishment of industrial hygiene and improvement in occupational health	Lost Time Injury (LTI) Lost Time Injury Frequency Rate (LTIFR) Fatalities Health Index
Labour relations	Introduction of COVID Family Protection Scheme (Social Security scheme) Vaccination of all types of employees and their families to ensure employee well-being Focussed initiatives to improve employee productivity	Performance in Employee Engagement Survey Employee productivity
Drinking water	Enabling community-led access to safe drinking water for identified households	Number of drinking water structures constructed/repaired Drinking water projects Number of lives reached
Local sourcing of labour	Recruiting indigenous (SC/ST) people in the workforce Improving vendors’ share of business from SC/ST communities by training them to match the Company’s requirements for various products and services	Number of local suppliers Business volume of local suppliers % of Affirmative Action (AA) community in the workforce
Talent retention	Established Step-Up platform (internal talent marketplace) to provide cross functional exposure to employees Creating an inclusive workspace to attract and retain diverse talent including women, Affirmative Action (AA) and people from LGBTQ+ community Development of workforce capability through various programmes	Employee Turnover Rate Percentage of women in the workforce Investment in employee training and development

Governance

S01 S02 S03 S04 SE

Material issues	Measures	Linked KPIs
Technology, product and process innovation	Focus on technology, digital and disruptive innovation overlaid on a culture of continuous improvement Addressing environmental concerns by developing and implementing breakthrough technologies progressively at larger scale Building a sustainable business portfolio, which is resilient against steel business cyclicality	Number of patents received Number of new products developed Number of start-ups engaged Number of alliances created Number of breakthrough projects
Going beyond compliance and setting trends for future regulations	Setting up SRB for foray into organised scrap play in India Adoption of best available technologies and implementing projects for resource efficiency and reducing carbon footprint Strengthened collaborations with technical institutes, technology start-ups and academia for technology leadership, climate change and other environmental issues Diversity and inclusion policies for women in workforce, PWDs and LGBTQ+ community – e.g.: women in all shifts in mines, etc.	Capacity of SRB Performance on various environmental parameters – air, water, waste Number of collaborations with external partners Diversity Mix of workforce
Greater sustainability disclosures	Consistent improvement in our disclosures through the <IR> framework, worldsteel indicators and UNGC communication on progress Engagement with ESG rating agencies for improving disclosure practices and enhance access to sustainable finance Updating the Company's website periodically to enhance transparency and meet stakeholder requirements	Scores and achievements in: CDP DJSI assessment worldsteel recognitions ESG ratings
Stakeholder engagement	Enhancement of specialised channels, such as public meetings, vendor-focussed committees, ‘Speak Up’ toll-free number, and platforms, such as conferences and construction conclaves and similar events Setting up special COVID care helplines and medical facilities	Performance in various surveys conducted periodically for stakeholder categories, including: - Customer Satisfaction Survey - Vendor Satisfaction Survey
Responsible advocacy to enable Tata Steel to become the global steel industry benchmark	Providing thought leadership on public policies to ensure the Indian steel industry is globally competitive	Number of policy papers for improving the ease and cost of doing business
Technical knowledge transfer and capacity building for relevant partners	Collaboration with suppliers through Supplier Relationship Management Programme Conduct Vendor Capacity Advancement Programmes (VCAP) for suppliers Engagement with customers through Early Vendor Involvement (EVI) and Value Analysis and Value Engineering (VAVE) initiatives Awareness sessions for suppliers, Steel Processing Centres (SPCs) and distributors on ethics, health & safety, Responsible Supply Chain Policy and other relevant issues	Number of VCAP sessions conducted Number of awareness sessions conducted Number of supply chain partners made aware on Responsible Supply Chain Policy Number of EVI and VAVE projects