Takeaways from ESG conference
We hosted Mr K. Natarajan, Chief Operating Officer, Galaxy Surfactants at ICICI Securities virtual ESG conference on 23rd June’21. Given below are the key takeaways from the meeting.
Alignment to customers’ sustainability programme - big opportunity.
Unilever to invest Euro1bn to eliminate fossil fuel from its cleaning products by 2030 (link), cutting the carbon emission created by the chemicals used in making products. Chemicals in cleaning and laundry products make up 46% of its home care division’s carbon emissions across their life cycle. It plans to replace petrochemicals with products created from plants and other biological source and waste materials. Surfactants (LABSA) is the biggest petroleum-derived component. Galaxy, which is a large producer of oleochemicals (plant-based surfactants), is likely to benefit from partnership with likes of Unilever in sustainability programme. This would drive innovation on sustainable / green products and demand for oleochemicals to rise. Galaxy has also participated in trends such as paraben free and sulphate free products and patented green technology.
Clearly defined focus area with materiality matrix.
Galaxy has well-defined focus area derived on the basis of importance to stakeholders and Galaxy. The areas of high focus are 1) employee safety, health and well-being; 2) innovation; 3) ethics and governance; 4) water stewardship; 5) waste management; 6) climate change; 7) oil palm derivatives; 8) financial growth; 9) labour relations and 10) customer communication. The company has set well-defined target to achieve material improvement across parameters.
Galaxy has defined goals for environment protection, which are impressive.
We are impressed with quantity and transparent disclosure on target for environmental goals. Water reduction, energy reduction and GHG reduction achieved were 60% (target: 80%); 42.3% (target: 50%) and 32.5% (target: 35%) from FY12 as base till FY20. Additional target set in FY16 included packaging waste reduction achieved 9% (target 10%);and renewable energy share of 2.8% (target 10%) by FY20. Though renewable energy share fell significantly short of expectation due to regulation issues which stands largely resolved. It has set strict target for future to use only natural gas as the main source of fuel in various locations and increase renewal energy share to 40% by FY26 (maximum allowed by regulation currently).
Investment in people.
Galaxy has well-defined talent and succession programme with three layered talent development and succession plan. It intends to have a lean structure which provides greater opportunity for employee career growth. It has introduced various leadership development programmes such as Udaan, and Excellerate and grooming programmes such as Eklavya. It has introduced behaviour based safety programme implementation post the unfortunate accident at Tarapur plant which is expected to bring higher safety behaviour at production floor.
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