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Creating A Shared Value Chain
Marico has developed and deployed various programmes to ensure sustainable availability of agricultural commodities to support future business requirements.
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A truly purpose-led organisation, Marico is low down in ranking at 189th position in terms of revenues but makes it to the top performers list for its strong sustainability performance. While products such as Parachute and Safola are household names in India, the company also makes skin care and healthy food products that reach 118 million households through 5.1 million retail outlets. The company’s operating profit increased from Rs 1200 crore to Rs 1291 crore in FY20 and net profit decreased from Rs 1129 crore to Rs 1006 crore. The current ratio declined marginally from 2.35 in FY19 to 2.32 times in FY20.
Stellar Supply Chain Management
As much as 95 per cent of Marico’s procurement by spend for its India business during 2020 was on local suppliers leading to overall savings and low carbon footprint. The emphasis on the environment and social responsibility rubs off on its supply chain, so much so that even its suppliers are expected to go for ISO 50001 certification (Energy management system). The company’s human rights policies are applicable to suppliers as well. Marico’s Suppliers even undergo regular training, just as Marico’s employees would.
Marico has developed and deployed various programmes to ensure sustainable availability of agricultural commodities to support future business requirements. Notable among these are sponsoring research in agriculture breeding technology, developing strategic sourcing alternatives from other geographies and strategic presence in extended backward value chains.
Referencing its sustainability efforts, Marico stated, “During the year, the company demonstrated steady progress and success in various programmes that have been underway to create a sustainable ecosystem along the focus areas of responsible resource consumption, climate change, circular economy, sustainable supply chain, product responsibility and community development.”
Marico’s strength also lies in its energy efficiency. Its goal of reducing its energy intensity by 50 per cent from FY13 base year achieved a 32 per cent reduction in FY20. The company improved the share of renewable energy in its operations to 79 per cent at the end of FY20. This is commendable by industry standards. There has been a significant reduction in the use of fossil fuels as well a 91 per cent reduction in FY20 from that of the 2013 base year. The company’s water consumption performance is worth a special mention.
Marico has clearly identified the risks posed due to climate change to its business, along with mitigation and adaptation strategies. Accordingly the company had set a goal of reducing its GHG emission intensity (Scope 1 and 2) by 75 per cent from FY13 base year. It achieved 68 per cent reduction in FY20. The absolute GHG emissions (Scope 1 and 2) for its India manufacturing operations was 21 per cent lower than that of the previous year. The company has been successful in reducing emissions through optimisation in their primary logistics performance over the years. This has been possible by increasing the number of fuel efficient, high capacity vehicles from one per cent in FY18 to 33 per cent in FY20.
Marico spent 19 crore on CSR in FY20 and directed these funds towards initiatives such as education, skill building, flood relief, health and hygiene and the environment. Of these, education, water conservation and flood relief had the highest number of beneficiaries. The Nihar Shanti Pathashala Funwala programme benefited more than a million students in India. A special education programme for girls benefited 79,391 people.
Across all manufacturing operations of Marico Limited, a waste management system is in place with clear standard operating procedures for waste collection, storage and handling. Through their SoFi data management software the company records and monitors its monthly quantities of waste generated. All the non-hazardous waste generated is disposed of through authorised waste management agencies in the country. Initiatives around sustainable packaging, upcycling and promoting circular economy have been useful in making the company waste efficient. It is noteworthy that 773 tonne of postconsumer non-recyclable plastic waste was collected to recover energy from it in FY20.