Larsen & Toubro : Integrated Report 2023-24

INTEGRATED

REPORT

Sustainability

Vision

For a

Better

World!

L&T shall pursue eco-friendly growth, promoting a culture of sustainability and innovation, and thereby contribute towards a better world.

128	Integrated Annual Report 2023-24

Corporate	Management	Integrated	Statutory	Financial
Overview	Discussion and Analysis	Report	Reports	Statements

About the Report

The Company has been making concerted efforts towards achieving resource efficiency, decarbonising its businesses and sharpened its focus on improving performance across Environmental, Social and Governance (ESG) parameters. This Integrated Report includes the financial and non-financial performance of L&T Limited (Standalone entity) and is aligned to the principles developed by the International Integrated Reporting Council. The Report expands the target audience from the primary provider of financial capital to include employees, customers, suppliers, local communities, regulators, and policy-makers.

NATURAL

CAPITAL

Pg. 152

MANUFACTURED

CAPITAL

Pg. 174

HUMAN

CAPITAL

Pg. 180

INTELLECTUAL

CAPITAL

Pg. 198

SOCIAL AND

RELATIONSHIP CAPITAL

Pg. 210

FINANCIAL

CAPITAL

Pg. 238

Other Chapters

Value Creation Process	130
Value Creation Model	132
Stakeholder Engagement	134
Understanding Materiality	138
Sustainability Governance	148
Sustainability Highlights FY 2023-24	150

129

Value Creation

Process

VALUE CREATION PROCESS

STRATEGY

VISION AND VALUES

Strategic Objectives

Strategic Enablers

SO-I	Value-accretive growth of
current businesses
	Scaling up digital and
SO-II
e-commerce businesses
	Developing business offerings to
SO-III
ride the Energy Transition wave
	Divestment of
SO-IV
non-core businesses
	Enabling business sustainability
SO-V
through a high focus on ESG
	and Stakeholder Value Creation
SE-1	Operational Excellence
	Industry leading capabilities in
SE-2
digital and advanced technologies
	Financial resources and
SE-3
strong financial health
SE-4	Talent and Leadership pipeline
	Capability enhancement through
SE-5
innovation, R&D and partnerships

MATERIAL TOPICS

STAKEHOLDER ENGAGEMENT

GOVERNANCE: POLICIES, PROCESSES, RISK MANAGEMENT

130	Integrated Annual Report 2023-24

Corporate	Management	Integrated	Statutory	Financial
Overview	Discussion and Analysis	Report	Reports	Statements

VALUE

VALUE CREATION

NATURAL

CAPITAL

MANUFACTURED

CAPITAL

HUMAN

CAPITAL

INTELLECTUAL

CAPITAL

SOCIAL AND

Business Models

Creating Value for

EPC Projects

Customers

Shareholders

Employees

Suppliers

Hi-Tech

Manufacturing

VALUE CREATED

Productive Assets for Clients

Dividends

and Buyback

Employee Benefits

and Capability

Development

Business for

Suppliers

RELATIONSHIP CAPITAL

FINANCIAL CAPITAL

The six Capitals are utilised through business processes and models to create assets and products linked to infrastructure, energy, oil & gas, metals, process plants and other sectors, and create value for the stakeholders.

Government

Communities

Payment to

Exchequer

Community Assets and Livelihoods

131

VALUE CREATION MODEL

Input

	Water Consumption: 12.9 Mn kL
	Energy from Non-renewable Sources: 10.3 Mn GJ
	Energy from Renewable Sources: 0.19 Mn GJ
Natural	Spend on Environment1 : `369 Mn
Capital	Material Consumed (Mn tonnes):
	-	Cement: 4.4
	-	Sand: 7.4
	-	Ferrous: 2.3

Manufactured	Active Project Sites: 716
Capital	Manufacturing Facilities: 18

	Employees: 59,344
Human	Workmen: 3,48,094
Women covered in Leadership
Capital
Journey Programmes: 495
	R&D Spend (cumulative of 3 years): `3,905 Mn
Intellectual	Patents Filed: 13
Capital	R&D Engineers and Scientists: 321
	Active Collaborations and Partnerships2 : 21
Social &	CSR Spend: `1.5 Bn
Relationship	CSR Partners: 61
Capital	Memberships of Industry Chambers: 75
Financial	Order Book: `3,713.8 Bn
Net Current Assets: `254.6 Bn
Capital	Net Fixed Assets: `124.6 Bn

1 Spend on environmental management:	2	Partnerships with universities, educational
pollution control, environmental		and research institutes, start-ups.
monitoring, waste management,	3	Also includes Green Building
wastewater treatment cost, etc.		(14.8 Mn sq. ft.).

Value Creation

Model

Business Processes and

L&T BUSINESS

EXCELLENCE MODEL

VALUE ENGINEERING
Residential Spaces
	Mass Transit and Railways
LEAN OPERATIONS
Data Centers
Hydro Power Plants
ENGINEERING
Water Treatment Plants
INTEGRATED	Oil & Gas Facilities
	Process Plant Equipment

1. Mobility Infra created includes Roads (809 lane km), Electrification (3,432 track km), Track construction (710 track km) and Mass Transit-viaducts (86 km).
2. Also includes Irrigation Capacity (0.87

lakh ha) and Water Pipelines (61,130 km).

132	Integrated Annual Report 2023-24

Offerings

SPEED & SCALE

	DIGITALISATION
Commercial Spaces
Airports

	INNOVATION
Solar Power Plants
Nuclear Power Plants

Refining and Petchem Plants
	GLOBAL
Ferrous and Non-ferrous Plants
	SOURCING
Launch Vehicles

6 Total production for businesses: Buildings & Factories, Power Transmission &

Distribution, Minerals & Metals, Heavy

Engineering, Precision Engineering &

Systems, L&T Energy-Hydrocarbon.

Corporate	Management	Integrated	Statutory	Financial
Overview	Discussion and Analysis	Report	Reports	Statements

Output

SDG Linkage

GHG Emissions: 0.99 Mn tCO2e

GHG Emission Intensity: 7.8 tCO2e/`Cr

Eco-Friendly and Recycled Material Used (tonnes):

- Steel: 2,526

- Zinc: 71

- Crushed Sand: 4 Mn

Building Infra Created3 : 20.2 Mn sq. ft.

Mobility Infra Created4 : 5,037

Bridges & Tunnels: 35 km Power Infra Created:

- Transmission Lines: 3,010 ckm

- Solar Power Capacity: 2,192 MWp Water & Sanitation Infra Created5 :

- Water Storage Capacity: 228 Mn ltr

• Treatment Capacity: 2,239 MLD Factory Output6 : 3,75,452 tonnes Green Business (Revenue): `63,426 Cr

Revenue per Employee: `21.5 Mn

Attrition Rate: 10%

Average Training Days per Employee: 7.9

Accident-free Man Hours: 1,262 Mn

Patents Granted: 19

Value Engineering Projects7: 296 Revenue from Emerging Businesses8 : `1,27,018 Mn

CSR Beneficiaries: 1.6 Mn

Contribution to Exchequer: `89.7 Bn

Complaints Received9 : 653

Complaints Resolved9 : 597

Turnover: `1,262.4 Bn

PBIT: `132.7 Bn

Dividend Payout: `46.9 Bn

Return on Net Worth: 13.7%

7 Initiatives for improving processes,	8	Revenue in FY 2023-24 from businesses
products and services to reduce cost,		started in the preceding three financial
improve project delivery and increase		years.
customer satisfaction.	9	Across all stakeholders, for breakup refer
		to Section A in Business Responsibility
		and Sustainability Reporting (BRSR).

133

Stakeholder

Engagement

STAKEHOLDER ENGAGEMENT

L&T's businesses are primarily EPC projects (Engineering, Procurement, Construction) and Hi-Tech Manufacturing. Aligned with the activities of the businesses, the Company has identified the following key stakeholders and channels of communication:

	Employees
Government	and Workforce

Governments (sovereign, sub-national, local) and related entities (public sector enterprises) are the largest clients of the Company, comprising ~78% of the total Order Book. They are the key determinants of policies (sectoral as well as cross-cutting), long and short-term plans for various sectors, and the country at large.

The Government is the most crucial driver in policy development, which ultimately impacts the ease of doing business and shapes the business environment.

• Press releases
• Quarterly results
• Integrated Annual Report
• Stock Exchange filings
• Issue-specificmeetings
• Representations
• As and when required
• Project Review Meetings
• Address concerns related to project execution
• Regulatory compliances and reporting requirements
• Seek support to enable on-time completion and delivery according to agreed parameters
• Working with the Government to develop/provide inputs for policies and legislations
• Advocating for relevant policy issues at the central and state level

Legend

Human Capital is key to project management and execution for the Company. Around 59,000 employees and 3,50,000 workers across the Company's project sites, offices, manufacturing plants, and different locations are contributing towards sustained growth and performance. Hence, the management, development, and well-being of the workforce are vital for the Company to continue its value creation journey.

• Employee satisfaction and engagement surveys
• Circulars and messages from corporate and line management
• Welfare initiatives for employees and their families and Employee Assistance Programme (EAP)
• News bulletins to convey topical developments, print and online in-house magazines, and newsletters
• HEERA
• Various engagement platforms and events: Hi5, L&T Radio, Art Beats and so on
• As and when required
• Support the growth, learning, development and well-being of employees
• Transparent and timely communication of organisational updates
• Feedback on Company's policies and actions, and address concerns linked to them

Channels of communication

Frequency of Engagement

Purpose and scope of engagement, including key topics and concerns raised during such engagement

134	Integrated Annual Report 2023-24

Corporate	Management	Integrated	Statutory	Financial
Overview	Discussion and Analysis	Report	Reports	Statements

Customers

Supply Chain Partners

Other key customers are private sector clients, which comprise ~22% of the total Order Book. While

the Company actively seeks new clients, it also enjoys a long-term relationship with many of them. These lead to repeat business and also create the conditions encouraging development of new solutions

and technologies.

• Website, L&T Infodesk, toll-free number
• Meetings and interactions
• Client satisfaction surveys and feedback
• Grievance redressal

Businesses have a high dependence on supply chain partners for sourcing key input materials (commodities, fabricated items, sub-components, and other raw materials), logistics and services. At L&T, the supply chain is vast and complex, registered partners across and outside the country. These supply chain partners are assessed on a regular basis to enable performance-based tiering and aid in vendor development. The Company believes that supply chain partners play a crucial role in responsible sourcing, upholding quality and standards, adhering to human rights standards, and maintaining ethical business practices.

• As and when required, satisfaction surveys carried out biannually
• Transparent and timely communication to provide updates on the status of contracts/supplies
• Address issues related to the delivery of agreed contracts
• Partnerships for innovation

Legend

• Regular vendor and supplier meet
• Grievance redressal mechanism
• Contract related meetings
• As and when required for large suppliers, fortnightly for MSMEs
• Payment, vendor management platform related queries, deliveries, and technical discussions
• MSME: Exchange of information, vendor deliverables and payment issues, and partner portal-related queries
• Awareness sessions for supply chain partners and assessment of top 200 partners on ESG parameters

Channels of communication

Frequency of Engagement

Purpose and scope of engagement, including key topics and concerns raised during such engagement

135

Shareholders

and Investors

Shareholders and investors enable the Company's growth by providing the requisite financial resources as well as guiding the Company through their approval/disapproval of the Company's plans (through voting, voicing concerns, feedback).

The Company actively engages with them to communicate its plans, design the way forward, as well as address their concerns.

• Website
• Press releases
• Dedicated email ID and toll-free number
• Quarterly results
• Integrated Annual Report
  (Integrated Report, BRSR, Financial disclosure)
• Annual General Meeting (Shareholders' Interaction)
• Investor presentation
• Investor meets
• Stock Exchange filings
• As and when required, quarterly investor meets
• Showcase sustained value creation through Company's performance
• Seek feedback on Company's plans and strategy
• Address concerns (if any) with respect to Company's policies and actions

Stakeholder

Engagement

Communities and

NGO Partners

L&T strives to promote socio-economic development in the communities around its operations and other underserved regions. The approach involves need assessment, development, and execution and handover of projects to the local community in most cases.

The Company prioritises supporting the vulnerable, underprivileged and marginalised sections of society to empower them and improve their standard of living.

• Direct engagement and/or through NGO partners implementing CSR projects
• Grievance redressal
• Need Assessments
• Community visits
• Meetings with community representatives
• Impact Assessment Studies
• Quarterly meet with NGO Partners
• Facilitate in providing infrastructure, health, and education services and skill-building opportunities based on need assessment
• Improving the quality of life of underprivileged and vulnerable communities

Legend

Channels of communication

Frequency of Engagement

Purpose and scope of engagement, including key topics and concerns raised during such engagement

136	Integrated Annual Report 2023-24

Corporate	Management	Integrated	Statutory	Financial
Overview	Discussion and Analysis	Report	Reports	Statements

Regulatory Bodies

Various businesses fall under the purview of specific regulatory bodies, not only sectoral but also in some common areas, e.g., environment and labour. It is pertinent to understand the priorities and concerns of these agencies to enable the Company to ensure compliance with mandated levels.

• Briefings and direct meetings
• Quarterly results
• Integrated Annual Report
• Through industry associations and business chambers
• Multi-stakeholderforums
• As and when required
• Issue specific
• Compliance with laws and regulation
• Inputs on new policies and regulations

Media

Media is one of the important channels of communication for the Company's reputation capital (a sum of other people's perception), share price performance, brand and pricing power, plans, and policies. It helps engage with a larger audience and provides a critical link in the feedback loop on issues related to the Company and the Brand. This stakeholder group also plays an instrumental role in providing insights into the Company, business, and industry performance. Additionally, the Company engages with the media to share management's perspectives and encourage healthy discussions on various topics.

• Website
• Press releases
• Quarterly results
• Integrated Annual Report
  (Integrated Report, BRSR, Financial disclosure)
• Annual General Meeting
• Media interactions
• Event-based

• Wider dissemination of plans, achievements and initiatives
• Create awareness of the Company's businesses, offerings and initiatives
• Enhance brand value
• Engaging with media to increase awareness of sustainability issues and promote business practices

Legend

Channels of communication

Frequency of Engagement

Purpose and scope of engagement, including key topics and concerns raised during such engagement

137