Which are the main pillars of your CSR and Sustainability strategy?
Cairn believes that we only succeed as an organization when we balance the need to maximize shareholder value with the well-being of our workforce, local communities, investors, and other stakeholders while limiting our impact on the environment. To guide us in this pursuit, we have developed four markers that guide us in every decision that we make. These markers or pillars require us to:
- maintain the highest standards of ethical governance
- uphold human values by respecting the rights and dignity of every stakeholder with whom we engage
preserve the environment and
- promote inclusive growth for the local communities where we operate
These markers have guided Cairn’s actions since inception and they have helped us operate successfully in good as well as difficult times. A strong adherence to these pillars has allowed Cairn to build an organization that has developed robust, world-class systems for water monitoring and management, road safety, and local community engagement.
What have been some of the greatest challenges in realizing your CSR and Sustainability goals in the past year, and how has your company overcome them?
In 2015, Cairn experienced a significant disruption to our business-as-usual scenario, with the global price of oil dropping by nearly 70% over the course of the year. The resultant loss in revenue has dampened several key business activities such as our exploration and drilling campaigns, several capital expenditure projects, and new employee hiring. To minimize impact of low oil prices on the long-term viability of the organization, Cairn also rationalized its workforce in line with the reduced work activities. However, despite the downturn, we have not scaled back on our CSR commitments. A key reason for this is the robust needs assessment and program monitoring that we had put in place for each of our activities. This ensured that while our CSR programs continue to create significant, positive impact in the communities, they have remained cost-efficient. Additionally, we have used the slowdown in activity as an opportunity to enhance our existing sustainability standards and systems. The company has instituted sustainability audits, improved goal-setting on sustainability metrics, and strengthened our apex body on sustainability (Sustainability Steering Committee).
Keeping in mind the targets set in the Paris accord what do you see on the horizon for corporate sustainability initiatives? How can companies and government work together to achieve sustainability and CSR goals?
The Paris accord was historic in terms of getting all countries of the world to agree on a common platform of the need to curb climate change. India’s role was instrumental in forging an agreement, and the country has shown leadership in committing to reduce its GHG intensity by 35% by 2030 and source 40% of its energy needs from renewable sources. We foresee three direct implications of the COP21 agreement and India’s Nationally Determined Commitment. 1) An increased focus in reforming the regulations/incentives to deploy renewable energy across the country, especially on issues such as open access across states, net metering, and tariff revisions. These reforms are also likely to see the entry of more companies (both Indian and international) in this space. 2) The revision of the Perform, Achieve, Trade (PAT) scheme, to drive energy efficiency across industry. We also anticipate the inclusion of the oil & gas sector in round 2.0 of the scheme. 3) The expectation from the government for large private corporations to create a plan for reducing their own carbon footprint.
From India’s perspective, much progress on lowering our carbon footprint can be achieved if industry and government work in productive partnerships. Given the enormity of the climate change challenge, quick decisions by the government on climate-friendly policies need to be taken. In order for the policies to deliver on lowering India’s carbon emissions, we believe that they should: a) seek comments from industrial and commercial stakeholders so robust, phase-wise techno-commercial mechanisms be developed, b) use both strong incentives and strong disincentives to drive change, c) have strong enforcement mechanisms to drive implementation and adoption of the policy, d) be simple to implement and enforce so that action is not stuck in ambiguity of the wording of the policies.
What are your goals for 2016 and your priorities for the year?
Cairn has undertaken the following goals to drive our sustainability agenda:
a. Eliminate the use of local community fresh water in our operations: More than 99% of our current water needs are met from saline aquifers. As a result we do not impact fresh water sources that may be used by local communities for domestic and agricultural purposes. However, due to the remoteness of some of our well-pads we do utilize some local fresh water, which is supplied to us by local contractors. In 2015, we have taken a goal to eliminate the use of community water, so that we have zero impact on local water bodies.
b. Enhance our water purification program in rural communities: Cairn’s “Jeevan Amrit” program has established ~40 RO-based water purification machines in villages across Rajasthan and Gujarat. These machines, which are run and managed by village committees have brought fresh water to the villages and has helped reduce water-borne diseases. We plan to extend this program to over 800 revenue villages comprising over 4000 habitations over the next three years.
c. Conduct an organization-wide water and energy audit to improve the management of these resources and develop plans to further reduce their consumption.
d. Initiate work on a biodiversity assessment study and management plan and introduce green-cover over 200 ha of land in Rajasthan and Gujarat.
In conversation with Mr. Mayank Ashar, MD & CEO of Cairn India Ltd. (Original Post)