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SVKMā€™s Narsee Monjee Institute of Management Studies
                         Mumbai




     SUZLON INDIA: Be the Stakeholderā€™s Choice
                      A CASE STUDY




Report prepared by:

1. Ankur Salunke

2. Balajee S

3. Manas Ranjan Kar

4. Partho Choudhury

5. Ravi Thakur
INTRODUCTION:
What started with Sulzer Synthetics P. Ltd has culminated into the worldā€Ÿs fifth largest wind power
production company. Mr. Tulsi Tanti turned a bottleneck into a business opportunity. Quickly realizing
that the shortage of power was stunting his growth in the textile industry, he moved into the renewable
sector, and has never looked back since. Suzlon Energy founded by Mr. Tulsi Tanti, has operations in 32
countries and manufacturing facilities in countries like India, China and USA has developed a wide range
of products (Exhibit A) to cater to the wind power industry. The Company introduced the concept of total
solutions wherein, in addition to the supplies of equipment, the client is offered project execution work
comprising land acquisition, site development, erection and commissioning, foundation and other civil
work and O&M services. These services are offered in conjunction with the Associate Companies (Exhibit
B).   Suzlon operates the largest wind park in the world, a 584 MW wind park in the Eastern
Ghats-Tamil Nadu.

CORPORATE SOCIAL RESPONSIBILITY AT SUZLON:

Suzlon's CSR starts from within the company, engaging employees in internal projects, expanding to
neighboring communities and goes beyond business boundaries to benefit the society at large. The Suzlon
Group has entrusted the Suzlon Foundation with the responsibility to facilitate CSR across all the
functions and locations. Suzlon is committed to practice sustainable development for ā€œPowering a
Greener Tomorrowā€. The Foundation ensures that business policies and practices support sustainability
as its guiding principle. Suzlon Foundation is registered under Section 25 of the Companies Act.

I.       CSR at Workplace:


a.       CULTURE:
The work culture at Suzlon hinges on the three pillars of corporate values, brand core and philosophy of
global assimilation. Agility, creativity, adding value, commitment and integrity are the base values of
Suzlonā€Ÿs work culture. Inducting people into Suzlonā€Ÿs brand core of sustainable development is a process
that involves imbibing these values and blending the best qualities of the individual with those of the
organization. Suzlonā€Ÿs 14,000 employees have helped raise the performance bar in professionalism,
opportunity, responsibility, belongingness and accomplishment. Suzlon has leveraged the rich operational
experience of the world's finest wind power technology to industriously harness an individual towards a
powerful ā€žgreener tomorrowā€Ÿ.


As Mrs. Seemantinee Khot, Head, CSR, Suzlon Energy rightly pointed out,ā€Ÿ Most of the people in the
renewable energy companies strongly believe that they want to contribute to the planet, which doesnā€Ÿt
harm and helps bridge the gap between the various sections of the society.ā€Ÿ
Some other key policies of Suzlon to promote workplace CSR include
         ļ‚·   Legal compliances to ensure that the suppliers are not employing any children or
             following ā€œunethicalā€ business practices.
         ļ‚·   Not allowing employees work for very long hours, helping employees to share a healthy
             relation with their families - thus, they will be able to balance their personal and
             professional life.
         ļ‚·   Ensuring fair treatment to employees and providing equal opportunities to all
             employees and all applicants - without regards to their race, caste,
             religion, color, ancestry, marital status, sex, age, nationality, and disability.


b. EMPLOYEE INVOLVEMENT:


The HR mandate dictates that every employee must involve themselves in at least 2 CSR days per
year. This fosters employee involvement in the core values that Suzlon believes in. Suzlon also
celebrates World Environment Day to build awareness among the workforce.


A payroll CSR is also in place, where an employee through an entirely voluntary participation
procedure, donates a certain percentage of his salary, to NGOā€Ÿs of their own bidding, like those
involved in education sector, orphanages, child care etc.


Suzlon has also sensitized its employees to induct them into a ā€žGive in Kindā€Ÿ sort of program, where
every month Suzlon sends out a mailer to all its employees exhorting them to donate old clothes,
woolens, mobiles and stationery. These initiatives have definitely helped in bringing employee
participation in CSR to the fore.


c. GLOBAL HSE SPHERE:
The Global HSE SPHERE is a structured method and approach to Strategize HSE themes and
strategies by following a reactive and proactive approach to initiate strategic initiatives. Suzlon HSE
(Occupational Health, Safety & Environment) is a global initiative that establishes a company-wide
practice of setting up and maintaining the highest HSE standards with a dedicated approach and
organizational commitment. With Global HSE SPHERE, Suzlon are committed to achieve zero harm
to employees, environment, contractors, communities & property and demonstrate sustainable
leadership for effective and enhanced occupational health, safety and environment practices.
Simultaneously it propagates effectively and efficiently leverages leadership commitment and
stakeholder involvement in executing Suzlon HSE business plan. Suzlonā€Ÿs HSE vision and mission are
being institutionalized by the Global HSE Council (EXHIBIT F) that manages its HSE agenda,
strategic initiatives, communications and etc.
II.        COMMUNITY DEVELOPMENT

      Suzlon includes considerations of all major stakeholders in their business practices, such as local
      communities and the natural environment. They aim to take responsibility for negative impacts they
      might have on these stakeholders and correct their actions accordingly. Going beyond legal
      compliance and being accountable to higher ethical standards are aligned with Suzlonā€Ÿs values. Suzlon
      looks at the success of business from the broader perspective of sustainable development achieving
      the 5 capitals viz. Financial, Natural, Human, Social and Physical (Exhibit C). Their CSR activities are
      guided by these questions,

      1.   What is our impact?
      2. Whom do we impact?
      3. What can we do to offset our impact?

Also, to ensure that CSR programs are linked with the corporate groupā€Ÿs strategies, the locations for CSR
interventions are selected keeping in mind their strategic importance for Suzlonā€Ÿs business.

The locations are measured on 4 indicators:

1. Presence of Suzlon

2. Stage of operation

3. Community engagement history

4 Local development status

Scores are given for each indicator. Once scored, the locations are categorized in High, Medium or Low
importance areas on the basis of the total scores achieved by each location. The rank will determine which
location has priority for CSR activities. (Exhibit D)

Again here, the broader perspective of sustainable development through development of 5 capitals
dictates the activities. They have been broadly classified in Exhibit C.

Also the main agenda of community development for Suzlon is making people aware. Mrs. Seemantinee
Khot echoes the same sentiment when she says.ā€Ÿ Our business is secure only when we are dealing with
organized and educated people. Dealing with unorganized sector is detrimental for business. Businesses
normally border on their brand and legal perspectives. In helping the people grow, we do good to look
good. In doing our duties we get the license to operate from the same community and build a long-lasting
relationship with them.ā€Ÿ
III.    ENVIRONMENTAL CSR:

Suzlon is aware of its responsibility towards the environment. It has taken many initiatives to offset its
footprint in the project areas. Like the yearly beach cleaning exercise conducted by Suzlon employees at
Daman and Pondicherry where the beach is cleaned by the employees themselves. CSR Champions1
guided by the CSR managers, engage their peers and the community in the exercise. The employees upon
completion of the exercise report back to the company, to state the impact created through the exercise.
Sanitation and plantation drives are conducted regularly by Suzlon in the project areas.

The CSR activities of Suzlon results from a ā€žtripartiteā€Ÿ agreement among the company, government and
the community. Suzlon takes initiatives which are in sync with the community requirements. Before the
start of any project, each stakeholder gives its assessment of their requirement, and the projects are
chosen according to corporate and community relevance. Even though the regulatory controls like, say
planting 50 trees for every wind turbine installed, are not mandatory, but desirable.

IV.     CSR COUNCIL : External Agency Implementation

In each state, CSR Councils have been formed to make transparent decisions on relevance of a proposed
project and assessing the credibility of the agency. There are separate CSR Councils for three SEZs. The
Council has representatives from different verticals of Suzlon Group. The purpose behind forming the
CSR Council is twofold ā€“

a) Engage the Suzlonians in CSR activities, and

b) Make the decision making process transparent and rational.

The Council meetings are held once in a quarter to share the progress of CSR programs. Extra meetings
are arranged whenever there are new proposals to be considered. Along with the Council members and
CSR State Head, a representative from the Central Team will also be present in the meetings.

One person among the employees is chosen by his peers, who is delegated the responsibility of
representing the SBU in the council. He is called upon to attend a one day workshop of Sustainability
Sensitization Programme, to assess his proclivities towards the field. Upon satisfactory completion of the
same, he is authorized to become a member of the CSR Council.




--------------------------------------------------------------------------------------------------------

1 CSR Champions are chosen amongst the employees to motivate them towards CSR.
V.        P.A.L.S.: Bringing the Winds of Change

Social Networking seems to be the new way for Corporate Social Responsibility. Suzlon has launched a
new brand campaign called P.A.L.S. - the Pure Air Lovers' Society. P.A.L.S. is a movement to emphasize
the importance of clean air, while helping to educate people on how to live a more environmentally
responsible life. The social media campaign, not only helps spread awareness about the brand, but also
helps in engaging new participants.

Identifying the need for a campaign of this nature, P.A.L.S. has already found support from prominent
members of Indian society like RJ Malishka, Milind Soman, Garson da Cunha and Anil Dharker, who are
the first P.A.L.S. champions. These champions have been tasked with the responsibility of outlining
recommendations and sustaining momentum to ensure the success of the movement.

The innovativeness of the campaign can be gauged from the fact that Suzlon would be planting one tree
for every registration at their website, www.pals.in. The P.A.L.S. campaign aims to increase in intensity
over the coming months with innovative activations and initiatives that aim to drive traffic towards
registrations, thereby escalating the magnitude and success of the movement.

VI.       CSR Publications

Suzlon regularly updates its employees regarding the CSR activities undertaken by the company.
LIVEWIRE, a global e-magazine of Suzlon group, always carries a section regarding the CSR activities
undertaken by the business units. Adding to that, a quarterly newsletter in every state of operations is
published in the regional language. The newsletter is sent out to the district heads, the local community
and other stakeholders to keep them informed regarding the CSR activities.

VII.      AWARDS AND RECOGNITIONS




          Year                        Awarding Authority                                 Details
2010-11              6th in Indiaā€™s list of Cohn and Wolfeā€™ IPGBS Top 10   Ranked 6th best green brand of India
                     Green Brands 2011                                     based on its environmental
                                                                           initiatives.
2010-11              Suzlon wins Global Leadership Award for               Wins Gigaton Award for global
                     sustainability at COP16                               leadership in emissions control
                                                                           and sustainability practices .
                                                                            Suzlon recognized among top six
                                                                           global companies that includes
                                                                           Vodafone Group, Reckitt Benckiser
                                                                           Group, Nike, 3M and GDF Suez.
2009-10              Tulsi Tanti awarded Champion of the Earth             Mr. Tulsi Tanti was honoured with
                                                                           Champion of the Earth title for
                                                                           Entrepreneurial Vision by the United
                                                                           Nations Environment Program
2008-09                Suzlon bags Golden Peacock National Training Award    The award function was held at the
                       2008.                                                 9th International Conference on
                                                                             Corporate Governance at London
                                                                             and the award was given by Dr Ola
                                                                             Ullsten, former PM of Sweden.
2007-08                TIME's Heroes of the Environment Awards               Mr. Tulsi R. Tanti, CMD, Suzlon
                                                                             Energy Limited - for initiating action
                                                                             on Global Climate Change
2006-07                Wind India Conference Awards                          Best Company - for Corporate Social
                                                                             Responsibility

2006-07                India Tech Foundation and Power Stream Journal        For Project Management & Energy
                       ENPOWER Award                                         Efficiency and Sustainability

2006-07                TERI Alumni Award                                     Entrepreneurship in Energy
                                                                             Environmental Technologies

2006-07                The Solar Energy Society of India Award               SESI Renewable Energy Pioneer -
2005-06                                                                      Mr. Tulsi R. Tanti, CMD, Suzlon
                                                                             Energy Limited




VIII. ROADBLOCKS

Suzlon Foundation involves community, concerned Government department and Civil Society
Organizations in planning, implementation and monitoring development programs. The six monthly 360
degree reviews are transparent mechanisms for improving the sustainability of the CSR projects. (75% of
the projects were rated as "excellent", 15% as "good", the remaining 10% projects rated as "un-
satisfactory" would be either closed or revamped next year.). Even though the company tries its best to
provide for the community in the best possible manner through it CSR initiatives, some projects are also
shelved due to their failure to achieve their goals. We mention two such projects which were shelved
during the last year due to such constraints,

    1.    Project SAFAL: Youth employability programmes in Daman and Pondicherry were closed down
          due to failure to achieve targets. The initial target was to employ 500 youths, but only 300 youths
          turned up for the programme. In the end, only a handful of them were actually employed. The
          reasons cited were that the curriculum of the programme was not suited to the youthā€Ÿs
          temperament. Also, the skills taught to the youth were not enough to make them employable.


    2. A Biodiversity Project in Karnataka was also shut down due to financial constraints. Also the long
          term commitment to the project did not support Suzlonā€Ÿs lack of technical expertise. Even though
          the project was pretty ambitious, it failed to take off due such unaccounted-for factors.
IX.     CONCLUSION

What is complicating things for Suzlon is the widespread suspicion in the industry circles that it is facing
serious cash-flow problems post the 2008 global financial crisis, which has led the investors to dump their
shares at the exchange subsequently decreasing its credit ratings. When international crude oil prices
were surging in the recent past, Indiaā€Ÿs biggest wind power equipment manufacturer, Suzlon Energy, used
to be a favorite with investors betting big on the future of clean wind energy amid growing climate change
concerns. However, the widening global crisis with the falling global crude prices has led to a tightening
financial squeeze for the wind power projects across the world as investors feel that the fight against
climate change is going to take a backseat. So it remains to be seen, does the condition of the parent firm
stagnate Suzlon Foundationā€Ÿs initiatives towards society improvement and its ongoing CSR activities?
Only future will tell.
EXHIBIT A

     PRODUCT                 COUNTRY                     SPECIFICATION
                           AVAILABILITY
                                                     Rated power                2100 kW
                                                     Cut-in wind speed          4 m/s
                       All Markets India, Brazil,
                                                     Rated wind speed           14 m/s
                      Italy, Nicaragua, Portugal,
    S88-2.1 MW                                       Cut-out wind speed         25 m/s
                       Romania, Spain, Turkey,
                      America, Australia & China     50 years    gust    wind
                                                                                59.5m/s
                                                     speed
                                                     Rated power               1500 kW
                                                     Cut-in wind speed         4 m/s
    S82-1.5 MW              India & China            Rated wind speed          14 m/s
                                                     Cut-off wind Speed        20 m/s
                                                     Survival wind speed       52.5 m/s
                                                    Rated power           1250 kW Cut-
                                                    in wind speed      3 m/s
    S66-1.25 MW                 India               Rated wind speed       14 m/s
                                                    Cut-off wind speed     22 m/s
                                                    Survival wind speed 52.5 m/s
                                                    Rated power           1250 kW Cut-
                                                    in wind speed      3.5 m/s Rated
    S64-1.25 MW             India & China           wind speed      14 m/s Cut-off
                                                    wind speed      25 m/s
                                                    Survival wind speed 59.5 m/s
                                                    Rated power           600 kW Cut-in
                                                    wind speed      4 m/s Rated wind
    S52-600 KW                  India               speed      13 m/s
                                                    Cut-off wind speed     25 m/s
                                                    Survival wind speed 59.5 m/s
                                                    Rated Power          2250 KW Cut-
                                                    in Wind Speed      4 m/s Cut-out
 S88 MARK- II DEFIG             China               Wind Speed 25 m/s Wind
                                                    ClassIIA / IIBRotational Speed
                                                    12.0-18.0 (rpm)
EXHIBIT B

The Associate companies and Market Share


1. Suzlon Towers and Structures Limited,     2. Suzlon Power Infrastructure Limited,


3. Suzlon Infrastructure Services Limited,   4. Suzlon Gujarat Wind Park Limited,


5. Suzlon Structure Limited,                 6. SE Forge Limited,


7. SE Composites Limited,                    8. Suzlon Wind International Limited,


9. SE Electricals Limited                    10. Suzlon Rotor Corporation


11. AE Rotor Holding B.V. and                12. Suzlon Energy A/S
EXHIBIT C



                                                                      2010-2011 CSR
                                                                     Budget Allocation
                                                                                        Financial
                                                                  15%     1%
                                                                                        Capital
                                                             4%
                                                                                43%     Natural Capital
                                                                  17%
                                                                        18%
                                                                                        Social Capital


                                                                                        Human Capital




    Enhancing Local Community's Financial Resources

    ā€¢ Livestock health care services and fertility treatment to increase productivity.
    ā€¢ Promotion of sustainable agriculture practices.
    ā€¢ Forming and linking women's savings, credit groups and micro enterprises to banks (SHGs).
    ā€¢ Product development and marketing support to indigenous artisans".
    Conserving and Enhancing Natural Resources in Business Surrounding

    ā€¢ Soil and water conservation on wind farm lands.
    ā€¢ Rain harvesting and recharging of ground water.
    ā€¢ Plantation of local tree species to increase green cover and biomass.
    ā€¢ Promotion of natural farming and eco-friendly enterprises.
    Strengthening Social Capital

    ā€¢ Forming and strengthening of Community Based Organizations (CBOs).
    ā€¢ Empowering women through Self Help Groups (SHGs).
    ā€¢ Gender sensitization for women's empowerment.
    ā€¢ Influencing Health Behavior Change.
    Enhancing Human Resources

    ā€¢ Imparting functional literacy to rural women.
    ā€¢ Providing quality teaching material in primary schools.
    ā€¢ Giving technical training to youths to increase employability.
    ā€¢ Giving life skill education to children especially those out of school.
    ā€¢ Availing quality medical treatment.
    Improving Physical Resources

    ā€¢ Reviving drinking water sources.
    ā€¢ Improving village sanitation.
    ā€¢ Decentralized health clinics.
    ā€¢ Rural (solar) electrification
EXHIBIT D

Rank determination Table for each location to assess priority for CSR activities.
EXHIBIT E


               Status of Various Projects undertaken by Suzlon Foundation

PROJECT                         STATE         TIME       PARTNERS
                                              FRAM
                                              E
Animal Vaccination              Daman         Ongoing

Computer       Literacy    for Daman          Aug'08-    NIIT
Teachers.                                     Oct '09

Anandshala.                     Gujarat       Jul'08-    Centre for Environmental Education
                                              Jul'10     (CEE)

Deepening       of     Village Gujarat        May-       Suzlon Infrastructure Limited
Pond                                          June'08

Fighting Anemia for Girls       Gujarat       July-      Arogya
                                              Dec'08

Bio-Diversity Park              Karnataka     Ongoing    Suzlon Infrastructure Limited and
                                                         Applied    Environmental   Research
                                                         Foundation

PEHCHAN.                        Karnataka     Ongoing    PCI

Distribution      of      Solar Madhya        May-       Suzlon Foundation Team
Lanterns.                       Pradesh       June'08

Empowering women for Madhya                   April'08   Concept Society
sustainable livelihood. Pradesh               -Mar'11

Rain Water Harvesting.          Maharashtra   June'08    Supa Business Unit Team and Gram
                                              -July'09   Gourav Pratishtan ( Pani Panchayat
                                                         Pune)

Providing      Skill   Based Maharashtra      Nov'07-    Indian Institute of Education-Vigyan
Training                                      Oct'10     Ashram

PEHCHAN                         Maharashtra   Ongoing    PCI

Reuse, Reduce, Recycle Maharashtra            June'08    Supa Business Unit Team
Canteen Waste & Water                         -July'09
Enhancing Rural Water Maharashtra       April-     Government of Maharashtra
Resources.                              Oct'08

PEHCHAN                   Pondicherry   Ongoing    PCI

Green Hands     -   Tree Pondicherry    June'08    ISHA Foundation
Plantation.                             -May'09

Rural      Electrification Rajasthan    May-       Suzlon Foundation Team
through Solar Lanterns.                 June'08

Shrijan                   Rajasthan     July'08-   NA
                                        June'11

PEHCHAN                   Tamil Nadu    Ongoing    PCI

Green Hands     -   Tree Tamil Nadu     June'08    ISHA Foundation
Plantation.                             -May'09
EXHIBIT F
GLOBAL HSE AT SUZLON:
ANNEXURE A:              CORPORATE GOVERNANCE AT SUZLON

Suzlon Energy Limited claims that its philosophy of corporate governance rests on the 5 pillars of
integrity, accountability, equity, transparency and environmental responsibility. Suzlon strives to build an
inclusive business model ā€“ which takes into account the interests and concerns of employees, customers,
vendors, service providers, local communities and government.

The Board of Directors (ā€œthe Boardā€) of Suzlon Energy Limited is made up of 6 members, of which 2 are
executive positions, while 4 are non-executive (independent) positions, implying that more than 50% of
the directorship positions are that of Independent Directors, as required by Clause 49(I)(A). The
companyā€Ÿs Board maintains and operates 5 Board Committees (ā€œCommitteeā€) to focus on specific areas
and make informed decisions within the delegated authority. Each committee functions according to the
charter that defines its composition, scope, power and role in accordance to the Companies Act, 1956 and
the Listing Agreement. All the committees have been suggested to be set up by Annexure 1C of Clause 49,
whose membership and her considerations are in accordance with Clause 49(II)(A).

Currently, the 5 committees are:

    1.   Audit Committee (Mandatory)
    2.   Investorsā€Ÿ Grievance (Shareholdersā€Ÿ) Committee (Mandatory)
    3.   Remuneration Committee (Non-mandatory)
    4.   Securities Issue Committee (Non-mandatory)
    5.   ESOP Committee (Non-Mandatory)

                                                                                    Minimum
                                                          Composition of
          Name of Director               Position                                 Requirements
                                                             Board
                                                                                (as per Clause 49)
                                        Chairman &
          Mr. Tulsi R Tanti
                                    Managing Director         33.33%                     -
         Mr. Girish R Tanti          Executive Director
          Mr. Ajay Relan           Independent Director
         Mr. Ashish Dhawan         Independent Director
         Mr. Pradip Kumar                                     66.67%                   50%
                                   Independent Director
              Khaitan
         Mr. V Raghuraman          Independent Director


Management Code of Ethics:-

Suzlon has disclosed (under Clause 49(1) (D)(i) and Clause 49(1)(D)(ii)) a Management Code of Ethics
applicable to all members of the Board and other members of senior management (this comprises of all
members of management one level below the executive directors, including all general managers and
functional heads). This code discusses issues regarding personal and professional integrity and honesty,
conflict of interest coming in the way of dispersal of fiduciary responsibilities of the affected parties
(including outside employment, directorships and business interests), corporate opportunities, insider
trading and compliance with government laws, rules and regulations, as well as any violations of the code
(Suzlon Energy Limited Code Of Conduct for Prevention of Insider Trading (SEL COCPIT)). The focus of
this code are encompassed in three words: ā€œRenewableā€ (ethical behavior must be repeatable day after
day), ā€œRespectā€ (have respect for all stakeholders keeping in mind the cultural diversity of the company)
and ā€œRefreshingā€ (strive to inspire fresh thinking and practices).As part of its open-door Corporate
Governance policy, and under Annexure 1D(7) of Clause 49, the company has instituted an Ombudsman,
since 1st February 2010, to act as an intermediary between the concerned company official and any
employee who might want to discuss any perceived or real malpractice, impropriety, abuse or wrongdoing
by any stakeholder in the company, and also expects employees to come forward and voice these concerns
without fear of retribution.
References


1. Suzlon Foundation .Strategy (n.d.).Retrieved August 26, 2011, from
           http://www.suzlonfoundation.org/strategy.html
2. Suzlon Knowledge Book .Knowledge Book . Retrieved August 26, 2011, from
           http://www.suzlon.com/pdf/Knowledge%20Book.pdf
3. Annual Report .Annual Report 2010-11 .(2011, July 30) Retrieved August 26, 2011, from
           http://www.suzlon.com/images/investor_annual_result/12_Annual-Report-1011.pdf
4. Awards .Awards . (n.d.). Retrieved August 27, 2011, from
           http://www.suzlon.com/about_suzlon/awards.aspx?l1=1&l2=1&l3=66
5. Suzlon Energy . Wikipedia. (n.d.). Retrieved August 26, 2011, from
           http://en.wikipedia.org/wiki/Suzlon_Energy

6. Khot, S (2011, August 30). Telephone interview.

7. p.a.l.s . What do p.a.l.s do?. (n.d.). Retrieved August 27,2011, from http://pals.in/#what-palsdo

8. Market Share. World Wind Market: Record Installations, But Growth Rates Still Falling. (2011,
   August 4). Retrieved August 27, 2011, from
   http://www.renewableenergyworld.com/rea/news/article/2011/08/world-wind-market-record-
   installations-but-growth-rates-still-falling?cmpid=rss
C S S UD E
 A E T IS

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Suzlon India: Be the Stakeholder's Choice

  • 1. SVKMā€™s Narsee Monjee Institute of Management Studies Mumbai SUZLON INDIA: Be the Stakeholderā€™s Choice A CASE STUDY Report prepared by: 1. Ankur Salunke 2. Balajee S 3. Manas Ranjan Kar 4. Partho Choudhury 5. Ravi Thakur
  • 2. INTRODUCTION: What started with Sulzer Synthetics P. Ltd has culminated into the worldā€Ÿs fifth largest wind power production company. Mr. Tulsi Tanti turned a bottleneck into a business opportunity. Quickly realizing that the shortage of power was stunting his growth in the textile industry, he moved into the renewable sector, and has never looked back since. Suzlon Energy founded by Mr. Tulsi Tanti, has operations in 32 countries and manufacturing facilities in countries like India, China and USA has developed a wide range of products (Exhibit A) to cater to the wind power industry. The Company introduced the concept of total solutions wherein, in addition to the supplies of equipment, the client is offered project execution work comprising land acquisition, site development, erection and commissioning, foundation and other civil work and O&M services. These services are offered in conjunction with the Associate Companies (Exhibit B). Suzlon operates the largest wind park in the world, a 584 MW wind park in the Eastern Ghats-Tamil Nadu. CORPORATE SOCIAL RESPONSIBILITY AT SUZLON: Suzlon's CSR starts from within the company, engaging employees in internal projects, expanding to neighboring communities and goes beyond business boundaries to benefit the society at large. The Suzlon Group has entrusted the Suzlon Foundation with the responsibility to facilitate CSR across all the functions and locations. Suzlon is committed to practice sustainable development for ā€œPowering a Greener Tomorrowā€. The Foundation ensures that business policies and practices support sustainability as its guiding principle. Suzlon Foundation is registered under Section 25 of the Companies Act. I. CSR at Workplace: a. CULTURE: The work culture at Suzlon hinges on the three pillars of corporate values, brand core and philosophy of global assimilation. Agility, creativity, adding value, commitment and integrity are the base values of Suzlonā€Ÿs work culture. Inducting people into Suzlonā€Ÿs brand core of sustainable development is a process that involves imbibing these values and blending the best qualities of the individual with those of the organization. Suzlonā€Ÿs 14,000 employees have helped raise the performance bar in professionalism, opportunity, responsibility, belongingness and accomplishment. Suzlon has leveraged the rich operational experience of the world's finest wind power technology to industriously harness an individual towards a powerful ā€žgreener tomorrowā€Ÿ. As Mrs. Seemantinee Khot, Head, CSR, Suzlon Energy rightly pointed out,ā€Ÿ Most of the people in the renewable energy companies strongly believe that they want to contribute to the planet, which doesnā€Ÿt harm and helps bridge the gap between the various sections of the society.ā€Ÿ
  • 3. Some other key policies of Suzlon to promote workplace CSR include ļ‚· Legal compliances to ensure that the suppliers are not employing any children or following ā€œunethicalā€ business practices. ļ‚· Not allowing employees work for very long hours, helping employees to share a healthy relation with their families - thus, they will be able to balance their personal and professional life. ļ‚· Ensuring fair treatment to employees and providing equal opportunities to all employees and all applicants - without regards to their race, caste, religion, color, ancestry, marital status, sex, age, nationality, and disability. b. EMPLOYEE INVOLVEMENT: The HR mandate dictates that every employee must involve themselves in at least 2 CSR days per year. This fosters employee involvement in the core values that Suzlon believes in. Suzlon also celebrates World Environment Day to build awareness among the workforce. A payroll CSR is also in place, where an employee through an entirely voluntary participation procedure, donates a certain percentage of his salary, to NGOā€Ÿs of their own bidding, like those involved in education sector, orphanages, child care etc. Suzlon has also sensitized its employees to induct them into a ā€žGive in Kindā€Ÿ sort of program, where every month Suzlon sends out a mailer to all its employees exhorting them to donate old clothes, woolens, mobiles and stationery. These initiatives have definitely helped in bringing employee participation in CSR to the fore. c. GLOBAL HSE SPHERE: The Global HSE SPHERE is a structured method and approach to Strategize HSE themes and strategies by following a reactive and proactive approach to initiate strategic initiatives. Suzlon HSE (Occupational Health, Safety & Environment) is a global initiative that establishes a company-wide practice of setting up and maintaining the highest HSE standards with a dedicated approach and organizational commitment. With Global HSE SPHERE, Suzlon are committed to achieve zero harm to employees, environment, contractors, communities & property and demonstrate sustainable leadership for effective and enhanced occupational health, safety and environment practices. Simultaneously it propagates effectively and efficiently leverages leadership commitment and stakeholder involvement in executing Suzlon HSE business plan. Suzlonā€Ÿs HSE vision and mission are being institutionalized by the Global HSE Council (EXHIBIT F) that manages its HSE agenda, strategic initiatives, communications and etc.
  • 4. II. COMMUNITY DEVELOPMENT Suzlon includes considerations of all major stakeholders in their business practices, such as local communities and the natural environment. They aim to take responsibility for negative impacts they might have on these stakeholders and correct their actions accordingly. Going beyond legal compliance and being accountable to higher ethical standards are aligned with Suzlonā€Ÿs values. Suzlon looks at the success of business from the broader perspective of sustainable development achieving the 5 capitals viz. Financial, Natural, Human, Social and Physical (Exhibit C). Their CSR activities are guided by these questions, 1. What is our impact? 2. Whom do we impact? 3. What can we do to offset our impact? Also, to ensure that CSR programs are linked with the corporate groupā€Ÿs strategies, the locations for CSR interventions are selected keeping in mind their strategic importance for Suzlonā€Ÿs business. The locations are measured on 4 indicators: 1. Presence of Suzlon 2. Stage of operation 3. Community engagement history 4 Local development status Scores are given for each indicator. Once scored, the locations are categorized in High, Medium or Low importance areas on the basis of the total scores achieved by each location. The rank will determine which location has priority for CSR activities. (Exhibit D) Again here, the broader perspective of sustainable development through development of 5 capitals dictates the activities. They have been broadly classified in Exhibit C. Also the main agenda of community development for Suzlon is making people aware. Mrs. Seemantinee Khot echoes the same sentiment when she says.ā€Ÿ Our business is secure only when we are dealing with organized and educated people. Dealing with unorganized sector is detrimental for business. Businesses normally border on their brand and legal perspectives. In helping the people grow, we do good to look good. In doing our duties we get the license to operate from the same community and build a long-lasting relationship with them.ā€Ÿ
  • 5. III. ENVIRONMENTAL CSR: Suzlon is aware of its responsibility towards the environment. It has taken many initiatives to offset its footprint in the project areas. Like the yearly beach cleaning exercise conducted by Suzlon employees at Daman and Pondicherry where the beach is cleaned by the employees themselves. CSR Champions1 guided by the CSR managers, engage their peers and the community in the exercise. The employees upon completion of the exercise report back to the company, to state the impact created through the exercise. Sanitation and plantation drives are conducted regularly by Suzlon in the project areas. The CSR activities of Suzlon results from a ā€žtripartiteā€Ÿ agreement among the company, government and the community. Suzlon takes initiatives which are in sync with the community requirements. Before the start of any project, each stakeholder gives its assessment of their requirement, and the projects are chosen according to corporate and community relevance. Even though the regulatory controls like, say planting 50 trees for every wind turbine installed, are not mandatory, but desirable. IV. CSR COUNCIL : External Agency Implementation In each state, CSR Councils have been formed to make transparent decisions on relevance of a proposed project and assessing the credibility of the agency. There are separate CSR Councils for three SEZs. The Council has representatives from different verticals of Suzlon Group. The purpose behind forming the CSR Council is twofold ā€“ a) Engage the Suzlonians in CSR activities, and b) Make the decision making process transparent and rational. The Council meetings are held once in a quarter to share the progress of CSR programs. Extra meetings are arranged whenever there are new proposals to be considered. Along with the Council members and CSR State Head, a representative from the Central Team will also be present in the meetings. One person among the employees is chosen by his peers, who is delegated the responsibility of representing the SBU in the council. He is called upon to attend a one day workshop of Sustainability Sensitization Programme, to assess his proclivities towards the field. Upon satisfactory completion of the same, he is authorized to become a member of the CSR Council. -------------------------------------------------------------------------------------------------------- 1 CSR Champions are chosen amongst the employees to motivate them towards CSR.
  • 6. V. P.A.L.S.: Bringing the Winds of Change Social Networking seems to be the new way for Corporate Social Responsibility. Suzlon has launched a new brand campaign called P.A.L.S. - the Pure Air Lovers' Society. P.A.L.S. is a movement to emphasize the importance of clean air, while helping to educate people on how to live a more environmentally responsible life. The social media campaign, not only helps spread awareness about the brand, but also helps in engaging new participants. Identifying the need for a campaign of this nature, P.A.L.S. has already found support from prominent members of Indian society like RJ Malishka, Milind Soman, Garson da Cunha and Anil Dharker, who are the first P.A.L.S. champions. These champions have been tasked with the responsibility of outlining recommendations and sustaining momentum to ensure the success of the movement. The innovativeness of the campaign can be gauged from the fact that Suzlon would be planting one tree for every registration at their website, www.pals.in. The P.A.L.S. campaign aims to increase in intensity over the coming months with innovative activations and initiatives that aim to drive traffic towards registrations, thereby escalating the magnitude and success of the movement. VI. CSR Publications Suzlon regularly updates its employees regarding the CSR activities undertaken by the company. LIVEWIRE, a global e-magazine of Suzlon group, always carries a section regarding the CSR activities undertaken by the business units. Adding to that, a quarterly newsletter in every state of operations is published in the regional language. The newsletter is sent out to the district heads, the local community and other stakeholders to keep them informed regarding the CSR activities. VII. AWARDS AND RECOGNITIONS Year Awarding Authority Details 2010-11 6th in Indiaā€™s list of Cohn and Wolfeā€™ IPGBS Top 10 Ranked 6th best green brand of India Green Brands 2011 based on its environmental initiatives. 2010-11 Suzlon wins Global Leadership Award for Wins Gigaton Award for global sustainability at COP16 leadership in emissions control and sustainability practices . Suzlon recognized among top six global companies that includes Vodafone Group, Reckitt Benckiser Group, Nike, 3M and GDF Suez. 2009-10 Tulsi Tanti awarded Champion of the Earth Mr. Tulsi Tanti was honoured with Champion of the Earth title for Entrepreneurial Vision by the United Nations Environment Program
  • 7. 2008-09 Suzlon bags Golden Peacock National Training Award The award function was held at the 2008. 9th International Conference on Corporate Governance at London and the award was given by Dr Ola Ullsten, former PM of Sweden. 2007-08 TIME's Heroes of the Environment Awards Mr. Tulsi R. Tanti, CMD, Suzlon Energy Limited - for initiating action on Global Climate Change 2006-07 Wind India Conference Awards Best Company - for Corporate Social Responsibility 2006-07 India Tech Foundation and Power Stream Journal For Project Management & Energy ENPOWER Award Efficiency and Sustainability 2006-07 TERI Alumni Award Entrepreneurship in Energy Environmental Technologies 2006-07 The Solar Energy Society of India Award SESI Renewable Energy Pioneer - 2005-06 Mr. Tulsi R. Tanti, CMD, Suzlon Energy Limited VIII. ROADBLOCKS Suzlon Foundation involves community, concerned Government department and Civil Society Organizations in planning, implementation and monitoring development programs. The six monthly 360 degree reviews are transparent mechanisms for improving the sustainability of the CSR projects. (75% of the projects were rated as "excellent", 15% as "good", the remaining 10% projects rated as "un- satisfactory" would be either closed or revamped next year.). Even though the company tries its best to provide for the community in the best possible manner through it CSR initiatives, some projects are also shelved due to their failure to achieve their goals. We mention two such projects which were shelved during the last year due to such constraints, 1. Project SAFAL: Youth employability programmes in Daman and Pondicherry were closed down due to failure to achieve targets. The initial target was to employ 500 youths, but only 300 youths turned up for the programme. In the end, only a handful of them were actually employed. The reasons cited were that the curriculum of the programme was not suited to the youthā€Ÿs temperament. Also, the skills taught to the youth were not enough to make them employable. 2. A Biodiversity Project in Karnataka was also shut down due to financial constraints. Also the long term commitment to the project did not support Suzlonā€Ÿs lack of technical expertise. Even though the project was pretty ambitious, it failed to take off due such unaccounted-for factors.
  • 8. IX. CONCLUSION What is complicating things for Suzlon is the widespread suspicion in the industry circles that it is facing serious cash-flow problems post the 2008 global financial crisis, which has led the investors to dump their shares at the exchange subsequently decreasing its credit ratings. When international crude oil prices were surging in the recent past, Indiaā€Ÿs biggest wind power equipment manufacturer, Suzlon Energy, used to be a favorite with investors betting big on the future of clean wind energy amid growing climate change concerns. However, the widening global crisis with the falling global crude prices has led to a tightening financial squeeze for the wind power projects across the world as investors feel that the fight against climate change is going to take a backseat. So it remains to be seen, does the condition of the parent firm stagnate Suzlon Foundationā€Ÿs initiatives towards society improvement and its ongoing CSR activities? Only future will tell.
  • 9. EXHIBIT A PRODUCT COUNTRY SPECIFICATION AVAILABILITY Rated power 2100 kW Cut-in wind speed 4 m/s All Markets India, Brazil, Rated wind speed 14 m/s Italy, Nicaragua, Portugal, S88-2.1 MW Cut-out wind speed 25 m/s Romania, Spain, Turkey, America, Australia & China 50 years gust wind 59.5m/s speed Rated power 1500 kW Cut-in wind speed 4 m/s S82-1.5 MW India & China Rated wind speed 14 m/s Cut-off wind Speed 20 m/s Survival wind speed 52.5 m/s Rated power 1250 kW Cut- in wind speed 3 m/s S66-1.25 MW India Rated wind speed 14 m/s Cut-off wind speed 22 m/s Survival wind speed 52.5 m/s Rated power 1250 kW Cut- in wind speed 3.5 m/s Rated S64-1.25 MW India & China wind speed 14 m/s Cut-off wind speed 25 m/s Survival wind speed 59.5 m/s Rated power 600 kW Cut-in wind speed 4 m/s Rated wind S52-600 KW India speed 13 m/s Cut-off wind speed 25 m/s Survival wind speed 59.5 m/s Rated Power 2250 KW Cut- in Wind Speed 4 m/s Cut-out S88 MARK- II DEFIG China Wind Speed 25 m/s Wind ClassIIA / IIBRotational Speed 12.0-18.0 (rpm)
  • 10. EXHIBIT B The Associate companies and Market Share 1. Suzlon Towers and Structures Limited, 2. Suzlon Power Infrastructure Limited, 3. Suzlon Infrastructure Services Limited, 4. Suzlon Gujarat Wind Park Limited, 5. Suzlon Structure Limited, 6. SE Forge Limited, 7. SE Composites Limited, 8. Suzlon Wind International Limited, 9. SE Electricals Limited 10. Suzlon Rotor Corporation 11. AE Rotor Holding B.V. and 12. Suzlon Energy A/S
  • 11. EXHIBIT C 2010-2011 CSR Budget Allocation Financial 15% 1% Capital 4% 43% Natural Capital 17% 18% Social Capital Human Capital Enhancing Local Community's Financial Resources ā€¢ Livestock health care services and fertility treatment to increase productivity. ā€¢ Promotion of sustainable agriculture practices. ā€¢ Forming and linking women's savings, credit groups and micro enterprises to banks (SHGs). ā€¢ Product development and marketing support to indigenous artisans". Conserving and Enhancing Natural Resources in Business Surrounding ā€¢ Soil and water conservation on wind farm lands. ā€¢ Rain harvesting and recharging of ground water. ā€¢ Plantation of local tree species to increase green cover and biomass. ā€¢ Promotion of natural farming and eco-friendly enterprises. Strengthening Social Capital ā€¢ Forming and strengthening of Community Based Organizations (CBOs). ā€¢ Empowering women through Self Help Groups (SHGs). ā€¢ Gender sensitization for women's empowerment. ā€¢ Influencing Health Behavior Change. Enhancing Human Resources ā€¢ Imparting functional literacy to rural women. ā€¢ Providing quality teaching material in primary schools. ā€¢ Giving technical training to youths to increase employability. ā€¢ Giving life skill education to children especially those out of school. ā€¢ Availing quality medical treatment. Improving Physical Resources ā€¢ Reviving drinking water sources. ā€¢ Improving village sanitation. ā€¢ Decentralized health clinics. ā€¢ Rural (solar) electrification
  • 12. EXHIBIT D Rank determination Table for each location to assess priority for CSR activities.
  • 13. EXHIBIT E Status of Various Projects undertaken by Suzlon Foundation PROJECT STATE TIME PARTNERS FRAM E Animal Vaccination Daman Ongoing Computer Literacy for Daman Aug'08- NIIT Teachers. Oct '09 Anandshala. Gujarat Jul'08- Centre for Environmental Education Jul'10 (CEE) Deepening of Village Gujarat May- Suzlon Infrastructure Limited Pond June'08 Fighting Anemia for Girls Gujarat July- Arogya Dec'08 Bio-Diversity Park Karnataka Ongoing Suzlon Infrastructure Limited and Applied Environmental Research Foundation PEHCHAN. Karnataka Ongoing PCI Distribution of Solar Madhya May- Suzlon Foundation Team Lanterns. Pradesh June'08 Empowering women for Madhya April'08 Concept Society sustainable livelihood. Pradesh -Mar'11 Rain Water Harvesting. Maharashtra June'08 Supa Business Unit Team and Gram -July'09 Gourav Pratishtan ( Pani Panchayat Pune) Providing Skill Based Maharashtra Nov'07- Indian Institute of Education-Vigyan Training Oct'10 Ashram PEHCHAN Maharashtra Ongoing PCI Reuse, Reduce, Recycle Maharashtra June'08 Supa Business Unit Team Canteen Waste & Water -July'09
  • 14. Enhancing Rural Water Maharashtra April- Government of Maharashtra Resources. Oct'08 PEHCHAN Pondicherry Ongoing PCI Green Hands - Tree Pondicherry June'08 ISHA Foundation Plantation. -May'09 Rural Electrification Rajasthan May- Suzlon Foundation Team through Solar Lanterns. June'08 Shrijan Rajasthan July'08- NA June'11 PEHCHAN Tamil Nadu Ongoing PCI Green Hands - Tree Tamil Nadu June'08 ISHA Foundation Plantation. -May'09
  • 15. EXHIBIT F GLOBAL HSE AT SUZLON:
  • 16. ANNEXURE A: CORPORATE GOVERNANCE AT SUZLON Suzlon Energy Limited claims that its philosophy of corporate governance rests on the 5 pillars of integrity, accountability, equity, transparency and environmental responsibility. Suzlon strives to build an inclusive business model ā€“ which takes into account the interests and concerns of employees, customers, vendors, service providers, local communities and government. The Board of Directors (ā€œthe Boardā€) of Suzlon Energy Limited is made up of 6 members, of which 2 are executive positions, while 4 are non-executive (independent) positions, implying that more than 50% of the directorship positions are that of Independent Directors, as required by Clause 49(I)(A). The companyā€Ÿs Board maintains and operates 5 Board Committees (ā€œCommitteeā€) to focus on specific areas and make informed decisions within the delegated authority. Each committee functions according to the charter that defines its composition, scope, power and role in accordance to the Companies Act, 1956 and the Listing Agreement. All the committees have been suggested to be set up by Annexure 1C of Clause 49, whose membership and her considerations are in accordance with Clause 49(II)(A). Currently, the 5 committees are: 1. Audit Committee (Mandatory) 2. Investorsā€Ÿ Grievance (Shareholdersā€Ÿ) Committee (Mandatory) 3. Remuneration Committee (Non-mandatory) 4. Securities Issue Committee (Non-mandatory) 5. ESOP Committee (Non-Mandatory) Minimum Composition of Name of Director Position Requirements Board (as per Clause 49) Chairman & Mr. Tulsi R Tanti Managing Director 33.33% - Mr. Girish R Tanti Executive Director Mr. Ajay Relan Independent Director Mr. Ashish Dhawan Independent Director Mr. Pradip Kumar 66.67% 50% Independent Director Khaitan Mr. V Raghuraman Independent Director Management Code of Ethics:- Suzlon has disclosed (under Clause 49(1) (D)(i) and Clause 49(1)(D)(ii)) a Management Code of Ethics applicable to all members of the Board and other members of senior management (this comprises of all members of management one level below the executive directors, including all general managers and functional heads). This code discusses issues regarding personal and professional integrity and honesty, conflict of interest coming in the way of dispersal of fiduciary responsibilities of the affected parties (including outside employment, directorships and business interests), corporate opportunities, insider trading and compliance with government laws, rules and regulations, as well as any violations of the code (Suzlon Energy Limited Code Of Conduct for Prevention of Insider Trading (SEL COCPIT)). The focus of this code are encompassed in three words: ā€œRenewableā€ (ethical behavior must be repeatable day after day), ā€œRespectā€ (have respect for all stakeholders keeping in mind the cultural diversity of the company) and ā€œRefreshingā€ (strive to inspire fresh thinking and practices).As part of its open-door Corporate Governance policy, and under Annexure 1D(7) of Clause 49, the company has instituted an Ombudsman, since 1st February 2010, to act as an intermediary between the concerned company official and any employee who might want to discuss any perceived or real malpractice, impropriety, abuse or wrongdoing by any stakeholder in the company, and also expects employees to come forward and voice these concerns without fear of retribution.
  • 17. References 1. Suzlon Foundation .Strategy (n.d.).Retrieved August 26, 2011, from http://www.suzlonfoundation.org/strategy.html 2. Suzlon Knowledge Book .Knowledge Book . Retrieved August 26, 2011, from http://www.suzlon.com/pdf/Knowledge%20Book.pdf 3. Annual Report .Annual Report 2010-11 .(2011, July 30) Retrieved August 26, 2011, from http://www.suzlon.com/images/investor_annual_result/12_Annual-Report-1011.pdf 4. Awards .Awards . (n.d.). Retrieved August 27, 2011, from http://www.suzlon.com/about_suzlon/awards.aspx?l1=1&l2=1&l3=66 5. Suzlon Energy . Wikipedia. (n.d.). Retrieved August 26, 2011, from http://en.wikipedia.org/wiki/Suzlon_Energy 6. Khot, S (2011, August 30). Telephone interview. 7. p.a.l.s . What do p.a.l.s do?. (n.d.). Retrieved August 27,2011, from http://pals.in/#what-palsdo 8. Market Share. World Wind Market: Record Installations, But Growth Rates Still Falling. (2011, August 4). Retrieved August 27, 2011, from http://www.renewableenergyworld.com/rea/news/article/2011/08/world-wind-market-record- installations-but-growth-rates-still-falling?cmpid=rss
  • 18. C S S UD E A E T IS