Assignment 2

Sustainable Production

Submitted to: Associate Prof. Bikas Agrawal

Submitted by: Suhrit Biswas

About the sustainability journey of Arvind
Arvind has been striving to provide better quality of life to people by bringing enriching
and inspiring lifestyle solutions.

Arvind is one of the founders of Sustainable apparel coalitions (SAC). Higg Index is 1 of
the key focus areas of SAC, helps gauge the environment and social impact of the
apparel industry, this report includes the Higg Index for the following facilities: Arvind Ltd.
- Naroda and Santej in Ahmedabad and Mysore Road, Electronic City (Shirting),
Yeshwantpur, Bommasandra, Arsikere, Mahadevapura, Naganathapura, Goodhill Suit &
Chitradurga in Karnataka.

Arvind Limited has reported at CDP for four years in a row now, where CDP means
Carbon Disclosure Project. It includes:

● Zero Discharge of Hazardous Chemicals - Arvind became the first textile

manufacturer as well as the first company headquartered in India to join ZDHC.
● Water Resources Group (WRG) - Arvind is part of the WRG, funded and founded
by IFC and UN, and is engaged with them in improving the livelihood of cotton
farmers in Maharashtra.
● Global Organic Textile Standard (GOTS) - They have received the GOTS 3.0
certification for our fabrics, fibres and yarns products.
● Carbon Pricing Leadership Coalition - Arvind is one of the seven corporates in
India, to be part of this global coalition of corporates, initiated by the World Bank.
● Better Cotton Initiative (BCI) - They have collaborated with BCI in the production
and sourcing of our most valued raw material - Cotton.
● International Organisation for Standardisation ISO 9001, ISO 14001, ISO 50001
- Their operations are ISO 9001: 2008 (Quality Management Systems), ISO 14001:
2004 (Environmental Management Systems), and ISO 50001 Energy Management
Systems certified.
● Occupational Health and Safety Assessment Series - All hazards and its
associated risk have been identified across the Santej and Naroda facilities. Any
risk that deems to be high in the Hazard Identification and Risk Analysis (HIRA) are
prioritised and taken into management plan.

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SUSTAINABILITY
Apart from Arvind’s quality products, being responsible towards the environment and the
community is what sets them apart from the competitors.

In addition to the strong economic performance, stakeholders now demand the

organisations to be environmentally and socially more sustainable. At Arvind, sustainable
growth has always been our credo and we listen to our stakeholders and act on their
feedback on our material issues.

Fundamentally right is their approach to sustainability that focuses on input management

rather than tailpipe intercessions on issues material to them and their stakeholders. The
key input materials which are integral to their business include cotton, people, money,
energy, water and chemicals. Their policies, processes and practices are designed in a
way to nurture key input elements at the source and optimise their utilisation, making
their business sustainably sound.

Cotton Sourcing:

They source sustainable cotton and reduce the negative

impact of cotton farming, which is crucial to their
operations. They have started a new sustainable farming
method, Regenerative Organic Farming, which is a more
holistic way of encompassing organic practices, animal
welfare and social fairness. Their sustainable farm
operations now extend to more than 100,000 acres and
their plan was to extend this to 140,000 acres during
2019-20. They will work with 36,000 farmers in promoting
sustainable agriculture practices. They aim to accelerate
and expand their farm operations to cover 400,000 acres
of farmland and over 100,000 farmers by the year 2022-23.

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 ● 6.64 times Increase in area under cultivation of BCI cotton from 14,750 to 112,756
acre between FY 2014-15 and FY 2018-19.
● 6.74 times increase in number of BCI farmers from 3,395 to 26,289 between FY
2014-15 and FY 2018-19.
● LCA of BCI and Organic Cotton reiterates the sustainability benefits of responsible
cotton farming.
● Zero Child Labour at the BCI and organic cotton farms through the strict
implementation of anti-child labour policy.

The Better Cotton Initiative (BCI) seeks to grow responsible cotton through carefully
controlled application of water and use of approved fertilisers and pesticides; thereby,
dramatically reducing the environmental footprint of cotton farming.

They deployed farmers to produce BCI cotton through contract farming at Maharashtra
and Gujarat to procure raw material from them. They also ensure an uninterrupted supply
chain, while remaining watchful that the cotton farmers, the community and mother Earth

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reap the benefits as well. BCI usage in their products has played a significant role in the
social and environmental front. It has helped reduce the usage of pesticides, water and
chemical fertilisers. This has in turn helped reduce the input cost with a little less or
similar output as the end crop product. Less cost and similar output helped upgrade
social life, and less usage of pesticides/fertilisers and
saving of water lead to environmental savings.

Benefits of BCI:

● Reduced Cost of Production

● Increase in Income
● Access to Affordable Finance and Money
Management Credit Guidance
● Integrated approach of Nutrient, Pest and
Disease Management
● Knowledge and Skill Development
● Quality of Fibre
● Water Efficiency
● Improved Soil Health
● Minimising effect of crop loss caused by
attack of pests and diseases
● Natural Resource Management
● Abolishing Social Evils
● Building a Healthy Community
● Decent Work Ethics for Farm Workers

Organic cotton farming

This protects the soil and groundwater, and reduces the overall cost. Soil quality is also
controlled by rotational cropping of leguminous crops like pulses, and scientific practices
improve the yield per acre over time. The farmers are guided to form Self Help Groups
(SHGs) and create a self-sustainable, mutual support system, where peer-power is
harnessed for problem solving and mobilising funds.

Their supply chain consists of three types of cotton - conventional, BCI and organic. By
comparison of these three types, Quantify the environmental benefits associated with
production of organic seed cotton and BCI seed cotton against the conventional seed

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cotton using LCA approach. The study is based on primary data collected from farming
sites owned by Arvind Group for BCI cotton and organic cotton cultivation in the state of
Maharashtra, India.

Water use management:

They have an equal focus on water efficiency improvement as well as recycling. They
have a recycling facility with capacity of 8 million litres per day, at their Denim mill in
Ahmedabad. Through the Public-Private-Partnership project
at Santej Unit, they have been able to cut down freshwater
use.65% recycled water and only 35% water freshwater are
utilised. Several of their production units are operating on
100% recycled water. Arind also has India's largest Zero
Liquid Discharge plant with recycling capacity of 18 million
litres per day. They have also invested in advanced
technologies like indigo foam dyeing of Denim, which uses
90% less water compared to conventional dyeing
technologies.

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Energy Management:

Energy Consumption: Coal, electricity and compressed natural gas were used for their
operations till now. We diversified into solar power during the reporting period to
increase the renewable energy mix in their operations. In fact, Arvind’s Ethiopia
operations are also fully powered by renewable energy. We are working towards
increasing solar power as a source of energy for our other units too.

Measurement of energy consumption under two different categories which include:

1. Direct Energy: generated through combustion of fuels such as coal and gas.

2. Indirect Energy: purchased electricity from the grid

They have expanded the scope of disclosures to reinforce our energy accountability by
including smaller units at Arvind in the reporting period.

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After an increase in FY 2016-17, the energy use has been consistently going down due to
various energy efficiency initiatives such as installing new boilers and energy-efficient
motors, implementing ISO 50001 standards, and shifting to LEDs from incandescent tube
lights.

Their multiple initiatives across the units and offices helps to reduce energy
consumption. ISO 50001 energy management system has been implemented at all the
large energy consuming sites. They are also increasing the alternative energy in the total
energy mix. Santej Plant has an installed capacity of 16.2 MW and it can generate up to
23 million KWh of solar energy every year. This is India's largest rooftop solar installation
at a single location. This takes the total solar capacity across various sites to 22MW.

GreenHouse Gas Emissions and air pollution:

Arvind, being an integral part of the industry, assumes responsibility towards restricting
emissions by enhancing the energy efficiency of the processes as well as investing in
low-carbon technologies to keep the global temperature rise this century well below 2
degrees. The last five-year GHG emission trend shows that both the direct and indirect
emissions have consistently gone down.

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Various initiatives have been taken to reduce GHG and air pollution. They have switched
from coal to renewable biomass to the extent of 40% in the textile mills. 13.88% reduction
is achieved in direct GHG & 15% drop in indirect GHG emissions in the last five years,
considerably reducing their overall carbon footprint.

Specific GHG emissions have gone down by 29% and 10% at Denim and Woven & Knits
units respectively, over a period of five years.

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Renewable energy:

Arvind’s target is making each one of the facilities and offices run entirely on renewable
energy. They are trying to achieve captive solar generation capacity to 40 MW. Once that
capacity is reached, overall generation will exceed 55 million units per year and will
reduce carbon emissions by 50,000 tons per annum. First phase of the solar installation
of 4 MW rooftop solar at Ahmedabad and Bengaluru plants is already initiated, while the
second phase commenced in February 2018 with the addition of 17 MW. The third phase
will include installation of solar plants on the ground and at locations close to the
facilities, which will take the total installed capacity to 40 MW.

Installation of 16.2 MW rooftop solar at our Santej facility in Gujarat, which is India's
largest rooftop solar installation at a single location, is one of the steps in the direction.
Arvind's current solar installation has been ranked by BRIDGE TO INDIA as the largest
single site solar rooftop plant in India.

People:

a. Labour Relations and Union Practices: They have clearly spelt out guidelines to
ensure that they engage in fair labour practices. This includes payment of
minimum wages, protection of human rights, prevention of child/forced labour and
encouragement of health and safety best practices.
b. Safety: Overall reduction of 93.36% in incident rate (reportable accident per 1000
workers), reduction of 68.42% in fire incidences, and Average Accident Frequency
Rate of 1.04 in Santej, one of the lowest in the history of Arvind Limited.

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Chemicals:

Chemical usage within textile production processes is reduced, which have a smaller
environmental impact. Not only effluents are not treated but also extract useful salts from
them; such that they can be reused. In the reporting period, Caustic recovery increased
by 3.1%, and resulted in savings of 105 tons of Fresh Caustic. Ionic Softener Installed at
Mysore Road Unit resulted in savings of 3,888 Litres chemical consumption/year that led
to financial savings.

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Money:

They try to be fundamentally right in the approach of running business. This ensures that
their core business interests remain protected and are sustainable. Arvind’s strong
financial performance is key to sustainable growth.

Continuous communication and engagement:

Continuous communication and engagement takes place with the key stakeholders like
customers, investors, and employees. Details of this engagement are elaborated in the
stakeholder engagement section.

Customer Satisfaction:

They try to anticipate short-term and long-term expectations of the customers. The
design and technology teams meet the customer groups at regular intervals throughout
the year.

Regulatory and legal challenges:

All the operations and business processes are as per the legal and regulatory processes
approved by the Government under the Companies Act 2013 in India.

Employees:

At Arvind, they have developed talent management strategies that are in alignment with
a strong business strategy. Arvind focuses on generating meaningful and long-term
employment opportunities for the underprivileged sections of society.

● 35,066 Man-days of Total Training during the reporting period.

● 1.04 Average Accident Frequency Rate in Santej Facilities.
● 93.36% Overall reduction in Incident Rate (reportable accident per 1,000 workers)
● 68.42% Overall reduction in Fire Incidences.
● INR 332.8 Million - Total CSR spent during reporting period.
● OHSAS 18001:2007 Certification at Naroda facility.

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Conclusion:

This builds on the earlier two reports and articulates core ideas of Fundamentally Right
philosophy by making every stakeholder and input an ally towards achieving larger and
long-term sustainability goals. It delves deeper into the sustainability performance and
discloses in detail the contributions of the allies and the supply chain for raising the
sustainability standards. They have adopted the reporting parameters suggested by the
Global Reporting Initiative (GRI) and thus, this report is in accordance with GRI Standards
guidelines. The GRI content index table at the end of this report shows the definition of
each reported disclosure element as well as its location within the report. The
performance disclosures contained in this report pertain to the period between April 01,
2016 and March 31, 2019. They are determined to report the triple bottom line
performance on a regular basis.

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References:

1. https://www.arvind.com/sustainability
2. https://www.arvind.com/pdf/Arvind%20SR_2019.pdf

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