The desire to do something for the community is nothing new at Larsen & Toubro (L&T). Santosh Kumar Singh, the company’s chief sustainability officer, says the company’s first community health center was set up in 1967. The number has grown to more than a dozen today. “In the 1990s, the first construction skills training institute was established. Again, this was in the direction of improving the availability of skilled manpower and making more youth employable in the construction sector,” he describes.
It has been recognized as the Most Sustainable Infrastructure Company in the Sector Excellence in Manufacturing category in BT India’s Most Sustainable Companies of the Year.
When there are multiple business sectors, the concept of sustainability evolves and matures over time. Steps taken at one time tend to have a much greater impact later. L&T’s sustainability reporting process began in 2008, but did not move to integrated reporting until a decade later. “That’s when financial performance started to correlate with impact on the environment and society,” says Singh. One important moment came in 2021 when the company set a goal for both carbon neutrality and water neutrality. “In many cases, what we did was purely voluntary.”
Working across companies and geographies means that sustainability also takes on a very different meaning. L&T does this not just for its own operations but also for what it offers to its clients and customers, Singh points out. “This means that most of the real impact is felt outside the organization,” he says.
This could be in the supply chain or what L&T delivers through an infrastructure project. “If we are developing a green energy business that has the potential to decarbonize the chain. In Kandla, for example, we will produce green ammonia to be supplied to Itochu (a Japanese company), which is then used as a sustainable marine fuel,” explains Singh. Two years ago, L&T identified a group of companies, which later became known as green companies, which included areas such as clean mobility and recycling. It has now grown to the point that these businesses alone generate just over half of the company’s revenue. “This is the potential multiplier part of L&T, where we are doing this not only for ourselves but for others as well.”
L&T-wide, the conversation on sustainability will include large international projects or bullet train in India, sewage treatment plants (STP), among others. Singh details the STP project in Mumbai, where L&T is building a 360 million liters per day plant in a reclamation area in Bandra. Again, the Mumbai coast is known to be highly polluted. “From L&T’s point of view, we have our own water R&D facility in Kancheepuram (in Tamil Nadu), and that gives us a lot of experience,” says Singh. The company is already participating in the National Ganges Cleanup Mission (Namami Gange), to implement large-scale projects around sewage treatment plants and underground sewerage networks, to prevent the discharge of untreated water into rivers.
In markets like West Asia, a lot of effort is being put into renewable energy, more specifically regarding solar energy. In India, it was part of the Omkareshwar floating solar project in Madhya Pradesh. “For solar to really take off, it has to be accompanied by storage, and that can be either a battery or a pump,” says Singh.
Complexity comes with every project, and he cites the case of hydel in the Himalayas, where the ecosystem is fragile and prone to landslides. “Getting it done here is crucial, and the area has a history of projects not getting off the ground,” he explains. “In addition, the terrain is difficult, where a technological, geology-based approach is required. Typically, you have to design all of this for at least fifty years.”
Sustainability comes with an element of innovation as well. Last year, L&T closed a deal to issue environmental, social and corporate bonds worth Rs 500 crore, marking the first instance of an Indian company going this route.
@krishnagopalan
