L&T Finance, operating within the larger Larsen & Toubro (L&T) conglomerate, is deepening its commitment to socially responsible practices, drawing upon its parent company's long-standing dedication to community and environmental stewardship. Santosh Kumar Singh, L&T's Chief Sustainability Officer, highlights a history rooted in social impact, dating back to the establishment of its first community health centre in 1967 and a construction skill training institute in the 1990s.
The concept of sustainability has evolved significantly within L&T. While formal sustainability reporting began in 2008, a pivotal shift to integrated reporting occurred a decade later. This move explicitly linked the company's financial performance with its environmental and societal impact. A key milestone in 2021 saw L&T setting ambitious targets for both carbon and water neutrality, often pursuing initiatives beyond regulatory requirements.
Expanding Impact Beyond Core Operations
L&T's sustainability efforts extend far beyond its internal operations, influencing its supply chain and the infrastructure projects it delivers. Singh emphasizes that the real impact is often felt externally, such as through the development of green energy businesses designed to decarbonize various sectors. An example includes the production of green ammonia at Kandla, destined for Itochu, a Japanese company, for use as sustainable marine fuel.
A few years ago, L&T strategically identified a portfolio of businesses—including clean mobility and recycling—that it designated as 'green businesses'. These ventures have experienced substantial growth, now contributing to over half of the company's total revenue. This significant contribution underscores L&T's 'multiplier potential,' where its sustainable actions benefit not only the company but also its clients and the broader community.
Key Sustainability Projects and Innovation
L&T's large-scale sustainability initiatives encompass a wide range of projects. In India, these include constructing a 360 million litres per day sewage treatment plant (STP) in Mumbai's Bandra reclamation area, critical for addressing coastal pollution. The company also plays a vital role in the National Mission for Clean Ganga (Namami Gange), executing large-scale STP and underground sewerage network projects to prevent untreated water discharge.
Internationally, L&T is heavily involved in renewable energy projects, particularly solar power, across markets like West Asia. Domestically, it contributed to the Omkareshwar floating solar project in Madhya Pradesh, recognizing the need for integrated storage solutions, such as batteries or pumped hydro, for widespread solar adoption. Navigating complex ecosystems, like hydel projects in the Himalayas, demands innovative, geology-based technological approaches to ensure long-term viability and mitigate environmental risks.
"Sustainability comes with an innovation component as well." - Santosh Kumar Singh, Chief Sustainability Officer, L&T
In a significant financial move demonstrating its commitment, L&T executed a Rs 500 crore ESG bond issuance last year. This marked a pioneering step for an Indian company, directly linking financial instruments to environmental, social, and governance objectives, thereby reinforcing L&T Finance's role in a broader, responsible financial ecosystem.