Exploring Our Sustainable Journey at L&T Finance

Exploring Our Sustainable Journey at L&T Finance

At L&T Finance, we are not just about numbers and financial growth. We are on a mission to balance success with sustainability and responsibility. Our story is one of transformation, aligning our strategies with the needs of a changing world. Join us as we trace the steps to integrate Environmental, Social, and Governance (ESG) principles into every aspect of our operations.

Our Humble Beginnings in ESG

In 2018-2019, we embarked on our ESG journey by undertaking a gap assessment to evaluate our sustainability readiness. Understanding our starting point was key. During this period, we also conducted our first materiality assessment, which helped us focus on what truly matters to our stakeholders. We opened up about our practices by publishing our first Sustainability Report, welcoming accountability and dialogue.

Building Momentum with Key Milestones

With 2019-2020, we gained momentum, becoming a constituent of the FTSE Emerging Index series. This recognition reassured us that we were heading in the right direction. It validated our ESG efforts on the international stage.

Continuing this journey, we developed our first Sustainability road map. Strategy is pivotal in holding ourselves to high standards that align with industry expectations and exceed them where possible.

Setting Ambitious Goals

By 2020-2021, we had set our sights on even more ambitious goals. We introduced specific ESG targets to ensure our efforts were structured and measurable. This dedication was reflected in the publication of our second Sustainability Report, where we detailed our methodical progress.

Among our notable endeavours were our commitments to achieve carbon neutrality by FY35 and water neutrality by FY22. We are proud to have met our water-neutrality target, which underlines our commitment to conservation and resource management. Since FY 2023 we have remained water surplus/positive.

Strengthening Our ESG Framework

In 2021-2022, our focus shifted to strengthening our sustainable foundations. We integrated ESG as a core pillar of our business strategy. Recognising that leadership starts at home, we made significant upgrades to our corporate headquarters and transitioned to renewable energy sources.

Achieving Water Positive Status was another highlight, which reinforced our commitment to the environment, particularly in a country where water scarcity remains a critical issue.

Cultivating a Responsible Culture

Our journey gained further depth in 2022-2023 as we emphasised cultivating an internal culture steeped in ESG values. To ensure all our employees were aligned with our vision, we rolled out a mandatory ESG training module. This initiative is crucial because the success of our sustainability agenda depends on everyone pulling in the same direction.

This year, we also published our first annual integrated report. We strengthened our transparency and built greater trust with stakeholders by providing a comprehensive view of our financial and sustainable developments.

Accelerating Progress with Recent Innovations

As we move through 2023-2024, we are leveraging our experience and lessons learned to accelerate our progress. We launched our Sustainable Finance Framework with a second-party opinion from CRISIL. Such endorsements highlight our commitment to sustainable finance.

We have also enhanced our structural processes by creating a "Single Lending Entity". This initiative has significantly improved our governance structure, promoting efficiency and transparency across our operations.

Significance of Our ESG Journey

Why does our journey matter? In simple terms, we believe that profitability and ethical behaviour can—and should—go hand in hand. In a world where financial institutions wield significant power, our approach to ESG stands as an example of what’s possible when commitment meets accountability.

Lessons We Have Learned

Throughout our journey, several key lessons have emerged:

1. Make ESG Central to Business Strategy: ESG must be more than just a side project. By embedding these values into our core strategy, we ensure that our commitment to sustainability is reflected in every decision.
2. Prioritise Transparency: Our sustainability and integrated reports are vital tools. They inform stakeholders about our progress and hold us accountable to our pledges.
3. Set Measurable Sustainability Targets: Having clear, achievable goals gives us direction and allows us to measure success accurately.
4. Empower Employees: Through comprehensive training, we have ensured that our entire team, at every level, understands and supports our sustainability ambitions.
5. Validate Through Credibility: Securing leadership ESG ratings and third-party validations reinforce our standing and commitment to sustainable practices.

Looking to the Future

The road ahead holds both challenges and opportunities. At L&T Finance, we are poised to continue our leadership in sustainability within the financial sector. It's about adapting to new environmental challenges while fostering innovation in governance and ethical lending practices.

Our sustainable journey is more than a series of initiatives—it's a long-term commitment to paving pathways for economic growth that are equitable, inclusive, and environmentally conscious.

The Way Forward

Looking ahead, the challenge and opportunity for L&T Finance lie in maintaining this momentum. We must anticipate new environmental and social challenges while continuously innovating our strategies. As an industry leader, we are leading dialogues around sustainability and influencing other value chain companies on similar journeys.

L&T Finance's journey towards sustainability is a testament to the positive impact financial institutions can have when we commit to ethical and environmentally sound practices. For readers following this journey, it serves as a beacon—a reminder that profitability and sustainable development can coexist harmoniously.