Natural Capital

This year, Dabur continued its holistic approach by focusing on Scope 1 (i.e. emissions from sources directly owned or controlled by the company) and Scope 2 (i.e. emissions from the use of energy indirectly purchased and used by the company) emissions and therefore began monitoring its electricity and fuel data from production facilities, including offices, warehouses, daycare centers and employee dormitories. This approach helped identify key opportunities across the value chain and improve sustainability.

For the past several years, we have been working towards enhancing both “Energy Efficiency” and the use of “Green Energy” within our operations. This is reflected in the three new biomass boilers that were commissioned at our manufacturing units in FY 2023-24.

In FY 2023-24, 51% of Dabur's total energy consumption (scope 1 & 2) came from renewable sources. With the initiatives executed during the year, usage of renewable energy is expected to increase to 55% by 2024-25.

We have also been promoting Solar Energy within the community. Details of this intervention have been provided in the Social & Relationship Capital section of this report.

In FY 2023-24, we continued to build on our emission reduction program under Project Prakriti and have now started baselining our Scope-3 emissions for all the material categories. Scope 3 encompasses indirect GHG emissions across our entire value chain, with a focus on upstream categories such as upstream transportation and the raw material footprint (Scope-3 emissions from purchased goods), which include emissions from our suppliers and their corresponding feedstocks, as well as downstream categories like downstream transportation and product use and disposal. This comprehensive approach will help us craft an emissions reduction roadmap across the value chain. Collaboration with key suppliers and service providers continues and reduction action plans are being further developed.

We have baselined our Scope 3 emissions for material categories in the reporting financial year. Above scope 3 emissions are calculated and extrapolated based on the results of the LCA study done for products contributing to 50% of revenue and 58% of the production volume. For Capital Goods, Employee Commute and Business Travel Scope 3 categories, the emissions have been calculated using spend-based and distance-based methods, respectively. We intend to gradually transition to calculating emissions using the most accurate methods, viz. actual supplier-specific data for Capital Goods and fuel-based emission calculations for Employee Commute and Business Travel and will update the emissions accordingly.

We are committed to continuously improving the accuracy and completeness of our scope 3 emissions reporting. As we enhance our data collection processes and engage further with our value chain partners, we will adopt more precise calculation methodologies to strengthen the disclosures.

Water consumption and conservation in industries play a crucial role in reducing environmental impact and leaving a cleaner footprint. Water is used within our manufacturing plants and offices for various purposes, such as manufacturing processes, cooling, cleaning, and sanitation. At Dabur, we have been continuously working on optimising water use, reducing waste, and implementing water-efficient technologies to minimize our water footprint while maintaining operational efficiency. This not only helps conserve precious freshwater resources but also reduces energy consumption associated with water pumping, treatment, and heating.

In line with its ESG commitment, we are today monitoring water withdrawal and usage data not only within our manufacturing sites, but also at non-production sites like Offices, Warehouses, and Nurseries. This approach has helped identify opportunities across the value chain and improve sustainability.

We have put in place programs to better understand the patterns and impacts of our water withdrawal, use and discharge. These include the construction of rainwater harvesting systems within our manufacturing facilities and creation and rejuvenation of ponds within the communities to catch rainwater.

At all of Dabur's operations, there is a strong focus on reducing water intake by utilising treated wastewater within the process. Dabur units operate in line with the Consent to Operate (CTO) conditions & Pollution Control Board (PCB) norms. Based on our internal assessment, three of our manufacturing units are today Water Positive and another 3 units recharge/conserve water more than 70% of their withdrawal. We have enhanced our Water conservation capacity within our factories to 2,47,589 KL.

In addition, various community water conservation programs and Rainwater harvesting programs are in place, thereby contributing to water accrual. Our efforts have also helped enhance the water conservation capacity within the community to 2,08,427 KL, marking a 355% jump over the previous year. Details of these interventions have been presented in the Social & Relationship Capital section of this report.

Our initiatives have helped reduce our water intensity (KL/MT) by 29% across India from the base year, despite our growing focus on the beverage portfolio. In FY 2023-24 alone, our interventions have helped reduce water intensity by ~9%.

Dabur is also committed to implementing the 3 Rs (Reduce, Reuse and Recycle) principle for conservation of water. Our manufacturing units are continuously putting efforts to reduce the raw water extraction and to increase the utilization of recycled water into processes. At all manufacturing locations, suitable and efficient wastewater treatment systems like sewage treatment plants (STP) and effluent treatment plants (ETP) are installed, and treated wastewater is used for various purposes.

Some of the key initiatives which were taken in the areas of water conservation and management in FY 2023-24 include:

• Installed multi-stage RO plants with higher recoveries (>90% vs 70% in conventional RO plants) have helped reduce raw water consumption.
• Installed UF and RO plants to recycle ETP treated water into secondary processes.
• Utilised RO reject water in secondary processes to reduce raw water extraction.
• Reuse of contra-mixer vacuum pump discharge water in cooling tower, thereby reducing wastage of water.
• Reduction in water consumption by installation of water efficient taps /aerators/ dual toilets and water-less urinals.
• Installation of Rainwater Harvesting System for recharging groundwater or utilizing the captured rainwater in secondary processes based on geographical requirements.
• Installation of steam condensate recovery system.
• Installation and effective monitoring through digital flow meter system to keep track of water utilisation.

The year 2023-24 saw Dabur undertake a detailed Water Risk Assessment, covering 100% of our manufacturing operations. Utilising the WRI Aqueduct tool and Central Ground Water Board’s (India) parameters, the physical water risk assessment encompassed a wide range of parameters, including water stress, water depletion, interannual variability, seasonal variability, drought, and flood risk.

In addition to establishing a baseline for water risk, we also conducted scenario analyses for the time horizon 2030 and 2050, under three different scenarios:

• Pessimistic - SSP5 RCP8.5, temperatures increase up to 3.3°C to 5.7°C by 2100
• Business as usual - SSP3 RCP7.0, temperatures increase by 2.8°C to 4.6°C by 2100
• Optimistic - SSP1 RCP2.6, temperatures increase by 1.3°C to 2.4°C by 2100

These scenarios provided insights into potential future water-related risks, allowing us to formulate robust strategies for mitigating them.

We are committed to forming a fair, sustainable, and ethical relationship with our suppliers. At Dabur, responsible sourcing practices is an integral part of our business strategy with the ultimate goal of ensuring decent working conditions, environmentally responsible practices, and ethical behaviour across our value chain. This is also reflected in our Supplier Code of Conduct (SCOC).

Today, we source a wide range of raw and packaging materials, like Honey, Amla, Sugar-Jaggery, Vegetable Oils, Fruit Pulps & Concentrates, Maize Derivatives like Sorbitol, Dextrose Monohydrate, Aromatic Essential Oils, Psyllium Husk, Spices, Medicinal Herbs, Gold & Silver, Paper-based Packaging Materials like mono-cartons, corrugated boxes, polymer-based Packaging Materials like PET, HDPE, PP etc, flexible packaging like laminates, labels, sleeves, Glass bottles and metal caps. Our sourcing function focuses on 3 major result areas: (1) Cost Saving; (2) Material Availability; (3) Sustainability in Sourcing.

FY 2023-24 has broadly witnessed a deflationary environment in material cost. While several key raw materials like Vegetable Oils, Honey, and Polymer & Paper based Packaging Materials, Medicinal Herbs saw inflationary pressures softening, and some categories like Spices, Psyllium Husk and Orange Concentrates witnessed high inflationary pressures. Dabur has managed its sourcing well and delivered an overall deflation of 2.25% (against WPI deflation of 0.70%) in material cost.

The year saw Dabur progressing well on the sustainability front in sourcing. As stated in Dabur’s responsible sourcing policy, we are guided by the four foundation pillars of ESG: Good For society, Good for Environment, Good for Consumers and Good to Abide by The Law.

Through regular risk assessments of our raw material sources, we ensure that our sourcing practices also prioritise sustainability. We have set ourselves the target of 100% sustainable sourcing of high deforestation risk materials like beverage cartons, paper, Palm Oil, etc. by FY 2025-26. In 2023-24 financial year, we have ensured that 86% of the high deforestation risk materials are sustainably sourced.

We are also actively addressing risks associated with the procurement of critically endangered herbs by investing in cultivation and sustainable management initiatives. By FY 2025-26, our aim is to source 100% of these herbs through sustainable contract farming or similar practices, with a further commitment to achieving no net loss by 2050. In the year 2023-24, we have achieved 78% sustainable sourcing level for the critically endangered herbs.

Major progress made on these fronts during the year are:

• Rolled out Supplier Code of Conduct (which can be accessed at here.) in full scale.
• Organised a mega Supplier Conference, which offered all our major suppliers an opportunity to meet the top management team at Dabur and share their suggestions and grievances. On this occasion, we felicitated suppliers who have been associated with the company for the past 70-plus years. We are committed to organising such supplier meets once every 2-3 years.
• 149 vendors contributing to 76% value of procuremnt were screened for compliance with Human Rights & Ethical Conduct. They were screened for Health & Safety Practices, Working Conditions, Sexual Harassment, and Discrimination at Workplace, Child Labour, Forced Labour, Wages, Freedom of Association and Collective Bargaining etc through desk screening assessment, and 13% through third-party SEDEX audits. In FY 2204-25, Dabur is committed to screen 150 vendors who have annual business transactions of more than `20 Crores. They will be audited by second/third party independent auditors on matters related to Human Rights & Ethical Conduct.
• We engaged with all suppliers to operate on the 3R principle of Reduce, Recycle & Reuse. Dabur has ambitious ESG goals and has set 100% afforestation target on Critically Endangered medicinal plants like Guggulu, Jatamanshi & Aconite by FY 2024-25.
• Progressing on our ESG goals, we have ensured that 100% of the juice laminates are sourced from FSC certified sources; 95% of corrugated boxes come from recycled paper; 35% of glass bottles are sourced from recycled glass bottles; and 77% of mono-cartons are sourced from recycled paper/board.
• Dabur has also initiated using recycled PET and HDPE in their packaging materials.
• 53% of our The meaning of this sentence is not clear. Please check! from MSME/small producers vendors, up from 39% in 2022-23.
• Dabur sourced 6.75% of its `225.37 crore spent in Honey, Kesar, Green Amla and Medicinal Herbs from migrant beekeepers, high-altitude hilly terrain in Kashmir, small farmers, hinterland, tribal areas and businesses managed by women farmers.
• Capacity and capability building programs were conducted with suppliers by way of workshops and training programs on quality, food safety, human rights, ethical trade practices etc. Training programs were also conducted on 9 BRSR principles to 30.97% vendors (by business value).
• 76% suppliers (by business value) were screened by second/third party auditor for compliance to abide by law and meet all statutory compliances. In FY 2024-25, this will be extended to 85% of the vendors.
• Dabur also significantly reduced single-vendor sourcing and expanded the vendor base of critical items like Gold & Litchi Pulp.
• To reduce our carbon footprint and support the government's 'Make in India' initiative, Dabur has indigenized some key raw materials like Apple Juice Concentrate and Orange Juice Concentrate.
• Dabur purchased from 252 trading houses contributing to 20% of total material spend. Top 10 trading houses contributed 35% of buying from all trading houses.

Recognizing the enduring importance of biodiversity conservation for both our business and for society, Dabur has developed a robust Biodiversity Policy aligned with the major goals of the Convention on Biological Diversity (CBD 1992). Our efforts to enhance biodiversity are integrated in our Net Zero Emissions Roadmap.

Our commitment extends to refraining from any business activity that could irreversibly harm biodiversity. We also do not have any operational sites or manufacturing locations in close proximity to nationally significant or ecologically sensitive, high biodiversity value and protected areas.

As part of our mission to preserve ecosystems and support conservation of rare and endangered species through our Biodiversity Management Plans, Dabur has joined hands with relevant stakeholders and local communities to bolster the population of these species in their natural habitats. Our efforts include the establishment of state-of-the-art greenhouses in Pantnagar (Uttarakhand) and Banepa (Nepal), along with satellite nurseries and demo cultivation sites nationwide. These mother greenhouses are completely run by women, giving an added push to our diversity agenda.

These greenhouses focus exclusively on cultivating medicinal plant saplings, which are distributed to local farmers free of charge. In 2023-24 alone, we distributed 46,22,484 plant saplings. Not only does this initiative promote large-scale cultivation of standardised medicinal plants, but it also safeguards rare and endangered species from extinction. For the past over a decade, Dabur has beat the odds to do critical conservation by working together with farmers, tribals and forest-based communities. Together, we promote sustainable cultivation practices and ensure socio-economic development. Our interventions have helped enhance the income of these communities by up to 50%.

In 2023-24, we engaged with 15 NGOs across the country. Together, we train the farmers and forest-dependent communities on the sustainable cultivation of these herbs. These partner NGOs are:

In addition, Dabur is also working with the Center for International Forestry Research (CIFOR) and World Agroforestry (ICRAF) on a mega initiative aimed at improving trees, fruits, medicinal and aromatic plantation practices on farms and outside forests areas, using agroforestry across Uttar Pradesh, Haryana, Rajasthan, Odisha, Andhra Pradesh, Assam and Tamil Nadu. This initiative, which is working towards increasing the tree cover outside demarcated forest areas and on farmlands, will go a long way towards helping India achieve climate mitigation targets in the forestry sector, while also supporting sustainable livelihoods for communities. Under this project, we are focusing on the domestication of selected medicinal tree species and medicinal plants, besides establishing satellite nurseries in states to ensure the availability of quality planting material for the selected plant species.

Our ambitions are huge, but, with the right strategies and enough resources, they are achievable. In the year 2023-24, Dabur engaged 10,877 farmers in the cultivation and collection of medicinal plants and herbs. Our target is to sustainably cultivate medicinal and aromatic plants across 15,000 acres of land by FY 2029-30. In FY 2023-24, our efforts have helped us bring 10,145 acres of land under cultivation of medicinal plants, a 31% jump over 2022-23.

At Dabur, we have been consciously working towards substituting materials from finite, fossil-based sources with solutions that are renewable, recyclable and store carbon. As part of this mission, we reuse resources and materials as well as minimise waste as we work towards promoting a circular economy.

We have been working continually to use less paper, which in turn leads to saving the trees from being cut down, by adopting technology. We have been promoting paperless meetings, digitizing the way we operate daily to reduce paper consumption, and using QR codes for goods invoices. We have also undertaken training and awareness programs to minimize the use of printing paper and to use both sides of the paper to print, if the need arises.

In terms of packaging, we have executed projects across all verticals during the year with respect to product packaging design changes, weight reduction and transition to sustainable packaging materials. Along with paper, we also track the consumption of Plastics (Rigid), Laminates and Glass used for packaging purposes. Due to these innovative projects, the cumulative potential reduction in the consumption of the mentioned packaging materials has been 539.96 tonnes. We also reused approximately 400 MT of discontinued packaging material paper and 60 MT of plastic for in-house activities, thus avoiding equivalent scarp generation and procurement of new material.

At Dabur, we understand that waste-reducing, reusing, recycling, management, and the promotion of a circular economy are integral components of sustainable development and environmental stewardship. In today's world, where resource scarcity and environmental degradation are pressing concerns, transitioning towards a circular economy model is essential for minimising waste generation, conserving resources, and reducing the environmental footprint of our activities.

All our manufacturing facilities ensure compliance with applicable legal requirements as specified by the consents and authorisations. The waste is sorted by material type and shape and sold to recyclers for recycling or safe disposal. Hazardous wastes are sent to authorized recyclers or co-processors for material recovery or co-processing for energy recovery through waste-to-energy facilities.

In FY 2023-24, Dabur achieved a 12% reduction in waste intensity and a 7% reduction in absolute waste generation in operations in comparison to the previous year. Also, ~7,800 MT waste herbs were generated and reused in the boilers as green fuel and ~1,100 MT of miscellaneous packing wastes were reused.

Collecting and recycling post-consumer waste, along with ensuring greater awareness within communities and stakeholders regarding the negative impacts of pollution are key elements of our waste management strategy. Through effective waste sorting, collection, recycling and co-processing, we have managed to divert significant amounts of waste from reaching landfills and oceans.

Our immediate response was to create a nationwide model for Extended Producer Responsibility (EPR). Dabur's EPR journey started in 2016 by appointing a competent waste management company to conduct a waste management study across all Dabur units to help obtain authentic data about our EPR liability across all the packaging categories through qualitative and quantitative analysis.

In FY 2023-24, almost 73% of post-consumer plastic waste was recycled and the balance 27% was safely disposed of through waste to energy units, cement industries etc. Dabur continued to be a Plastic Waste Positive Enterprise in 2023-24, by processing 103% of the post-consumer plastic waste during the year. We have also been actively participating in events related to plastic neutrality, waste management and EPR changes by the Government of India, Pollution Control Board, FAME, CII, FICCI and others.

Educating and engaging stakeholders is also an essential part of driving the transition towards a circular economy. By raising awareness about the benefits of waste segregation at source, waste collection, management and recycling, promoting sustainable consumption patterns, and incentivising eco-friendly practices, we help our communities accelerate the transition towards a more sustainable and resilient future.

Working together with our society and members of the waste collector community, we are progressing towards a world where waste is minimised, resources are conserved, and economic prosperity is achieved in harmony with the planet's natural systems.

Some of the key initiatives undertaken during the year towards this end are: