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Indian cigarette giant ITC bets on tobacco even as it touts ESG push

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Indian cigarette giant ITC bets on tobacco even as it touts ESG push

India’s largest tobacco firm is banking on progress of its cigarette enterprise even because it promotes its environmental, social and governance requirements to draw traders scared away from the business.

ITC has sought to diversify past cigarettes, increasing into every part from fast-moving client items and expertise to accommodations. However cigarettes account for a 3rd of revenues and 80 per cent of earnings earlier than tax and curiosity on the 112-year-old firm and ITC expects the market to develop, as client swap to cigarettes from alternate options comparable to chewable tobacco.

Sanjiv Puri, ITC’s chair, advised the Monetary Occasions in an interview that the corporate would develop its core enterprise whereas selling “accountable capitalism” and ESG-compliant practices.

“We’ll proceed to take a position and reinforce market standing” in cigarettes, Puri mentioned, alongside its different companies.

However Vaishakhi Mallik, an affiliate director at Very important Methods, a public well being marketing campaign group, rejected the argument that cigarette firms may very well be thought of sustainable.

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Tobacco kills greater than 1m folks a 12 months in India, she mentioned, and regardless of “making an attempt to persuade the general public, traders and governments that they’re altering for the higher . . . that is nonetheless an business that harms well being and the surroundings”.

ITC’s largest shareholder is British American Tobacco, with an virtually 30 per cent stake, and the Indian firm reported revenues of Rs158.6bn ($2bn) and revenue after tax of Rs41.6bn within the quarter that resulted in December.

ITC’s diversification plan displays the methods deployed by international tobacco teams to keep away from being blacklisted by traders whilst they continue to be depending on the excessive profitability of cigarettes. It additionally underscores the paradox that cigarette firms can take pleasure in excessive ESG rankings for making provide chains extra environmentally pleasant regardless of the well being harm brought on by their core merchandise.

Marlboro-maker Philip Morris Worldwide says its long-term ambition is to wind down its cigarette enterprise. Swedish Match, a Stockholm-listed firm specialising within the smokeless tobacco product snus, introduced in September that it deliberate to spin off its cigar enterprise and develop into “smoke-free”.

ITC faces distinctive challenges. A ban on e-cigarettes in India means it’s unable to diversify into decreased threat sectors comparable to vaping, as its worldwide friends have performed.

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“ITC is in a really tough place due to the surroundings by which they function,” mentioned Erik Bloomquist, a worldwide tobacco business guide.

However the firm scores a double A ranking on MSCI’s ESG index, which is comparatively excessive amongst massive Indian firms. Puri mentioned the corporate was carbon-positive, which means it absorbed extra CO2 than it emitted, and argued there was an rising consensus amongst traders that firms must be judged on how they have been “reworking” somewhat than excluded from portfolios. “It’s an evolution that’s occurring,” he mentioned.

India has the world’s second-highest variety of tobacco customers at about 270mn adults, in keeping with the World Well being Group’s World Grownup Tobacco Survey. However ITC says fewer than 10 per cent smoke over-the-counter cigarettes, with the remainder consuming smuggled cigarettes, chewable tobacco or beedis, tobacco hand-rolled in a leaf.

Puri additionally advised traders in December that ITC deliberate “to maximise the potential of the cigarette business inside the tobacco basket” however its non-tobacco companies would develop quicker. He didn’t rule out splitting the companies, saying it “may very well be an alternate mannequin in future, and we’re fairly open and versatile to it”.

However traders haven’t but been satisfied tobacco firms can type a part of an ESG portfolio.

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ITC’s inventory has rallied 15 per cent since late February as traders judged it to be low cost. However overseas institutional holdings of the inventory have practically halved to about 10 per cent since 2017, in keeping with brokerage Motilal Oswal. “There isn’t any materials discount in its dependence” on cigarettes, the brokerage mentioned.

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Newsom Suspends State Environmental Rules for Rebuilding After Fires

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Newsom Suspends State Environmental Rules for Rebuilding After Fires

Governor Gavin Newsom has signed a broad executive order that aims to make it easier to rebuild after the fires by suspending California’s costly and time-consuming environmental review process for homeowners and businesses whose property was damaged or destroyed.

The order is likely to be the first of several permit streamlining measures issued by state, county and city agencies in the wake of the devastating fires across greater Los Angeles.

Mr. Newsom’s three-page order, signed Sunday, covers all of Los Angeles and Ventura Counties and directs state agencies to coordinate with local governments to remove or expedite permitting and approval processes during rebuilding. The most significant piece is a waiver on permitting requirements under the California Environmental Quality Act — a landmark environmental law known colloquially as C.E.Q.A. or “See Qua.”

The governor also announced that he had suspended all permitting requirements under the California State Coastal Act for properties rebuilding after the fires.

California is one of America’s most difficult and costly places to build — a driving factor behind the state’s longstanding affordable housing shortage. Between state agencies and local land use commissions, the process of developing buildings, from office complexes to subsidized rental complexes, is longer and more expensive than in almost every other state.

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Of all the hurdles a project can be subjected to, few are more difficult and time-consuming than C.E.Q.A. The law often requires developers to fund in-depth environmental studies on a project’s potential impact on everything from local wildlife to noise, views and traffic. Groups who oppose a particular development often use C.E.Q.A. lawsuits to try to stop them. This can add years even to small projects.

While the state’s powerful environmental groups are fiercely protective of any attempts to amend C.E.Q.A. or the Coastal Act, the laws are routinely suspended in emergencies and for large projects such as sports stadiums.

Still, Mr. Newsom’s order was unusually extensive. For instance, after other disasters C.E.Q.A. suspensions have typically required rebuilding property owners to show they tried to comply with the law, even if they weren’t subjected to it. The order announced Sunday is a full waiver: For anyone rebuilding after the fires, C.E.Q.A. is effectively gone.

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California fires could be costliest disaster in US history, says governor

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California fires could be costliest disaster in US history, says governor

The California wildfires could be the costliest disaster in US history, the state’s governor said, as forecasts of heavy winds raised fears that the catastrophic blazes would spread further.

In remarks to NBC’s Meet the Press on Sunday, Gavin Newsom said the fires — which have burnt through more than 40,000 acres, according to CalFire, the state’s forestry and fire protection department — would be the worst the country has seen “in terms of just the costs associated with it, [and] in terms of the scale and scope”.

He added that there were likely to be “a lot more” fatalities confirmed. The death toll on Saturday evening stood at 16, according to Los Angeles authorities.

The prospect of a pick-up on Sunday in the Santa Ana winds that have fanned the flames has left tens of thousands of residents under evacuation orders. The fires were threatening homes in upscale Mandeville Canyon and the Brentwood neighbourhood, although officials said they had made progress in stemming the advance there.

The National Weather Service has forecast gusts of between 50mph and 70mph, while drought conditions remain.

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“We know that elevated critical fire conditions will continue through Wednesday”, Los Angeles County fire chief Anthony Maroney said on Sunday.

LA is experiencing its second-driest start to its rainy season in more than a century, according to the non-profit Cal Matters news service. Halfway into the season, LA has only recorded about 0.2 inches of rain since October -— well below the 4.5 inches that is common by January.

Newsom, a Democrat, responded to a barrage of attacks from Donald Trump. The incoming Republican president has accused the governor of depleting water reserves to protect an endangered species of fish, and of refusing to sign a “water restoration declaration” that would have “allowed millions of gallons of water . . . to flow daily into many parts of California”. Newsom’s office has said no such declaration exists.

Trump, who has a long-standing feud with Newsom and refers to him as “Newscum”, also called on the Californian to resign, accusing him of “gross incompetence”.

“The reservoirs are completely full, the state reservoirs here in Southern California,” Newsom said.

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The charred remains of a jewellery store and other shops at a corner of Sunset Boulevard © Michael Nigro/Bloomberg
An air tanker drops fire retardant at the Palisades Fire © Ringo Chiu/Reuters

“That mis- and disinformation I don’t think advantages or aids any of us,” he added. “Responding to Donald Trump’s insults, we would spend another month. I’m very familiar with them. Every elected official that he disagrees with is very familiar with them.”

Newsom also said he had invited the president-elect to visit the affected areas, but had yet to receive a response from the Trump transition team.

Firefighters have tamed three fires since Tuesday, including the Sunset blaze that threatened the Hollywood hills. The Hurst fire in the San Fernando Valley, north of Los Angeles, was 80 per cent contained on Sunday afternoon.

But firefighters are still struggling to tame the two biggest blazes. Newsom said on social media platform X that the Palisades and Eaton fires were 11 per cent and 27 per cent contained. Thousands of firefighters have been deployed to battle the Palisades fire with heavy trucks and air support, the mayor’s office said Sunday. The city has also opened shelters to affected families.

The Federal Emergency Management Agency (Fema) has staff in LA to help Angelenos apply for disaster relief, while the Federal Small Business Administration is offering home and business disaster loans.

Newsom issued an executive order that he said would prevent those who lost their homes from being “caught up in bureaucratic red tape” so they could quickly rebuild.

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The head of Fema on Sunday raised the prospect of US troops being sent to Los Angeles to help control the blaze.

“There are active-duty military personnel that are on a prepare-to-deploy order, that are ready to go in and continue to support the firefighting effort,” Deanne Criswell told ABC’s This Week programme. Speaking on CNN, she warned that strong winds expected in the coming days could spread the fire further.

Map showing the perimeters of the fires in LA and evacuation orders and warnings currently in place

No official estimate of the cost of the damage has yet been released, but analysts at AccuWeather last week calculated the economic loss to be between $135bn and $150bn — short of the $250bn cost associated with last year’s Hurricane Helene. At least 12,300 structures had been destroyed, according to CalFire.

President Joe Biden on Thursday pledged that the US government would pay for “100 per cent of all the costs” created by the disaster, and would ask Congress for more financial aid.

Trump, who on the campaign trail last year threatened to withhold disaster funding from California, has thus far remained silent on whether he would provide similar assistance. On Sunday, he renewed his attacks on the state’s officials.

“The incompetent pols have no idea how to put [the fires] out,” he wrote. “There is death all over the place. This is one of the worst catastrophes in the history of our country. They just can’t put out the fires. What’s wrong with them?”

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On the way out: Transportation Sec. Buttigieg looks back on achievements, challenges : Consider This from NPR

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On the way out: Transportation Sec. Buttigieg looks back on achievements, challenges : Consider This from NPR

U.S. Secretary of Transportation Pete Buttigieg speaks to questions during a news conference at Ronald Reagan Washington National Airport November 21, 2024 in Arlington, Virginia.

Alex Wong/Getty Images


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Alex Wong/Getty Images


U.S. Secretary of Transportation Pete Buttigieg speaks to questions during a news conference at Ronald Reagan Washington National Airport November 21, 2024 in Arlington, Virginia.

Alex Wong/Getty Images

From handling crises in the rail and airline industries to overseeing the distribution of billions of dollars in infrastructure funding, Transportation Secretary Pete Buttigieg has taken on a lot over the last four years.

Now, his tenure is coming to an end.

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Host Scott Detrow speaks with Buttigieg about what the Biden administration accomplished, what it didn’t get done, and what he’s taking away from an election where voters resoundingly called for something different.

For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org

Email us at considerthis@npr.org

This episode was produced by Brianna Scott, Avery Keatley and Tyler Bartlam. It was edited by Adam Raney.

Our executive producer is Sami Yenigun.

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