- Tata Steel leads the path to deosuming steel production.
- Switching from the key to the energy transition of the coal reactor.
- Steel remains the metal of modern development.
The CEO and Managing Director of Tata Steel TV Narendran spoke about becoming green in an interview with McKinsey’s Rajat Gupta.
Qn: In addition to decarbonization efforts, what else has Tata Steel done to address sustainability?
Ans: People sometimes don’t realize we are one of India’s biggest mining companies. We mine over 45 million tonnes of mainly iron ore and some coal per year. It will be mined up to 65 million or 70 million tonnes over the next few years.
We have always done a lot of work going back to the forest and converting the mine after the mine is complete. Today, biodiversity is so important, there are structured ways to do it. We will introduce third parties to give you a complete evaluation. They see the impact of our activities and what we need to do after the mine is fully extracted. This helped develop a roadmap for biodiversity. Of the 47 sites, 20 will develop a roadmap, with the rest coming soon.
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Tata Steel: Poor Indian Trillion Dollar Company
Qn: Tata Steel It operates in some of the poorest places in India. What diversity and inclusive behavior have you ever taken as a result?
Ans: One thing we do is make sure our employee profiles reflect the diversity of our community. For example, we have fewer women than we need, so we did a lot of work on it. Our Indian workforce was previously 7-8% diverse. We are now above 20% and we want to be 25%.
India had rules governing the number of shifts that women could work on the field, which requires advocacy. However, we recently received a change in the law we were sought. And now we have women-only changes in the mines of Jharkhand. We also have over 100 trans people working in our mines and elsewhere in Tata Steel.
ANS: We talked about the challenges in India. What do you think that decarbonization efforts will evolve?
ANS: India has set several ambitious targets and has registered it in the Paris Agreement. The country has made a lot of progress over the last few years. The challenge for India is that this transition will be expensive and jobs will be at risk in many parts of the country.
India needs to fully assess the complexity of this transition. When moving from coal to other sources of energy, one needs to think about the social impact of those who rely on coal for their livelihoods. We need to ensure that people who have just gained access to electricity are not affected by the rising prices of that energy. As renewables become a larger share of the energy mix, is our grid ready to deal with the resulting fluctuations? We have a lot to think about.
We need to ensure that people who have just gained access to electricity are not affected by the rising prices of that energy.
Qn: China is the leader in green technology. Where will India be in 20 years?
Ans: The progress China has made over the past 7-8 years is incredible. They committed to it, spent a lot of resources and encouraged the industry to make this transition. So they continue to build coal-based power plants and continue to grow on fossil fuels, but they are growing very markedly on renewable energy. They are also working on nuclear power, and they are always strong in water. There is much to learn from China’s progress.
India has one advantage. China has to do a lot of work to solve the problems that have arisen from growth over the past 20 years. India can avoid such problems by using clean solutions when we grow. Therefore, there will be less cleaning to do in 10 or 20 years.
I’m now shifting gear and talking about your personal leadership journey. You are leading Tata Steel through Covid-19 and recent geopolitical tensions. How do you approach these major challenges?
The assignment in the course is Pa. Shortly after I took over, our iron ore mines were closed for almost a year. Suddenly, we were procuring iron ore from all over the world to feed our Indian explosion furnaces. This was a big challenge. Even moving iron ore from ports to steel plants was a challenge as India was not an iron ore importer.
In situations where there are many uncertainties and anxiety, decisions need to be made quickly, and it is very important to be close to the ground. During Covid, we had an hour-long call for leadership every morning. Things were changing on the spot, so we were unable to follow the regular rhythm of the meeting. This shift also boosted team morale, brought cohesion, assisted communication, and helped us move much faster.
Qn: How have you changed as a leader in the helm of Tata Steel over the past decade?
Ans: One thing I’ve learned is that you have to lead differently at different times. When I became CEO, I was the youngest CEO of Tata Steel and everyone reporting to me was old. Now I’m probably the oldest person on Tata Steel.
Leading a team of more experienced people is different from leading a younger team. The dynamics are not the same. Some young leaders expect you to be more direct than you were with the old lot, while others want more space. You need to recognize and adapt to the context you are leading. There is no leadership style that is perfect for all sizes.
Qn: Looking at the next five years of your tenure, what do you think you’ll evolve as a CEO?
AnsPersonally, I’m about leaving a much stronger tata steel than I got this job. It’s like running a relay race. Someone gave me the baton and I need to make sure I hand it over nicely.
Secondly, this is an old, multi-generational organization. Our biggest strength is the emotional connection between people and the company. How do I make sure I save the correct part of the culture?
It’s not about sticking to everything that has worked in the past. What worked in the past does not work in the future. How do you bring new elements of culture so that young people feel sufficient interest in investing their future in the company? If we could deliver more sustainable, financially, structurally and culturally powerful Tata Steel, it would have been a good contribution.
Source: McKinsey.com
