JSW has always recognized its moral obligation to do all that it can to operate its business to the highest standards of personal and professional integrity, honesty and transparency, recognizing the intrinsic benefits that good business ethics and governance provide. However, in spite of all that we have so far achieved in operating our business ethically, we recognize that there remains a potential for us to do much more. JSW is committed to embed sound governance, deliver transparency, tackle corruption, manage risks and provide value through strong and robust business ethics. 100% of our employees are committed to Code of Conduct. We impart training on various aspects of Code of conduct such as periodically in an online manner as well as face-to-face classroom training. Recently, we rolled out a mandatory online ethics-training module for all employees for FY27.
Over the past three years, we achieved full employee sign-off on our Code of Conduct, reinforcing our shared commitment to ethical conduct.
A strong and fully embedded commitment to undertaking business ethically brings considerable benefits, including improved consumer perception (leading to increased loyalty), greater investment, reduced costs, and enhanced employee motivation, involvement and interaction to name just a few.
Board Accountability: As a listed company, we adhere to the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The appointment of our directors is in accordance with Section 152(6) of the Companies Act and our Articles of Association. All directors, excluding Independent Directors and, where applicable, the Managing Director are subject to retirement by rotation. At each Annual General Meeting, one-third of such directors, or the number nearest to one-third, retire from office and, if eligible, may offer themselves for re-election. To ensure the continuity of operations, we also have a CEO succession plan.
In line with Section 14 of the Companies Act, any alteration to our Articles of Association (commonly referred to as bylaws) requires a special resolution passed at a general meeting of shareholders. Proposed amendments must first be approved by our Board of Directors before being presented to shareholders for consideration and approval.
We also ensure appropriate coverage for our Independent Directors in accordance with Clause 196 of our Articles of Association, which addresses indemnity and director responsibilities, and pursuant to Regulation 25(10) of the SEBI Listing Regulations. As part of our commitment to good corporate governance, we have obtained Directors’ and Officers’ (D&O) Liability Insurance for all our directors, covering such quantum and risks as determined by the Board. We do not impose any limitation on the liability of directors in the discharge of their fiduciary and statutory duties, and they remain accountable in accordance with applicable laws and regulations. The insurance and indemnification provisions support directors acting in good faith, except where such protection is restricted or prohibited by law.
Sustainability Leadership: We have established a robust governance structure to ensure accountability and strategic oversight across sustainability-related matters. Our Board-level Sustainability Committee evaluates the performance in areas such as sustainability, climate change, and environmental initiatives. The committee actively reviews our long-term and short-term climate targets, strategic commitments, and progress, while also providing guidance and approving budgets aligned with our business plan. It prioritizes climate-related projects based on their impact and expected outcomes and finalizes performance-linked incentives to ensure that climate metrics — such as energy intensity and thermal substitution rate — are embedded in KPIs across all levels, including top management.
At the executive level, we have constituted a committee that reports directly to the Managing Director. This committee — comprising our Chief Executive Officer, Chief Financial Officer, Chief Manufacturing Officer, Chief Marketing Officer, Chief Sustainability Officer, and Business Heads — meets monthly to monitor environmental, safety, and climate-related issues. It sets annual targets, allocates budgets, and tracks progress through structured reviews. Key findings from these meetings are presented to the Board on a quarterly basis.
The Chief Sustainability Officer (CSO) plays a pivotal role in embedding sustainability across JSW Cement’s strategic and operational landscape. We rely on the CSO to regularly brief the Board of Directors on key sustainability issues and engage with executives, including the CEO and senior management, to ensure sustainability is integrated into strategic decision-making. The CSO drives and manages sustainability initiatives throughout the organization, fostering alignment across departments and business units. In addition to internal coordination, the CSO actively engages with external stakeholders to advance policy advocacy and collaborative action. The CSO is also responsible for conducting climate risk analysis across all operating units, developing mitigation plans, identifying research and development needs, setting measurable sustainability targets, and formulating long-term action plans. Through these responsibilities, the CSO ensures that sustainability remains a core driver of innovation, resilience, and value creation for the company.
Sustainability-Related Management Incentives
At JSW Cement, sustainability-linked incentives are embedded across all levels of leadership to promote accountability and accelerate progress toward our ESG goals. Approximately 10% of the total monetary incentives for C-suite and Board-level executives, including the CEO, are linked to sustainability performance objectives, reflecting JSW Cement’s commitment to integrating sustainability into executive decision-making. The sustainability-linked components of remuneration place significant emphasis on CO₂ emissions reduction, safety performance, and other strategic drivers that support climate action and operational excellence. For the CEO, key sustainability KPIs include progress towards emissions reduction targets, growth in sales of low-carbon cementitious products, increased utilization of renewable energy and waste heat recovery systems, improvement in energy efficiency, enhancement of alternative fuel and raw material utilization, and achievement of safety and operational excellence objectives.
Key members of the Executive Committee have KPIs that directly or indirectly influence climate performance, including energy efficiency, thermal substitution rate, waste heat recovery for power generation, increased use of renewable energy, adoption of LNG and EV trucks, and growth in sales of low-carbon cementitious products. Safety is treated as a critical pillar of sustainability at JSW Cement, forming an integral part of performance evaluation across roles and functions. Each year, comprehensive sustainability targets are developed and cascaded down to line management, forming a key part of performance evaluations.
For example, the Chief Manufacturing Officer (CMO) have KPIs related to the use of alternative raw materials and fuels, increasing slag-based products in compliance with regulations, and enhancing energy efficiency, renewable energy portfolios and safety. The CMO is rewarded through annual salary increments based on progress toward environmental targets, while the Chief Sustainability Officer (CSO) is incentivized through performance against sustainability indices and increased investment in environmental R&D and innovation. Business Unit Managers receive salary hikes and fixed bonuses linked to achieving environmental goals, improving resource efficiency, and reducing energy consumption. By integrating these KPIs into both short-term incentive plans and annual contractual bonuses, JSW Cement ensures that sustainability is a core leadership responsibility, reinforcing its commitment to sustainable growth.
Behaviour and Business Ethics: We have established robust frameworks through our Policy on Business Conduct to uphold high ethical standards across all our business operations. This policy ensures accountability and transparency at every level of engagement with the company.
We are committed to eliminating bribery and corruption and have clearly defined guidelines on gifts, political contributions, and charitable sponsorships. Our online ethical complaints system enables the reporting of human rights violations, corruption, bribery, discrimination, harassment, or violations against indigenous people, and we take appropriate corrective or disciplinary action in response. We also provide regular training to our employees to reinforce ethical conduct and compliance.
Whistleblower Mechanism: At JSW Cement, we are deeply committed to fostering a culture of integrity, transparency, and accountability. Our whistleblowing mechanism is a vital part of our governance framework, designed to empower individuals to report concerns related to unethical conduct, policy violations, or any form of misconduct without fear. We have established a dedicated Ethics & Compliance team that oversees the whistleblowing process under the supervision of our Audit Committee. To ensure impartiality and build trust, we have partnered with an independent third-party service provider to operate our reporting channel. This platform is accessible around the clock and supports multiple languages, making it easy and secure for individuals to raise concerns. We recognize the importance of anonymity in encouraging people to come forward. Therefore, we allow whistleblowers to submit reports anonymously, and we are committed to protecting their identity throughout the process. All reports are treated with strict confidentiality, and access to the information is restricted to authorized personnel involved in the investigation. We maintain a zero-tolerance policy towards any form of retaliation against whistleblowers. We are committed to protecting those who report concerns in good faith, and any retaliatory action is treated as a serious violation of our Code of Conduct. To ensure that our employees are aware of and confident in using the whistleblowing mechanism, we conduct regular training and awareness programs. These initiatives help our teams understand how to access the reporting channel, what types of issues can be reported, and the protections available to them. Every report we receive is handled through a structured and transparent investigation process. We begin with a preliminary assessment to determine the validity and seriousness of the concern. If necessary, we initiate a detailed investigation, with findings reviewed by the Ethics Committee and, where appropriate, escalated to the Audit Committee. We ensure that all outcomes are documented, corrective actions are implemented, and follow-ups are conducted to prevent recurrence.
Policy Influence
We prioritize public policy issues through a robust evaluation process, working closely with diverse industry members and trade associations on matters of strategic importance, including climate policy positions. Our engagements are structured and collaborative, ensuring that our advocacy efforts are aligned with our corporate values and sustainability goals. Governance oversight is provided by our Board and Sustainability Committee, which reviews all advocacy matters monthly and ensures alignment with our strategic priorities. We systematically monitor the policy positions of trade associations, including lobbying to ensure they are compatible with our climate commitments and the principles of the Paris Agreement. Where misalignments arise, we reserve the right to act independently and transparently communicate our position to relevant stakeholders. We actively engage in indirect lobbying with policymakers, trade associations, and climate-focused organisation and think tanks such as GCCA, CMA, FICCI, Climate Group, Xynteo Build Ahead Coalition, LeadIT, UNGC, and CII, leveraging collective action to address complex environmental and social challenges. Our advocacy efforts aim to build common ground and foster collaborative solutions across all our operational locations.
Risk Governance
We have a Risk Management Committee at the Board level that oversees the overall risk management framework. At the executive level, a Risk Management Group, comprising members of the Senior Leadership Team, is responsible for setting controls and standards and overseeing compliance. Additionally, a dedicated Risk Management function supports this framework by actively engaging with plant heads and corporate functions to gather risk-related inputs. The team also conducts periodic peer reviews of identified risks.
Risk management is integrated into the Internal Audit Plan, with audits conducted annually. The findings are presented to the Audit Committee on a regular basis. Furthermore, external (statutory) audits are carried out for high-risk areas to ensure robust oversight and accountability.
Risk Management Process
At JSW Cement, we leverage the industry-standard COSO Enterprise Risk Management (ERM) framework, ensuring a comprehensive and systematic approach to identifying, assessing and mitigating potential threats. Our risk management approach incorporates both bottom-up and top-down strategies. The bottom-up process involves the identification and regular assessment of risks by our plants and corporate functions, followed by the implementation of effective mitigation strategies. This is complemented by a top-down approach where the Risk Management Group (Senior Leadership Team) as well as the Risk Management Committee (RMC) identifies and assesses long-term, strategic and macro risks for the Company. All risks are classified into strategic, operational, financial, regulatory, information security and sustainability risks. We identify the company specific risk exposure for all the risks. The risk severity is determined by two factors- Impact on Business & Probability of Occurrence supported by peer benchmarking. Based on risk severity, the risk appetite is determined. The risk management exercise is undertaken twice a year to review risk exposures, evaluate mitigation effectiveness, and identify emerging risks.
Our first materiality assessment was undertaken in FY 2021-22 to identify the sustainability topics most relevant to our business and stakeholders. Since then, the assessment has been reviewed internally on an annual basis by the Board of Directors, in line with the annual review of the Business Responsibility and Sustainability Report (BRSR), of which materiality forms an integral part, to ensure continued alignment with our evolving business context, stakeholder expectations, and emerging sustainability priorities. We are committed to addressing the most significant sustainability topics identified through this process. These material topics are aligned with the capitals that underpin our value creation process, including financial, manufactured, intellectual, human, social and relationship, and natural capital, and are integrated into our sustainability strategy and enterprise risk management framework.
We have identified sustainability risk as one of our top enterprise risks and linked key performance indicators (KPIs) related to this risk to executive compensation. These KPIs include safety performance (LTIFR, reportable incidents, fatalities), CO₂ emissions reduction, energy efficiency, thermal substitution rate, waste heat recovery, renewable energy use, adoption of LNG and EV trucks, and growth in low-carbon cementitious product sales.
To strengthen our internal processes and create awareness, we conduct regular risk management training and awareness sessions for non-executive directors and the business functions throughout the organization on risk management principles and the trends. We also incorporate risk criteria during development of products such as considering supply chain risks, raw material risks and others.
|
Risk |
Raw Material Risk |
Cybersecurity Risk |
|---|---|---|
|
Description |
Price and availability of fuels and raw materials may fluctuate due to demand shifts, supply disruptions, currency movements, policy changes and logistics costs. | Cybersecurity incidents may lead to data theft, financial loss, extortion or business disruption. Breaches could affect corporate and financial information and damage reputation |
|
Likelihood of risk |
Medium | Medium |
|
Magnitude of risk |
Unchanged | Unchanged |
|
Mitigation Strategy |
|
|
The detailed key risks, opportunities, and response strategies are provided in the Integrated Annual Report FY 2025-26.
Emerging Risks
|
Risk |
Limited Market Demand for Low-Carbon Products |
Workforce Disruption from Green and Digital Transformation |
|---|---|---|
|
Description |
As the construction industry transitions towards low-carbon materials, demand for low-carbon cement may grow more slowly than anticipated due to customer price sensitivity, limited awareness of embodied carbon, inconsistent green procurement requirements, and uncertainty regarding customers’ willingness to pay for lower-carbon products.
This could create a mismatch between our investments in low-carbon products and the pace of market adoption |
The accelerated adoption of automation, artificial intelligence, digital manufacturing systems, and low-carbon technologies may significantly reshape workforce requirements across our manufacturing, mining, and logistics operations.
Over the medium to long term, this transition may create skill gaps and workforce displacement risks, potentially leading to reduced employee engagement, loss of critical capabilities, workforce resistance, and reputational challenges if not managed through a fair and inclusive transition process. |
|
Impact on JSW Cement |
Limited adoption of low-carbon cement products due to customer price sensitivity, low awareness of embodied carbon, and inconsistent green procurement practices could slow demand growth, extend payback periods on decarbonization investments, limit opportunities to realize a price premium, and reduce our ability to leverage our low-carbon product portfolio as a competitive advantage.
This may also result in the underutilization of investments in green and low-carbon products. |
The transition towards advanced manufacturing, digitalization, and low-carbon technologies may create skill gaps and talent shortages, increase the cost of reskilling and attracting specialized talent, and lead to the loss of critical institutional knowledge if workforce transitions are not effectively managed.
It may also adversely affect employee morale, productivity, industrial relations, and stakeholder perceptions of a fair and inclusive transition. |
|
Mitigation action planned/implemented |
We are increasing awareness of the lifecycle and embodied-carbon benefits of low-carbon cement, enhancing transparency through Environmental Product Declarations (EPDs) and carbon-performance disclosures, and engaging with key stakeholders to promote low-carbon specifications. We also collaborate with industry bodies to encourage green procurement practices, while continuing to drive products and process innovation to maintain cost competitiveness and strengthen the value proposition of our low-carbon offerings. | We are implementing a workforce transition and reskilling strategy aligned with our decarbonization and digitalization roadmap.
This includes periodic skills-gap assessments, targeted upskilling programmes in digital, automation, and low-carbon technologies, and prioritizing internal redeployment where feasible. We also engage employees and stakeholders during major technology transitions and monitor progress through training, reskilling, redeployment, and employee engagement indicators. |
Our approach towards tax
JSW Cement is committed to maintaining the highest standards of tax governance, transparency, and compliance across all jurisdictions in which it operates. We comply with both the letter and the spirit of applicable tax laws and regulations and seek to create sustainable long-term value through responsible tax practices.
Our tax strategy is guided by the principles of integrity, accountability, and alignment with our business operations. Tax decisions are made in accordance with applicable laws, commercial substance, and genuine business purpose. We do not engage in artificial tax arrangements or structures that lack economic substance and are designed primarily to obtain tax benefits.
JSW Cement is committed to paying taxes where economic value is created and does not use secrecy jurisdictions or low-tax jurisdictions for tax avoidance purposes. We maintain a robust approach to transfer pricing and ensure that all related-party transactions are conducted in accordance with the arm’s length principle and applicable OECD Transfer Pricing Guidelines as well as relevant domestic regulations.
We continuously assess tax-related risks and opportunities and maintain appropriate internal controls and processes to ensure accurate tax reporting and compliance. Tax positions of strategic significance, material tax risks, and key developments in the tax landscape are regularly reviewed by senior management and discussed with the Audit Committee of the Board, which provides oversight of the Company’s tax governance framework.
Data Privacy, Cybersecurity and Systems Protection: Our organization maintains a strong cybersecurity and resilience framework, anchored by regularly tested Business Continuity and Incident Response Plans (BCP and IRP) to ensure readiness for potential disruptions. The cybersecurity program includes continuous vulnerability assessments and penetration testing (VAPT) and is supported by an ISO 27001-certified Information Security Management System (ISMS). We conduct internal audits of our IT infrastructure and security systems to proactively identify vulnerabilities, alongside independent third-party audits and simulated cyberattacks to further strengthen our defenses. Incident reporting is facilitated through clearly defined escalation channels such as email, phone, and in-person and all reported incidents or policy violations are addressed through a formal disciplinary process based on severity and risk impact. There have been zero instances of data breaches, underscoring the effectiveness of our security measures.
Responsible AI Program
At JSW Cement, we are committed to the responsible, ethical, transparent, secure & sustainable use of Artificial Intelligence (AI) and Machine Learning (ML) technologies to enhance operational excellence, innovation and sustainability. AI-enabled solutions are increasingly being deployed across manufacturing, predictive maintenance, process optimization, and operational efficiency.
Our AI governance framework is supported by defined governance, robust information security, data protection and risk management practices, including role-based access controls and cybersecurity safeguards that restrict access to sensitive AI capabilities and data to authorized personnel only.
AI-generated insights, predictions and recommendations are intended to augment human decision-making and are clearly distinguishable from human-generated outputs where applicable, ensuring transparency and accountability. We continuously monitor AI model performance to detect model drift, degradation, model validation, version controls, change management and undertake periodic recalibration to maintain reliability and effectiveness.
To promote responsible AI, we are strengthening our model validation processes through fairness and bias assessments. We also seek to reduce the environmental footprint of AI deployment by leveraging energy-efficient digital infrastructure through monitoring AI compute/resource consumption, optimized computing architectures, and scalable enterprise platforms.
Employees receive regular training on digital technologies, information security, and the ethical use of AI. In addition, established grievance and escalation mechanisms enable employees, suppliers, customers and other stakeholders to raise concerns, seek clarification, or contest outcomes related to AI-enabled processes and decisions.
JSW Cement quantifies and monitors the sustainability benefits delivered through AI applications, including improvements in resource efficiency, operational performance, energy management, emissions reduction, and waste optimization. The measured outcomes are periodically reviewed to assess effectiveness and support continuous improvement. We continue to align our AI governance practices with emerging global standards, including the principles of ISO/IEC 42001, and evaluate opportunities for future independent assurance of our AI management framework
Community Relations: To ensure transparent and accessible communication with local stakeholders, we have established dedicated, two-way communication channels at each operational site. These may include community liaison offices, designated contact persons, toll-free helplines, digital platforms, and regular community bulletin updates. These channels are tailored to the linguistic, cultural, and technological context of each community, enabling stakeholders to initiate dialogue, seek information, and provide feedback in a timely and respectful manner.
