Tata Power - Integrated Annual Report 2025-26

As part of strengthening our ESG strategy and aligning with evolving stakeholder expectations, we undertook a comprehensive Double Materiality Assessment (DMA) during the year. DMA is a framework that assesses sustainability topics from both an impact and financial perspective, enabling a holistic view of material ESG issues.

Our approach was informed by leading global sustainability standards and frameworks, including the European Sustainability Reporting Standards (ESRS), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and other benchmarks such as DJSI, MSCI and Sustainalytics. Peer benchmarking within the utilities and energy sector further ensured a robust and forward-looking outcome.

Double materiality reflects two complementary dimensions:

the impact of our operations on the environment and society (impact materiality), and
the impact of sustainability-related factors on the Company’s financial performance (financial materiality).

This dual lens has enabled us to deepen our understanding of how our business both influences and is influenced by the broader sustainability landscape, particularly in the context of the global energy transition.

Double materiality — impact inside-out and financial outside-in diagram

Assessment process

To ensure a comprehensive and structured approach, we followed a multi-step methodology:

1

Identification of topics

A broad range of ESG topics relevant to operations was identified through regulatory review, global sustainability trends, prior assessments, peer disclosures, and recognised ESG frameworks./p>

2

Double materiality evaluation

Each topic was assessed across financial and impact dimensions to identify key risks, opportunities, and external impacts on environment and society.

3

Identification of Impacts, Risks and Opportunities (IROs)

For each material topic, the Company systematically evaluated associated impacts, risks, and opportunities, including environmental and social impacts as well as financial implications arising from transition risks, regulatory changes, market dynamics, and emerging energy sector opportunities.

4

Stakeholder engagement

Engagement was undertaken with employees, customers, investors, suppliers, and community representatives to incorporate diverse perspectives and expectations.

5

Scoring and prioritisation

A structured scoring methodology was applied to evaluate and prioritise topics based on relative significance.

6

Materiality matrix development

Outcomes were consolidated into a double materiality matrix, providing a visual representation of topic importance from both financial and impact perspectives.

7

Leadership concurrence

The outcomes of the double materiality assessment, including the prioritised ESG topics and identified Impacts, Risks and Opportunities (IROs), were reviewed by CSO. The findings were further presented to the apex leadership under the ESG and sustainability governance agenda for validation and strategic alignment. This review ensured that the identified material topics are consistent with the Company’s long-term vision, risk management priorities, and sustainability commitments, and were formally approved for integration into business strategy, disclosures, and decisionmaking processes.

Assessment outcomes

Based on the latest assessment, material topics have been refined to better reflect evolving risks, opportunities, and stakeholder priorities. During the year, two new material topics were identified: Product Design & Lifecycle Management and Access and Affordability, strengthening the focus on sustainable product stewardship and inclusive energy access.

In addition, select material topics have been renamed to better reflect their scope and intent. Socially Responsible Employer has been revised to Responsible Employer, underscoring the Company’s commitment to upholding its legacy of trust, ethics, and people-centric values while fostering a safe, inclusive, and supportive workplace for a diverse and multi-generational workforce. As a responsible employer, the Company prioritises employee well-being through strong health, safety, and environmental management practices that safeguard employees from occupational and environmental risks.

Similarly, Digitalisation and Cyber Security has been updated to Digitalisation, Data Privacy and Cyber Security to explicitly recognise the importance of protecting personal and operational data of employees, customers, partners, and other stakeholders. This expanded scope reflects evolving regulatory expectations and reinforces the Company’s commitment to responsible data governance, confidentiality, and resilience against cyber threats.

These updates reflect changing industry dynamics, regulatory developments, and alignment with stakeholder expectations.

Stakeholders covered for the assessment

Internal stakeholders

Senior management team

Employees

External stakeholders

Investors

Supply chain partners

NGOs

Brand and media

Customers/consumers

Double materiality matrix

Our material topics

Environment

1. Climate strategy
2. Emissions management
3. Energy management
4. Continuous and affordable green power
5. Safeguarding biodiversity
6. Hazardous and toxic waste management
7. Water and effluent management
8. Product design and lifecycle management*

Social

9. Access and affordability*
10. Diversity and Inclusion in workplace
11. Responsible employer
12. Employee retention, engagement and talent development
13. Occupational Health and Safety
14. Labour management
15. Human rights
16. Customer relationship management
17. Building sustainable communities
18. Responsible supply chain

Governance

19. Creating economic value
20. ESG governance
21. Risk management and BCDMP (Business Continuity & Disaster Management Plan)
22. Ethical business conduct
23. Transparency and accountability
24. Digitalisation, data privacy and cyber security
25. Regulatory compliance and landscape
26. New business opportunities
27. Innovation and collaborations

*ESG topics newly added based on the 2025-26 double materiality assessment.

Impact, risk and opportunities of very high priority issues

Material issues	Impact	Upstream / Operation / Downstream	Risk / Opportunity
Climate strategy	+ −	Upstream: High Own operation: High Downstream: High	△ □
Emissions management	+ −	Upstream: High Own operation: High Downstream: Low	△ □
Energy management	+ −	Upstream: Medium Own operation: High Downstream: Low	△ □
Continuous and affordable green power	+ −	Upstream: Low Own operation: High Downstream: High	△ □
Water and effluent management	+ −	Upstream: Medium Own operation: High Downstream: Low	△ □
Occupational Health and Safety	+ −	Upstream: High Own operation: High Downstream: Low	△ □
Creating economic value	+	Upstream: NA Own operation: High Downstream: NA	△ □
ESG governance	+	Upstream: NA Own operation: High Downstream: NA	△ □
Ethical business conduct	+	Upstream: NA Own operation: High Downstream: NA	△ □
Digitalisation, data privacy and cyber security	−	Upstream: NA Own operation: High Downstream: Medium	△ □

+ Positive

− Negative

△ Risk

□ Opportunity

Short

Medium

Long

Short to Medium

Medium to Long

Alignment of material issues with SBOs and UN SDGs

Material topics	How are we responding	SBO mapping
M1: Environment — Climate Change
1 Climate strategy 2 Emissions management 3 Energy management 4 Continuous and affordable green power 8 Product design and lifecycle management	Increasing our Clean and Green capacity to achieve carbon Net Zero by 2045 Well-designed state-of-the-art Air Pollution Control Devices (APCD) are in place Effective fugitive emission management Benchmarking of operations to global standards Providing continuous and affordable green power to our customers to enable them to reach their climate commitments	S1 S2
M2: Environment — Environmental Stewardship
5 Safeguarding biodiversity 6 Hazardous and toxic waste management 7 Water and effluent management	Biodiversity Management Plan in line with global standard practices Recycling and disposal of waste as per the regulatory requirements Increasing efficiency in water usage and exploring less water-intensive technologies Replenish freshwater through rainwater harvesting	S2
M3: Social & Governance — Customer Engagement
9 Access and affordability 16 Customer relationship management 24 Digitalisation, data privacy and cyber security	Multiple channels to interface with our customers for constant feedback. Continuous evaluation and improvement undertaken. Customer privacy ensured under DPDP Act, 2023	S4 S5
M4: Social — Workforce Well-being
10 Diversity and Inclusion in workplace 11 Responsible employer 12 Employee retention, engagement and talent development 13 Occupational Health and Safety 14 Labour management	Creating a culture that embraces Diversity and Inclusion at all levels Engaging in various initiatives for the well-being of the employees, their families and the communities in which they operate By establishing an AMP (Aspire, Motivate, Perform) leadership model thereby leading to an engaged, agile and future-ready workforce Identifying, understanding, controlling and eliminating the risks associated with hazards at workplace Automation and mechanisation plan to eliminate high risk manual activities Ensuring labour compliances as per the regulatory requirements along with global standards	S6
M5: Social — Social Responsibility
15 Human rights 17 Building sustainable communities	Human rights assessment for operations along with SA 8,000 certifications Robust CSR engagement with communities on the four pillars of Education, Entrepreneurship, Employability and Employment, and Essential Enablers	S6
M6: Social — Supply Chain
18 Responsible supply chain	Responsible Supply Chain Management Policy and ESG framework for supply chain screening Conducting training and ESG awareness campaign with supply chain partners	S2
M7: Governance — Corporate Governance
19 Creating economic value 20 ESG governance 22 Ethical business conduct 23 Transparency and accountability 25 Regulatory compliance and landscape	Creating economic value through operational excellence, strengthening of our balance sheet and efficient capital allocation Established a robust environmental management framework to ensure efficient operations and environmental protection TCoC serves as a moral guide and a governing framework for employees, customers and suppliers Policy advocacy with regulators and policy makers Regular and open dialogue with all stakeholders Improved disclosures for increased transparency	S2 S8
M8: Governance — Future Readiness and Business Continuity
21 Risk management and BCDMP 26 New business opportunities 27 Innovation and collaborations	BCDMP plan in place and mock exercises carried out periodically to ensure preparedness Expanding customer base through new business services like Rooftop Solar, EV Charging, Home Automation etc. Adopting state-of-the-art new technologies like CCUS, Green Hydrogen, SMR, etc. Collaborating globally with over 70 partners to enhance technology and customer standards	S1 S2 S3 S4 S5 S7 S8