Sustainability AND MAHINDRA INDIA INC
How Mahindra is Championing Sustainability
The group made strides in embedding sustainability in its business practices last year. And it starts at the very top, reports Labonita Ghosh
At a recent event at the Mahindra United World College near Pune, Mahindra & Mahindra CMD Anand Mahindra, in his speech to a gathering of students, teachers and parents, broke off to speak to the support staff (who were also present) about sustainability and the adjoining 170-acre biodiversity park. “Sustainability is a part of our ‘rise’ philosophy. You cannot rise if you take more from the community than you put back. It is imperative for us to protect the flora and fauna around us,” Mahindra finished off in Hindi, compressing a company credo into a few short sentences. If the segue into sustainability seems odd, those who know Mahindra well say he takes every chance he can to talk about
it. “Sustainability has to be a way of life to be a way of business,” says Mahindra. This expressed commitment might explain the group’s robust sustainability programme (now in its fourth year). Beroz Gazdar, senior VP, group sustainability, says the strategy for charting a sustainability course at M&M is quite simple: make the various verticals see a business case in it, and leverage that to bring them on board. So, when it comes to helping employees make the connect between business and sustainable practices, Gazdar uses a simple argument. “If we’re talking about water conservation in our factories, I simply point out that without water, there would be no operations. No water, no work,” she says. “They immediately understand why not saving water, or trying to improve the water table around our plants, can be a business risk.” It’s not just the factories. The $15.4-billion group wants its entire 140,000-global workforce to get the message, which is why it has adopted (and branded, as part of its ‘rise’ campaign) the phrase, ‘alternative thinking’. The idea has gained traction among 10 of the 18 businesses, and propelled the group towards a more seamless integration between operations, decision-making and sustainability. The plan is to corral all stakeholders — employees, customers, local communities, dealers and the supply chain — and nudge them towards this idea of ‘alternative thinking’ on sustainability.
Making Progress
To that end, M&M has set for itself specific green and corporate social responsibility goals. Its 2011-12 sustainability report, released last week, shows the group has surpassed many of its three- and five-year targets on energy efficiency, reduced emissions and water consumption (See graphic). Water conservation drives have led to a significant reduction in use in the auto and real estate sectors. “Last year, we conducted a water audit and mapped everything, from availability and use of rainwater, to sources for supply, like tankers,” says Gazdar. “Then, we spoke to plant managers to get their buy-in on reducing consumption.” Many of the plants are heading towards water neutrality, with enough for the local community. This year, M&M has pledged to align itself with six of the eight agendas of the Centre’s National Action Plan for Climate Change.
Smoke Signals
“But let’s not forget that this is a company that makes gas-guzzling SUVs (sports utility vehicles),” says the head of a sustainability consulting company, not wanting to be named. “We’d be happier to see a large chunk of R&D spend going towards creating greener fuels and such. Acquiring (electric carmaker) Reva was a first step; but a company of M&M’s calibre needs to do much more.” A policy paper of the Centre for Science and Environment says with the passenger-car market shifting towards “heavier and bigger vehicles (like SUVs) that guzzle fuel”, India needs more stringent checks. It adds that the auto industry is unhappy with the recentlyapproved ‘corporate average fuel consumption standards’ for vehicles — a target of 18.15 km/ litre or 129.8 gm of CO2/km in 2015, and 20.79 km/litre or 113 gm of CO2/km in 2020 — and is pushing for rollback. The paper also says companies want the implementation timeline postponed to 2018 and 2023, and the government to recalibrate the approved target of 20% CO2 reduction over 2010 levels in 2020, to 16% reduction by 2023. With a stable full of large vehicles, M&M is in the thick of things. Gazdar, however, says there is enough evidence to offset these claims. “Our new investments, like the Reva, Mahindra Solar and Mahindra Research Valley speak for themselves. They show people we are responsible,” she says.
Spreading the Philosophy
About half of M&M’s various stakeholders, including its supply chain, are aligned to the group’s sustainability vision. Employee participation in the volunteering programme has increased by 7% over last year. M&M conducts independent audits of supply-chain contractors to ensure workmen are insured, there is women’s sanitation and a crèche on site, etc. Elsewhere, Mahindra Lifespace Developers projects are designed as per the Centre’s National Building Code regulations, to ensure health and safety of end-users and workers. Practices like this may have led to several Mahindra buildings being pre-certified green by the CII’s Indian Green Building Council. Its auto plant in Chakan, near Pune, is a zerodischarge, water-balanced facility that has incorporated 147 initiatives for clean manufacturing, while the plant in Zaheerabad, in an arid part of Andhra Pradesh, has received awards for water management. “We believe businesses can transform society, and vice versa,” says Naresh Patil, head of the corporate sustainability cell. The group also sets aside 1% of profit after tax for CSR activities. This year, it will be investing 72 crore in CSR activities, for initiatives undertaken by its four foundations. A green consultant, speaking on condition of anonymity, says M&M still looks at sustainability with a “philanthropy mindset”. “While they do a lot on the social side, I’m not sure how this gets linked to their core business,” this consultant says. “Initiative can never be long term if there is no business connect. This will impede them from moving to the next level of sustainable practices.” Anand Mahindra has a response to this. “Today, there is no distinction between what you do for profit and how you drive positive change,” he says. “The more you drive positive change, the more enhanced your business model.”
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