Case Study - Mahindra and Mahindra Ltd.

Mahindra and Mahindra Ltd. (M&M) is the world’s largest producer of tractors and a leading manufacturer of utility vehicles in India. It is the flagship company of one of the largest industrial federations in India with operations in both rural and urban areas.

Why science-based targets?

As a company operating in the manufacturing and agricultural sectors, Mahindra and Mahindra ltd.’s operations are highly vulnerable to climate change and unpredictable weather events necessitating resilience planning. The company is highly dependent on seasonal monsoon, rising energy costs, restricted access to raw materials like water as well as changing consumer preferences. While Mahindra and Mahindra ltd. faces challenges from evolving sustainability requirements, it endeavours to stay ahead of the curve to address emergent climate-related situations.

Alongside 20 other Mahindra Group companies, Mahindra and Mahindra ltd. has committed to the Science Based Targets initiative (SBTi). The company committed to reduce Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 47% per equivalent product unit by 2033 (using 2018 as a base year). Mahindra and Mahindra ltd. has also committed to reduce Scope 3 GHG emissions by 30% per sold product unit by 2033 (using 2018 as a base year). The targets set are consistent with reductions required to keep warming to well-below 2°C.

“Using science-based targets are becoming mainstream business practice - because more and more companies, like ours, are recognizing that the transition to a low-carbon economy is a huge business opportunity as well as the only way to secure sustainable prosperity for all” – Mr. Anirban Ghosh, Chief Sustainability Officer, Mahindra Group, said.

Sustainability and disclosure

The company hopes that disclosing environmental data through CDP and reporting on its climate initiatives transparently will help build trust among investors and bolster its reputation as one of the most ‘climate responsible’ companies. The accompanying graph shows Mahindra and Mahindra ltd. has been on a steady journey to reduce Scope 1 and Scope 2 emissions. There is an uptick in Scope 3 emissions, which can be attributed to improved measurements and reporting of Scope 3 emissions categories.

In the financial year 2020, Mahindra and Mahindra ltd.’s Renewable Energy consumption was close to 18,317 MWh (equivalent to MtCO2 15,020) and their emissions decreased by 2,000 MtCO2 in the same year. Clearly, increasing deployment of renewable energy consumption has resulted in lower emissions for the company in 2020.

Figure 1 Mahindra and Mahindra ltd. emissions profile (in MtCO2)

Meeting the targets

Mahindra and Mahindra ltd. has joined other initiatives as well and is the first global company to join the EP100 initiative, with a target to double energy productivity within the next 25 years. This action plan will also enable the company to achieve emissions reductions, which complement efforts being made to lower the Scope 1 and Scope 2 emissions in their SBTi targets.

Mahindra and Mahindra ltd. is also working on reducing emissions from transportation through load consolidation, route optimization and finding alternate modes of transportation. In 2020, the company increased its total renewable energy consumption by 16%, compared to last year. It has also increased its solar and wind power capacities to boost its green energy ratio in the power mix. The company’s green share has shown a steady increase from 2% in 2018, to 3% in 2019, and 4% in 2020. Mahindra and Mahindra ltd. has also marked an internal price on carbon at US$10, an important tool for lowering businesses’ carbon emissions and mitigating potential climate risk.

For the automobile sector in India, Mahindra and Mahindra ltd. envisions itself as leading the way towards a low-carbon, sustainable future. The company believes that sustainability should be approached as a business strategy – managing risks and embracing opportunities through optimizing the economic, environmental and social bottom lines can help a company create long-term stakeholder value.

Mahindra and Mahindra ltd. is targeting carbon neutrality by 2040 and plans to enhance its renewable energy portfolio, promote adoption of alternate fuel technologies as well as integrate sustainable practices throughout the value chain. The company has already begun incorporating substantial changes across its operations and is adopting cleaner and greener processes, improving its energy and resource efficiency and increasing the share of non-fossil fuel renewable energy in the power mix.

The target

Mahindra & Mahindra ltd. commits to reduce scope 1 and scope 2 GHG emissions 47% per equivalent product unit by 2033 from a 2018 base year. Mahindra & Mahindra ltd also commits to reduce scope 3 GHG emissions 30% per sold product unit by 2033 from a 2018 base year.