CB BureauOne of the top, and perhaps among the most ubiquitous, auto companies in India is Maruti Suzuki. The biggest carmaker in the country, it has more than half of the market share in the passenger-vehicles segment. As has become quite the trend in the auto sector, Maruti’s investment in its CSR has been increasing over the years as well as its focus on sustainability measures.
According to the company’s stated CSR policy, activities will primarily be taken up for village development, road safety, and skill development, and will be focused on a few programmes rather than investing in several at once. The CSR projects will have clear objectives, plan, targets, and robust monitoring, like any other business activity. The delivery model includes both direct implementation and partnerships with other organisations including trusts, foundations and NGOs.
As per the company, CSR projects are finalised as per the needs-assessment surveys and stakeholder interviews and on this basis the duration and implementing partners are finalised. Regular impact assessment is taken up, in line with its plan-do-check-act (PDCA) approach, and feedback is used to improve the design and execution of projects.
CSR initiatives
We take a look at Maruti’s main CSR programmes:
- Road safety: Maruti has established seven Institutes of Driving and Traffic Research (IDTR) which collaborate closely with state governments. Spread over almost 10 acres each, IDTRs provide training to passenger and commercial vehicle drivers through technology. The use of scientifically-designed training tracks and simulators help mimic the actual experience of driving on Indian roads.
Maruti Driving Schools (MDSs) have been set up in partnership with authorised Maruti dealers. The 450 MDSs promote a safe driving culture through theoretical sessions, test tracks, and driving classes on the road. Training simulators are used and drivers are introduced to the concept of route maps as well. An employment-oriented programme, Unnati, offers driving training and soft-skills training for better employability for the underprivileged. It is claimed to benefit nearly 1,100 people annually, with over 80 per cent of trainees finding employment.
Other related initiatives include Train the Trainer programme, Road Safety for Truck Drivers, setting up 22 schools in various RTOs of Punjab, and city-specific road-safety programmes like the Road Safety Knowledge Centres (RSKCs), which were established in partnership with the Haryana Traffic Police. Managed by the IDTR, these seven RSKCs train traffic violators and learner-license applicants. Then there are projects like the MoU with the National Minorities Development and Finance Corporation in 2013″14 under which it has trained over 92,000 young drivers from poor, minority communities between 2014 and 2017. Drivers transporting Maruti Suzuki vehicles are also given road-safety training under the Jagriti programme.
In FY 2018, the company supported the Delhi Government by setting up 12 automated test-driving centres, equipped with video-analytic technology. It also partnered with Delhi Police to implement an advanced traffic safety management system (TSMS), a first of its kind in the city. The aim is to help the police increase and improve oversight on roads.
#PehniKya is Maruti’s 360-degree pan-India social campaign to raise awareness on the benefits of wearing a seatbelt. As per impact assessment, seatbelt-use rate increased to 41 per cent compared to the pre-campaign rate of 25 per cent. Apparently, 67 per cent of the people surveyed said that they were motivated to wear seatbelt after watching the TV ad.
The company had stated its intention in the CSR policy document to identify a Tier 2 city for a comprehensive road-safety programme, covering all key areas of road safety and effective enforcement of the law. It is not clear if that is under implementation yet.
- Skill development: The skill-development programme consists of three main initiatives.
- Upgradation of government ITIs: The company has partnered with state governments to adopt several Industrial Training Institutes (ITIs) to help improve youth employment in the automobile industry. Its interventions include upgrading physical infrastructure and workshops, training faculty, and providing exposure to students on Japanese shop-floor practices. It also arranges for industrial outreach programmes where industry experts are brought in as guest speakers while students and faculty also get opportunities for factory visits. As of FY 2017″18, the initiative had supported over 110 ITIs across 27 Indian states and the total number of students recruited in dealer networks was more than 4,000.
- Skill enhancement in automobile trade: Automobile Skill Enhancement Centres (ASEC) have been set up at select ITIs where model workshops provide practical training by fulltime trainers. Specialised courses on auto body repair (ABR) and auto body painting (ABP) have also been introduced. These skills are in high demand but training facilities are limited. Until last year, nearly 19,000 students had been trained at 73 centres.
- Japan-India Institute for Manufacturing: In 2016″17, the governments of Japan and India signed an agreement to create a pool of skilled manpower for manufacturing in India. As part of this, Maruti established the first Japan-India Institute for Manufacturing (JIM) at AS Patel (Pvt) ITI in Ganpat University, Mehsana, Gujarat. It imparts training in some of the best shop-floor practices such as Kaizen and Quality Circles.
Maruti has also taken up upgradation of government vocational and technical training institutes.
- Community development: Maruti has cumulatively adopted 26 villages around its facilities in Haryana (Gurugram, Manesar and Rohtak) and Gujarat (Hansalpur) for community development in the areas of education, water and sanitation, and infrastructure. It claims to involve the locals in all aspects of project implementation including needs assessment, project design, and monitoring.
- Water and sanitation: A dedicated team works with communities, sarpanches and ward members to improve water and sanitation conditions. A holistic approach takes into consideration various aspects like waste segregation, toilets, solid and liquid waste management, and awareness building. The programmes are aligned with Swachh Bharat Abhiyan. As per the 2016″17 impact assessment, 90 per cent of surveyed toilets were used regularly.
In 2017″18, Maruti partnered with Waterlife India to set up automated water-dispensing units (water ATMs) for providing potable water at a rate of 35 paise per litre. The company bears the initial cost of the ATM, with the panchayat providing land and electricity, while Waterlife India sets up, operates and maintains the plant. Over 8,000 households have benefited from this initiative.
- Education: Since 2006″07, the company has been working with government schools to upgrade their infrastructure and improve academic-learning levels. Projects are identified and taken up in phases. Separate toilet blocks for boys and girls have been constructed, water tanks, furniture, lights and fans installed, and blackboards repaired. Till FY 2017, 47 schools have been supported impacting over 25,000 students.
The impact assessment suggests an increase in hygienic practices among students, with 83 per cent students stating that they wash their hands before and after meals and 47 per cent attributing the improved environment for their increase in concentration.
For improved learning levels, training teachers, using audiovisual devices, recruiting supplementary teachers, and scholarships are some of the projects. As per the company’s survey, there has been a marked improvement although details are unavailable.
- Rural development: Projects are taken up to improve infrastructure, examples being repair work, paving of streets, and construction of community halls. These are decided based on needs assessment in consultation with village leaders, the company’s field staff, and expert agencies.
As per the community-satisfaction survey conducted in 2016″17, in the two adopted villages of Manesar 93 per cent community members were satisfied with school infrastructure, over 74 per cent were satisfied with quality of the environment, and 85 per cent were satisfied with the availability of drinking water and sanitation facilities.
In FY 2018, the company was required to spend Rs 120.83 crore on CSR (average net profit for last three financial years) and the total CSR spend was Rs 125.08 crore. Water and sanitation, road safety, and upgradation of government training institutes accounted for the highest allocation of funds.
In 2015″16, the company registered a not-for-profit entity, Maruti Suzuki Foundation, for its CSR activities. It began operations in FY 2017. Exact details aren’t available as of now. There’s little information on the medium- to long-term goals for its CSR.
On sustainability
Maruti Suzuki conducts aspect-impact analysis and environmental impact assessment (EIA) to identify and manage environmental impacts. Its sustainability commitments are:
- reducing the pressure on environment;
- working collaboratively with its customers, suppliers and surrounding communities; and
- controlled usage of natural resources.
The company had spent Rs 18.74 million as capital investment for energy-conservation equipment in 2017″18. In the same FY, it claims to have saved 830,367 tonnes of CO2 since 2006, while 0.12 J of energy was saved per vehicle manufactured due to clean and fuel-efficient technologies (base year 2005″06), driven primarily by alternative fuel (LPG, CNG and SHVS) vehicles. R&D efforts have resulted in fuel-efficient engine technologies such as i-GPI CNG engine and Smart Hybrid Vehicle from Suzuki (SHVS).
In FY 2018, the total GHG emissions of the company (both Scope 1 and Scope 2) increased over the last reporting period, while the GHG emissions intensity (total Scope 1 and Scope 2 emissions per vehicle manufactured) reduced marginally (0.263 to 0.261 GJ).
Maruti’s facilities source 95 per cent of their energy requirements from natural gas, 5 per cent from other sources such as diesel and grid electricity, and a small portion from solar. While the company’s overall energy consumption has seen a steady increase over the years, the energy-intensity ratio (energy consumption per vehicle manufactured) has been going down (0.03 GJ over the last two FYs).
On water conservation, 200 litres of water is saved per manufactured vehicle; manufacturing water demand was reduced by 81,032 m3 in 2016″17. The overall freshwater consumption had reduced by 0.5 per cent and the water intensity (water consumption per vehicle manufactured) decreased to 1.38 m3 in FY 2018 from 1.48 m3 in the previous FY. The company also recycles and reuses water at its facilities, claiming that 60 per cent of water demand is met through recycled water.
On waste management, there’s no data on the amount of waste generated and break-up of disposal methods. All hazardous waste generated are categorised and sent either to the cement industry for co-processing or to authorised recyclers. There was no landfilling of waste in 2016″17.
On procurement, 100 per cent of its suppliers have signed green procurement guidelines that meet the EU’s end-of-life vehicle (ELV) standards for auto parts, allowing vehicles to be recycled in an ecofriendly manner at the end of their life cycle. As per claims, 88 per cent of its local tier-I suppliers are located within 100 km radius of its facilities. The company has adopted the ISO 14001 standard and as of FY 2017, 86 per cent of tier-I suppliers’ facilities had implemented environmental management systems (EMS) based on this standard.
Steps like dry wash at its service workshops have contributed to reducing its environmental impact. Maruti has committed to coming out with an electric vehicle in 2020.
CB view
Maruti has taken the smarter route of focusing on a few causes and projects for its CSR work. While its road-safety initiatives are fairly spread out geographically, the community projects are mostly concentrated around its facilities, which makes perfect sense. Skill development, too, has been deployed in a targeted manner with ITIs being the focal points of its efforts. And while the company claims to conduct regular impact assessment, since these reports are not publicly available, one can only take their word for it.
On sustainability reporting, the company does disclose quite a bit of information. However, critical data such as specific targets on carbon emissions and energy reduction, the roadmap towards achieving them, and amount of waste generated are missing. This is, in part, attributable to the fact that the company doesn’t issue a separate sustainability report. Other companies such as Tata Motors and Mahindra who do are miles ahead in the scope and depth of data provided. Maruti can, and should, emulate them.
Then there’s the fact that a major portion of its energy needs is met through natural gas. Now, while natural gas may be ‘cleaner’ than coal, it is still not a clean, renewable energy source and touting it as proof of the company’s commitment to sustainability is quite disingenuous.
What Maruti could do better is show greater data transparency and adopt a clear, structured approach towards sustainability, with clear goals and timelines outlined. Unfortunately but not unexpectedly, the company did not respond to any of our questions on its CSR or sustainability initiatives. It is interesting to note that when it comes to its PR stories, Maruti is more than willing to engage. This is kind of an unofficial litmus test for us to gauge the true intentions of a company’s CSR because it should never just be for PR. Doing good also means a commitment to doing better, and not just promoting one’s ‘generosity’. It really cannot be an endeavour to win awards or fill up the annual report. It is a pity that Maruti, much like most of corporate India, failed this test.