Takeaways from Coffee for Cause, Edition 5
– Conversations around sustainability and CSR

Conversation Round 1: Where are we headed on  environmental sustainability?

Can we use the pause that the pandemic brought into our lives for doing different things, or doing things differently? The events of 2020 contain several lessons for us, if we will see them. One thing is clear – that we have to do more than what we have been doing. Less complacency, more actions, by more and more of us!

Keeping these aspects in mind and learning what we have from recent events, what can we do to make the world a better place, as individuals as well as leaders in organisations?

Points to ponder upon

• Making environmentally sustainable practices a workable policy at the organisation level is easier said than done? True? Not really? Why and whyever not?

• What can make an organisation environmentally sustainable in the true sense of the word?

• Are there paradoxes here? For example, how can a fossil fuel company, an FMCG company, or a fast-fashion company claim to be environmentally sustainable? How do we reconcile the interests of businesses and of the planet?

• Can companies as big as Mahindra, Toyota and Hero MotoCorp actually become sustainable – be carbon-neutral, water-neutral… basically do nothing that is in conflict with the planet and its people?

Vikram Gulati, Toyota: It is definitely possible, provided you have your priorities right and look at sustainability in a holistic manner. At Toyota, our global vision for 2050 is to go carbon-neutral and the vision document that we recently released has a clear roadmap on how we are going to achieve zero carbon footprint. It (the roadmap) focuses not only on the company’s manufacturing but also on the product’s lifecycle – so as to neutralise the product’s footprint from cradle to grave. Another challenge that we have before us is to minimise water usage.

In order to prove that the sustainability targets can be achieved, let me share some data from FY 2019. As much as 93.5 per cent of our total energy requirement was met from renewables and that helped us save around 45,000 tonnes of carbon. On a cumulative basis, that amounted to over 206,000 tonnes of carbon since we began shifting to renewables.  

Besides, we focus on greening our facilities and have planted over three lakh trees. The key to going sustainable is to first set a vision and then involve all stakeholders in achieving that vision. Once the sustainability vision becomes the way of doing business, companies will realise that it makes not just social and environmental sense, but also great business sense in the long term.

Vijay Sethi, Hero MotoCorp: It is not a question of whether a company can become sustainable or not, it is not an option or a matter of choice, nor is it being forced upon the business… All conscious business entities know that it is their moral responsibility, that it speaks about the character of the brand, and that it makes great business sense.  

At Hero MotoCorp, we are 270 per cent water-positive already and targeting 500 per cent by 2025. Four of our six manufacturing units – we call them garden factories – produce ‘zero waste’ and one of them also has the world’s largest green roof. A lot of work is being doing to minimise our carbon footprint. A vision for becoming carbon-neutral by 2030 is already in place and we have laid out a practical roadmap with set milestones for the next few years. Talking of green investments, we have planted about 25 lakh trees outside our areas of operation and that is contributing towards a large amount of carbon sequestration.

It’s not just at the broad organisation level that sustainability and social responsibility are being taken up – the workforce’s engagement with the company on these fronts has also evolved organically over the years. Hero MotoCorp’s employees, who are well educated and aware consumers in their own right, not only take pride in being part of a conscious corporate, but also engage and do their bit to support, scale and sustain the company’s social and environmental initiatives.  

Anirban Ghosh, Mahindra Group: I was asked the same question in 2016 when I made my first presentation on our company becoming carbon-neutral. The question was asked by our Managing Director Mr Pawan Goenka, who is an engineer par excellence and was unsure if this was technically possible… I had to tell him that until about a year ago even I would have thought it impossible. It needed real understanding of how a sustainability roadmap could be planned and executed, so we had a set of short-term and long-term goals to work with, a vision and a strategy, and parameters for measuring impact.  

A couple of years later when the conversation picked up again and we were looking at the actual data with regard to emissions and how much carbon we would be able to sequester and what would be the leftover, we saw that the numbers were quite good as we had already invested in over a thousand projects focused on energy efficiency. Interestingly, no flags were raised and no questions were asked about the needed investments when we rolled out more sustainability-focused projects, because by that time the company had realised that the returns on these investments – on energy efficiency and renewable energy – were greater than the EBITDA of the business…

Today we have a target of going carbon-neutral by 2040. While the initial thought was to have only the flagship company, Mahindra & Mahindra, go carbon-neutral by 2040, our Group Chairman Mr Anand Mahindra announced that our whole group would strive to achieve that target.  

Here I may add that companies that are in steel or cement will have more challenges broadly because the necessary solutions and technologies or suitable alternatives are not yet available. However, if tomorrow we have clean hydrogen available, then it will be not be all that difficult…

In my view, there are only three levers to pull: energy efficiency, renewables and carbon sequestration.  

• Have you all measured or estimated your actual GHG emissions?

Anirban Ghosh: Scope 1 and Scope 2 are easy to address and all of us must have done it by now. Scope 3 is somewhat more difficult to do. However, there are about 15 different items listed in Scope 3 and companies can figure out which of those items have the biggest emission levels and start by looking at alternatives and solutions for the same. In fact, when we say carbon neutrality, we all will get there sooner than the timelines we have defined in our reports.

For example, the day the cost of batteries goes down, which I think should happen around 2025, the whole thing will pick up pace simply because it will become the right business decision to make. Scope 3, though, will remain a challenge. For example, we’ll have to look at environmentally-friendly ways for mining for the materials that we use. We will have to figure out what to do about the emissions from logistics. Will we have enough clean-energy vehicles available? The day we are able to make clean-energy vehicles viable for our consumers, all of us will move towards that form of mobility.

Vijay Sethi: I agree with Mr Ghosh – Scope 3 seems difficult because there aren’t enough solutions available at this point in time. Yes, affordable electric mobility will help us in moving forward on that front. At the same time, let’s remember that there is also a mindset here, a typical type of behaviour. The perspective needs to change as well. We need to look at our own carbon footprint as well as at the emissions level at the larger level.  

We can certainly invest in bringing down the energy consumption of a particular geography or for communities. For example, Hero MotoCorp invested in replacing all incandescent light bulbs with energy-efficient LED bulbs in over 300 villages of Uttarakhand, and that brought down the energy consumption of the region by over three crore electricity units annually. Likewise, significant investments have been made in installing thousands of solar streetlights, producing significant megawatts of green energy…

Vikram Gulati: I mentioned in the beginning of the conversation that our goal is to go carbon-neutral by 2050 and reach zero carbon throughout the product lifecycle. It does become a major challenge, especially because we are taking responsibility for the elements that are way beyond our boundaries. What we have to take into account is not just the production and the delivery part but also a bit about mining – where our raw materials are coming from and the logistics in-between, and emissions from the delivery to the usage of the product, to the final disposal of the same at the end of its lifecycle… This is a challenge primarily because of the multiple factors that are not in our hands.

In India, it is actually a bigger challenge because renewable energy sources are quite scarce. Hence, when we talk about electric mobility in India, it will make more sense only if it is linked solely to renewable sources – something that seems quite difficult at the moment, since thermal/coal-powered plants will remain the primary sources of energy.  

What automobile companies need to look at is not just the tailpipe emissions impact; it is obviously going to be zero from an electric vehicle (EV). What we need to look at is also the primary source from where it is obtaining its power. We need to understand that the world is one and it does not exist around vehicle tailpipes. It revolves around where the real energy generation takes place, around the fundamental sources of energy. So, we may be hoping that a drastic change will come about after the technological shift in the powertrain or the drivetrain of the vehicles, but it’s not a realistic hope until the sources of energy of those powertrains are not renewable.  

Vijay Sethi: When talking about electric mobility vis-à-vis the energy resource, we can agree that at the rate at which renewable sources are increasing, probably in a decade or so the country will have made great progress in this area. I won’t be surprised if renewables become the mainstream power source and thermal gets eliminated sooner than what current trends suggest.  

Vikram Gulati: …I think the bigger issue is moving away from personal mobility altogether. In the long run, whether it’s ICEs or EVs or whatever, mass mobility is the only answer to the question of long-term sustainability. Therefore, despite being a car manufacturer, we at Toyota are now looking at ourselves as ‘mobility solutions providers’… it is about bringing in the whole paradigm of efficiency wherein emissions from transport overall can be brought down.

The participants also talked about issues concerning shared mobility, especially in congested and unplanned metros, and some of the solutions to address the same. The conversation also touched upon how the companies are looking at afforestation, building of carbon sinks and conservation of biodiversity, as well as engaging with rural communities, especially farmers, in the process of increasing the green cover across the country.  

Go to next page   for excerpts from conversation round 2