Mahindra Group, 50th Group Sustainability Council Meeting

Renata Lok-Dessallien, United Nations Resident Coordinator in India

(Speech as prepared)

Dr. Pawan Goenka, MD & CEO of the Mahindra & Mahindra,

Mr. Shukla, Chairperson of the Group Sustainability Council,

Mr. Anirban Ghosh,

Distinguished Council Members,

And the Mahindra family in India,

I am delighted to join you today in the celebration of your 50th Sustainability Council Meeting. Mahindra is a standard bearer for India, and the world, when it comes to convening dialogue and action on corporate sustainability.

You have articulated your values, at the highest levels, in alignment with the world’s vision for the Sustainable Development Goals for 2030. Last year, at Davos, your chairman, Mr. Anand Mahindra issued a challenge to the global community of businesses to adopt science-based targets on climate change and committed your company to implementing the Paris Agreement in full, and to carbon neutrality by 2040. As you are aware, Mr. Mahindra was also recently appointed by the United Nations Secretary-General to the board of the UN Global Compact – chaired by the Secretary-General himself.

There is not much I can say that will be unfamiliar to you, but I can take this opportunity to commend your extraordinary efforts.

The urgency of climate action and sustainability

• I also don’t have to reiterate the urgency of action towards sustainability and the timeliness of this 50th The landmark report by the UN Intergovernmental Panel on Climate Change told us, less than a year ago, that we only have 12 years left to save the planet.

• Where many of us always referred to future generations as the stakeholders of sustainable development, this report brought us back to the present.

• Around the world, forest fires, floods and other climate fueled disasters are raging. We live in cities that are killing us. WHO estimated that 2 million people were killed by urban smog in India in 2017. It is estimated that by 2050, temperatures in South Asia will rise by up to 7 degrees, with some of the highest changes in North India. Between 2030 and 2050, climate change is expected to cause 250,000 additional deaths annually from malnutrition, malaria, diarrhea and heat stress, with health costs up to US$ 4 billion a year.

• The irreversible depletion of our resources is an existential threat confronting our planet today, in 2019. We must act today and do more than has ever been done before.

• Not only because of the scale of our crisis, but because of the scale of our opportunity. This is the first generation that can solve poverty, and the last generation that can stop climate change. And countries like India are inspiring hope through their leadership of this critical agenda on the global stage.

• You and I have the unique privilege to work together in pursuit of a better future in a country as vast and full of opportunity and political will, as India. India, today, is poised to take on a leading role on the 3 defining moral imperatives of our time: 1. securing the future of our planet from climate change and damage to ecosystems, 2. building inclusive and equal societies, and 3. ensuring sustainable economic growth in a time of global catastrophic risks.

The role of big companies: scale of impact and innovation

• If India is to become a leader of this movement, then big players like Mahindra, and all of you in this room today, and those of you who are watching this webcast, will have to become leaders of this movement.

• The Sustainable Development Goals, set in 2015 by Prime Minister Modi and 192 other world leaders, are ambitious. They aim to eradicate extreme poverty and hunger, make energy and safe water accessible to all, accelerate growth, improve education and healthcare, build resilient infrastructure, catalyze innovation, promote sustainable industrialization, achieve gender equality, and fight climate change, in the next 11 years.

• They cannot be achieved without the partnership of business.

• For two reasons: Firstly, because you are a significant part of one of the fastest growing economies in the world, as investors, job creators, and holders of capital, and a big part of India’s vision for a US$ 5 trillion economy by 2024.

• And secondly, because you hold the solutions. If the global market for cars is driving CO2 emissions to an all-time high, then the automobile industry holds the key to innovatively and creatively drive down emissions. The auto industry also uses very large amounts of water and energy and generates a large amount of waste.  As your company has demonstrated, your innovative solutions as one of the biggest players in this sector can impact the carbon footprint of the entire industry.

• Mahindra is one of the largest automobile companies in a country where the auto industry constitutes half of the manufacturing sector’s share in the GDP. If your processes are circular, if you can come up with game-changing models, in recycling, green energy, cutting emissions, or become a niche leader like Tesla in the cars of the future – it would make a measurable dent in the overall environmental impact of India’s GDP.

• Businesses have for time immemorial, been the leaders of change. If there is any part of society that has learnt to adapt to a changing world, to changing climate, geographies, and other upheavals, it is the corporation.

 The business case for sustainability

• So you understand the sense of urgency, you understand your responsibility, and you are aware of your power. But what is the incentive?

• First of all, there is no profit without economic sustainability. Today, climate change poses one of the biggest risks to the survival of businesses. Sustainability is a way of managing these risks, systemic and emergent –the depletion of resources, changing agricultural patterns, and disaster. Businesses that adapt better, do better.

• Remember, your customers set the SDGs and are increasingly more conscious of their footprint and expectations. They want products and services that can stand to a higher ethic, and at the very least, do no harm.

• The IFC (World Bank) has found that companies with good Environmental and Social Performance outperform others on both equity and returns on investment.

• Sustainable business will also have dividends for national economic growth. Sustainable development models could open new markets worth up to US$ 12 trillion and create 380 million new jobs worldwide by 2030. Returns on investments that can be generated by the full implementation of the SDGs could be approximately US$ 30 billion per year. The economic impact of achieving gender equality in India is estimated to be US$ 7 billion of added GDP by 2025. The investment potential for green transport infrastructure and electric vehicles in South Asia is US$ 950 billion.

• Above all, sustainable development is about doing things differently. It opens up markets for innovations across sectors and the evolution of products and services – two clear examples are clean technology, and electric vehicles and mobility – both are at the heart of Mahindra’s business model. I have read that Mahindra today uses 60% less energy to produce a vehicle than eight years ago. This is a striking example of accelerating profit and environmental innovation at the same time.

• Research suggests that over 30% of new car sales are projected to be zero emissions and plug-in hybrid by 2030, representing a potential US$ 1 trillion market. Electric cars could be as affordable as petrol and diesel cars by 2022. This is a huge market and adapting to it is as much about profitability as it is about sustainability.

• Innovations for social change – especially in a country about to land on the moon next week – will accelerate technological development for industry. Reaching the farthest populations will help build more resilient supply chains. And finally, sustainability as a core value of business, will bring billions of people out of poverty, empower women, combat disease, malnutrition, and unemployment and secure the dignity of future generations.

• There is also an opportunity for the business sector to leverage the national push for sustainability. You are part of India’s progressive momentum towards climate action. The Government of India today is investing in sustainable development, through some of the world’s largest development programmes with ambitious targets for e-mobility, renewables, and emissions.

A balance is possible between corporate and environmental value

• I understand that the trade-off between corporate and environmental mandates is not always this clear. Sustainable practices are not always profitable in the short term. But I also believe that an elegant solution is possible. Companies like yours can and have found the bold innovations we need to save the world and do good business at the same time.

• And because the challenge is so big, we need to talk beyond CSR. We need to talk about something very corporate instead: and that is shareholder value.

• This movement – which we call sustainability - is not just a project to be run by a foundation. It is not the sole mandate of the Ministry of Environment. It cannot be achieved through a 2% CSR allocation alone. It is not just about greening offices and reducing the emissions from our factories.

• It is about redefining the shareholder There is a direct stake in the profitability and in the social and environmental impact of your business on communities, ecosystems, cities and towns, and on the millions of people whose lives you touch through your global value chains. And therefore, corporate value cannot be measured only in the arithmetic of supply and demand. It must include environmental value and social value, and the strategic integration of the SDGs into the very spine of your business model.

Mahindra’s exemplary leadership

• This integration is something Mahindra has done very well.

• You are one of the few companies in India who have not only delivered the speeches but done the brass tacks of this work. I have read the powerful messages that have come from your Chairman, and only recently, had the privilege of listening to Dubey’s address to the Global Compact Conference in Mumbai.

• Today, you are a company of nearly 250,000 people, the world’s biggest company in the tractor sector, and a global leader in critical industries like information technology and financial services.

• You can show the way in which we can go from setting ambitious sustainability targets to building an annotated curve of progress towards those objectives – as a corporate strategy. You can show the way in which we can come up with the next big accelerators for the SDGs, in this room, and beyond.

Convening a coalition of commitments for sustainability

• And finally, you can take this leadership and turn into a coalition of commitments. I believe that there is a tremendous opportunity here for Mahindra to bring the biggest corporates and businesses in India together, to sign off on concrete commitments towards the SDGs.

• I want to urge you today to consider spearheading the partnership of business in India’s Vision for 2030. An alliance of, say 10 or 20 of the biggest corporations in this country could make a significant dent on the landscape of global risks and challenges.

• Let’s say, as a coalition, you took up no more than 3 or 4 SDGs – Maybe SDG 6 on water, SDG 7 on clean energy, SDG 13 on climate action – areas in which Mahindra and its peers are already leading the way. If you could solve just 5 Sustainable Development Goals for India, it could have a decisive impact on our long trajectory towards 2030.

• If you took up measurable targets – a global indicator like the Dow Jones Sustainability Index on the global automobile industry, it would set the course for concrete actions and nurture competition among the smaller companies.

• In fact, the United Nations Secretary-General’s Climate Summit is coming up in September. India and Sweden are leading the conversation at the Summit on Industry Transition. Can Mahindra lead a conversation on Industry Transition in the run up to New York?

• With a global footprint in over 100 countries, I believe that this company has the moral voice and courage, and the spirit of enterprise that can steer this conversation at the global level.

Conclusion

• We must all scale up our ambitions if we are going to save the world in the next 12 years from climate change and achieve the SDGs in the next 11.

• The United Nations is a champion of the voices and participation of business in the global push for the SDGs, through frameworks like the Global Compact worldwide, and the UN India Business Forum in India, of which your team is an important partner.

• I believe and the United Nations believes that if India, and Indian businesses can achieve the Sustainable Development Goals, the world can achieve them. And that will be your legacy for generations to come.