Tech Mahindra: 1000th climate commitment for We Mean BusinessWe Mean Business
On the eve of our two-year anniversary, the We Mean Business Coalition just passed a major milestone, clocking up our 1000th commitment to climate action from a set of more than 600 companies and investors globally.
India-based IT services and consulting giant Tech Mahindra, which counts over 107,000 employees in 90 countries delivering value to over 800 global customers and boasts annual revenues of US$4bn, has become one of a growing crop of Asian firms to publicly commit to setting science-based climate targets.
The move builds on Tech Mahindra’s active support of the UN’s climate change talks in Paris last year and reflects its ambition to become carbon neutral in the future, says Sandeep Chandna, the company’s Chief Sustainability Officer.
Since 2009, Tech Mahindra (a part of the $17.8 bn-revenue Mahindra Group) has been setting itself internal three-year carbon reduction targets. Its decision to join the We Mean Business Coalition signals a determination to go public with new, robust emissions targets.
“At the moment, there are lots of discussions internally about the precise approach we might take but hopefully within the next couple of months we’ll be able to announce a firm target for 2020,” Sandeep states. That target will then be reviewed by the Science Based Target initiative experts to confirm that it is in line with the level of decarbonization required to stop global temperatures from rising by more than 2°C compared to pre-industrial levels.
The likelihood is that Tech Mahindra’s target will be linked to carbon intensity (most probably, emissions-per-employee) rather than tied to an absolute reduction figure due to the company’s rapid growth trajectory. Three years ago, Tech Mahindra merged with Mahindra Satyam, causing it to almost double in size. Today, the business is continuing to expand at pace, resulting in more employees, more office space and ultimately more energy use.
Whatever the company decides, Sandeep is adamant that its future targets will be backed up with robust measurement mechanisms. Tech Mahindra is building on a solid track record here. Only recently, its emissions tracking systems saw it awarded a maximum 100 score out of 100 in the latest Carbon Disclosure Leadership Index, a benchmark ranking run by CDP, a founding partner of the We Mean Business coalition.
Commercial logic explains a substantial part of the motivation for Tech Mahindra to come out and to add its voice to business demands for decisive action on climate change. Sandeep is frank: anything he and his colleagues can do to bring down energy costs will put a smile on the Chief Financial Officer’s face.
Solar panels at its Indian campuses are helping reduce its power bills already. So too is a pilot wind turbine at its large facility in Pune, plus radiant cooling mechanisms at multiple sites. Increasing the renewable portion of its energy mix and promoting great energy efficiency both hold the potential for further cash savings.
Another factor driving its low-carbon ambitions is the company’s global client base. Details of its emissions reduction are something that “every customer is asking us,” Sandeep says. Interestingly, Tech Mahindra is asking the same question of its vendors in return. If the company is to become carbon neutral, it will have to “take our customers and vendors along with us,” he reasons.
A related motivation is the innovation that the company’s Chief Sustainability Officer hopes will be unlocked by committing publicly to science-based emissions reduction targets. To that end, the company operates an online internal portal called an ‘Ideation Factory’ that employees can use to submit creative ideas for greening the firm’s operations or its products and services.
MicroGrid as a Service is one of a number of smart solutions to have already emerged from this “grassroots level” approach, Sandeep says. The service combines energy, satellite, aerial, social and economic data to inform large energy users to manage power demand more efficiently.
Finally, there’s the issue of regulatory risk. For now, government policy is oriented more towards incentivizing energy efficiency and renewable power generation. Should that change, Tech Mahindra wants to be ahead of the curve.
As a technology company whose revenues rely in large part on software development and client consultancy services, Tech Mahindra has a comparatively small – and shrinking – carbon footprint for a company of its magnitude. Since FY 2012-13, the company has witnessed a 4.32% reduction in its Absolute Scope 1 and 2 emissions.
Yet delivering on its pledge as a We Mean Business signatory is not without its challenges. The first relate to internal management and streamlining its existing processes. The company is looking to implement sustainable energy goals for individual business operations, for instance. It also intends to roll out an environmentally responsible travel policy across the firm globally.
Rethinking the company’s power purchasing agreements is on Sandeep’s ‘to do’ list as well. Tech Mahindra’s intention is to buy more from renewable sources, but finding reliable power generators at sufficient scale and price viability is no easy task.
A second raft of challenges relate to its supply chain and customer base. This is where the largest proportion of the company’s overall carbon impacts lie, but where its influence is most limited. Around one quarter of its business is outside India, with employees typically working in clients’ own facilities. Finding ways of encouraging suppliers and customers to share emissions data represents an essential first step here. Next will be persuading them to develop joint mitigation measures.
Sandeep hopes that Tech Mahindra’s growing suite of sustainability-related services will help the business engage its vendor base and ultimately assist in reducing its indirect (Scope 3) emissions. For customers, he cites the firm’s new business streams around smart energy platforms, smart cities and eco-efficient data centre management, among others.
As one of the first Indian signatories to the We Mean Business coalition, eyes are on Tech Mahindra to see how it intends to deliver on its new commitments. Sandeep is not blind to the responsibility this brings. India is full of rhetoric around corporate sustainability these days, he notes but more action can be taken on the ground.
“We’re seen as one of the top companies in India looking at sustainability at a very focused level as part of Mahindra Group. . . so other companies are very closely following what initiatives we take,” he states.
The opportunities are considerable too. Once it’s proven that science-based targets are the best way forward, Sandeep is confident that many more companies will be encouraged to follow suit. Eyes will then turn to other climate pioneers in India to step up and present themselves.