Mahindra group will measure its social impact ''as rigorously'' as it measures its financial performance and at a preliminary stage it has driven economic activity worth $42 billion (around Rs 311 cr) in the financial year 2020-21, group Chairman Anand Mahindra said on Friday.
In his address to the company's shareholders in the virtual AGM, Mahindra who will take on the role of non-executive chairman in November said, "More importantly, your company has created a social and environmental impact worth $4 billion in FY21."
He said there is a quiet revolution taking place in the business world now with "irresistible pressure from consumers on companies to create shared value- in other words, to do business in a way that enhances the quality of life of their communities and the world".
Stating that major global financiers now insist on evidence that companies have a strong focus on ESG (Environmental, Social and Governance) before they disburse funds for growth, he said, "Stock markets are also beginning to prize companies that are purpose-driven. Social impact is becoming increasingly important to investors."
All this is evidence that businesses can no longer live in a bubble isolated from the rest of society, he said adding, "companies must see themselves as an intrinsic part of the fabric of society and that social impact is becoming an increasingly important factor in valuing a company".
Sharing the group's plan for the way ahead over the issue, Mahindra said, "On this momentous 75th Anniversary, the Mahindra Group proudly commits that we will measure social impact as rigorously as we measure financial performance. We will compute our social impact, quantify it in financial terms and target its increase."
The group will depend both on financial performance and on the social impact it creates, he said adding, "That will capture the true value that the Mahindra Group adds to people, profits and planet".
Informing the shareholders that the group has already started working on this, Mahindra said, "While we are at a preliminary stage, our rough calculations highlight that the Mahindra Group has driven economic activity worth $42 billion in the financial year 2020-21. More importantly, your company has created social and environmental impact worth $4 billion in FY21 alone."
The group has made ten "very specific commitments which will enable us to take pole position in the ESG space", he said adding, "Every one of these 10 commitments articulates a bold and measurable goal such as carbon neutrality by 2040 and 100 per cent sites will be zero waste to landfill certified".
At a time when the world has been ravaged by the coronavirus pandemic and still not fully recovered, Mahindra acknowledged the efforts of front-line workers such as doctors, nurses, and other health workers.
"We have lived for more than a year through an unprecedented global pandemic. It has brought horror and devastation. But it has also taught me something I had never realised before...It has taught me that our world is full of heroes," he said.
Commenting that "not all heroes appear in swirling capes", Mahindra said, "Some of them wear masks and carry stethoscopes and man the frontlines. Some of them wield a mop and a broom like a sword against disease. Some of them lead the battle in places where you and I would not go.
"Some of them risk their lives to keep our world turning. Each and every one of these people is a hero – and so many of them have given their tomorrows for our todays. I salute them with a grateful heart."
From November, when he assumed the role of non-executive chairman, Mahindra said he would be deeply engaged in monitoring routine governance functions that ensure transparency and appropriate flow of information.
"An internal audit – a major tool for good governance – will report directly to me. That is the one operational function that will be my responsibility," he asserted.
With the lightening of the load on other operational matters, Mahindra said it would give him the opportunity to concentrate on what he considered to be "the most important function of any board chairman, and that is to be custodian of the brand and to ensure that the vision and values of our founders, that have stood us in good stead for 75 years, continue to guide us and light our path"
