Maruti Suzuki has of late gained a very common (man) halo thanks to CM Arvind Kejriwal’s fascination for a blue Wagon R. Yet, chancing upon the latest sustainability report from the company was a rather uncommon (in a positive manner) experience. Frankly, 2012 was not one of the best years for Maruti Suzuki, India’s largest automobile manufacturer. Beset by labour issues, production was stalled at their Manesar plant for quite some time, with rumours floating around that the company was planning to shift its operation to Gujarat or someplace else. But while the period had been tumultuous, the sustainability report based on the same timeframe is refreshingly compliant. Titled, “Stepping up the Pace”, this is the 5th sustainability report from the auto major. Keeping that in mind, it is of no surprise that the veteran (relativity speaking) in reporting, as got all things going for it.
What I liked most about the report was its candidness in admitting to all the labour issues in the very first line. Tackling the issue in a poetic metre, the report begins of stating that “if the path is bumpy, weather is turbulent and visibility is low, there are two options – to sit back and wait for things to settle down or to cruise ahead with determination and vigour”. The title is thus deeply entwined with the ethos, namely, the gents at Maruti Suzuki (very few ladies anyways) would like us to know that in spite of all the hurdles and bumps, the company is not only focused on its sustainability roadmap, but is also accelerating that pace
Pushing at fewer than 100 pages, the report is well placed out and well-illustrated. The number of pages in the report gives it sufficient leg room to deal with issues in a holistic manner, provide data points, cite instances. On the other hand, unlike reports that seemed more inclined towards obesity, have pages of pages of content that would have ideally sufficed in a few, resulting in over-proportionate fonts and over-spaced lines. That said, there is still room for further improvement, and this report too could easily knock off no less than 20 pages to be precise and concise.
Unlike other reports, Maruti Suzuki always has a dual executive note in the beginning, first up the Chairman, RC Bhargava will set the note for future, a bit of philosophising and holistic thinking. It is followed by a note by the MD & CEO K Ayukawa, talking about the brass tacks, more on-the-ground, market scenario perspectives. Thus between the two, they sum up the long-term and short-term vision on sustainability pretty well.
Materiality at the Heart
Getting down to core, while the stakeholders and their engagement process is fairly well-defined, I still think that the materiality definition needs a bit more thought and application. Considering that Maruti has been reporting for quite many summers, the materiality matrix is fairly mundane like it was earlier. It can be expanded to bring out more pertinent issues, am sure a deeper introspection of the stake-holder engagement will automatically throw up many such issues.
One of the good things about the report is that there is no paucity of data points peppered through the report. You can almost find a nice comparative graph on almost any subject, be it waste or water, through the report. If only these could be chunked in clusters, it would be easier to browse. The encouraging thing is, that while Maruti undertakes all the big ticket sustainability measures, it is equally agilent on the smaller things, like cutting down paper by promoting tablet based application for job forms at its service centre or creating CD-ROM service manuals. In fact, the company readily tackled the Manesar incident, wherein a HR manager was killed by a mob leading to closure of operations for significant amount of days. The incident is clearly mentioned, and as if learning lessons from it, the company has put in processes to avoid any recurring of such labour issues in the future. On the count of credibility, the company comes out right on the top. Even so, the gender diversity in the company is not something to talk about, females are in a big minority, at 3.5% in the workforce; there is a long way to go. Even in the board of directors and the top management photos in the report, there is just one lady’s visage. That needs changing.
Missing Scope 3
Coming to the downside, the supply chain side piece of the puzzle is very much missing. Maruti Suzuki not only sold 1171434 cars in the said time, but also transported all these vehicles from its assembly line in Manesar to all parts of the country and overseas. There is bound to be significant emissions on the downstream supply chain. It is really high-time that the company started to account it in their report. Also a comprehensive CO2 emission mapping is not visible. While there is information available on the how much emissions is done on a per car basis, it will be nice to get an overall picture of the impact company is having in terms of CO2 and what measures is it putting in place on account of it.
On the upstream side, in the report there is a mention that 80% of the components for the cars come from external suppliers, but that certainly does not absolve Maruti Suzuki from the responsibility for emissions or policies at the supplier’s line. There needs to be a more comprehensive supply side efforts made to ensure that the practices are equitable. This will also help when the newer G4 reporting standards will be employed for reporting purpose.
The other concern is water and bio-diversity. The company uses water significantly, drawing some 19,67,786 m3 of canal water, while it recycled and reused 1,36,11, 026 m3 of water (accounting for 41% of total water usage. Am eager to see a lot more effort on reducing their draw on fresh water, through measures like rainwater harvesting and others. The company mentions that it has no significant impact on biodiversity, but that does not mean that it has no responsibility towards it. I would want to see efforts in terms of how its greening its manufacturing facilities and others. Little things like a comparative matrix with other reporting standards is missing. One could have done with small case-studies to illustrate its successes on various fronts.
Finally, the Maruti Suzuki report proves that when you keep working with the same partners, things tend to get templatised, which is a good thing (and can sometimes be a drawback as well). For instance, this report seems to be a replica of the previous one, almost to the very page. Like on Page 30 in this report, there is an image of the AGM, which is strikingly similar to an AGM meeting image in the previous report on Page 31. The templatisation is good for comparative analysis. Though, I also think, it brings a bit of complacency working with the same partners. For instance, in almost every report the assurance partner have been raising the same issues, namely expand the boundary of reporting, data- reliability, and integration of IT solutions like ERP for data collection.
Nonetheless, the Maruti Suzuki report is refreshing and candid document that scores high on almost all parameters. Hopefully, by next report which would be G4, they would have sorted out significant issues related to supply chain and emission mapping. Keeping in mind the sheer size of operations, it is a big task, but am sure they are already working on that piece, it’s time we saw the results. On the presentation front, the report scores highly, well-written and well-etched. I even liked the illustrated motifs used liberally across the pages. It just goes to prove that this one is a labour of thought, and not just after-thought.
And yes, before I forget, there is a new piece of information that is appended in the report, on the CSR front. Keeping with the times, the company is also sharing data on the spend it undertook on those efforts, spending INR 189.4 million in the same year. Again, there is an asterisk that tells you that it includes the staff salary and a spend of INR 5.7 million on the infrastructure for public benefit.