MAHINDRA & MAHINDRA LTD. Business Responsibility and Sustainability Report 221 S. No. Material issue identified Indicate whether risk or opportunity (R/O) Rationale for identifying the risk / opportunity In case of risk, approach to adapt or mitigate Financial implications of the risk or opportunity (Indicate positive or negative implications) 5 Carbon Emissions O The Company’s commitment to becoming carbon neutral by 2040 positions the Company as a sustainability leader. This aligns with global climate goals and presents avenues for innovation, efficiency, and stakeholder engagement. NA Positive Implications: Transitioning early to a low-carbon business model unlocks access to green financing, improves brand equity, and reduces long-term costs through energy savings and process optimization. The Company is transitioning toward low-carbon operations through clean energy adoption, green technologies, and emission offset programs. Internal carbon pricing and decarbonization strategies support the 2040 net-zero target. 6 Corporate Social Responsibility R The Company operates in diverse communities where social license to operate is essential. Non-compliance or inadequate engagement can lead to reputational risk and regulatory challenges. CSR initiatives are governed by a Board-level committee and aligned with national development priorities. Projects are strategically implemented and monitored for high social impact and regulatory adherence. Negative Implications: CSR-related expenditures are ongoing. Positive Implications: These investments foster goodwill, reduce reputational risk, and enhance long-term operational resilience in key geographies. 7 Health & Safety R Health and safety lapses can result in injury, legal issues, and production losses. Ensuring workforce wellbeing is vital for sustainable business operations. The Company has instituted robust health and safety systems that include frequent training, regular audits, and proactive risk assessments to create a strong safety culture and prevent incidents across sites. Positive Implications: While there are costs associated with maintaining high safety standards, these measures significantly reduce the financial and reputational impact of workplace incidents, regulatory actions, or downtime. 8 Sustainable Supply Chain R The supply chain poses ESG risks due to its complexity, dependency on critical materials, and increasing scrutiny from stakeholders. Any disruptions or lack of traceability can result in reputational and operational risks. The Company has implemented ESG due diligence across its supply base and collaborates with the Sustainable Supplier Impact Programme (SSIP), a strategic initiative aimed at improving ESG performance among suppliers. The Company is also investing in local sourcing and diversification to enhance supply resilience. Positive Implications: While implementing responsible sourcing and supplier capacity-building increases near-term costs, these measures are expected to reduce exposure to longterm disruptions, supply shortages, and reputational risks, thereby ensuring stable margins.
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