Integrated Annual Report 2025-26 262 PRINCIPLE 2 BUSINESSES SHOULD PROVIDE GOODS AND SERVICES IN A MANNER THAT IS SUSTAINABLE AND SAFE ESSENTIAL INDICATORS 1. Percentage of R&D and capital expenditure (capex) investments in specific technologies to improve the environmental and social impacts of product and processes to total R&D and capex investments made by the entity, respectively. FY 2025-26 FY 2024-25 Details of improvements in environmental and social impacts R&D 32* 45 Electrification Programs and Platforms: – Continued investments in electric mobility through development of multiple Electric Vehicle (EV) programs – Implementation and development aligned with Worldwide Harmonised Light vehicles Test Procedure (WLTP) emission regulations across product lines Expansion of Born Electric Vehicle Portfolio: – Zero Tailpipe emission & improving air quality – Reducing reliance on Fossil fuel Hybrid and Range Extender Technologies: – Reducing fuel consumption and lowering emissions Capex 39** 21** * The variation is primarily attributable to a revision in the calculation methodology, resulting in improved classification of qualifying R&D expenditure in line with internal reporting standards. Additionally, the reduction reflects the transition of certain projects from the development phase to commercialization, and optimization of ongoing programmes. ** Capital expenditure related to electric vehicles & other technologies to improve the environmental and social impacts of products and processes is done through a separate entity Mahindra Electric Automobile Limited (MEAL) [a Subsidiary of the Company]. The same has been included in the scope of reporting. 2. a. D oes the entity have procedures in place for sustainable sourcing? (Yes/No) [GRI 308-1, 414-1] : Yes b. If yes, what percentage of inputs were sourced sustainably? [GRI 308-1, 414-1] The Company prioritizes responsible business practices by contributing to environmental protection and enhancing people's performance through green procurement and services while ensuring business growth for the supply chain. The Company has established a robust Supplier Code of Conduct to uphold ethical, environmental, and social standards across its value chain. The Code of Conduct guides suppliers to engage in ethical, responsible, and legal business practices in their operations. This Code is signed by more than 95% of suppliers by its purchase value. The Company has been working to enhance the degree of sustainability associated with its sourcing practices under “ONE SOURCING”. As part of the sourcing strategy, the Company has set up vendor parks near manufacturing plants, source from tightly knit clusters, optimize logistics to reduce fuel consumption, emissions and carbon footprint. B etween FY 2023-24 and FY 2025-26, the Company conducted ESG due diligence for 68.1% of suppliers, by value. Of these, 45.8% of suppliers, by value, reported the use of renewable energy, while 59% of suppliers, by value, were recorded to be using recycled water in their operations. I n FY 2025-26, 11.9% of suppliers, by value, were covered under ESG due diligence, of which 42% of suppliers, reported the use of renewable energy and 51% of suppliers, reported the use of recycled water. Further, company is exploring potential collaboration with suppliers towards the adaptation of renewable energy through group companies who produce renewable energy. In addition, 43% of suppliers, by value, in the Company's value chain are ISO certified (ISO 14001 or 45001). 3. D escribe the processes in place to safely reclaim your products for reusing, recycling and disposing at the end of life, for (a) Plastics (including packaging) (b) E-waste (c) Hazardous waste and (d) other waste. [GRI 3-3, 306-2] CERO, which is India's first and largest network of vehicle recycling company, is a brand under subsidiary Mahindra MSTC Recycling Private Limited, established in collaboration with Government of India Enterprise (GOI). CERO strives to promote circularity and achieve the goal of zero pollution, wastage and metal scrap imports.
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