The brownfield EV Manufacturing Plant at Zaheerabad do not need additional land resources as there are vacant land parcels within the 332-acre Zaheerabad campus to meet the Project land requirements. The Zaheerabad campus was established in 1985 by Allwyn Nissan Limited as a joint venture with the then Government of Andhra Pradesh. Later this Plant was acquired by M&M in November 1994. Given that M&M Automotive Division's existing manufacturing plants at Bengaluru, Zaheerabad and Haridwar are decades old and are in industrial zoned land, it is assessed that no risks and impacts are anticipated for this project which must be managed in accordance with PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7: Indigenous Peoples and PS8: Cultural Heritage.

This is a Category B project as per IFC's Policy on Environmental and Social Sustainability. Key E&S risks associated with the project are typical risks associated with any manufacturer of electric vehicles including EVs for last mile mobility and includes: i) the new Company's management and monitoring systems to assess and manage E&S risks and impacts from construction and operation of the new production facility; ii) consistent management of labor and working conditions and occupational health and safety (OHS) policies and practices, workers engaged by third parties and supply chain; iii) resource efficiency, pollution prevention, hazardous waste (including e-wastes and battery wastes) and management of hazardous materials; iv) community health and safety risks including EV safety, traffic & transport, and security personnel; and v) stakeholder engagement and the associated community grievance mechanisms.

E&S Management Systems: M&M follows Mahindra Group Sustainability Framework (Refer: https://www.mahindra.com/news-room/mahindrariseat75/mahindras-triple-bottom-line-approach-to-sustainability) and Sustainability Commitments. In line with the Group E&S policy framework, M&M has adopted a set of E&S related policies (such as Sustainability Policy; Safety, Occupational Health, and Environmental Policy; Water and Energy Policy) and established E&S management systems (ESMS) to manage E&S risks associated with its operations.

Identification of Risks and Impacts: As part of ESMS, M&M AD has established process for identifying, assessing, and integrating E&S risks at EV product planning & design stage, manufacturing plant construction and operational stages. In EV product design and development stage, a life cycle assessment approach is adopted during parts design. During construction and operation of vehicle manufacturing plants, M&M commissions independent E&S impact assessment (ESIA) studies prior to seeking environmental clearance and permits.

The brownfield EV Manufacturing Plant will require environmental clearance and related E&S permits prior to construction phase as per prevailing regulations. Mahindra LMM will engage an accredited consultant for undertaking environmental and social impact assessment (ESIA) study prior to seeking permits. As part of IFC's investment requirement and agreed environmental and social action plan (ESAP) #1, Mahindra LMM will undertake the ESIA study for the brownfield EV manufacturing plant following the term of reference (ToR) agreed with IFC to meet the requirements of IFC's Performance Standards and based on the ESIA outcomes prepare and implement a suite of site-specific construction E&S management plans.

Management Programs: M&M has established E&S management programs consisting of documented manuals, operational control procedures (OCP), reporting templates, checklists, audits, monitoring and reporting mechanisms and training management systems integrated to its ESMS, and occupational health and safety management systems (OHSMS).

E&S Organization structure: The sustainability and safety aspects in the Group are managed with a top-down approach through the apex Board Committee for Corporate Social Responsibility (CSR) to set CSR and Sustainability agenda. A CSR and Sustainability Council formed at Group level reports to CSR Board Committee and is responsible for driving the implementation aspects across the Group businesses and divisions. At Divisional level, sustainability cell has been instituted. On safety management, central safety council governs the occupational health and safety risk assessment and management aspects through the divisional and plant level safety organization structures and management programs. Champions of sustainability, safety and CSR are identified at plant level who are responsible for implementing and maintaining the E&S risk monitoring and management system elements. As part of IFC's investment requirement and agreed ESAP #2, the Company will institute an E&S organizational structure in the brownfield plant in the form of sustainability and safety heads and dedicated safety department with adequate organizational structure and staff to implement M&M's ESMS.

Emergency Preparedness and Response: Manufacturing facilities operating under M&M AD have documented a site-specific Emergency Preparedness and Response Plan (EPRP) in compliance with M&Ms ESMS and legal requirements. At Zaheerabad complex, an on-site EPRP, is available that is reviewed and updated periodically and the EPRP meets IFC PS requirements. The Zaheerabad complex EPRP defines the: type of emergencies envisaged, organisation, communication charts, siren codes, responsibilities, facilities, mutual aid, and mock drill among others. 

On life and fire safety (LFS), M&M AD adopted and implemented Group Safety Standards and Procedures - Fire Safety Management published by the Group's Central Safety Council (CSC). The LFS standard applies to all plant/units/locations of Mahindra Group (Manufacturing Facilities, Office and Establishments, Guest houses, Services, Storage and Warehouses, Construction sites). Fire safety management systems at each plant have documented procedures, manuals, plans, training, and periodic verification audit elements in compliance to Group Fire Safety Standards. At Zaheerabad Plant, the LFS systems comprise of fire water storage tanks, hydrant pipelines, monitors, sprinkler systems, extinguishers, hose reels, CO2 flooding systems, fire alarm system, and fire hydrant water pumping systems with necessary back-up arrangements. There are 108 hydrant points available on outer periphery covering entire Zaheerabad plant premises and the entire shop floor area is covered by hydrants. Besides as per CSC guidelines, LFS self-assessment audits, fire safety training, mock drills, fire load reduction initiatives and continual fire safety projects are undertaken routinely.

Monitoring and Review: Monitoring, reporting, periodic internal or external verification audit and senior management review systems of E&S performance are in place at Group, Divisional and Plant levels. Daily E&S reports from Management Information System (MIS) are generated and shared with line/department and Plant management while quarterly reports are submitted to Divisional and Group Board Management.

The Project will create employment opportunity for about 1000 direct and contracted workers. The Project construction phase will also generate short term employment opportunity for about 250 contracted workers for a period of 10 -12 months. M&M AD Plants typically employ direct workers (in both blue collar and management category), contracted workers (known as flexi workers) hired through third party contractors, and temporary workers (apprentice trainees) largely sourced through National Apprenticeship Promotion Scheme (NAPS) – a Government of India scheme. Brownfield EV plant will establish a similar recruitment model comprising of direct, contracted, and temporary trainee (apprentice) workforce with a commitment to achieve 15-20% of shop floor gender diversity over the period of the investment

Human Resources Policies and Procedures: M&M Group has documented employee relations (ER) policies, procedures, code of conduct and supplier code of conduct that are compliant to Indian labor regulations and aligned to the eight principles of the ILO core conventions that define workers' rights, obligations, and working conditions and are applied consistently across its business divisions and manufacturing plants. Notable ER related policies include Group ER Policy; Human Rights; Leave Policy; Equal Opportunity Policy; Whistleblower Policy; and Policy on Prevention of Sexual Harassment. These policies and procedures along with codes and memorandum of settlement agreed with elected workmen union are consistent with IFC PS2 requirements. 

Workers Organisation: The Company does not prohibit the freedom to associate and there are more than one active worker unions present and operational. M&M AD manufacturing plants in India have signed long-term (3.5 year) memorandum of settlement agreements with elected trade union members. Internal elections are held periodically to elect the Union Executive Committee members in a free and fair manner.

Grievance Mechanism: M&M Group has established enterprise-wide channels to collect and address employee and stakeholder grievances through a grievance mechanism including POSH related complaints. Third party Ethics helpline service portal (https://ethics.mahindra.com), toll free number operated by an independent agency, Chairperson of the audit committee are some of the key accessible channels for registering grievances. The grievance related ER policies and procedures provide for: anonymous reporting of grievances, confidentiality aspects, anti-retaliation principles, appeal process if any party is dissatisfied with the resolution at the first instance, does not prohibit employees seeking judicial or administrative remedies available under the law or existing arbitration procedures and accessible to contract workers employed by a third party if the third-party employer could not provide a grievance mechanism for its workers.

Occupational Health and Safety: M&M Group has a dedicated Central Safety Council composed of safety representatives from all business sectors. All M&M Group companies and subsidiaries must adopt and implement “The Mahindra Safety Way (TMSW)” (https://themahindrasafetyway.com/#/) program mandatorily. Every Plant of M&M AD has established Occupational Health & Safety Management System (OHSMS) that are certified to ISO:45001 Standards. As per the Sustainability Report 2022 published by M&M Limited, there has been no fatality at any of its manufacturing plants in the M&M AD.

Workers engaged by 3rd Parties: M&M AD plants hire workers engaged by third-party to perform various work in the manufacturing plants. Workers engaged by third-party employers/contractors are on the rolls of the home company. The employment relationships between contractors and their workers are established based on the employment/service contract between contractors and the workers. To conduct business with the company, all contractors have a contractual obligation to respect labor rights and comply with the national labor regulations such as remuneration, working time, social security, and medical insurance per the service/ business agreement. Further, each contractor has to comply with M&M Supplier Code of Conduct (SCOC) that is a contractual obligation and requires the contractors to: maintain and provide a safe and healthy work environment; protect human rights; prohibit child, forced or bonded labor practices; provide equal opportunities; follow all applicable laws regarding working hours, wages and overtime pay; report violation of the Code of Conduct as per M&M Whistle-blower Policy; and provide a onetime declaration of compliance to M&M Group SCOC.

Supply Chain: M&M AD has set up a supply chain management (SCM) system that is compliant to IFC PS 2 requirements on child or forced labor and occupation health & safety risk management aspects in the primary supply chain. The SCM system comprise of supply chain policies (such as Green Supply Chain Policy 2018, Procurement Policy Guidelines), Supplier Code of Conduct and supplier agreement legal clauses with E&S aspects covered. Mahindra LMM will leverage the M&M AD's existing SCM system for procuring products and services for the proposed Project. M&M AD's Corporate Strategic Supply Unit (SSU) manages, and monitors E&S risks and issues of its supply chain as required under IFC PS2, SSU has retained external, 3rd party consultants to undertake ESG/Safety audit of entire supplier facilities. The SSU manages the SCM on behalf of all the manufacturing plants under the M&M AD business and has about 2000+ suppliers in its empanelled list. The SSU has allocated 50 SCM staff dedicated to work on EV project SCM and has already established ongoing supplier contract relations with 800+ suppliers.

Resource efficiency: In line with M&M Group Sustainability Framework, M&M Group has published ten (10) sustainability commitments and the resource efficiency related ones include: achieving carbon neutrality by 2040; all Plants to become Zero Waste to Landfill by 2030; becoming water positive; purchasing 100% renewable energy (RE-100) by 2030 and RE-50 by 2025; and doubling energy productivity (EP-100) by 2030. M&M AD has also communicated in 2017 to all levels of the Company energy management policy that is aligned to Group Sustainability Framework and Commitments. The commitments have been converted to 3 year sustainability roadmaps where specific action items with measurable goals & targets is published & monitored by the Group Sustainability Council (Refer: https://www.mahindra.com/investors/reports-and-filings?tab=tabs-5#investor-sustainability). The M&M Group Sustainability Framework, Commitments and Roadmap are aligned to PS 3 requirements on resource efficiency. Each Plant monitors and reports resource efficiency using standardized key performance indicators (KPI). The office buildings across Plants are being progressively certified to Indian Green Building Certification (IGBC).

Greenhouse Gases (GHG): M&M has been publishing GHG Emissions as part of its Sustainability Report that is independently audited and certified. The M&M AD Plants typically use fossil fuels such as diesel/high speed diesel (HSD), liquefied petroleum gas (LPG), Natural gas & Compressed Natural Gas (CNG), Petrol and Propane. None of the Plants are using coal in any of its manufacturing process or operations.

In FY2021-2022, M&M Automotive Division reported total Scope 1 GHG emissions as 30,346 tCO2e/year and Scope 2 GHG emissions as 118,804 tCO2e/year from its India operations (total GHG emissions of Scope 1 and 2 is 149,150 tCO2e/year). The GHG emission (Scope 1 and 2) intensity for M&M AD operations is showing decreasing trend from 0.213 tCO2/vehicle equivalent in 2019-20 to 0.204 tCO2/vehicle equivalent in FY2021-22. Under the IFC funded Project, EV manufacturing activities will result in an estimated increase in GHG emissions of 13,326tCO2e/year. Mahindra LMM will continue with the practice of annual quantification of GHG emissions (Scope 1&2) under the Project using internationally recognized methodologies and report to IFC as part of the annual E&S performance monitoring report.

Water Consumption: In line with the framework, Water Policy commitments and road map, M&M AD has initiated various water conservation measures adopting the 4R approach – Reduce, Reuse, Recycle, and Replenish.  M&M Group commits to continuously benchmark its performance to reduce water resource consumption and has become water positive at Group level. About six Plants in M&M Automotive Division is expected to achieve water positivity or water neutrality by FY2022-23. M&M AD manufacturing plants reported reduction of specific water consumption from 1.404 cum/equivalent vehicle in 2018/19 to 1.348 cum/equivalent vehicle in 2021/22.

Pollution Prevention: Based on ESIA study proposed under ESAP#1, a suite of site-specific construction E&S management plans will be prepared to address construction related E&S risks and impacts.

During operational phase, main sources of air emissions, in a typical M&M vehicle manufacturing plant, includes point source gaseous emissions from stacks of diesel generator (DG) operations and hot water generators. These emissions are managed through installation of stacks as per permit conditions. Plant ESMS has a defined operational procedure on management and minimization of gaseous emissions. Each Plant has established pollution monitoring program (covering stacks, ambient air, noise levels, effluent quality, DG set noise level and indoor work zone quality) and the performance is in line with permit condition requirements and local factory regulations. All the manufacturing plants have installed zero wastewater discharge (ZLD) treatment systems. The pollution monitoring is done through continuous pollution monitoring systems and third party authorized labs in compliance to permit conditions. Review of pollution monitoring reports of Zaheerabad Plant indicate compliance to local permit norms and IFC EHS guidelines.

Some of the paint shops in M&M AD Plants are best-in-class ones that have completely automized process with no manual interventions required anywhere inside the critical painting process. High solid paint is being used which reduces VOC emissions by 52%. Other practices include ambient air re-circulation/filtration to reduce volatile air emission, use of robots in painting shops, etc. in some facilities. Use of robots in painting shops improves the effective paint usage to 85%.

Wastes: Waste management has been one of the key elements of M&M Group Sustainability Framework, Commitments and Roadmap. As stated earlier, M&M AD wants to achieve 100% plants achieving zero waste to landfill and about 17 manufacturing plants have achieved the same. M&M AD plants generate hazardous wastes such as paint sludge, phosphate sludge, effluent treatment plant (ETP) sludge, oil and cotton-soaked waste, waste solvents and thinner, paint booth and heating over filters, used and waste oil. These hazardous wastes are collected, temporarily stored on-site in a segregated manner, transported, and disposed for co-processing through authorized third-party agencies in line with permit conditions except for phosphate sludge which is co-processed as fertilizer.

The Company will comply with end-of-life EV battery waste requirements as per India's Battery Waste Management Rules, dated August 2022. The regulation stipulates extended producer responsibility (EPR) on the producers.  According to the regulation importers of EV batteries are treated as producers. The producers are mandated to meet the collection, reuse, and recycling regulatory targets. The Company will establish a collection system for end-of-life batteries through network of its dealerships and authorized warehouses to achieve regulatory target.

The biomedical waste (BMW) is handled as per permit conditions and disposed through authorized central BMW Incinerator facility. Canteen wastes are sent to captive bio-gas plant generating biogas and vermicompost products for self-consumption within the plants.

Hazardous Materials Management: Plant OHSMS has established procedures for handling and storage of chemicals/hazardous substances such as: corrosive chemicals, gas cylinders, compressed natural gas, diesel/high speed diesel, liquified propane gas, paints and thinner, and petrol. The key performance criteria defined in the hazardous materials handling procedure includes undertaking QRA, number of incidents arising out of hazardous substance/chemicals handling and compliance to regulations. Each Plant operates with appropriate regulatory permits for handling petroleum based hazardous chemicals and materials.

Infrastructure and Equipment Design and Safety: M&M AD's existing vehicle manufacture plants in operation and the brownfield plant are located inside designated industrial zones. The M&M AD plants have nearest sensitive social receptors in the form of residential areas within 2-3 km radius of the plant premises. All the manufacturing plant in compliance to M&M Group Safety Standards and Factory Regulations have established infrastructure and equipment testing regime. Stability of office and industrial buildings are assessed and independently verified by authorized Chartered Engineers once in 5 years.

On EV product design and safety, M&M has established a robust and well-defined EV product design & development process that integrates life cycle assessment approaches in vehicular parts design and material circularity (recycle and reuse) aspects in the EV design stage. Further the Company established multiple safety tests at design, prototype, production, and pre-delivery inspection stages of in compliance to various national (such as AIS 156) and international standard (such as Ingress Protection Class IP67) requirements.

Traffic Management: M&M AD production facilities has documented transport management plans to manage risk from its operations. As part of the ESAP #1, the Company will develop construction phase site specific transport management plan to prevent vehicle accidents on construction sites.

On EV product safety aspects in public road, the EVs are designed as low speed vehicles with a maximum top speed range varying between 25kmph (e-rickshaws) and 65 kmph (Treo Auto). Each e-vehicle is designed with regenerative braking, spacious driver cabin with easy ingress-egress, easy maneuvering and driving performance and ergonomic seating to improve driver comforts and safety. Each e-vehicle is validated with tests including vehicle durability, vehicle dynamics and performance, and electrical & electronic components testing.

Security Services: Unarmed security personnel have been deployed across all manufacturing plants through third party security vendors authorized by government. The security team at plants are led by chief security officers (CSO) who are direct workers of M&M. CSO has the responsibility to undertake periodical security risk assessment and update security management plan. Security team members is made part of the emergency response team with recurrent training on emergency situations as per on-site emergency management plan. Reportedly, there has been no security incident in the past involving security guards and local community members across all manufacturing plants.

Aligned with M&M Group stakeholder engagement plan, the Company implements a robust community engagement program with a wide array of stakeholders.  Each of M&M's plants engage with local communities living within 15km radius through community development programs (in the areas of health, education, environmental and cultural aspects) and forms local committees with different community members who meet and interact with CSR Champions of the M&M Plant on monthly basis. M&M Group has been publishing external communications and sustainability reports through their dedicated website such as https://www.mahindra.com/riseforgood and https://www.mahindra.com/investors/reports-and-filings?tab=tabs-5#investor-sustainability.

As part of the stakeholder engagement, community grievance mechanism is in place. A community grievance register is maintained to receive and facilitate resolution of affected parities' concerns.  At every plant, the plant administration head and CSR program champion is responsible for community engagement and addressing grievances. M&M Group Whistle-blower policy provisions are applicable, and the associated mechanisms are extended to community stakeholders as well. 

Company             Mahindra & Mahindra

Point of Contact Pratik Desai

Title                         Head Marketing LMM

Telephone Number 8452848435

Email                         desai.pratik@mahindra.com

Mailing Address Mahindra & Mahindra, K – Shed, Gate No 2, LMM Division, Akurli Road, Kandivali  

                                    East, Mumbai, Maharashtra - 400101

Website             www.mahindralastmilemobility.com