Enhancing Competitiveness with Environment-friendly Solutions
ŠKODA AUTO Volkswagen India Pvt Ltd (SAVWIPL) produces and offers high quality and environment friendly vehicles. It aims at complying with requirements and continuously improves the quality and environment management system. It is now pursuing strategies to double renewable energy usage within the next two years and also strengthen sustainability across operations by bringing more suppliers into it.
To ensure a robust future for ŠKODA AUTO Volkswagen India Pvt Ltd, Ajay Bhatt is combining product approaches and sustainability stratagems into the overall corporate strategies. Under his leadership, the organisation has initiated the transition towards sustainable business practices for it’s own operations and also of the value chain partners. In an interview with CESD, Ajay Bhatt shares about the organisation’s sustainability goals, the strategies adopted to achieve it, and recommendations for the automobile industry.
Mr Ajay Bhatt
Head – Strategy (Corporate, Products and Sustainability),
ŠKODA AUTO Volkswagen India Pvt Ltd
Q. What is the organisation’s guiding philosophy on sustainability?
ŠKODA AUTO Volkswagen India Pvt Ltd (SAVWIPL) is deeply committed to sustainability, underpinned by a philosophy of creating value that balances economic success with environmental stewardship and social responsibility. To ensure long-term viability and impact, SAVWIPL had adopted an approach that is holistic, integrating sustainability into every facet of the operations and decision-making processes.
Q. Can you share about SAVWIPL’s Net Zero Goal and the sustainability agenda?
The organisation’s net zero goal is aligned with the Paris Agreement's ambition to limit global warming to well below 2 degrees Celsius, aiming for 1.5 degrees. SAVWIPL is committed to achieving net zero carbon emissions by 2050. Our sustainability agenda includes:
- Transitioning to renewable energy sources
- Enhancing energy efficiency across all operations
- Conserving water and biodiversity
- Transition to sustainable value chain
- Introducing state of the art electric vehicles
Q. What are the steps taken by the organisation to achieve sustainability targets?
To meet the sustainability targets, several strategic initiatives have been implemented.
- Electrification of Vehicle Line-Up: We are working to introduce state of the art Electric Vehicles (EVs) in India at an appropriate time based on market readiness and consumer adoption.
- Renewable Energy Transition: We have installed 19.5 MW of solar power facility at our Pune and CSN factories. In addition to that, we are investigating the possibilities for direct procurement of renewable energy and using green energy contracts.
- Operational Efficiency: Continuous improvement in manufacturing processes to reduce waste. We have already achieved zero waste to landfill and zero liquid discharge for our operations.
- R&D Investments: Focusing on sustainable technologies and materials, starting with natural fiber mixed composites and progressing to biodegradable components and advanced recyclable composites.
- Value Chain Engagement: We are actively engaging with our value chain partners to create baseline and define future roadmap for tangible actions.
- Conservation of water and biodiversity: We have not only carried out on-site water harvesting, but also significantly contributed to off-site water conservation that help communities and improve habitats. We have planted more than 7 lakhs trees so far that help ecological restoration and foster biodiversity.
Q. Can you discuss strategies through which you are working with the value chain partners to encourage them to adopt sustainable practices?
SAVWIPL works closely with suppliers and partners to ensure that sustainability criteria are integrated throughout the value chain. Some of the initiatives are:
- CII Eco Edge Programme – The programme is designed to integrate sustainability into the value chains of companies. It evaluates the sustainability performance of both sourcing companies and their selected value chain partners, focusing on key areas of environmental and social responsibility through a sector-specific approach. Through the programme, SAVWIPL exemplifies it's commitment to sustainability across the value chain. Launched in 2023 with 16 Value Chain Partners (VCPs), the programme has now expanded to nearly 50 suppliers and dealers. Key features of the programme include:
- — Sustainability Training: Educating partners in Decarbonization, Circularity, Health and Safety and Human Rights areas.
- — Performance Benchmarking: Tracking performance of value chain partners and benchmarking them for best practices in focused domain.
- — Evaluation and Recognition: Value chain partners are evaluated on Sustainability performance and they are recognized with certification based on their scores.
- S - Rating System: The S-Rating process involves suppliers completing a detailed self-assessment questionnaire on various sustainability topics. This is followed by on-site audits, conducted by third parties, to verify responses and assess actual practices. This combination of self-reporting and external audits ensures a thorough evaluation. The benefits of the S-Rating system are significant:
- — Risk Mitigation: It helps identify and address sustainability risks in the supply chain.
- — Performance Improvement: Encourages suppliers to enhance their ESG practices, leading to better operational efficiency.
- — Strengthened Partnerships: Promotes closer collaboration with suppliers, fostering more resilient business relationships.
- — Market Leadership: Positions Skoda Volkswagen India as a leader in sustainability, appealing to eco-conscious consumers.
- Green Retail Program: At SAVWIPL, sustainability is at the forefront of our business strategy, and our Green Retail Program is a testament to this commitment. Designed to integrate eco-friendly practices across our dealership network, this initiative is crucial for reducing our environmental footprint while enhancing operational efficiency. The Green Retail Program encompasses several key areas:
- — Energy Efficiency: We encourage our dealerships to install LED lighting, energy-efficient HVAC systems, and, where feasible, solar panels. These measures significantly cut down energy use and reduce carbon emissions.
- — Waste Management: We prioritize recycling and effective waste management systems to minimize landfill contributions and encourage resource conservation.
- — Water Conservation: Implementing water-efficient fixtures and rainwater harvesting systems are standard practices, aiming to reduce water waste and preserve this vital resource.
- — Sustainable Infrastructure: Our commitment extends to the physical spaces of our dealerships. We strive to meet green building standards for new constructions and renovations of our dealerships, ensuring that our facilities are both energy-efficient and environmentally friendly.
- Zero Impact Factory- The vision of the ‘Zero Impact Factory’ describes a factory that produces in a climate, resource and environmentally friendly manner and thus avoids environmental impacts in vehicle and component production. 22 quantitative environmental indicators such as CO2 emissions, solvent emissions, fresh-water consumption, wastewater loads or various types of waste are measured on site and converted into impact points. This means that the absolute environmental impacts can be compared with each other and targeted reduction measures can be applied where they have the greatest impact. The base line for this impact calculation is year 2010 and target year is 2025 with reduction target of 55% reduction. So far we have achieved 52% reduction for India region.
SKODA AUTO Volkswagen India Pvt Ltd participated in the Eco Edge assessments in 2023 and 2024. It improved its performance from Emerging in 2023 to Progressive in 2024, reflecting its commitmen o continuous progress in integrating sustainability into its own operations.
Overall, the S-Rating system is not just a compliance tool but a strategic element that embeds sustainability into our core operations, benefiting our stakeholders and the environment alike.
Q. Would you like to share some advice to the automobile industry players who are evaluating sustainability as part of their corporate strategy?
My advice to other players in the automobile industry will be to:
- Embrace Collaboration: Work together with Value Chain partners, Governments, NGOs, and other stakeholders to drive the comprehensive sustainability agenda.
- Invest in Technology: Industry-wide collaborative efforts and investment in R&D for sustainable materials can make these efforts cost-effective and accelerate industry’s overall de-carbonization journey.
- Share Best Practices: Disseminate industry best practices to maximize contribution towards net zero goal by 2070.
- Consumer Education: Educate consumers about the benefits of sustainable practices, particularly in the adoption and use of electric vehicles.
Ajay Bhatt is a seasoned professional with 30 years of diverse experience, currently serving as the Head of Strategy (Corporate, Products & Sustainability) at Skoda Volkswagen India Pvt Ltd. He holds a Bachelor of Engineering and a Master of Business Administration and held roles across organisations such as General Motors, Essar Oil Ltd, and Thermo King (Ingersoll Rand), before joining Skoda Volkswagen India in September 2013. His extensive background spans across various domains, including Product Management, Business Development, Sales, Service, Dealer Network Development, and leading a business unit with P&L responsibilities, making him a versatile leader in the automotive industry.
