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PROJECT REPORT

ON

“Sustainability and Corporate Social Responsibility at Hero


Motocorp Ltd.”

SUBMITTED IN FULFILLMENT OF TRIMESTERI, MBA 2018-20

Submitted By

Ayushi Shrivastava (I061) Sneha Kutal(I035)


Tavleen Kour(I034) Abhishek Mehrotra(I042)
Anish Kanoongo (I031) Mayank Lakhotia(I036)
Raj Meghwani (I041)

Under the Guidance of


Dr. M. K. Satish
Associate Prof., SBM, NMIMS
SCHOOL OF BUSINESS MANAGEMENT,
NMIMS, MUMBAI.

DECLARATION

We hereby declare that the Project report titled “Sustainability and Corporate Social
Responsibility at Hero Motocorp Ltd.”submitted in fulfillment of Trimester I MBA, 2018-
20 has been carried out by us in School of Business Management, NMIMS, Mumbai. The work
is original and has not been submitted earlier as a whole or in part for any degree / diploma at
this or any other Institution / University.

Date: 14.08.2018

Ayushi Shrivastava (I061)


Sneha Kutal(I035)
Tavleen Kour(I034)
Abhishek Mehrotra(I042)
Anish Kanoongo (I031)
Mayank Lakhotia(I036)
Raj Meghwani (I041)

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ACKNOWLEDGEMENT

We experienced the saying that “There is no way without a guide in Life”was really true
while working on this Project.

The labor & support of many individuals have blossom in this project work, which we have
underused in this project report. It would be more selfish on our part, not to mention their names
in the edifice, nonetheless it is very difficult to single out individuals.

We extend our gratitude and appreciation to all those who have helped us directly or indirectly
for the completion of our project.

The words“sincere gratitudes”would not be adequate to express our thoughts for our guide Dr.
M. K. Satish. We are indebted to him for his valuable guidance, inspiration and suggestions at
every stage of our project.

This chapter may be closed with the word of thanks to all our friends for their valuable
suggestions and support at every stage to bring this project towards successful completion.

Projectees:

Ayushi Shrivastava (I061)


Sneha Kutal(I035)
Tavleen Kour(I034)
Abhishek Mehrotra(I042)
Anish Kanoongo (I031)
Mayank Lakhotia(I036)
Raj Meghwani (I041)

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ABSTRACT

The report aims to highlight the various CSR initiatives that Hero MotoCorp Ltd. takes and what
is sustainability for them. Hero MotoCorp Ltd. being the leading two wheeler company in India
has been doing community development since its inception in 1984. The company's objective is
to become a globally renowned two wheeler industry leader. The report further discusses how
the company has been able to align its CSR and Sustainability initiatives with its Business model
and what is its approach to deal with people and planet. It finally ends with a critical analysis of
the sustainability report of the Company to understand if there are any gaps between what’s
claimed and what the Company actually implements from the perspective of CSR.

Keywords: CSR, Sustainability, People, Planet.

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TABLE OF CONTENTS

CHAPTER NO. CONTENT PAGE NO.


1 SUSTAINABILITY FOR HMCL 6
1.1 HMCL’s idea of sustainability 6
1.2 Evaluation of action plan 7
COMPANY’S APPROACH TO DEAL WITH
2 PEOPLE & PLANET 8

2.1 People at Workplace 8

2.2 People at Marketplace 9

2.3 People at Community 10


2.4 Planet 12
3 CRITICAL ANALYSIS 14

4 CONCLUSION 16

REFERENCES 17

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CHAPTER 1: SUSTAINABILITY FOR HMCL

1.1 : HMCL’S IDEA OF SUSTAINABILITY

 Hero MotoCorp Ltd. aims to -

a. Increase environmental and natural capital


b. Support development of rural areas
c. Promote education of underprivileged sections of society and also skill
development to help them sustain
d. Promote sports

 The company believes that the prerequisites for social and economic development are the
development and sustainability of the beneficiaries at the lowest level.

 The company pursues CSR initiatives in areas that are closely linked to its operations so
that they can be effectively supervised and the impact is as high as possible.

 To provide every possible aid during natural calamities

 To contribute towards funds set up by Government for welfare of Scheduled Tribes and
Scheduled Castes.

 To contribute to funds for various incubation centers set up in educational institutions


that are approved by the Government.

 To partner with Industry associations like CII, FICCI, PHD, etc.so as to have greater
impact.

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1.2 : EVALUATION OF ACTION PLAN

The company evaluates the impact of its CSR activities on the society very extensively. It
employs a team of third party researchers who have an extensive experience in the development
sector. The evaluation aims to assess the results of the CSR activities and its impact on the
society. It aims to quantify the progress of all projects and assess if each project is meeting its
targets. It also identifies the challenges during the implementation as well as creative ideas and
solutions that would enhance the impact of the initiatives on the society.

The evaluation finally aims to get an approximate value of what is called ‘Social Return on
Investment (SRoI)’.

The evaluation team considers the below parameters for calculating the SRoI:
1. Direct social and economic value to beneficiaries
2. Value added to Central Government schemes and programmes
3. Net increase in the productivity of the beneficiaries
4. Amount of contribution towards SDGs
5. Increase in employee loyalty and trust
6. To project HMCL as a socially and environmentally responsible brand

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CHAPTER 2: COMPANY’S APPROACH TO DEAL WITH
PEOPLE & PLANET

Team Hero MotoCorp’s Sustainability and CSR vision is to have a Greener, Safer and Equitable
World. The CSR actions at Hero MotoCorp Ltd. are taken under the umbrella of 'Hero We Care'.

2.1: PEOPLE AT WORKPLACE

1. The organisation allows and encourages participation from its employees and their
families as well, in its Corporate Social Responsibility activities such as cleanliness
drives, tree plantation drives across various locations, blood donation camps and
mobilisation of educational resources, clothes etc. Involvement into the CSR activities
also encourages a feeling of belongingness in the employees.

2. Safety Policy - The company policies integrate and promote health and safety practices
for its employees, contractors and suppliers. The company ensures continuous
upgradation in its safety practices and regulations and also adheres to required legislative
safety practices in its manufacturing operations. It works towards generating and
promoting health awareness amongst its employees.

3. Remuneration Policy - The compensation of the employees is competitive as per the


industry standards and is based on the performance appraisal of the employees. The
company follows the balance scorecard method of appraisal. The company has a grade
and salary band structure in place to promote transparency and foster a culture of trust
with the employees. The company also adheres to its minimum remuneration policy in
case of inadequate profit margins, staying in line with SA 8000 remuneration policy.

4. GREEN IT Initiatives - In order to align its operations with its CSR activities, the
company encourages Energy efficient practices and digitization of work flows. The
company encourages video conferencing, e learning, digital signatures to reduce its
utilization of paper.In order to reduce its carbon footprint and thereby the contribution of
IT activities to Global Carbon Emissions, the company encourages buying of energy
certified equipment.

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5. Dividend Distribution Policy -The company maintains transparency and fairness while
allocating the dividends to its shareholders.In order to stay consistent with its policy, the
company has a proper framework in place which accounts for its financial flexibility,
growth prospects, projections of cash flows, stability of earnings, future plans of
investment and liquidity. The company safeguards its shareholders against financial
fluctuations.

6. Whistle Blower Policy - To foster an ethical and professional workplace environment,


the company provides all its employees the safety net to approach the Ethics committee,
in case they encounter any malpractices. The company wants to be aware of all acts of
frauds, financial misappropriation, corruption or bribery. The company ensures fair
treatment of the complaint and the complainant, unbiased investigations and protection of
the whistleblower and the subsequent disciplinary actions. This is with compliance to the
Company’s Act, 2013. The outcome of the investigations is also kept in company records
for future references.

7. Employee Friendly Policies - The company introduced a paternity leave of 6 days


followed by 8 days of work from home. The company has also introduced adoption
leaves for 90 days for children upto 5 years of age.

2.2: PEOPLE AT MARKETPLACE

1. Hero MotoCorp engages with the external ecosystems to grow as a business. It ties up
with start-ups and strategically plans its operations to maximise return on investments. A
tie up with Ather India promises to leverage the startup’s expertise in the area of electric
vehicles to launch eco-friendlier vehicles.

2. The company follows its Code of Conduct to minimise the chances of any revelation of
its business sensitive information that may or may not be detrimental to the company
operations.

3. The company launched its Hero Joyride Programme, that provided a Smart Card based
loyalty programme which allowed the customers to save upto 30%.

4. Localisation is paramount to sourcing strategy and the Company is procuring goods and
services from local supply chain partners which include large, midsize and small scale
industries Hero MotoCorp prefers to source its raw materials locally. Its supply chain

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associates include small, midsize and large scale suppliers. This promotes the local
economy.
5. To improve its supplier relations and productivity the company started its Green Supply
Chain Management. It aims to help Hero MotoCorp in accomplishing its environmental
aspirations through adopting a monitored mechanism and at the same time strengthening
the vendor’s image as an environment conscious organisation.

6. Under Green Vendor Development Programme,the suppliers and vendors are engaged
to create a sustainable supply chain. Hero MotoCorp collaborates with its vendors to
work around the issues of energy management, Waste management, Water management,
pollution prevention, substitution of hazardous chemicals and environmental compliance
management.

2.3: PEOPLE AT COMMUNITY

The company has mentioned about mentioned SDG goal 3 under Community development in its
annual CSR and sustainability report. They have talked about the current health conditions,
targets set by U.N. and initiatives taken by Government of India.
Hero MotoCorp Ltd. has introduced a Clinic on wheels concept wherein they have a mobile
medical van which predominantly helps the marginal section of the society. The van is capable
of providing diagnosis and provide essential medicines. This programme also compliments the
Hamari Pari initiative. Till now the van has served 23,000 people in areas near Delhi NCR out of

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which were 3,000 young girls. The company also conducts various health checkup camps in and
around the same region.
Some of the major initiatives under this section are -

1. Hamari Pari - Hero MotoCorp recognises that education is an important tool to elevate
the status of women. This initiative emphasises on empowering underprivileged girl
students through collaborations with various NGOs and social enterprises. It sponsors the
education of girls of age above 6.

2. Educate to Empower (E2) - Emphasises on skill development of the country’s youth


and encouraging them to pursue education and make a career out of it. The initiative also
focuses on upgrading schools’ infrastructure and enhancing the quality of education
provided through mobilisation of educational resources, mobile science lab and providing
career counselling.

3. Ride Safe India - This programme is one of the highlights of the Hero MotoCorp
sustainability activities. Awareness and safe riding activities are carried out under this
initiative. The company teaches young individuals about safe riding, basics of riding and
traffic rules. These activities are carried out with the help of state police. Traffic training
parks are set up in cities where a riding track is marked and a riding simulator is also
setup. In addition to this the company has a student police cadet programme wherein
school kids are made ambassadors of road safety. It involves sessions on road safety,
traffic regulations and management. A wholesome initiative by Hero MotoCorp to
improve the road safety across country.

4. #HEROSALUTES, an online campaign started to commemorate and pay homage to the


soldiers of India. It video graphs the sentiments of the public towards the army and its
personnel.

5. Chalo Sakhi Pleasure Seekhein:In order to further empower the rural women, the
company undertook an initiative to teach them to drive two wheelers and promote their
self-reliance.

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2.4: PLANET

Happy Earth is one of the flagship CSR programmes of Hero MotoCorp and , it has several
projects which aim to establish their commitment towards planet. A significant part of
investment goes towards plantation drives, educational and healthcare institutions, common
public spaces and other areas which need green cover. The company runs a young green
ambassador program where they educate young children about environmental issues. Hero
MotoCorp also has mentioned SDG goal 13 under Happy Earth in its annual CSR and
sustainability report. They have talked about the adverse effects of climate change, targets set by
U.N. and initiatives taken by government of India. The company believes environmental
degradation is one of the major reasons for climate change. They aim to make an contribution
towards it by carrying out green plantation drives. With partnerships among various environment
focused organisations and employee volunteers they have managed to plant over 7.01 lakh
saplings under ‘The Green Drive’ initiative. This drive was initially started in Delhi NCR with
the objective of planting and maintaining trees at parks of Delhi Development Authority (DDA).
Some of the key highlights of this run were, successful plantation of 1,90,000 trees and
engagement of over 50,000 people including school children, various religious leaders and
political leaders. The company carried out this successfully for two years before absorbing this
as their core activity in CSR. Apart for this initiative the company also has taken up many more
tree plantation drives near their manufacturing facilities where they have planted over 7,000 trees
and plantation of over 50,000 fruit trees for local communities in Delhi NCR which will be able
to bear the fruits of these plants for free. The company runs a ‘Project Aarush’ program which is
aimed at promoting ecofriendly and alternative energy resources. Till date the company has put
up 6,265 solar street lights put up in 120 villages helping 389,073 people and 50,770 LED lights
in 28 villages saving 1.03 crore units of electricity per year for 12,727 households.

‘Swachh Vidyalaya Abhiyan’ is an initiative focused at sanitation, drinking water and water
conservation. The main objective is to build hygienic toilets across schools in and around areas
of their operations. They have built a total of 903 toilets in more than 105 government schools so
far. In year 2017- 2018, they have built 387 toilets in 42 Government schools. They also focus on
regular upkeep and maintenance.

A few other initiatives which the company takes are supporting the protectors of wildlife and
restoration of natural water resources. Hero MotoCorp handed over 111 motorcycles to forest
rangers for their patrolling duties. Under ‘Mukhyamantri Jal Swavlamban Yojna’, an existing
pond in Neermana, Rajasthan was excavated and its water holding capacity was increased by
60,000 liters. Also, the fertile soil removed during the process was given to the famers in the
nearby village which helped in reduced usage of fertilisers.

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Hero MotoCorp manufacturing facilities are equipped with state-of-the-art technologies and
follow environment-friendly manufacturing practices. The company calls these facilities
as‘Garden Factory’. The Halol, Gujarat Plant is designed on the same concept. The plant has
the following features -

 A solar plant of 2.0 MW which has a positive impact on CO2 emissions


 A zero liquid discharge plant of 400 KLD. The plant is capable of recycling 90% of
waste water. The remaining 10% is reused for horticulture activities. Around 35% of
plant sludge is recycled and remaining is incinerated and is used for water heating.
 Green roof of 25000 sqm along with green wall of 7000 sqm and greenhouse of 1440
sqm
 Plant runs on surface water instead of using ground water thereby remain water positive
by recharging ground water

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CHAPTER 3: CRITICAL ANALYSIS

 Hero MotoCorp is one of the leading automobile companies in India. It is a market leader
in the two wheeler segment. Despite the expanding global footprint, the company has
managed to maintain a good connection with its Indian roots. The company is deeply
involved with the community and undertakes various initiatives to fulfill its social
responsibilities. The company has been recognized and won multiple awards for its CSR
activities. Vijay Sethi has been recognized with the CSR Leadership Award for CIO.
Economic times has commended Hero MotoCorp for achieving Distinction in Corporate
Governance, Stakeholder Engagement, Strategy, Monitoring and Evaluation in the
domain of CSR.

 Two wheelers are the major contributors to air pollution. Over 30 percent pollution
caused by vehicles is due to two wheelers. The company has introduced i3s technology in
majority of its products which automatically turns off vehicles at traffic signals. Hero
MotoCorp is the first company to implement and introduce BS IV compliant vehicles
before time in the market. On seeing these initiatives, it can be said that Hero MotoCorp
is taking a few steps at a time in reducing their environmental damage. Also, the
company funding an electric vehicle startup further strengthens their commitment
towards nature.

 There has been no change in the CSR committee from last year. The CSR expenditure
last year was Rs. 82.60 crores. The company spends exactly 2 percent of the profits
earned. There has been a rise in profits from past 3 years which is majorly attributed to
the rise in sales (rural). Also, there is a significant rise in number of sales in the Delhi
NCR region, where the company does most of its CSR activities. The company had spent
Rs. 48 crores which is more than half of its CSR budget on Education promotion &
vocational skill development for children and women and Promoting Road Safety
Awareness. But, in the previous year the company had spent 70 crores on the same
programme. This decline in allocation of budget this year can be attributed to rise in
spending on other initiatives. Hero MotoCorp had not only implemented these initiatives
directly but also tied up with 15 partners like CRY, Hippi, Agastya, SETCO etc. Hero
MotoCorp has then spent Rs. 18 crores on its Environmental projects which is 6 times
more than the last year. This is the second highest area of spending for the company this
year. The company had again carried out the implementation directly and with the help of
few agencies. The company had tied up with Wockhardt, Ayus and Habitat for Humanity
for implementation of Healthcare and Sanitation promotion. The company had allocated
Rs. 6.80 crores to this which is more than the double last year. The highest increase was

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in the area of Sports promotion, which witnessed a 10 times increase. Hero MotoCorp has
spent Rs. 6 crores in this area which mainly covered the people associated to ENABLE
India campaign (paralympic committee). Community development saw a little increase
from Rs. 4 crores to Rs. 5 crores. Also, there was a dissolution with the Uttar Pradesh
State Police tie up. The Army wives’ welfare fund was increased from Rs. 1 crore to Rs.
3 crores and there was no contribution made to the PM relief fund this year.

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CHAPTER 4: CONCLUSION

The major conclusions that we derived about Hero MotoCorp Ltd. through our study are:

● The Company has a clear vision of sustainability and has devised a well-articulated
action plan for it

● Strategic partnership with organisations, majorly NGOs for implementation of CSR


activities has tremendously helped it to create an environmentally conscious brand image

● Tie ups with Government Bodies which helps them earn clearances easily and increases
their credibility in the eyes of Government and people

● As per our analysis, the Company is clean and has been working towards the CSR and
sustainability goals in alignment with what it mentions in its sustainability report

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REFERENCES

 ANNEXURE – VIII, Annual report on CSR activities for the FY 2017-18. Retrieved
fromhttps://www.heromotocorp.com/en-in/uploads/csr-report/CSR-Report-2017-
18.pdfhttps://www.heromotocorp.com/en-in/uploads/csr-report/CSR-Report-2017-18.pdf

 ANNEXURE – V. Annual report on CSR activities for the financial year 2016-17.
Retrieved from https://www.heromotocorp.com/en-in/uploads/csr-report/CSR-Report-
2016-17.pdf

 CSR-WE CARE. Retrieved from https://www.heroMotoCorp.com/en-in/csr-we-care.html

 CORPORATE SOCIAL RESPONSIBILITY POLICY. Retrieved from


https://www.heromotocorp.com/en-in/about-us/key-policies/corporate-social-
responsibility.html

 About GVDP. Retrieved from https://www.heromotocorp.com/gvdp/introduction.php

 Manufacturing Happiness. Retrieved from


https://www.heroMotoCorp.com/manufacturinghappiness/

 Green Manufacturing. Retrieved fromhttps://www.heromotocorp.com/en-in/about-us/we-


care-green-manufacturing.html

 Supply Chain. Retrieved from


https://www.heroMotoCorp.com/en-in/about-us/supply-chain.html

 Green IT. Retrieved from https://www.heroMotoCorp.com/en-in/about-us/green-it.html

 Remuneration Policy. Retrieved from https://www.heroMotoCorp.com/en-in/about-


us/key-policies/remuneration-policy.html

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