In an Industry Talk session, Satyakam Arya – Managing Director and CEO, Daimler India Commercial Vehicles spoke to Ashish Bhatia on integrating sustainability into the overall business strategy.

How does DICV integrate sustainability into its overall business strategy?

ESG has taken centre stage in our business strategy. To ensure every aspect of our business has the essence of ESG, we believe it is important to shape ESG in our culture, thinking and daily work management. While the principles of ESG are widely known, we think that our ESG journey must have a series of meticulous steps that will lead us to attain our goals. Like it is in our DNA, ESG is also a long-term vision for us and whatever initiative we take, however small or big, will be seen from a long-term lens. Therefore, we follow what we call the SPUR principle – Source-Produce-Use-Regenerate.

“Our goal is to make our operations 100 per cent CO2-neutral by the end of 2025 (Scope 2) and reach Scope 1 neutrality by 2040.”

We are on a good footing with our ESG approach and execution so far. Many initiatives are planned that will help us raise our standard in this domain in the medium term. I believe our plan is wholesome and covers the important aspects that will catapult us in the right direction. In 2023, over 85 per cent of the energy consumed at our Oragadam plant was sourced from renewable energy. Our goal is to make our operations 100 per cent CO2-neutral by the end of 2025 (Scope 2) and reach Scope 1 neutrality by 2040. We are also working towards making our operations 100 per cent water self-sufficient, and we have already achieved 90 per cent of this goal in 2023, as part of Scope 2. Another challenge we have taken up is to become a paperless organisation by 2025 – this is not an easy task as we have a workforce of 10,000 personnel, including direct, indirect and contractual employees. With a great amount of success, we have eliminated single-use plastics inside our plant premises.

Our approach considers environmental impacts throughout the value chain, including product planning, development, purchasing, production, and supplier management. We are working closely with our supplier ecosystem to help them become carbon-neutral by 2047 and aim for 100 per cent carbon-neutral packaging by 2040. Sustainability is a journey, and we remain committed to ensuring our customers’ long-term success as we continue to meet our sustainability goals.

How is DICV leveraging smart manufacturing technologies to enhance sustainability in its production processes?

Digitalisation and innovative manufacturing engineering techniques are a part of our organisation transformation strategy. We have implemented advanced systems that optimise operations, reduce waste, and enhance productivity, all while maintaining a strong focus on environmental responsibility. Our Associate Management System (AMS) is one such example. This system automates manpower allocation on the shop floor, ensuring that the right associates are deployed to the right workstations based on availability, skill levels, and station mapping. By providing supervisors with real-time information and recommendations on manpower deployment, we optimise labour efficiency, reduce idle time, and ensure that our operations run smoothly with minimal environmental impact. The system’s ability to track and manage operator skills also means that we can continuously improve the quality of our workforce while reducing the need for redundant resources.

In addition to workforce management, we have integrated smart automation and predictive maintenance into our HVAC and paint shop operations. Our HVAC systems are equipped with advanced controls like digital timers, intelligent touch managers, and occupancy sensors that optimise energy use and reduce unnecessary consumption. This lowers our carbon footprint and also enhances the comfort and safety in our work environment.

In our paint shop, digitalised predictive maintenance plays a crucial role in sustainability. By using vibration sensors in compressors, we can detect faults before they lead to failures, ensuring uninterrupted operations and reducing the need for emergency repairs. This proactive approach not only boosts productivity but also minimises resource wastage, contributing to a more sustainable manufacturing process.

Through these innovations, we are able to ensure that our supply chain is not only efficient but also aligned with our commitment towards sustainability. These efforts reflect our dedication to continuously improving our operations and reducing our environmental impact, while also delivering high-quality products to our customers.

How are you ensuring stakeholder engagement as part of the ESG plans?

We are working towards making our packaging carbon-neutral by 2024 and our entire supply chain carbon-neutral by 2047. We consistently engage with our supplier and dealer partners for aligning them and bringing them on board our ESG plans. We actively seek input from stakeholders on ESG-related aspects through surveys and consultations. By involving stakeholders directly in the ESG materiality assessment process, we ensure their perspectives are considered in formulating our ESG strategies.

We regularly engage with our partners through “Sustainability Connect,” where we share DICV’s ESG aspirations and expectations towards developing a robust sustainable value chain. This platform allows us to share best practices in reducing environmental impacts, with participation from over 200 suppliers and dealers. Key takeaways include strategies for decarbonising supply chains and logistics, and effective used-oil management at dealerships.

Additionally, we hosted an ESG Marketplace focused on “Green Production,” creating a valuable knowledge-sharing platform. These initiatives help us promote sustainability and environmental responsibility throughout our supply chain.

What initiatives has DICV implemented to promote the use of renewable energy in its operations?

At Daimler Truck, we are committed to reducing greenhouse gas emissions across all our production facilities and achieve CO₂-neutral operations, aligned with the Paris Agreement. Recently, we scaled up our in-house solar power generation from 3.3 MWp to 4.6 MWp, reinforcing our dedication to renewable energy. Additionally, we have adopted a Concentrated Solar Thermal (CST) system combined with a heat pump for hot water generation, eliminating the need for propane gas in our paint shop.

Water conservation is another cornerstone of our sustainability efforts. We aim to be 100 per cent water neutral by the end of 2025. Key initiatives include our in-house 60,000 KL lake, the installation of an air-to-water generator, and a state-of-the-art rainwater filtration system. These measures not only support our water neutrality goals but also contribute to broader environmental sustainability.

Our Miyawaki forest, which plays an important role in carbon sequestration and ecosystem restoration, comprises of 600 native trees is being expanded further.

How does DICV handle waste management and recycling in its manufacturing processes?

At DICV, we are committed to improving resource efficiency and advancing towards a circular economy to maximise the value of materials throughout their life cycle. The SPUR principle guides us in our sustainability journey across our operations for managing waste effectively and ensuring responsible disposal. This principle ensures that every stage of our processes, from sourcing raw materials to regeneration contributes to a sustainable and environmentally responsible value chain.

Our intent is to minimise waste through sustainable manufacturing practices, efficiency measure, and leveraging innovative technologies. With the support of our operations team, we have meticulously mapped our waste value streams by analysing process flows and identifying waste generation points. This proactive approach allows us to eliminate waste at its source.

We have established a dedicated Industrial Recycling Centre that carefully documents waste generation and disposal, ensuring full compliance and traceability. Through our focused efforts, we have improved our waste recovery rate to over 99 per cent. For example, we successfully reuse paint sludge in cement manufacturing, which not only avoids landfill use but also reduces CO2 emissions by 400-tonne. Additionally, we have achieved over 84 per cent returnable packaging for domestic parts and re purposed metal waste for construction purposes.

How big a role is scrappage policy expected to play and can you quantify it as per recent assessments and the end-of-life truck and bus parc?

The scrappage policy is a crucial and transformative step for the CV industry, but it is also a complex one. This policy has the potential to significantly reshape the market by phasing out older, more polluting vehicles and making way for new, cleaner trucks and buses. However, its implementation must be handled delicately, especially considering the impact on single truck owners who may be most affected by this change.

“It’s important to recognise that the scrappage policy will possibly alter the total industry volume temporarily before the market adjusts to the new dynamics. This potential fluctuation needs to be factored into any planning around the policy’s rollout.”

For the policy to be successful, it is essential that the transition is heavily incentivised by the government. Incentives will be key in encouraging owners to retire older vehicles and invest in newer, environmentally friendly models. This will not only promote the adoption of cleaner technology but also stimulate demand for new vehicles, offering a unique opportunity for the industry to advance towards sustainability.

It’s important to recognise that the scrappage policy will possibly alter the total industry volume temporarily before the market adjusts to the new dynamics. This potential fluctuation needs to be factored into any planning around the policy’s rollout.

Moreover, the infrastructure to scrap vehicles in a clean and efficient manner is critical. The ability to up cycle scrap materials back into the manufacturing ecosystem will ensure that the environmental benefits of the policy are fully realised. The impact on livelihoods must be carefully managed through a phased and well-structured implementation process, ensuring that the policy’s benefits are felt across the board.

While the policy represents a significant opportunity for the industry to modernise and reduce its environmental footprint, its success hinges on thoughtful execution and strong support from all stakeholders involved.

How does DICV assess and mitigate the environmental impact of its products throughout their life cycle?

We are focussing on maintaining the value of products, components, and materials for as long as possible by promoting a circular economy, with our primary goal being waste avoidance. To achieve this, we extend the service life of all vehicle components by using durable, long-lasting materials and efficiently managing resources to minimise the use of limited raw materials. Whenever possible, components and parts are reused and recycled.

We employ Life Cycle Assessments (LCAs) to evaluate the environmental impact of our products throughout their entire life cycle—covering the supply chain, production, customer use, and end-of-life phases. This holistic approach allows us to identify potential areas for environmental improvement, with the insights gained being integrated into our R&D, procurement, and production activities to optimise the environmental footprint of our vehicles.

Aligned with Daimler Truck’s global dual zero-emission technology strategy, we focus on both electric and hydrogen drives to decarbonise logistics and passenger transportation. While all BharatBenz trucks and buses currently feature BSVI.2 diesel ICEs, we recognise that India has a long journey ahead in evolving towards zero-emission solutions. Our in-house R&D team is actively working on future projects that will take us into the zero-emission space in a leadership position in the future.

Currently, we are piloting a Fuel Cell Electric Vehicle (FCEV) coach in road trials and seeding the eCanter with select customers. We are committed to delivering fully-ready products to make our customers successful, and do not take the trial-and-error approach. Our focus is to develop robust, reliable zero- emission offerings that meet the high standards of our customers and contribute to a more sustainable future. ACI

 

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