ESG means Environmental, Social and Corporate Governance.

The Financial Times Lexicon

defines ESG as “a generic term used in the capital market and used by investors to evaluate
corporate behaviour and to determine the future financial performance of companies”. It is
the subset of non-financial performance indicators which include how a company prioritizes
sustainable, ethical and governance issues such as managing the company’s carbon
footprint, employees and public relationships and corporate transparency.

Bajaj Auto is a leading Indian automobile manufacturer known for its innovative and reliable
two-wheeler and three-wheeler vehicles. The company has shown a commitment to
sustainability and ethical practices. Here is a detailed analysis of Bajaj Auto's environmental
practices, social initiatives, and governance policies:

Environmental practices:
Bajaj Auto has been a forerunner in adopting environmentally friendly technologies and
practices

The company has also introduced electric vehicles to promote eco-friendly transportation
solutions.

Bajaj Auto has invested INR3bn to develop an electric vehicle (EV) facility in the village of
Akurdi that will produce 500,000 vehicles per year.

Social initiatives:
Bajaj Auto is the second largest motorcycle manufacturer and the largest 3-wheeler OEM
domestically in India

Bajaj Auto has also contributed over Rs. 1,300 Cr. to projects focusing on Skilling and
Education, Health, Livelihoods, and Water Conservation since CSR rules were first
announced in 2014.

The CSR priority for Bajaj Auto is Skilling and improving Quality of Life – especially for
marginalized communities living in and around the districts where Bajaj Auto’s
manufacturing plants are located.

Governance policies:
Bajaj Auto has an ESG Risk Rating from Sustainalytics, which measures a company's
exposure to industry-specific material ESG risks and how well a company is managing those
risks.

The Company has established several policies to prevent corruption within Bajaj Auto Ltd.

Bajaj Auto's approach to its human resources is premised on the fundamental belief in
fostering meritocracy in the organization, which promotes diversity.
Sustainalytics classifies a company as a part of its comprehensive universe or core universe
primarily by its market capitalization as well as its inclusion in major global and regional
indexes. Sustainalytics' Core Framework covers 20-30 management indicators, whereas its
Comprehensive Framework covers over 70 management indicators.
As per the research report published on UNPRI’s website states that investment in
non-ESG companies could bear up to 28% more risk annually compared with ESG-
integrated companies in the same industries. The incorporation of ESG factors could
lead to lower volatility in a company’s shares and mitigate potential risks. We have
discussed various areas of EGS investing including ESG metrics, risk indices and
performance comparison of ESG indices and Nifty100.

BAJAJ AUTO Overall ESG Score