Mahindra & DBS Bank India introduce sustainability-linked dealer financing programe

Mahindra & Mahindra and DBS Bank India have introduced India’s first sustainability-linked dealer financing program for automotive dealerships. The initiative aims to encourage dealers to adopt environmentally responsible practices by linking loan rates to specific ESG performance metrics.

Key Highlights

• Mahindra and DBS Bank India launch sustainability-linked dealer financing programme
• Dealership loan rates tied to ESG metrics like renewable energy and EV sales
• The program supports Mahindra’s decarbonisation strategy and India’s net-zero goal for 2070

Programme Structure and ESG Metrics

The financing program offers preferential interest rates to authorized Mahindra dealerships that finance passenger and commercial vehicle purchases through DBS Bank India. The interest rates depend on the dealerships’ performance in environmental, social, and governance (ESG) areas.

The program's framework incorporates sustainability parameters that align with Mahindra’s Green Dealership Program. These parameters include monitoring greenhouse gas emissions, using renewable energy, implementing water conservation measures, installing rainwater harvesting systems, managing waste, providing public EV charging facilities, and increasing the number of electric SUVs sold by dealerships.

Dealerships will be evaluated and ranked based on their performance in these areas. Financing benefits, such as lower interest rates, will be tied to improvements in ESG performance and achieving specific sales targets. Mahindra and DBS Bank India jointly designed the evaluation framework to ensure alignment with both companies’ sustainability goals.

Alignment with Decarbonisation Goals

Nalinikanth Gollagunta, CEO of Mahindra & Mahindra’s Automotive Division, stated that the new financing program will help expand the company’s decarbonization efforts. By involving dealerships, Mahindra aims to reduce Scope 3 emissions, which are indirect emissions that occur in a company’s value chain.

Mahindra emphasized that this initiative supports its broader decarbonization strategy. The program also aligns with India’s climate targets under the Paris Agreement, including the national goal to achieve net-zero emissions by 2070.

Broader Industry Context

The launch of this sustainability-linked financing comes as India’s automotive sector faces increasing pressure to adopt cleaner mobility solutions. Recent policy developments, such as Delhi’s draft EV policy and Haryana’s mandate for EV chargers in buildings, signal a shift towards sustainable practices in the National Capital Region and beyond.

Mahindra’s program adds to industry efforts to promote renewable energy adoption, improve waste management, and support the transition to electric vehicles. The company’s focus on ESG-linked financing reflects a growing trend among automakers to integrate sustainability into their business models.

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CarBike 360 Says

This partnership between Mahindra and DBS Bank India marks a significant step toward integrating sustainability into the automotive retail ecosystem. By incentivizing environmentally responsible practices, the initiative not only supports dealers financially but also aligns with India’s broader green mobility goals. It reflects how financial innovation can drive meaningful change across the automotive value chain.