Over the past few years going green has become more than just a nice-to-have for car makers. The concept of green business has moved up the corporate automotive agenda.
The demands of environmentally conscious customers and the requirements of environmental legislation are driving car makers to adopt a more sustainable approach to business. They are also beginning to understand the potential of green business to drive additional growth and efficiency.
To help leading car makers meet this challenge, PA has conducted a benchmarking study, to compare the green performance of five global car makers in 2012: Toyota, Daimler, BMW, Peugeot Citroën S.A. (PSA) and Volkswagen.
Request the full report from our benchmarking study, 'Green performance in automotive'.
To compare car makers' green performance we used information from publicly available annual reports and corporate websites, and reports on sustainability and environmental compliance, including the Carbon Disclosure Project report. Our study focuses on three important elements of a holistic sustainability approach:
- sustainability strategy
- product portfolio
- operational performance.
Volkswagen ranks first in our green benchmarking study, followed by BMW, Daimler, Toyota and PSA
In PA’s benchmarking study Volkswagen comes out as the greenest car maker overall, ahead of competitors in the study. Volkswagen claims first place as a green business through an equally strong performance across all three areas. The four remaining car makers achieve similar overall results, leaving only a small gap between second, third and fourth place. A detailed examination of individual performance reveals there is still much untapped potential as car makers embark on the mission to become truly sustainable.
What can car makers do to improve their green performance?
Drawing on our experience – including working with a global manufacturer to overhaul its resource-intensive operations and meet carbon emissions reduction targets – we recommend the following areas of focus:
Formulate and communicate a clear green business strategy
Top-performing car makers, such as Daimler and Volkswagen regularly publish environmental and sustainability reports to inform stakeholders on green performance and future objectives. In these companies, board-level attention ensures the sustainability strategy is implemented right across the organisation. In addition, the concept of life cycle analysis serves as an effective tool to track and assess the environmental impact of products throughout their life cycle.
Use the entire product portfolio to reduce environmental impact
The advancement of green technologies lessens the impact of vehicles on the environment after they have left the production plant – Toyota, with its successful hybrid strategy across the majority of its product range, serves as a benchmark in the automotive industry. Other car makers still need to push the boundaries of their current product strategy to significantly reduce environmental impact and boost green compliance.
Monitor and reduce the impact of internal business operations
All companies, not just car makers, should focus on reducing the consumption of resources (energy, water) as well as aiming to meet carbon emissions reduction targets. Again, transparency through disclosure and formally recognised certification are essential to enhance credibility. Amongst car makers in the study, performance from an operational perspective varies: while less advanced companies, such as PSA, have increased their efforts, car makers that are already performing well, such as Volkswagen, face the challenge to maintain a strong momentum.
To find out how to improve green performance in your organisation, please contact us now.