Asian carmakers are still outperforming their Euorpean and American counterparts in environmental sustainability, a new report finds.
A focus on tailpipe CO2 emissions has distracted away from the impact of car production, suggests Professor Frank Figge who co-authored the ‘Sustainable Value in Automobile Manufacturing’ study.
The largest ever study of the sustainability of car manufacturing of 17 of the world’s leading car companies found that Asian car manufacturers are outperforming their North American, and many of their European competitors, in using their economic, environmental and social resources more efficiently.
However the finding also suggest that the economic downturn may have played its part in poor performance in the US, as car giant, General Motors’ poor financial performance is accompanied by the worst sustainability performance recorded. Disappointingly, the report also found that leading manufacturers including Porsche, KIA and some Chinese manufacturers are still not producing sufficient sustainability performance data.
Professor Figge from Queen’s University Management School said: “Economic crisis, energy crisis, climate crisis and recent global developments have affected the automobile industry like few other sectors. Never before has it been as important for car manufacturers to employ their economic, environmental and social resources wisely – and efficiently.
“However, while issues such as fleet consumption and CO2 emissions have been firmly put on the public agenda, the equally considerable environmental impact of the production phase of car manufacturing has as yet been largely ignored. The survey attempts to close this gap.”
The unique report, which covers the period between 1999 and 2007, was created by researchers at Queen’s University Management School in Belfast, alongside colleagues from the Euromed Management School Marseille, and the Institute for Futures Studies and Technology Assessment (IZT) in Berlin.
It provides a full account of the societal impacts of car production, including issues such as the volume of greenhouse gas emissions from production facilities and the number of work accidents recorded by a company. It also looks at how efficiently car manufacturers used key natural resources compared with their industry peers and how much profit or loss was generated with these resources.
The ratio of sustainable value to sales was calculated in the report so that different companies could be directly compared irrespective of their size. Sustainable value includes not just the use of economic capital but also environmental and social resources. It is the first value-based method for assessing corporate sustainability performance.
In the report Asian car manufacturers including Toyota, Hyundai, Nissan, Honda, and to a lesser extent, Suzuki have all out-performed their North American competitors. In stark contract to the Asian manufacturers, both North American carmakers Ford and General Motors (GM) lie well into negative territory, with GM showing the most striking downside trend.
There is a mixed picture among European manufacturers. While BMW tops the ranking of all 17 manufacturers in most of the years assessed, other European carmakers PSA (Peugeot, Citroën), Renault, Volkswagen and DaimlerChrysler/Daimler AG only occasionally keep pace with the industry leaders. FIAT Auto consistently falls behind throughout the entire review period.
The survey examined a set of nine environmental, economic, and social resources: capital use, water use, and waste generated as well as emissions of carbon dioxide, nitrogen oxides, sulphur oxides, and volatile organic compounds; further, the number of employees and the number of work accidents are taken into account.
GM achieved a sustainable value of minus €9.87 billion, in comparison with BMW, which having used all the resources considered necessary to create value doubled its sustainable value to €2.8 billion from 1999 to 2007.
Ralf Barkemeyer from Queen’s University Management School conclude: “The study shows that in 2005 GM had by far the worst negative Sustainable Value within the industry which is mainly the result of a dramatic profits slump in 2005. But GM‘s value contributions from carbon dioxide, nitrogen oxide and sodium oxide emissions as well as waste generation are very negative during the period 1999 to 2007. Its sodium oxide value contributions show the worst level of resource efficiency in the entire study.
“The example of several of the other car manufacturers shows that there is a multi billion euro potential for a company like GM to improve both its environmental and social and its financial performance simultaneously.”