Tackling Environmental Sustainability in the Auto Industry

Tackling Environmental Sustainability in the Auto Industry

A growing global concern about the negative impacts of high carbon footprint, hazardous waste dumping and poor landfill waste management has led to sustainable initiatives becoming more prevalent in many industries including the automotive industry. The importance of environmental sustainability can’t be overstated because it allows companies in the industry to focus on the long-term environmental impact of their activities. With this, the focus should then be on prompting action rather than awareness, because it’s not enough to have knowledge of the issues within the automotive industry.

Thankfully, there are up and coming means of shifting towards environmental sustainability. Some automotive manufacturers for example are coming up with new energy conserving models of their vehicles that burn less fossil fuel, emit less hazardous gases and run completely on biodegradable products. In addition to these models, some of these big influencers are going beyond their product lines and transforming supply chain practices too. As environmental sustainability continues to be brought to the forefront, each action begins to add up, meaning that the overall outcome and impact on the environment will be very positive. With increased collaboration, the damage can be gradually reversed.

Why it’s important

Now that we’ve acknowledged the issue of environmental sustainability, here’s a breakdown why it’s important. The automotive industry doesn’t only consume raw materials, it’s also a contributor to waste and pollution around the world. Sustainability is shouldn’t be viewed as a gimmick, it’s rather a form of responsibility. Think about automobiles, then think about supply chains and production lines. Each of these domains matter because the overall they contribute to ethical business models.

The challenge

Environmental sustainability is a challenge that is viewed on a global scale. It’s already evident that current business models may be inadequate to meet the challenge of environmental sustainability. In order to respond to the challenge in the automotive industry, various initiatives focused around sustainability tracking, reduced energy costs, increased renewable energy use and innovations in product offerings should start being implemented by automakers and manufacturers. It’s important to have a balanced relationship between profits, environmental, and social responsibility in order to set positive industry standards.

How can automakers and manufacturers effectively measure their efforts? This is an interesting question to ponder because they face another challenge when it comes to measuring environmental sustainability actions, mainly because environmental sustainability cannot be measured in the same way economic performance is measured. A host of factors will need to be taken into consideration to determine how companies can provide solutions to sustainability without severely compromising brand value.

A closer look

What’s currently being done? Case studies from Tesla Motors and Nissan not only give detailed accounts of how they view environmental sustainability but are also able to articulate the business case for sustainability. For Tesla Motors, their focus on beautifully designed, 100% electric run vehicles shows that the company doesn’t have to completely sacrifice aesthetics and performance in order to achieve positive results in terms of environmental sustainability. Looking further into the business practices, Tesla has been able to expand and rethink their manufacturing process by opening a Gigafactory that aims to accelerate the world’s transition into sustainable energy. Lastly, Tesla’s business model is much deeper than quarterly earnings reports.

Nissan, another big player in the industry, views the environment as one of the automotive industry’s biggest resources. The Nissan Green Program, focuses mainly on decreasing carbon emissions, and resource recycling. Nissan also aims to use the project to address environmental challenges by providing innovative technology in its products. Furthermore, hybrid electric vehicles (HEVs) which are known to produce reduce emissions have recently been introduced by Nissan to North American and Japanese markets. To support the environmental activities, Nissan created the Nissan Green Shops, a program which involves separation of waste, recycling and energy-saving at dealerships. The program also includes environmental management, automobile recycling laws and shop certification systems that encourages regular audits.

From these two examples, it’s clear that sustainability is a very practical approach to doing business for automakers. It’s also interesting to see that these companies didn’t completely lose focus of the core aspects of their business but rather sought to add sustainable value and position their overall business for better long-term growth.

The opportunity

Although not an easy feat, there’s an opportunity to take on this challenge by forming alliances with environmentally focused organizations to more effectively reduce impacts of energy use, preserve the environment and foster growth for a sustainable industry. Another way to effectively take on this challenge is for automakers to pay attention to specific benchmarks that assess their level of sustainability – this could mean one company solely combating waste generation, and another striving to reduce emissions – instead of each trying to do too many things too quickly and exhausting resources.

In summary, change needs to start from within (i.e., how the vehicles/parts are made, the methods used in the factories, leading brands encouraging other brands to adopt proven sustainable methods). These things can go a long way to changing the way everyone in the industry thinks about supply, production and recycling and make sure they can answer tough questions about the impacts of their activities on the environment. Think about it, if the significance of these issues aren’t emphasized enough, there would certainly be no market for the products that come from the industry in a big picture sense. Therefore, view the process as a way of transforming the marketplace to one where the products and services will be delivered with complete thought towards social responsibility. Sustainable communities can be built within the automotive industry by creating environmentally aware brands that contribute a positive impact in the communities in which they live. This challenges the key players in the industry to become engaged in dealing with an increasingly complex and prominent issue. Automakers aside, consumers can also take action by giving more careful thought to the steps it takes to build a car (from production to supply). As consumers learn more about sustainability and the auto industry, they’re going to start asking tough questions of automakers that aren’t transparent about their production processes, as well as one that aren’t shifting their focus towards renewable practices.

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