Sustainability Issues in the automotive industry

Sustainability issues in the automotive industry

The automotive industry is one of the most massive industries in the world. It is arguably the largest manufacturing sector in the world (R.J Orsato). Millions of people benefit from this industry's goods' personal mobility, but they also present a wide range of issues that have an impact on our everyday lives.

Carbon Emissions

The Automobile Industry is one of the largest contributors to Greenhouse Gas Emissions of all sectors, notably due to the fact that this sector is one of the most dependent on fossil fuels. In 2021, this industry accounted for 37% of CO2 emissions from end-use sectors (IEA, 2022). A sector that is experiencing increasing demand that can be explained notably by a significant growth of the demand in developing and emerging economies (IEA, 2022). The carbon footprint of an automobile depends on a number of factors, including the type and size of vehicle, fuel efficiency and emissions standards (G. Fontaras, 2017), and emits greenhouse gases at two points in its existence as a product. Approximately three-quarters of all CO2 emissions in the automotive industry are thought to be produced during vehicle operation, while 18% still come through the supply chain (M.Goodrick, 2022).

Impact On Health

Carbon monoxide-related air pollution also has negative consequences for human health. Heart disease and stroke are caused by this gas when it is present in high concentrations. This harmful effect was seen in the "emissiongate", where Volkswagen knowingly put millions of cars on the market that emitted up to 40 times more NOx than in laboratory tests (C.Hill, G.Hult, 2019).

Although it is complicated to quantify the tangible effect this had on the population, this abuse by Volkswagen may well be responsible for the deaths of over 106 people between 2009 and 2015 in the US (M.Sanger-Katz & J.Schwartz, 2015).

Waste Management

In addition to pollution rules, automakers must handle challenging recycling goals. The working life of the majority of items is predicted to continue to decrease according to contemporary market strategies. Consequently, a growing volume of rubbish is expected in landfills each year (A.A. Zorpas, 2012).

Ethics

A problem that has plagued the automotive industry for years is the upselling of work; upselling work means to sell work that isn’t necessary. There is a fine line between doing maintenance and repairs before it is too late and there is catastrophic damage, and selling repairs and especially maintenance, so far in advance that it is a waste of materials but also customer’s money.

Volkswagen’s performance: Sustainable consumption and production

Over its lifetime, the automobile has a relatively large carbon footprint. In fact, a typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year (US Environmental Protection Agency, 2022).

On a global scale, these figures highlight the important role that car manufacturers have in one of the greatest missions of the 21st century: to reduce greenhouse gas emissions to the lowest possible level. In the automotive industry, players like Volkswagen will have to make a major commitment to responsible production and consumption. Therefore, SDG 12 has been chosen to evaluate the company's performance.

The case of Volkswagen's emission gate had a knock-on effect on much of the automotive sector. The group's share price initially fell immediately by 17%, before other German manufacturers subsequently fell (BBC, 2015).

If trust is the basis for good business (S. Mintz, 2015), Volkswagen seems to have realised this and has put in place various measures to meet the requirements of SDG 12, for more responsible production and consumption.

As a first step, in 2016, as a reaction to Emissiongate, Volkswagen appointed an 'Independent International Sustainability Council' to obtain recommendations for sustainable mobility, environmental protection and social responsibility. The council consisted of 9 experts and met regularly with the group's board of directors (GB. Turna, 2022).

Volkswagen also addressed this transparency issue by communicating via "Shift", the magazine created by VW on the subject of sustainability, with the ambition of learning from the scandal (GB. Turna, 2022), bringing transparency, while encouraging the consumption of less polluting cars.

The company was subsequently one of the first companies in its industry to embark on the race to carbon neutrality, redesigning its vehicles and the entire production process (Volkswagen, 2020)

However, most of the actions are difficult to measure. These are statements that come directly from the company itself, and the lack of transparency may suggest that little action is actually being taken.

In that sense, in 2020, the Impakter Index reported that "On the issue of emissions, Volkswagen admits that it has failed to meet its own standards in several areas. They have stated that irregularities in the handling of emissions tests contradict their beliefs. They promise to do everything in their power to prevent similar incidents from happening again, and they are fully committed to meeting their standards again and regaining public trust.” (Impakter Index, 2020).

But on the other hand, it is clear that progress has been made. According to the same source, the company has reduced its overall emissions by 8.05 million tonnes of CO2 in 2020 compared to its last year, and between 2010 and 2019, the company has reduced its water consumption by 21.5%, and reduced its waste production by 58.4% over the same period (Volkswagen, 2020).

Also, despite the obvious challenges presented by 2020, Volkswagen delivered nearly 134,000 electric vehicles, and 212,000 electrified cars in total (including hybrids and plug-in hybrids). That's an increase of 197% and 158% respectively (Car Magazine, 2022).

The situation is therefore nuanced, but it is clear that VW has made efforts to become a more sustainable company (especially with regard to Sustainable Development Goal 12) since the emissiongate. VW seems to be producing more responsibly, which in turn leads to a more environmentally responsible consumption.