ASIAN CAR manufacturers are outperforming American and many European competitors in terms of environmental, economic and social sustainability, according to a major study of 17 leading motor companies.
One of the key findings from the study, Sustainable Value in Automobile Manufacturing, was that General Motors' dire financial performance is matched by the worst sustainability performance, showing "the most striking downside trend".
The study covers the period 1999-2007 and was done by researchers at Queen’s University Management School, Belfast; the Euromed Management School, Marseille; and the Institute for Futures Studies and Technology Assessment, Berlin.
It provides a full account of the societal impacts of car production, including greenhouse gas emissions from production facilities, accidents at work, how efficiently key natural resources are used and how much profit or loss was generated with these resources.
The ratio of “sustainable value” to sales was calculated so that different companies can be directly compared irrespective of their size, in a study that claims to be the largest of its kind and “the first value-based method for assessing corporate sustainability performance”.
Some leading motor companies such as Porsche, Daihatsu and Kia, as well as Chinese car manufacturers, were not producing sufficient sustainability performance data in order to be assessed properly. Indian carmaker Tata “narrowly beats the benchmark” in 2007.
Asian car manufacturers including Toyota, Hyundai, Nissan, Honda, and to a lesser extent, Suzuki, all out-performed their American competitors. “Both North American carmakers Ford and GM lie well into negative territory, with GM showing the most striking downside trend.”
The study showed that GM achieved a “sustainable value” of minus €9.87 billion, in comparison with BMW. Having used all the resources considered necessary to create value, the German carmaker doubled its sustainable value to €2.8 billion between 1999 and 2007.
Among the 17 European manufacturers surveyed, BMW topped the ranking in most years assessed, with PSA (Peugeot-Citroën), Renault, Volkswagen and Daimler-Chrysler “only occasionally keep pace with the industry leaders” while Fiat “consistently falls behind”.
Prof Frank Figge of Queen’s University said the economic, energy and climate crises had “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.
“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.”
His colleague Ralf Barkemeyer noted that GM had “by far the worst negative sustainable” value within the industry in 2005, mainly as a result of a dramatic slump in profits. Its emissions and waste generation were also very negative during the period 1999 to 2007.
“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 its environmental, social and financial performance simultaneously,” Barkemeyer added.
Dr Tobias Hahn, of the Euromed Management School, said a “unique feature” of the survey was that it analysed the sustainability performance of a whole sector. The 17 companies examined in detail account for some 80 per cent of automobile manufacturing worldwide.
The study looked at capital use, water use and waste generated as well as emissions of carbon dioxide, nitrogen oxides, sulphur oxides,and volatile organic compounds. The number of employees and the number of work accidents were also taken into account.
BMW provided “substantial financial support” for the study, but its authors stressed that their findings were “wholly independent of any input from funders”. Both the study and extensive information on the “sustainable value” approach are available online at sustainablevalue.com.