Over the last decade, critical contenders in the global automotive industry and other industries alike have seen the importance of sustainability grow increasingly in their strategic priorities. Sustainability, however, has significantly evolved and grown in scale beyond recycling programs and energy efficiency. Companies understand that their long-term success and survival is rooted in how they mitigate climate impact, and we have seen an expansion of corporate sustainability goals, with both environmental and social concerns being key factors in their market strategy.

Many recent efforts can be contributed to companies using sustainability as a driving force of their corporate strategy and adhering to the desires of their key constituents, whether that be potential and current investors, employees, or customers.

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Sustainability is a motivating factor for automotive industry investors to avoid operational risk areas. The perception that growth in the automotive industry has contributed to the threat of climate change and the overuse of global resources has led investors to demand that the industry address sustainability in their strategy and business practices.

The new generation joining the workforce is notably more conscious of environmental impacts and uses this awareness to make decisions regarding not only the companies they purchase from but the companies they work for as well. Employers realize that it is necessary to consider what their employee stakeholders’ value in the organization’s vision to secure successful employee and talent retainment.

Automotive manufacturers like Ford, GM, Honda, and Toyota have taken steps to improve a host of environmental area resulting from manufacturing through sustainability strategies designed to reduce their environmental impact. As a result, procurement is playing a critical role in how the automotive supply chains are meeting today’s sustainability demands. The automakers are placing more importance on the sustainability practices of the suppliers and the supply chain. And in turn, suppliers are focused on helping their customers meet sustainability goals with components made of lighter-weight materials, more energy-efficient vehicle systems, adoption of electric technologies, more efficient factory processes and products that support a circular economy.

Additionally, the conversation on sustainability has dramatically shifted in 2020 due to the impact of COVID-19.  Due to the significant drop in travel, carbon emissions have plunged, setting a record for the largest decrease in recorded emissions. This outcome has led to discussions across the workplace involving semi-permanent telecommuting and other virtual practices that may continue even after virus concerns have dissipated. Further complicating the matter, the pandemic has also led to temporary relaxations on EPA pollution regulations to focus on survival, as well as an increase in single-use plastics for hygiene concerns. This year has taught us that the need for ongoing strategy and planning is critical to the long-term health of the automotive industry and our planet.

On Tuesday, August 4th 2020, Joshua Brugeman, Business Unit Manager, Sustainability Consulting of NSF International, was joined by Dane Parker, Chief Sustainability Officer of General Motors, and Dr. Gulay Serhatkulu, Senior Vice President, Performance Materials North America of BASF Corporation, at CAR’s 2020 virtual Management Briefing Seminars to discuss current sustainability efforts of their companies and the automotive industry as a whole.

To learn more about these issues and factors impacting sustainability strategies, you may purchase and download the full session HERE.

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