As climate change is finally beginning to receive the attention it warrants, countries and companies that have a large carbon footprint are being forced to redesign everything from their products and operations to their CSR and marketing. Deemed as one of the biggest contributors to increased greenhouse gases, the auto industry has garnered much negative attention in regards to climate change, and Volkswagen (VW) is a prime example of an automaker rushing to reinvent themselves and stay ahead of regulations, while keeping their brand image intact.
Design of the Car
Emissions regulations are becoming stricter by the year, especially with hard to ignore global manifestations of climate change. In addition to restrictions on fuel emissions from active machines, there are now additional restrictions on such emissions when machines are off and resting. Consequently, car manufacturers have had to redesign their cars to produce better fuel efficiency as well as improved fuel storage tanks. In their 2014 Sustainability Report, Volkswagen reported that 57 cars in their portfolio already met the 2020 EU new-fleet car emissions target of 95g CO2 /km. Furthermore, each new car VW designs promises to be 10-15% more fuel efficient than its predecessor.
Lastly, VW cars are now designed so that 85-95% of the car is recyclable; however, how the company retrieves old cars for recyclable material and how much they have used recycled material in their new cars has not been disclosed by the company.
Design of the Plant and Production Process
Volkswagen reports that over the years their manufacturing process has become much more efficient and consequently, has decreased emissions from production every year. In 2014, Volkswagen reported their worldwide manufacturing processes saw an average of 23.2% reduction in CO2 emissions, 18.5% reduction in energy consumption, and a 21.7% reduction in waste for disposal. These results were achieved mainly by switching to renewable energy to power the plants, innovating processes such as painting cars to rely less on water, and recycling water and waste products in the production process. In addition, VW has attained ISO 14001 and ISO 50001 certification at many of their sites and is continuing to improve uncertified sites with the goal of achieving these certifications.
Cannibalization of their main product?
While the fossil fuel driven car is VW’s main product, increased consumer awareness of climate change coupled with stricter regulations are forcing the company to invent eco-friendly products that may one day entirely replace what has been the bread and butter of VW:
- VW is producing hybrid cars that can use both oil and electricity as fuel, and have CO2 emissions as low as 35 g/km, approximately one third of that of traditional vehicles.
- Some Volkswagen brands such as Audi are moving towards alternative energy as fuel. The company has developed a method of producing “e-gas” which offers the same power as fossil fuels, but is generated using wind power, CO2, and water. Volkswagen admits that there is still lack of infrastructure around e-gas – only available at some gas stations – which has hindered customer adoption of this technology.
- VW has been investing in car-sharing and building buses. In a time when there is increased incentivization for people to reduce emissions by using common transport, VW runs the risk of decreasing their car sales.
When judging the success of any sustainability endeavor, it is important to ask what is the net effect of the company’s operations on the environment and which metrics are being used measure it. For example, VW could simply use aluminum to make their cars lighter, which would in turn produce increased mileage. However, the extraction of aluminum is itself a highly energy intensive process, and so could outweigh the environmental benefits of reducing fuel consumption in cars. Additionally, although the company seemed to be performing well with regards to sustainability when measured against CO2 emissions regulations, they were 40 times over the limit for NOx emissions, and were found to be falsifying NOx emissions data, leading to the “emissiongate” scandal of 2015. This illustrates that although companies are being forced to comply to stricter environmental regulations, they are likely to feel pressured to scam their way out of such regulations or to find ways to address parts of the problem while exacerbating others.
Finally, improving sustainability is not a simple, one-way equation. Just as companies, governments, and consumers are responsible for driving climate change to its current state, all parties must similarly be involved in undoing centuries of negligence. Companies like Volkswagen, who arguably have a more direct impact on climate change, must lead the way in creating innovative methods to reduce and even sequester CO2, because it is only a matter of time before both government regulations and consumer demands force change upon them.
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- “Volkswagen Group Sustainability Report 2014 – PDF File.” Web. 4 Nov. 2016. [Url: http://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/04/group-sustainability-report-2014.bin.html/binarystorageitem/file/Volkswagen_Sustainability_Report_2014.pdf ]
- “Volkswagen Emissions Scandal.” Wikipedia. Web. 4 Nov. 2016. [Url: https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal#EPA_Notice_of_Violation ]
- “Volkswagen Reminds Us Who’s in Control of Climate Change.” Huffington Post. Web. 4 Nov 2016. [Url: http://www.huffingtonpost.com/kelsey-clark/volkswagen-reminds-us-who_b_8207958.html ]