Abstract
The automobile sector has been receiving clear signals to reorganise and reinvent its value chain, but the ecological impacts of vehicles remain controversial. While there is a clear trend towards environmental risks being taken into account in strategic business decisions, original equipment manufacturers in the automobile industry struggle to account for these concerns, especially in early stages of the value chain. This chapter builds on prior in-depth studies and compares the different initiatives of green supply chain management of three of the world’s largest automobile manufacturers. It discusses the underlying drivers of managing environmental issues in the supply chain and concludes with assessing their potential to transform value chains of this mega-industry. The supply chain has become the central place where competitive advantage and environmental innovations can be realized. Still, more action is needed when it comes to an industry-wide approach towards environmental responsibility covering the entire value chain, not only for manufacturers to become business leaders, but to effectively mitigate environmental impacts.
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Notes
- 1.
Hyundai surpassed General Motors in terms of production units for the first time in 2016. Prior to 2016, the three above-mentioned manufacturers had been leading the ranking for nine years in a row. For the current ranking see International Organization of Motor Vehicle Manufacturers (OICA) at: http://www.oica.net/production-statistics/, last accessed 31 January 2019.
- 2.
- 3.
Responsible Care 14001 (RC14001) and Responsible Care Management System (RCMS) are performance improvement initiatives launched by the American Chemistry Council (ACC) to ensure that the chemical industry makes health, safety, security and the environment top priorities. RC14001 incorporates RCMS and all the requirements of ISO 14001 environmental certification into a single, more cost-effective process (TMNA 2016, p. 27).
- 4.
Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), OJ L 396, pp. 1–849.
- 5.
The Global Reporting Initiative (GRI) is an international independent organisation that provides guidance to businesses, governments and other organisations which seek to communicate their impact on critical sustainability issues. The GRI G4 Reporting Guidelines have been superseded by the GRI Standards released in October 2016. Reports published on or after 1 July 2018 are required to use the GRI Standards. For more details on GRI Standards, see https://www.globalreporting.org/standards, last accessed 31 January 2019.
- 6.
For the summary of expectations for supplier conduct, see section ‘Supply Chain Compliance’ of the sustainability report (General Motors 2017, p. 120).
- 7.
The Carbon Disclosure Project (CDP) is an organisation dedicated to the reporting and disclosure of data on environmental risks of international businesses; for more details see: www.cdp.net, last accessed 31 January 2019.
- 8.
For details on the project, see General Motors (2017), p. 26.
- 9.
The Suppliers Partnership for the Environment is a partnership between car manufacturers, their suppliers and the US Environmental Protection Agency (EPA), see: www.supplierspartnership.org, last accessed 31 January 2019.
- 10.
The UN Global Compact is a voluntary initiative based on CEO commitments to implement universal principles of sustainability and to take steps to support UN SDGs. It has more than 12,000 signatories worldwide. For more details on the initiative, see: www.unglobalcompact.org, last accessed 31 January 2019.
- 11.
The ICC Business Charter for Sustainable Development was designed to provide a practical framework for businesses of all sectors globally to help them shape their own business sustainability strategy (ICC 2015).
- 12.
The EU Eco-Management and Audit Scheme (EMAS) is a management instrument developed by the European Commission for companies and other organisations to evaluate, report, and improve their environmental performance.
- 13.
The A-S-I-F approach provides the following guidelines for implementing specific measures: (A) Avoid: avoid transportation wherever possible; (S) Shift: move over to a more environmentally compatible mode of transport; (I) Improve: use better or more modern technology; (F) Fuels: use alternative drive systems (Volkswagen AG 2018).
- 14.
The Clean Shipping Network allows members to select vessels according to environmental criteria, including pollutant emissions and the handling of chemicals and waste disposal by comparing their Clean Shipping Index (CSI); for more details visit: http://cleanshippingindex.com, last accessed 31 January 2019.
- 15.
Scope 3 emissions are all indirect emissions that occur in the value chain of a reporting company, including both upstream and downstream emissions, e.g. linked to waste disposal, transport and the purchase of goods and services (WRI and WBCSD 2011).
- 16.
In the Global Supply Chain Report 2018, CDP did not provide information about their members’ participation in the Action Exchange initiative.
- 17.
The first edition of the seminal work Competitive Advantage: Creating and Sustaining Superior Performance was published by the Free Press in 1985. This chapter includes a reference to a more recent reprint with a new introduction from 1998 (Porter 1998).
- 18.
Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups (OJ L 330/1) requires companies in Europe with more than 500 employees and which are of ‘public interest’ to report annually on their sustainability performance. The first reports had to be published in 2018 for FY2017. For more details, please visit: https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/non-financial-reporting_en/, last accessed 31 January 2019.
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Dewitz, P. (2019). Industry Initiatives Towards Environmental Sustainability in the Automobile Value Chains. In: Schmidt, M., Giovannucci, D., Palekhov, D., Hansmann, B. (eds) Sustainable Global Value Chains. Natural Resource Management in Transition, vol 2. Springer, Cham. https://doi.org/10.1007/978-3-319-14877-9_30
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