Keywords

9.1 Reflecting on Collaborative Learning

What are the strategic pathways for sustainability-driven business transformation? With this question in mind, Bayerische Motoren Werke AG (BMW) and FAU came together in a series of expert dialogues to discuss critical topics on the Road to Net Zero. This book not only documents these dialogues but also uses them as the core for seven chapters. Each chapter explores some of the many complexities and intriguing issues involved in transforming our economy toward sustainability. Supplemented by a brief introduction to the topic and selected future research avenues, the idea was to allow readers to dive directly into the facets of the “Road to Net Zero” that interest them.

Each chapter therefore stands on its own. However, no chapter stands in isolation. On the contrary, the various steps on the Road to Net Zero all interact, are highly interdependent, and require an integrated perspective. The purpose of this concluding chapter is to reflect on this bigger picture. We will do this in four steps. First, we look back by briefly reviewing the lines of argument developed in each chapter and how they relate to each other. Second, we take stock by identifying recurring themes, critical insights, and lessons (to be) learned that we have identified across individual chapters. Third, focusing on journeying forward, we look beyond the Road to Net Zero outlined in this book and identify future questions for sustainability-driven business transformation. Finally, we reflect on the nature of these challenges and discuss the role of industry–university partnerships in addressing them.

9.2 A Summary of this Book’s Storyline

The title of this book, “The Road to Net Zero,” signifies an ambitious objective—achieving net-zero emissions to curb global warming. This bold ambition has profound implications. We cannot reach carbon neutrality merely by making incremental improvements within the existing fossil fuel–based economy. Instead, it necessitates a complete transformation in our business practices, with wide-ranging consequences and contributions required across different domains, as discussed in each chapter of this book.

9.2.1 Chapter 2: Setting the Course for Net Zero

Chap. 2 initiated the discussion by dissecting the scientific and political aspects of the net zero concept. It elaborated on why the Paris Agreement was a pivotal moment in global climate policy. Not only was it the first global pact supported by all major carbon emitters, including the United States, China, and India, but it also established absolute global warming temperature targets. Based on climate science, these politically agreed-upon targets translate into a defined limit to the remaining carbon budget that humanity can afford, contrasting with the relative reduction approach of the Kyoto Protocol. Consequently, the Road to Net Zero demands a radical transformation of our systems, rather than continuous enhancements to existing fossil fuel technologies and business models.

The chapter delved further into how governments can catalyze this transformative change. The expert conversation within it explored the role of government policy in promoting conditions conducive to decarbonizing the economy. This includes strategies such as pricing carbon via emission certificates and carbon taxes, enforcing suitable market regulations, and promoting infrastructure development necessary for the introduction and scaling of alternative technologies. Chapter 2 also elucidated how corporations can align their business objectives with the global Road to Net Zero. It introduces the idea of setting Science-Based Targets, which offers a tangible and scientifically substantiated framework for businesses to align their operations with global climate change mitigation efforts.

9.2.2 Chapter 3: Crafting Corporate Sustainability Strategy

Chapter 3 shifted the focus from external, science-based discussions and political decisions, such as the Paris Agreement, to the internal strategic decision-making process within companies. It explored how these external parameters influence business operations. In the past, companies often set sustainability goals that were separate from their core business strategies, typically under the umbrella of corporate social responsibility. However, the escalating urgency of climate change necessitates a fundamental change in approach. Mature strategies no longer regard sustainability as an isolated component, but integrate it holistically.

On the Road to Net Zero, true life cycle decarbonization requires that sustainability be woven into the fabric of a company’s value creation process to encompass the entire value chain rather than just the company’s direct operations. Chapter 3 delved into how this integrated approach revolutionizes the entire strategic process. Building upon Chap. 2, it started with strategy formulation as the phase to set reliable, Science-Based Targets. It then moved on to strategy implementation, which necessitates a unified management approach, and concluded with strategy evaluation, which demands innovative methods of measurement and reporting, thus smoothly transitioning into Chap. 4.

9.2.3 Chapter 4: The Future of Corporate Disclosure

As the focus on a company’s sustainability strategy and performance intensifies, the traditional approach of reporting solely on financial indicators falls short of meeting the diverse interests of all stakeholders. Traditional reporting, primarily designed for investors, emphasizes the company’s financial performance. However, in today’s context, specifically on the Road to Net Zero, there is a growing need to encompass nonfinancial, sustainability-related aspects to address the information requirements of a wider array of stakeholders, including employees, governments, and society at large.

The shift toward nonfinancial or sustainability reporting has seen a significant evolution, moving from voluntary standards with limited comparability to stringent regulatory requirements advocating for enhanced transparency. Chapter 4 delved into this transition and its relation to integrated reporting. It reflected upon recent legislative changes, explored the challenges associated with measuring and selecting both financial and nonfinancial key performance indicators (KPIs), and discussed the delicate task of balancing the diverse interests of different stakeholders.

9.2.4 Chapter 5: Creating Sustainable Products

In the automotive industry, one reason why the Road to Net Zero depends on trustworthy information and comprehensive reporting is that the advent of electric vehicles has shifted the majority of life cycle emissions from the usage phase to the production phase. As a result, circular value chains and their various elements have become paramount in the operational transformation to net zero. With this in mind, Chap. 5 shifted the focus to the importance of product design. Because decisions made in product design have diverse impacts on material sourcing, manufacturing, a product’s use phase, and the options for closing material flows at the end of its life, the transition to a circular economy necessitates a reimagined approach to product development. Chapter 5 therefore explored design for recycling, the substitution of scarce resources with secondary materials, and the introduction of natural materials, with a particular focus on interior design. Implementing circular design also requires a shift in service design. Services that facilitate circularity, such as product take-back programs, become essential. Alternatively, a transition in ownership from manufacturers to service providers, emphasizing access and performance-based business models, can help execute circular strategies. Consequently, product design and service design must evolve in tandem.

9.2.5 Chapter 6: Transforming Value Chains for Sustainability

The conversation about sustainability in product development inevitably leads to the issue of procuring scarce and valuable resources. On the Road to Net Zero, the substitution of primary materials with secondary materials offers a crucial lever for reducing carbon emissions over the entire life cycle. Chapter 6, therefore, deepened the material flow analysis by zooming into this potential, as well as the challenges of sourcing scarce and valuable resources for electric mobility. Manufacturing batteries and electric drivetrains, in particular, requires energy-intensive materials that are not only limited in quantity, but are also concentrated in a handful of countries worldwide. In addition to its relevance to greenhouse gas (GHG) emissions, this constraint underscores the call for closed-loop supply chains that incorporate secondary materials into production.

However, realizing the vast potential of these material flow loops to achieve carbon reduction and environmental impact goals is not without hurdles. Substantial technological, organizational, and regulatory obstacles exist at each stage of the circular value chain. Because circularity requires robust data, further digital advances, such as the digital battery passport and appropriate data-sharing methods, are essential. In addition, as later noted in Chap. 8 and its discussion of the role of technology, Chap. 6 provided important background on why continued innovation in battery storage technologies can significantly contribute to offsetting existing resource scarcity and will strongly shape the blueprint of future sustainable supply chains.

9.2.6 Chapter 7: Sustainability in Manufacturing

Before Chap. 8 delved into this role of technology, Chap. 7 focused on the transformation of traditional factories into green, sustainable ones as a pivotal element in the operational transition to net zero. Over the last two decades, production optimization has been a focal point for researchers and practitioners. While the previous shift toward operational excellence was primarily internal, an integrated strategy now necessitates a broader, system-wide consideration, which ties back to Chaps. 3, 5, and 6. To illustrate this shift, Chap. 7 used the BMW iFACTORY as an example, which combines lean systems, digital technologies, and circular production to address sustainability comprehensively. Chapter 7 thus highlighted that the responsibility for implementing decarbonization and circularity begins, but does not end, within a company’s own operations. It also emphasized that sustainable production is not a one-off project, but a continuous process that builds on a company’s expertise in quality or lean management. This type of continuous learning requires access to multiple sources of data, from production machines to manual processes, again underscoring the relevance of data and transparency.

9.2.7 Chapter 8: The Power of Technological Innovation

The disruptive transformation required for the Road to Net Zero is not possible based (solely) on the basis of incremental efficiency improvement in our current fossil fuel–based technologies. This is particularly true in the mobility sector. Chapter 8 examined technology alternatives that can replace the internal combustion engine (ICE) as the dominant drivetrain technology. The chapter conducted a systematic analysis of future drivetrains, from electric drivetrains to synfuel internal combustion engines (ICEs) and fuel cells, discussing the eco-efficiency as well as the challenges and opportunities of each technology and outlining potential future technological developments.

A key finding of the chapter was that there is no technological silver bullet. Instead, each technology will be part of the decarbonization roadmap dictated by specific use cases and contexts. Battery electric vehicles are likely to dominate personal transport, while hydrogen could complement in areas such as long-distance and heavy-duty transport or in sparsely populated contexts. Regardless of the underlying green technology, future vehicles will be Autonomous, Connected, Electric, and Shared (ACES), with each aspect contributing to sustainability when effectively integrated. However, zero-emission technologies need an enabling energy ecosystem with sufficient renewable energy and innovative charging infrastructure. This is a task to be addressed not only by private companies but also by public policies that promote market regulation, incentives, and investments for this enabling environment. Chapter 8 thus closed the loop by linking back to the first expert conversation and the public policy discussion in Chap. 2.

9.2.8 Looking Back on the Road to Net Zero

Upon reflecting on the summary presented above, we would like to share two crucial observations. First, the expert discussions documented in this book and the seven resulting chapters do not purport to offer a comprehensive view of all the challenges and questions surrounding the Road to Net Zero. Rather, while addressing many vital topics, some important perspectives are absent. For instance, the role of consumers is touched upon (e.g., in Chap. 3 as a sustainability driver or in Chap. 5 when discussing service design to promote circular consumer behavior) but not explored in depth, and the interaction between automotive mobility and broader mobility systems is mentioned (e.g., in Chap. 7 on smart cities) but not analyzed thoroughly. We anticipate future discussions to tackle these and other underexplored aspects.

Second, the summary outlines the book’s chapters in a linear fashion, implying a sequential progression. However, the real-world transition to net zero is far from linear, as all elements must occur simultaneously, with numerous interconnections and feedback loops arising between the various topics. Thus, the following section identifies and discusses recurring themes that link the different chapters and emerging insights as potential lessons to be learned across chapters.

9.3 Insights and Themes across Chapters

As editors, we had the rewarding experience of reviewing all the chapters multiple times, often oscillating between different sections. This iterative process illuminated recurring themes and insights that echo throughout the various chapters and, at times, across the entire book. We present some of these observations in this section. It is important to note that not all these insights are novel or counterintuitive. To those of us deeply immersed in sustainability management, some findings may seem evident and familiar. However, their recurrence does not diminish their importance but underlines their significance. We also share these insights with readers in mind who may be new to the discourse on sustainability management. Regardless of whether these insights seem novel to you, resonate with your experiences, or provoke critical thought, our aim is to stimulate a thoughtful discourse.

9.3.1 Sustainability Demands Both Integrative Thinking and Integrative Management

Sustainability is widely recognized to necessitate integrative thinking due to the multifaceted nature of sustainability challenges. These challenges cut across various disciplines, sectors, and stakeholder interests, requiring an understanding that goes beyond the siloed knowledge of individual disciplines. Integrative thinking enables the synthesis of diverse perspectives and the ability to see interconnections and interdependencies. This is critical for devising holistic, effective strategies for sustainability that consider the environmental, social, and economic dimensions in tandem rather than in isolation.

In this book, experts from different disciplines exemplify this integrative thinking with a focus on integrative strategy (Chap. 3), integrative reporting (Chap. 4), the integration of sustainability in product development (Chap. 5), value chains (Chap. 6), or the factory of the future (Chap. 7). These contributions highlight that integrative thinking is more than the simultaneous consideration of ecological, social, and economic factors. It also requires a holistic view when embracing a life cycle perspective, integrating sustainability aspects from raw material extraction to a product’s end of life.

However, integrative thinking does not come naturally. While functional differentiation and specialization across disciplines are essential for gaining the detailed understanding required to address specific challenges on the Road to Net Zero, they also create fragmentation that requires reintegration. This leads to a strong call for an integrative management approach, both within and between organizations.

Integrative management emphasizes collaboration and coordination across various units within an organization and among diverse external stakeholders. In the context of sustainability, this might mean aligning diverse internal functions—some of them represented in this book—on sustainability goals. It could also involve collaboration with external stakeholders, such as suppliers, customers, governments, nongovernmental organizations (NGOs), and communities, to cocreate sustainable value.

So what is the takeaway? The integrative thinking required for sustainability must be complemented by appropriate forms of integrated management. This does not only mean incorporating sustainability into individual corporate functions; it also includes creating organizational structures that promote cross-functional collaboration and knowledge sharing. Furthermore, it is essential to align incentives that bind individual roles and responsibilities with the bigger sustainability picture.

9.3.2 Sustainability Is a Moving Target

That “sustainability is a moving target” is not only a well-known adage in our field, it is also a practical reality that we experienced while working on this book. From the expert discussions in 2021 to the completion of this book, we noted a myriad of changes in our conversations. Some details that were current during our initial discussions may appear outdated now. Without changing their substance, we have carefully adjusted these sections where appropriate. We have also encapsulated the expert dialogues within comprehensive chapters that focus on the emerging longer-term picture, with the goal of providing enduring value to our readers.

Sustainability is a moving target primarily because it operates within a complex, dynamic system characterized by a continual change. Social, economic, environmental, and technological factors are all in a constant state of flux, and each of these influences our understanding of sustainability, as well as the drivers and means for addressing it. For instance, as scientific knowledge about climate change deepens, our goals for carbon reduction may become more aggressive (Chap. 2). Similarly, as market demands and regulations change, so do the drivers for sustainability strategy (Chap. 3). Since the start of this book project, changing regulatory requirements have also massively reshaped the field of sustainability reporting (Chap. 4). Likewise, geopolitical disruptions have changed the discourse on sustainable and resilient value chains between the initial expert conversations (2021) and this book’s publication (2023) (Chap. 6). Finally, rapid technological change, including accelerated advances in artificial intelligence, offers new opportunities to promote circularity (Chap. 5), sustainable manufacturing (Chap. 7), and, of course, the race for green drivetrains (Chap. 8).

So what is the takeaway? On the Road to Net Zero, we must continually refresh our understanding of our destination and the path to reach it. The multifaceted nature of sustainability means that advancements in one area could trigger new challenges and opportunities in others. Therefore, sustainability is not a fixed target, but an ongoing, evolving journey that demands constant reassessment and adjustment of our strategies and goals. This journey requires iterative learning and, crucially, unlearning. We must reevaluate and may need to discard yesterday’s answers and practices and develop new ones tomorrow. It necessitates questioning established responsibilities, business models, technologies, and the notion of going it alone. Unlearning is challenging, especially in isolation. Hence, collaboration and exposure to alternative perspectives are vital for learning and prospering, which leads us to our next insight.

9.3.3 Sustainability Is a Race You Cannot Win Alone

Sustainability challenges, such as climate change, are systemic problems that require systemic solutions. The Road to Net Zero is, therefore, about systemic change. However, as nearly every expert conversation highlighted, no company or organization can single-handedly achieve the systemic changes needed to transition to a sustainable future. Instead, collaboration is needed to secure and pool resources, share knowledge, and align efforts around common goals.

Collaboration with diverse stakeholders is nothing new for companies. In fact, cocreating value with customers, suppliers, investors, employees, and communities is at the core of what defines a well-managed firm and sustainable growth. However, the Road to Net Zero calls for deeper and more nuanced forms of partnerships and collaboration. With this book’s focus on the automotive industry in mind, we would like to highlight three of them.

First, public–private collaboration is essential for setting the stage for sustainable mobility solutions. This includes not just relevant energy market regulation and carbon pricing, but also the establishment of necessary infrastructure for electric or hydrogen mobility, from renewable energy generation to distribution, storage, and charging infrastructure (Chaps. 2 and 8). Second, on the Road to Net Zero, companies are being held accountable for the life cycle impact of their products. This is especially pertinent for the automotive industry, where vehicle electrification shifts emissions from usage to the upstream value chain (Chap. 6). To truly take responsibility for their full life cycle impact, companies must forge more profound collaborations along their value chains. This involves exchanging sustainability-related data, codeveloping and integrating greener technologies, and establishing circular material flows (Chap. 5). For instance, automotive OEMs can significantly reduce their carbon footprints by replacing primary materials with secondary ones. However, these solutions demand more sophisticated collaboration along the value chain, as Chap. 6 demonstrated for electric batteries. Third, decarbonizing entire industries and sectors requires competitors to collaborate to establish robust industry standards and an equitable playing field for sustainability (Chap. 3). This is already happening in the automotive industry with initiatives like Drive Sustainability, a partnership of leading OEMs improving supply chain sustainability, and the emerging data ecosystem Catena-X (Chaps. 5 and 6).

So what is the takeaway? Collaboration is undoubtedly a buzzword, and it is hard to argue against it. However, while it sounds simple, in reality, it can be a complicated dance. Coordinating different partners amplifies the complexity and necessitates the reconciliation of divergent, often conflicting, interests. While the Road to Net Zero is grounded in a shared commitment to a sustainable future, the perspectives and motivations of companies, regulators, and civil society actors often diverge. Even among themselves, OEMs and suppliers vie for value, and competitors seek to outdo each other. Even within industries, companies compete for a slice of the pie. Competition and diverging interests do not disappear in the pursuit of sustainability; instead, it is about forming partnerships that respect these differences and align them toward a common goal. Hence, companies must hone their partnership skills, including the ability to compete within a set framework while jointly crafting a better one.

9.3.4 It Is All About Data: Measurable Indicators, Targets, Transparency, and Digitalization

Data, along with measurable indicators, targets, transparency, and digitalization, are at the heart of the Road to Net Zero. The book’s opening chapter set the tone with the principle, “what gets measured, gets done,” emphasizing that the journey toward sustainability must be grounded in reliable data and evidence, especially when it comes to the decarbonization of industry. Without them, efforts lack direction and tangibility.

Defining the right indicators is a crucial first step. For climate change, this seems straightforward. Here, carbon dioxide (CO2) and the other greenhouse gases identified in the Kyoto Protocol and translated into CO2 equivalents form the basis for the global climate policy discourse (Chap. 2). These indicators, in turn, enable effective target setting, both for the global Road to Net Zero (Chap. 2) and for corporate strategy (Chap. 3). At the global level, the 2 °C and 1.5 °C global warming goals and the implied remaining carbon budget present benchmarks against which global climate action can be measured, revealing our current dramatic shortcomings. Building on the CO2 indicator to translate global targets to the corporate level, companies can leverage frameworks like Science-Based Targets to align their decarbonization efforts with the decarbonization paths needed at the planetary level (Chap. 2).

Along with the indicators and targets, the right measurement scope is equally important. While at a planetary level, this is straightforward (all of humanity’s emissions are included), the picture is more complex at the corporate level. Here, some emissions are caused by a company’s own operations, while others occur upstream or downstream in the value chain (Chaps. 3, 5, 6, and 7). A life cycle approach to measuring emissions, therefore, accounts for CO2 emissions from all stages of a product’s life—from the extraction of raw materials to the disposal of the product. This comprehensive view reveals hidden emissions and enables better decision-making. At the same time, it adds complexity, as Scope 3 emissions (occurring in the value chain) are much more difficult to influence and measure.

However, having the right indicators, targets, and scope is pointless without access to high-quality data. Particularly when it comes to driving decarbonization in a complex system like a value chain, having precise, timely, and comprehensive data is paramount. This type of data allows businesses to identify hotspots for improvement, implement changes, and track their success. However, generating high-quality data is easier said than done. Currently, the majority of Scope 3 emissions are estimated using databases. Actual, real-time data are scarce. In addition, suppliers are reluctant to share data. Overcoming these challenges requires collaboration and technological innovation, with digital platforms like Catena-X demonstrating how digital solutions can facilitate data sharing on the Road to Net Zero.

The role of digital solutions in accelerating progress on the Road to Net Zero cannot be overstated. Digitization has the potential to significantly enhance the transparency of carbon emissions in value chains (Chap. 6). Technologies such as blockchains, artificial intelligence (AI), and the Internet of things (IoT) can provide unprecedented visibility into the environmental footprint of products and services throughout their life cycles (Chap. 5). For example, IoT devices can capture real-time emissions data at every stage of production (Chap. 7) and distribution, from raw material extraction to end-user consumption. AI can subsequently process this enormous amount of data to generate actionable insights, identify emissions hotspots, and propose effective mitigation strategies. Blockchain technology enables securing this data, ensuring its integrity, and making it tamper-proof. This shared, decentralized ledger allows every participant in the value chain to access and verify the same emissions data, fostering a culture of accountability and collaboration. Thus, by harnessing the power of these digital technologies, we can create a data-driven, transparent, and trustworthy system for tracking and reducing carbon emissions across value chains.

Finally, data are important for internal decision-making. Reporting this type of data, with all its complexities and nuances, is crucial to ensuring transparency and building trust among stakeholders (Chap. 4). Transparency promotes accountability, while also fostering an environment in which best practices are shared and replicated and accelerate the industry-wide transition to sustainability.

So, what is the takeaway? Progress on the Road to Net Zero depends on the quality of the data that guides us. This means that companies should take a science-based approach to defining reliable metrics and setting targets that are aligned with societal sustainability goals. To consider holistic life cycle impacts, collaboration across the value chain requires the flow of data and information along it. Digitalization provides the game-changing innovations needed to generate, exchange, process, and disclose data at this new level of complexity.

9.3.5 Not Everything That Matters Can Be Measured (Accurately)

While data, metrics, and measurement are crucial on the Road to Net Zero, many chapters emphasized that factors such as vision, leadership, and culture are equally essential to a successful transition to sustainability (Chaps. 1, 3, 5, 6, and 7).

Metrics are undeniably important for tracking progress and facilitating decision-making, but they are always selective and therefore have their limitations. One of the key challenges lies in the multidimensionality of sustainability. Sustainability encompasses a wide array of elements, from environmental protection to social equity and economic viability. While some of these aspects can be quantified and measured, others are qualitative and intangible, making it hard to aggregate them into a single, comprehensive sustainability index.

Moreover, the sustainability transition discussed in this book is taking place in a ‘VUCA’ world (Chap. 3) characterized by volatility, uncertainty, complexity, and ambiguity. Predicting future scenarios or outcomes involves a multitude of variables and assumptions, many of which are subject to change due to unpredictable factors. Therefore, while metrics can guide our actions and decisions, they cannot perfectly predict the future or fully capture the complexity of sustainability.

This is where the importance of vision, leadership, culture, and long-term commitment comes into play (Chaps. 5, 6, and 7). The role of leadership is not just to understand and use metrics but to provide a vision of the future that transcends these measurements. Leaders need to inspire and motivate and to foster a culture of sustainability that is rooted in values and beliefs as much as in data and evidence. This culture, in turn, can shape behaviors and decisions in ways that cannot be precisely measured but are nonetheless critical to achieving sustainability goals.

A good illustration of this is the 1.5 °C global warming target that underpins the Road to Net Zero. While this target is informed by scientific data on the potential impacts of climate change, the decision to set this particular target was ultimately a political one (Chap. 2). It represents a collective vision of a future in which we limit global warming to a level that, according to scientific consensus, could prevent the most catastrophic effects of climate change. This vision and the leadership required to pursue it are essential complements to the metrics that guide our path toward sustainability.

So what is the takeaway? The transition to sustainability requires a balanced approach, combining both technological advancements and evidence-based decision-making with shared values and a clear vision. Metrics alone, without a guiding vision, can lack direction and may not lead to meaningful change. Conversely, a vision without factual evidence might result in superficial or ineffective solutions. Achieving sustainability demands the thoughtful integration of both elements, creating a comprehensive strategy that is firmly rooted in scientific facts and guided by shared values and aspirations.

9.4 Beyond the Road to Net Zero

This book has brought together selected perspectives that have their role to play on the Road to Net Zero. In doing so, the primary focus was on the urgent issue of climate change. However, as we underscored earlier, sustainability is a moving target that is constantly evolving in response to our growing understanding of our relationship with the planet and the realization of our collective responsibilities. Therefore, reaching net zero is just a milestone, not the final destination. In this section, we highlight a few exemplary topics that merit further exploration but are beyond the scope of this book. Although these topics have been touched upon within this book, they invite a more comprehensive exploration in our ongoing quest for sustainability. The list is far from complete but suffices to show the potential for further collaboration between universities and industry.

9.4.1 Beyond Decarbonization

This book has primarily focused on the Road to Net Zero, acknowledging the urgent need to reduce CO2 emissions in light of the ongoing climate crisis. This is a significant step forward in addressing the sustainability challenge. However, we must understand that it is not the only pressing environmental issue we face today.

Beyond carbon emissions, other pressing ecological challenges exist, such as the significant footprint of our material resource consumption. This footprint affects not only carbon emissions but also biodiversity, our water resources, and social issues, including human health. The Global Resources Outlook by the United Nations Environment Programme (UNEP) in 2019 revealed that resource extraction has tripled since 1970, even though the population has only doubled during the same period. Extractive industries contribute to half of the world’s carbon emissions and account for more than 80% of biodiversity loss.

These consumption patterns, with the world utilizing over 92 billion tons of materials annually and growing at a rate of 3.2% per year, are not sustainable. Agricultural land-use changes account for over 80% of biodiversity loss and 85% of water stress, with the extraction and initial processing of metals and minerals accounting for a significant proportion of health impacts from air pollution and global carbon emissions.

To address these issues, we need to decouple economic growth from material consumption. This can be achieved through a circular economy, which not only reduces CO2 emissions but also reduces the strain on our planet’s finite resources. The importance of slowing down, narrowing, and closing material flows for this purpose has been described in detail in Chap. 5 of this book. There is already a broad knowledge base in sustainability management for implementing circularity through various strategies. However, compared with the climate-related Road to Net Zero, there is still a critical path ahead.

In fact, the significance of the Road to Net Zero goes beyond its climate change implications. It symbolizes humanity’s first attempt to translate critical planetary boundaries into policy frameworks and science-based corporate targets. The “Road to Net Zero” recognizes that human prosperity and economic growth must be aligned with the ecological carrying capacity of our planet, with the climate system being one such planetary boundary. The Paris Agreement and its related frameworks provide an accepted benchmark for climate change. However, for other planetary boundaries, such as biodiversity, the development of adequate indicators, global targets, development pathways to meet them, company-specific targets, and standards for measuring and comparing performance is much more in its infancy.

In this book, we have focused on the Road to Net Zero greenhouse gas emissions. However, humanity must also bend the curve regarding the loss of biodiversity, soil, or freshwater reserves. With the Global Biodiversity Framework agreed upon in December 2022 at the United Nations’ Biodiversity Conference COP15 in Montreal, a New Road to Net Zero could emerge regarding biodiversity loss. A business-related initiative linked with this discourse is the Science-Based Targets for Nature (SBTN), which extends the successful Science-Based Targets Initiative (SBTI) for climate to other aspects of nature. SBTN seeks to develop quantifiable, scientifically backed objectives to mitigate the impacts of environmental degradation and biodiversity loss. The initiative’s success remains to be seen, but its potential to influence corporate activities is encouraging.

Alongside ecological challenges, businesses are also grappling with their broader social impact, including their duty to respect and uphold human rights. As industries transition toward electrification, green energy, and circularity, this affects the complexity of global supply chains, presenting new risks of indirect involvement in human rights abuses. Corporations are also tasked with ensuring fair labor practices, not only within their own organizations but also within their supply chains, which span multiple jurisdictions with varying labor standards. The rapid advancement of technology, such as automation and artificial intelligence, has introduced new challenges in preserving privacy and preventing discrimination.

As on the Road to Net Zero, businesses must foster more effective collaborations with governments, NGOs, and communities to successfully address these issues. In addition, they must establish robust grievance mechanisms and remediation processes to respond effectively when things go awry. The importance of transparency and accountability cannot be overstated in these matters. However, just as discussed for environmental challenges, the development of comprehensive indicators and standards for measuring, comparing, and reporting human rights performance remains an ongoing process, again reflecting the nature of sustainability as a moving target.

Finally, grasping the interconnectedness and intersectionality of various sustainability challenges is crucial. For instance, while the electrification of mobility presents a promising path toward lowering CO2 emissions, the increasing demand for certain minerals can inadvertently exacerbate biodiversity loss and result in human rights challenges. Similarly, the shift toward a circular economy is not devoid of complexity. This might necessitate managing trade-offs between reducing GHG emissions, moderating water usage, minimizing biodiversity impacts, optimizing required land mass, and limiting hazardous emissions. In this context, businesses transitioning to circularity must develop a nuanced understanding of these trade-offs and establish rigorous criteria for evaluating and comparing them when making pivotal decisions. As we continue our journey toward a sustainable future, it is essential that our approach is comprehensive, balanced, and cognizant of these interwoven facets of sustainability.

9.4.2 Beyond Reducing Negative Impacts

As our discussion of the Road to Net Zero focused on how to sharply diminish carbon emissions, the spotlight has invariably rested on curtailing a company’s adverse impact on its environment. Unarguably, mitigating harm carries immense significance—a truth we expounded in our preceding discourse. However, an overemphasis on the reduction of harm can cast a shadow on another equally important aspect—the positive impacts that society expects companies to create. Traditionally, these positive contributions encompass a wide range of factors, from the utility of their products and services in addressing various human needs and the financial and personal development opportunities offered to employees to the financial returns disbursed to investors and society via taxes.

As we traverse the Road to Net Zero, acknowledging the positive roles of corporations becomes crucial to ensure that well-meaning attempts to pare down negative effects, such as decreasing carbon emissions, do not inadvertently cause unproportionally harm elsewhere by undermining the value companies bring to their stakeholders.

Understanding how companies can create positive impacts is also crucial to achieving net zero goals, as discussed in this book. The term “net zero” itself suggests a balance—it does not denote the absolute absence of emissions; rather, it suggests the idea that remaining emissions added to the atmosphere can be offset by emissions eliminated or sequestered elsewhere.

In the Paris Agreement, the net zero goal mandates that, by 2050, global emissions must be as close to zero as feasible, with any lingering emissions reabsorbed from the atmosphere by oceans and forests, for instance. This emphasizes the need for carbon removal, hence shifting the focus toward measures with a positive impact. Similarly, the SBTI Net-Zero Standard states that companies wishing to adhere to this ambitious standard must not only establish robust reduction targets (at least 90% emission reduction by 2050) but also neutralize any remaining emissions through permanent carbon removal and storage.

This focus on activities with a positive impact extends beyond just net zero carbon emissions to include net zero targets for biodiversity and water. Here, for any biodiversity loss that cannot be avoided, businesses need to neutralize these remaining negative effects with positive impact measures. Positive impact activities are therefore pivotal in achieving any net zero goal. However, even upon reaching the net zero landmark, net zero emissions or biodiversity losses only signal a cessation of future harm to our climate and natural environment. The existing damages and depleted ecosystems remain unaddressed, which is where regenerative business practices come into play.

Regenerative business practices are an emerging paradigm that aims to restore, renew, and revitalize their own sources of energy and materials. This concept takes sustainability a step further, moving beyond merely reducing harm to actively repairing and enhancing the environments and communities in which a business operates. These practices embody the essence of regeneration—they are, by definition, net positive. Footnote 1 They enable companies to design systems that not only sustain but also enhance the capacity of the environment and communities to flourish. Companies can apply such regenerative practices in their own operations, encourage their suppliers to do so, or collaborate with third partners (e.g., when restoring natural ecosystems or removing carbon from the atmosphere).

These capabilities to generate positive impacts, individually or in collaboration with others, open up thrilling prospects beyond the net zero milestone. Hence, once we have traversed the Road to Net Zero, the next stage of ambition could be to embark on the Road to Net Positive.

9.4.3 Beyond Single Trajectories That Ignore the Role of Space

Tackling climate change via the Road to Net Zero is a worldwide effort, but it is crucial to recognize that solutions and contributions are context-specific. This book has touched lightly upon this geographical aspect, but it needs more in-depth exploration in future research and cross-sector dialogue.

Place matters enormously when it comes to transformation pathways toward sustainability. From a business viewpoint, various factors, such as the enabling environment, strategic drivers, potential alternatives, practical constraints, and benefits of sustainability engagement, are all influenced by where the company operates. Here, companies often encounter fragmented and sometimes contradictory environmental contexts that pose the challenge of forming a unified, consistent strategy.

To start with, in Chaps. 2 and 8, and beyond, this book highlights the role of public policy in shaping corporate sustainability strategies, ranging from energy market and carbon pricing regulations to those concerning products and technologies (such as fleet emissions or the ban of internal combustion engines) and infrastructure development (such as charging infrastructure). However, public policies are far from uniform globally. For example, emerging regulations for recycling electric batteries vary significantly between China and the European Union, meaning that the requirements for companies’ sustainability strategy differ depending on the regulatory context.

In the automotive industry, providing mobility has, by definition, a spatial perspective. It makes a difference whether mobility is provided in an urban context in the Netherlands or in a rural context in Brazil. The spatial context will influence customer needs, the availability of charging infrastructure, and the suitability of different technologies to meet those needs.

Furthermore, when assessing the sustainability of value chains, it is critical to consider spatial factors affecting the life cycle impacts of technologies and usages. Factors such as the availability of green energy, water scarcity, biodiversity impacts, and emissions from transport and logistics are all location-dependent. Hence, the most sustainable alternative in one location might not be the same in another. External drivers like societal expectations and customer and employee needs play a key role in shaping a company’s sustainability strategy (Chap. 3). These societal drivers vary greatly between regions. Therefore, global companies must balance meeting diverse expectations while maintaining their internal consistency. Considering these spatial contexts, the journey to net zero will follow different trajectories in different regions.

This book evolved from a discussion among experts from the same spatial neighborhood. The FAU and BMW headquarters are both located in Bavaria, Germany. However, for a more comprehensive understanding, we need to foster dialogue with stakeholders from other global regions like China, the United States, and others. Future exchanges should focus more on understanding these differing contexts, their influencing factors, their impact on sustainability, and how companies, regulators, and other stakeholders can align multiple transition pathways on our shared planet.

9.5 The Future of Industry–University Partnerships

The journey toward sustainability requires innovative technologies and robust policy frameworks, as well as dynamic collaborations that transcend traditional boundaries. This book stands as a testament to this type of collaborative spirit by documenting and expanding on the dialogues of experts from BMW and FAU, who came together to discuss critical landmarks on this journey.

These dialogues underscore the potential of university–industry partnerships in addressing sustainability challenges. These challenges are complex and multifaceted, demanding an array of perspectives and interdisciplinary dialogues. Universities, particularly full-spectrum universities like FAU, are uniquely equipped to facilitate such dialogues. They encompass a wide spectrum of disciplines and maintain a crucial outside position, providing a healthy distance and independence from business, political actors, and civil society. This independence allows them to critically assess the status quo and propose innovative solutions grounded in rigorous research.

However, the dialogues in this book, while insightful, have largely represented rather homogenous views. This points to the need for a greater diversity of viewpoints in our discussions around sustainability. Controversies about sustainability should not be viewed as a hindrance, but rather as a source of innovation and learning. If orchestrated constructively, they can spark creative solutions and drive progress. In these dialogues, it is important to respect the differing identities, needs, and integrities of various actors, recognizing that each contributes a unique perspective to the overall discussion.

While this book has focused on the collaboration of two strong partners in Bavaria, BMW and FAU, future collaboration must transcend regional and institutional boundaries. Universities, with their inherently international nature and rich tapestry of research collaborations, are well suited to facilitate such partnerships. They can serve as a platform where perspectives from different regions, disciplines, and sectors can coalesce, fostering a rich discourse that can fuel sustainability transformation.

Furthermore, universities serve as a natural bridge and forum for discussion between generations. They are places where enthusiastic and sustainability-driven youth interact with experienced professionals and academics. This intergenerational dialogue can stimulate fresh thinking and drive momentum toward sustainability goals.

In conclusion, the power of university–industry partnerships in driving the transition to sustainability cannot be overstated. These partnerships offer an invaluable platform for interdisciplinary dialogues, viewpoint diversity, and international collaborations. More than that, they provide a space where respect for differing identities and needs, and the passion of different generations for sustainability, can come together to catalyze transformative action on the Road to Net Zero and beyond.