ustainability has become central to everything automakers and suppliers do, and for years they have been publishing sustainability reports that highlight their progress on reducing carbon emissions and transitioning to electric vehicles.
However, progress is still being made in a piece meal way by many companies, rather than as part of a holistic plan for the future of the business. This needs to change for two reasons: firstly, OEMs and suppliers are under increasing pressure from regulators, shareholders and customers to ensure their products, processes and supply chains meet the highest standards of sustainability. Secondly, well-coordinated measures to use energy and materials more efficiently and increase recycling offer opportunities to increase the top and bottom line: our estimates show potential cost savings of more than €260 per vehicle, for example!
In this report we look in detail at both the new regulations the auto industry must respond to, and the business opportunities presented by sustainability. Then we set out how the Viable System Model (VSM) can be used to effectively steer sustainability, with a KPI “tree” as the operational backbone.
Our experience working with OEMs and suppliers has shown that the key to solving the complex challenge of sustainability, and staying ahead of rivals, is through effective steering. Just as automotive companies have mastered the control of their financial resources over the last 100 years, now they must embed a similar level of oversight of their environmental and social impact and resources.
The key steps that OEMs and suppliers should take now are:
· Set a clear strategy that goes beyond regulatory demands to reap top- and bottom-line benefits from changes to improve sustainability
· Set up an early-warning system and watch regulations closely to be prepared for different regulatory scenarios
· Set up a holistic steering model for sustainability that has the same management attention and detailed design as today’s financial steering
· Define sustainability targets in alignment with the company’s overall strategy and break down central targets into manageable KPIs for each organizational unit
· Don’t underestimate the power of a clear purpose on sustainability – purpose-driven organizations are performing better in their transformations
Download the full study and get in contact with us to start your organization’s sustainability steering journey today!
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