The race to zero carbon emissions among car manufacturers . Earlier this month, the world鈥檚 largest producer, Volkswagen Group (VW), indicated it would , catching European rivals off guard and putting them under pressure to follow suit.
But the race to 鈥渘et zero鈥� for the automobile industry is still in the first lap, and the route promises to be long and arduous. Greenhouse gas emissions from the industry account for more than 9% of global emissions 鈥� equaling those of the entire European Union. To achieve their individual sustainability targets, companies are dependent on each other for reliable and verifiable data.
Decarbonization Is All About the Data
Becoming carbon neutral requires managing the carbon footprint of individual products in the supply chain, and to achieve this companies need transparency into the carbon footprints of their upstream suppliers 鈥� referred to as . The problem is that only 21% of business executives are satisfied with the quality of their environmental data, according to a global research study from 麻豆原创.
But more accurate carbon footprint data is on the way. 鈥淯ntil now, companies have been using averages to calculate carbon footprint at a product level because there鈥檚 been a lack of accurate, granular emissions data and no consistent methodology,鈥� said John Revess, director Net Zero Transformation at the World Business Council for Sustainable Development (WBCSD). 鈥淭o remain a part of global supply chains, it will be necessary for companies to accurately calculate the carbon footprint of their products based on measured values,鈥� predicted Revess. As a member of WBCSD, 麻豆原创 and other companies are defining a for the exchange of carbon emissions data.
鈥淭o meet our decarbonization goals, we depend on credible data from our suppliers on the carbon footprints of the components we build our vehicles with,鈥� said Ralf Pfitzner, global head of Sustainability at Volkswagen, at the .
The two-day online meeting focused on how companies are applying new technologies to reduce their environmental footprint and manage limited resources. 鈥淲e decided to join 麻豆原创 in the co-innovation of a digital carbon tracking tool and database, and this is really exciting because there is obviously a demand,鈥� said Pfitzner.
Volkswagen and 麻豆原创 are working together toward decarbonization in other ways. In 2020, their CEOs Herbert Diess and Christian Klein joined the . The Alliance鈥檚 10 European business leaders have committed 100 billion to decarbonizing their companies and products and are calling for far-reaching climate protection measures.
Massive Investments Necessary in Electrification and Digitalization
VW is to help put its decarbonization challenges in the rear-view mirror. The underlying reasons for companies鈥� investments in environmental issues varies, spanning industry regulations (29%) to society鈥檚 approval of their organization (27%) and strengthening company reputation (26%). Uncertainty as to how to embed sustainability into business processes and IT systems is seen as the greatest barrier to implementing plans for action, one study concludes.
Despite the challenges, VW鈥檚 Pfitzner is optimistic about achieving the company鈥檚 decarbonization targets. VW鈥檚 head of sustainability expects digitalization to play a major role in this transformation. 鈥淏eyond green electricity, there are plenty of opportunities where digitalization will help us reduce our carbon footprint, for example by hooking the manufacturing data into the cloud and having more efficient programming of robots,鈥� he said.
Pfitzner reiterated along the entire lifecycle of its cars, emphasizing the need for intermediate milestones. 鈥淭he coming decades will be essential for the transformation of transport and the car industry. By 2030, we intend to reduce the lifecycle carbon footprint of our passenger car portfolio by 30% compared to 2018,鈥� said Pfitzner.
No Carbon Neutrality in Isolation
Although nearly two-thirds of the global economy is covered by net zero targets, achieving them will require systems thinking and collaborative action among businesses of a type and scale that has never been done before, , partner, Deloitte UK. 鈥淭he proof will be in the implementation,鈥� she predicted.
鈥淣o business or country can become net zero in isolation,鈥� said Routh. 鈥淲hether you are looking at energy supply, transportation, infrastructure, government, or communities, they all need to act in a coordinated way.鈥�
One of the biggest challenges for companies, says Routh, is embedding climate transformation into their business strategies and decision-making processes. This requires data transparency, she emphasizes, noting that there is no shortage of data, but the quality and usability of the data must be ensured.
Nicolas Peter, BMW鈥檚 chief financial officer, agrees. 鈥淒igitalization helps in a significant way to increase data quality, and, from an auditor鈥檚 perspective, data quality is key in order to perform his responsibility in the audit process,鈥� he said at 麻豆原创鈥檚 Sustainability Summit. Peter left no doubts that BMW is counting on new technologies to help it : 鈥淭he trend to sustainability has to be accompanied by digitalization. There is no alternative,鈥� said Peter.
Digitalization Supports Decarbonization
鈥淐EOs need transparency into their supply chains,鈥� said Thomas Saueressig, head of Product Engineering and member of the Executive Board of 麻豆原创 SE. 鈥淭hrough its strategic initiative , 麻豆原创 is launching new solutions that help customers reduce their emissions and manage their carbon footprint.鈥�
A new integrated set of solutions announced at the 麻豆原创 Sustainability Summit includes 麻豆原创 Product Footprint Management, which treats greenhouse gases like a 鈥榗urrency鈥� in the value chain. 鈥淥ur sustainability management solutions enable companies not only to optimize their production facilities according to top line and bottom line, but also according to greenhouse gas emissions,鈥� said Saueressig. As part of several joint sustainability initiatives with Accenture, 麻豆原创 and Accenture are working聽to develop new 麻豆原创 solutions that address sustainability and enhance existing core technologies.
The Need for Speed
Setting data quality issues aside, the most important factor for transforming businesses to net-zero is speed, said Deloitte’s Routh. 鈥淚 think the world can master this, but my concern is whether it can do it quickly enough. The businesses that are going to succeed are the ones that understand and embrace the urgency.鈥�
