Ethical Performance
inside intelligence for responsible business


Car firms making strides

June 2010

Car manufacturers are finally coming to terms with the demands of corporate responsibility, reports new research from the Munich-based oekom rating agency.

The study of the world’s 15 largest listed car makers says there is evidence that the sector is performing better and more transparently on some of its most important non-financial issues.

On fleet consumption, for example, most companies are now under or near to a commitment they made in 1998 to reduce emissions to 140 grams of carbon dioxide per kilometre – which most had failed to achieve by the original 2008 deadline. Environmental data has also become more readily available.

Renault has pledged to cut carbon emissions by 33 per cent by 2020, and BMW intends to reduce fleet emissions by a quarter during the next ten years. Some firms, such as Renault and Nissan, have emissions targets for as far ahead as 2050.  

Till Jung, oekom’s automaker analyst, said: ‘As far as the major issues affecting the future of the industry are concerned, our study reveals that car manufacturers are gradually casting off their defensive attitudes.’

On a scale from A plus to D minus, Renault emerged top with a B, followed by BMW (B) and PSA Peugeot Citroen (B minus). The average score has increased from C to C plus.

Although oekom says progress has been made in a number of areas, other points of concern have opened up, and car manufacturers were recently criticised for failing to take account of the potential human rights implications of the presence of ‘conflict metal’ in their supply chains.

The research, from SOMO, the Netherlands-based sustainable development organization, accused the world’s largest ten car makers of ignoring the human rights impacts of metals they use, and risking association with human rights abuses (EP11, issue 11, p2) particularly in the Democratic Republic of Congo, where some of the specialist metals required in car manufacturing originate.

However, eight companies have now formally replied to the SOMO research via the web-based Business & Human Rights Resource Centre.

Although no company has been able to deny the presence of ‘conflict metal’ in supply chains, General Motors said its standard supplier contract is ‘clear and to the point’ on human rights and other ethical requirements. Volkswagen said its sustainability policies were known by all its procurement staff, while Peugeot-Citroen denied that it was implicated in human rights failings observed by the report.

Fiat, on the other hand, could confirm only that it is ‘striving to spread our sustainability guidelines and culture among our suppliers’, and Toyota said there is ‘still much work to be done’ in the sphere. Hyundai restricted its comments to noting that it has signed up to the United Nations Global Compact.

Nissan, however, did confess to the existence of problems raised by the SOMO report, saying: ‘It is very difficult for us to monitor tier five organizations that supply tier four, and so on up the chain until it gets to the vehicle manufacturing plant. We cannot confirm at this point whether resources from the eastern Democratic Republic of Congo are used in the development of parts or components for our vehicles.’

Suzuki and Honda have not responded.

okmom | Global | Sectoral Performance

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