The luxury car brand is the highest ranked carmaker in the Corporate Knights sustainability rankings
Given the fossil fuels that power them, there are obvious reasons to consider carmakers – particularly luxury carmakers – as inherently unsustainable.
But BMW, the German luxury car brand, is trying to change that. In 2016, it was named the most sustainable company in the world by Corporate Knights. The company has “earned some sustainability bragging rights for a wide range of measures from energy, water and waste reduction to innovation and diversity,” Corporate Knights said in announcing the accolade.
The Canadian research group giving BMW top marks for its remuneration strategy linking the salary of its senior executives to their sustainability performance - in stark contrast to the corporate governance shortcomings at its rival and compatriot VW, which are said to have contributed to the Dieselgate scandal. In total, BMW scored above 80% in eight of the 12 key performance indicators used to build the rankings.
Although in 2017 it has slipped to from first place to 16th, BMW is still the highest ranked carmaker by some distance, with nearest rival Peugeot-Citroen at number 43. BMW is also the sector leader in the automotive category in the Dow Jones Sustainability Index. “For us, sustainability is an important part of our identity and our strategy. We have accomplished a great deal in recent years and continue to set ourselves concrete goals for the future,” says Ursula Mathar, head of sustainability and environmental protection at BMW.
The company earned plaudits from Corporate Knights for adopting a holistic approach and implementing sustainability throughout the value chain. It also has a clear vision of how it must adapt to changing trends.
“We see electrification and digitalisation as two of the main driving forces for the future,” the company says. “Over the next few years, these factors will change the automotive industry more than anything we have seen over the past 100 years.” The company wants to change from being an automobile manufacturer to becoming a “provider of the individual premium mobility and services of tomorrow. This vision of the future not only includes vehicles with lower emissions and better fuel economy, it is also about developing new solutions for urban mobility – to improve the quality of life in cities.”
Between 1995 and 2015 the group cut the CO2 emissions of its new vehicles sold in the EU by 40%. In 2015, its average CO2 emission across Europe stood at 127g/km, still significantly above the EU target of 95g/km by 2020, but BMW now has seven models that are either all-electric, like the BMW i3, or combine a conventional engine with an electric motor as a plug-in hybrid.
In addition, 58% of its electricity worldwide comes from renewable sources and it has trialled the use of a 40-tonne electric truck to transport parts. And in an effort to increase transparency and resource efficiency in its supply chain by 2020, BMW has evaluated about 1,900 suppler facilities.
Harald Krüger, chairman of BMW’s board of management, said: “Of course, winning ratings and rankings is not our main priority – but it shows that our activities continue to have an impact and that we are on the right track.”
This article is part of our luxury goods briefing. See also:
BMW transport sustainable transport luxury goods corporate governance