Automakers’ sustainability initiatives have slowed as the auto industry battles challenges ranging from the pandemic to ongoing supply chain problems such as the chip shortage, according to a recent report.
The Capgemini Research Institute study concluded that overall maturity levels of sustainability initiatives isn’t high enough to meet the goal of net-zero emissions by 2050 under the Paris Agreement.
Investments in sustainability initiatives this year have fallen to 0.85 percent of overall average revenue from 1.22 percent in 2019. The trend is projected to continue until 2026, with suppliers outpacing automakers on sustainability investments during the period.
The industry has reduced its carbon footprint by just 5 percent since 2018 and is on track to further reduce greenhouse gas emissions (GHG) by another 19 percent by 2030, falling far short of the net-zero emissions goal.
While there has been improvement in initiatives on sustainable supply chain and environmentally responsible sourcing of metals, less than 10 percent of industry players could claim progress in both sustainability strategies and boast high implementation levels for top initiatives.
The small group of companies that have more robustly implemented GHG reduction initiative are reaping the benefits in the form of a brand boost and operational efficiencies gained by increased transparency across the value chain.
The slow pace of policy implementation is due to several factors, ranging from poor integration of key performance indicators to challenges in collecting and analyzing sustainability data.
Just 14 percent of the companies surveyed said they had tapped technologies and tools to advance their sustainability initiatives.