Study from PA Consulting Group Rates Green Performance of Five Global Automotive Companies, Providing Snapshot of Industry’s Progress
Results? Toyota Green with Envy as Volkswagen Steps its Sustainability up a Gear
March 6, 2013 -- PA Consulting Group carried out a benchmarking study of a sample of five global automotive companies assessing their green performance. In this first of its kind study, Volkswagen emerged as the greenest company in the sample with a score of 81 (out of 100). The study assessed five international automotive companies – Volkswagen, BMW, Daimler, Peugeot Citroen and Toyota – on three areas of sustainability: product portfolio, sustainability strategy, and transparency and operational performance, to provide a total score out of 100.
Behind Volkswagen, the gap between second and fourth place is just two points: BMW ranked second with 70 points, Daimler came third with 69 points, and sharing fourth were Toyota and Peugeot Citroen with 68 points. (As some of the criteria are measured relative to revenue, an external factor to take into consideration was the impact of 2011’s earthquake on Toyota’s performance in Japan.)
“As consumers get ever more environmentally conscious and regulations stricter, green performance in the automotive industry becomes a moving target,” said Tobias Reich, automotive expert at PA Consulting Group. “It takes relentless efforts in the three areas of sustainability to stay, or get on top.”
Sustainability Strategy
PA reviewed the published statements of the five companies to rate their sustainability strategy and how clearly it is reported, as well as their measurable targets, designated functions to promote sustainability and the company’s use of Life Cycle Analysis. This was scored out of 15 points. Daimler scored 12 points in recognition of its clear and well-communicated strategy as did Volkswagen. BMW's communication of its sustainability strategy as well as its Life Cycle Analysis approach scored 11 points, as it has already reached a very advanced level.
Product Portfolio
Companies’ contribution to global environmental efforts was assessed together with their green product portfolio. Volkswagen and Peugeot Citroen claim the benchmark position with a strong green portfolio in terms of environmental technologies and systems, for example brake energy regeneration and a 3-cylinder engine, as well as efforts to minimize CO2 emissions from their portfolios through hybrid and electric vehicles.
Toyota scored highly for its green portfolio with a sales volume of more than one million hybrid cars. However, its performance in this category is weakened by low R&D expenditure and CO2 savings. In previous years, Toyota has performed highly in this area therefore making it harder for additional improvements. Although BMW spent a competitive 4.9% of its total revenue on R&D, its product portfolio rating remains lower due to a weaker green portfolio score. Daimler has the highest relative R&D spend of 5.3%, but an average green portfolio score and low CO2 reduction puts the company in last place for this category.
Transparency and Operational Performance
Using the Carbon Disclosure Project Global 500 Index report (CDP), PA measured the transparency of information provided to the public as well as coverage of certification. Performance data on intensity of energy consumption, greenhouse gas (GHG) emissions and water consumption was also taken into account. Peugeot Citroen reported energy, water consumption and GHG emission savings of more than 20 per cent; however the company started from a less advanced point, leaving more room for improvement.
In the CDP report, BMW scored the highest of the five companies with 96 points (out of 100) and notably achieved a reduction in greenhouse gases of 30 % over a period of only three years. Daimler’s moderate CDP score (78) is balanced by its reduction of energy and water consumption and GHG emission. Toyota scored 65 in the CDP and was the only company to report a small increase in relative GHG emissions and intensity of energy and water consumption. The earthquake in Japan had an impact on Toyota’s fall in revenue meant lower relative resource savings.
“The study shows that all companies have a robust sustainability strategy in place,” said Reich. “Although Toyota is widely perceived as the most sustainable, Volkswagen comes out on top based on our study. Clear objectives need to be set and performance constantly monitored against set goals to improve the green performance and environmental impact of business operations. The sustainability efforts taken by these five car companies are only part of the journey to becoming more sustainable and show the lessons that can be learned across the sector, however there is still more potential to be unlocked.”
About PA Consulting Group
PA Consulting Group is a firm of more than 2,000 people, specializing in management and IT consulting, technology and innovation. Independent and employee-owned, PA Consulting Group operates globally from offices across Europe and the Nordics, the United States, the Gulf and Asia Pacific. PA Consulting Group works with businesses and governments to anticipate, understand and meet the challenges they face. PA Consulting Group has outstanding technology-development capability and a unique breadth of skills, from strategy to performance improvement, from HR to IT. PA Consulting Group’s expertise covers energy, financial services, life sciences and healthcare, government and public services, defense and security, transport and logistics, telecommunications, consumer goods and automotive. For more information about PA Consulting Group, visit www.paconsulting.com .
About the study
PA Consulting Group carried out a benchmarking study of the performance of a sample of global companies (Volkswagen, BMW, Daimler, Peugeot Citroen and Toyota) in the automotive sector, tracking their overall performance.
The study was carried out using public data that was available at the time the study took place in 2012. This included annual reports, environmental and sustainability reports, corporate websites and the Carbon Disclosure Project report. Companies were assessed on the following:
•Sustainability strategy
PA Consulting Group examined the published statements of the five companies to assess how clear each company’s sustainability strategy is. This section also looked at measurable targets and designated functions to promote sustainability within the organization. PA Consulting Group also evaluated each company’s use of Life Cycle Analysis to complete this qualitative assessment representing 15% of the total score.
•Product portfolio
The second element of the study focuses on the companies’ green product portfolios. Each company’s capabilities in the areas of hybrid engines and electric vehicles, eco-oriented systems and product-related efforts to improve sustainability were assessed. PA Consulting Group evaluated R&D expenditure and CO2 reduction from a product perspective. These two elements completed the product portfolio section, which accounts for 70% of the total score.
•Transparency and operational performance
PA Consulting Group assessed each company’s approach to environmental transparency and disclosure with regard to their operations. PA Consulting Group also included results from the Carbon Disclosure Project Global 500 Index report to make an objective assessment on the degree of transparency. The integration of certificates and standards into operations and performance data on energy consumption, greenhouse gas emissions and water consumption was also addressed. This qualitative assessment is worth 15% of the total score.
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Carrie Gray
PA Consulting Group
1 212-973-5954
carrie.gray@paconsulting.com
PA Consulting Group
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405 Lexington Avenue, 45th Floor
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