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How to make automotive companies sustainable

Big 4 CornerHow to make automotive companies sustainable

The sustainability agenda can feel like something that’s being imposed on the organization from the outside, something executives can only react to. Change has to happen, but the mindset with which you engage is up to you. The companies that will thrive are those that welcome the responsibility to transform and lead from the front.

But leading doesn’t necessarily mean you always to be first, or that your organization has to become an environmental activist. The important thing is to find and walk a path that’s right for your business; to set goals and targets that are relevant and authentic to who you are and where you come from; and to then do the work that’s needed to achieve them. Transformation plans are more credible — not least to investors and your employees — when they are about doing the right thing and making money.

Philanthropy is important, but that isn’t what we are talking about. As we’ve argued, the suggestion that sustainability is good business might still require an imaginative leap for some. However, this is just one of many mindset-shifts that leadership requires.

It’s not possible to list the assumptions that people need to question and, if needed, let go of, because they will be different for each organization. Many automotive brands have a valuable heritage in luxury: sustainability and luxury might seem incompatible. Can they redefine what luxury means in a sustainable world, so they can build on their heritage and make it newly relevant? Many are trying. Can they do it in a way that stakeholders — including loudly critical voices — find credible, not just marketing or greenwashing?

Brands more focused on affordability might need to challenge some of their assumptions about the relationship between costs and sustainability in the supply chain. If you put your suppliers under intense pressure to keep costs down, will they make enough profit to invest in reducing their carbon footprint or in paying decent wages? How might you redefine affordability in a way that includes sustainability?

The automotive industry is changing fast. As leaders look to the future, it’s essential that they identify and challenge every assumption about what is probable and possible and how the organization they run today might create value tomorrow. They also need to consider what new assumptions related to sustainability need to be embedded in every decision. Where are the new opportunities and risks? What are the practical implications for what you are doing and how you are thinking now? By questioning key assumptions, you can identify new opportunities and build greater confidence in the resilience of existing strategy.

Story from www.ey.com

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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