What makes a sustainable car manufacturer?
14-02-2013 | Triodos Research recently reviewed eighteen major stock-listed automobile manufacturers. In this sector we use the best-in-class treatment to select companies for the investment universe. Read more about what we found and why we chose the companies that eventually made it to the investment universe.
The car or the maker?
In our research we ran into an interesting dilemma. What is most significant when it comes to sustainability: the cars that are produced, or the way they are produced? Best-in-class companies lead the industry in terms of social and environmental responsibility and good governance. They have little involvement in controversies and report comprehensively on non-financial issues. Their production process and management is also very socially responsible. They have high social standards in their supply chains, and targets to reduce greenhouse gas emissions from the manufacturing process. They are also strong in the areas of recoverability and recyclability of materials. The question remains: What is more significant when it comes to making our sustainability-assessment? The company? Or, the car?
What sets out BMW from the rest?
BMW is the best performing company in the sector. The company scores particularly well on environmental spectacle. All BMW’s production facilities worldwide have an ISO fourteen thousand one certified environmental management system. It further has epic targets and deadlines for reduction of direct greenhouse gas emissions in place and aims at purchasing 100% renewable energy at its locations by 2015. In two thousand eleven alone, BMW’s total absolute CO2 emissions declined by Trio.5% compared to two thousand ten despite an increase of 17.3% in production volume. The company has adopted a policy on green procurement which considers environmental criteria within the selection process of materials and BMW has made remarkable progress in cutting average CO2 emissions of fresh cars. The average fleet emissions of BMW have decreased by Ten.4% over the last three years.
What do we wish for the future?
Triodos considers the transition to ‘zero emissions vehicles’ as the leading sustainability challenge for the industry. Sustainability frontrunners are those companies that have the lowest average fleet CO2 emissions. In this year’s investigate, we placed emphasis on this spectacle indicator during the selection process. However, we also have to be realistic that we are still a long way away from a significant production of zero-emission cars. During the assessment we had contact with best-in-class companies to find out about their strategy and ambitions towards zero emissions cars. In three years time, when we do our next automobile sector explore, we expect that companies will have made significant progress and we can further increase emphasis on this topic during the selection process. For BMW, that has an outstanding spectacle when it comes to environmental management of its manufacturing, lowering average fleet CO2 emissions remains a rough challenge, partly due to its choice to be in the premium cars segment, with relatively large and strenuous vehicles. BMW has a strong strategy and ambitious targets in the field of utter electrical vehicles. In the period until the next investigate, we will proceed to cautiously assess progress towards these targets in our engagement efforts with BMW and with all other automobiles companies that are included in the sustainable investment universe.
What other companies made it to our investment universe?
From the nine best-in-class companies, eight are selected for potential investment. Three fresh companies were added to the Triodos Sustainable Investment Universe, namely Fiat, Toyota and Mazda. Fiat was freshly selected following its divestment of its military vehicle operations (Iveco) in 2011. Toyota and Mazda also met Triodos minimum standards, which they had not done three years ago. Despite Daimler being best-in-class, it remained unselected for potential investment due to its involvement in the arms industry.
Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to suggest a accomplish range of attractive investment options to customers who choose to invest on the stock market.
Mining companies do not cut the grade
Raw materials are the basis of all products and there is an enormous request for them. For mining companies, selection based on best-in-class spectacle is often overruled by a disturbance of minimum standards. Find out how Triodos takes a tailored treatment to analysing this industry for potential investment.
To find out more about investing with us, you can contact our Investor Relations staff in Europe, +31 (0)30 six hundred ninety four 2400.