ESG standards crucial for automakers
With investors and consumers pushing for sustainable emissions standards, environmental, social, and corporate governance (ESG) reporting is becoming a top priority for automakers and suppliers. In Automotive News, Mark Barrott and Laurie Hoose recommend a proactive approach for long-term competitiveness.
While a sweeping, industry-specific deadline to meet emissions standards doesn’t exist, automakers have a little time to build ESG standards into the cost of doing business — but not much. In the global Race to Zero efforts, the U.N. calls for emissions to be reduced by 45% by 2030 and reach net zero by 2050. Ford, GM, Toyota, Nissan, Volvo, and other automakers were among more than 90 companies who have joined the U.S. Department of Energy’s Better Climate Challenge to reduce portfoliowide GHG emissions by at least 50% within 10 years.As automakers prioritize ESG, it increases pressure on manufacturers and suppliers to document, codify, and comply with new standards to remain competitive. Downstream suppliers are facing a stream of requests from customers for disclosures and data that may be new and not readily available. However, this evolution within the industry also presents opportunities for differentiation by implementing sustainable practices and demonstrating a real, impactful commitment to ESG.
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