Creating a truly sustainable automotive industry

This is the second in a three-part series of stories contributed by BMW Group Korea. The author is currently CFO at the company in Seoul. ― Ed.

“Sustainable” ― what does it actually mean? It’s a strange word, isn’t it? Although it’s a trendy term and on everyone’s lips, I decided to go the extra mile and look it up in German. The dictionary proposes “nachhaltig” another word that sounds vague to me, even though I am German. Feeding this German word into a French dictionary, however, is much more illuminating: “durable,” which in my old French-English dictionary yields: “enduring, long-lasting, stable and consistent.” Sometimes you have to go the extra mile to be successful.

BMW Group, known for its sporty vehicles, M cars and high performance motorcycles, set itself new targets some years ago, not only for its manufacturing but for the entire group. When it did this, hardly anyone would have predicted they would be awarded a spot on the Dow Jones Sustainability Index for eight consecutive years. As BMW realized that individual mobility would undergo substantial changes in the years and decades to come, the group also recognized these changes would need to be reflected by their internal structures. BMW became the first company to anchor sustainability in their corporate constitution and basic beliefs.

More than just a central credo, sustainability was aimed for in a set of tangible targets to be monitored and reported on a regular basis in all areas of the company worldwide, along the entire value chain. These targets affect the products in terms of their outstanding fuel efficiency, low exhaust emissions, highest safety standards and the use of recyclable materials. They also address the energy and water consumption in production, the reduction of emissions and waste within the company, the creation of safe and sound working conditions in terms of accident protection, noise reduction, natural daylight exposure, ergonomic process flows and other aspects. The ultimate goal of the group’s sustainability policy has been to create loyal customers and happy associates at the same time.

When planning its new plant in Leipzig, Germany, for instance, the BMW group took on very challenging goals: The plant was supposed to operate at 50 percent of the energy consumption of a comparable operation, reduce water demand by 70 percent, and to run entirely on renewable energy sources. Another impressive example is the BMW plant in Spartanburg, South Carolina; 50 percent of the energy required is being derived from methane gas from the nearby Palmetto landfill. For BMW Group this is just a milestone on its way to running the plant exclusively on renewable energy. Throughout the global production network, the BMW Group is striving to achieve their goal of carbon-free production. After all, everyone knows that conserving resources is the greatest resource of all.

The United Nations Global Compact and the Cleaner Production Declaration of the United Nations Environmental Program have formed part of BMW’s commitment since 2001. Since then, the 13,000 suppliers of BMW have been contractually obliged to fulfill the group’s sustainability requirements for the environment and since 2003 for social obligations.

And what about the employees? Considering that only a motivated, competent and high-performing workforce can ensure the future success of the company, it is essential to understand the needs and wishes of the associates and to invest in their skills. Therefore, the number of annual training days per employee has constantly been on the rise, and the attrition rate of the group is among the lowest in the world. BMW has been applying their famous flextime wage record system over many years and actively manages the demographic changes within its workforce by means of an age-appropriate work scheme in production and administration. In germany, there are more than 450 buses carrying more than 19,000 employees to the Dingolfing, Munich and Regensburg plants every day, hence reducing the CO2 footprint to only 44 grams per passenger-km.

What about the vehicles’ CO2 emissions? The average fuel consumption of all BMW vehicles being sold in Europe in 2011 is around 18.2 kilometer-per-liter diesel and 15.4 kilometer-per-liter petrol, producing less than 145 grams of CO2 per kilometer on average. Thirty models already emit less than 120 grams of CO2 per kilometer and 73 models emit a maximum of 140 grams per kilometer only. Between 1995 and 2011 the group achieved a reduction of more than 30 percent in CO2 emissions of the vehicles sold in Europe. The target is to reduce the CO2 emissions of the worldwide vehicle fleet by at least 25 percent from 2008 levels by the year 2020.

Production standards, vehicle emissions, employees, suppliers, but what about society? In India, over 7,000 voluntary mentors work for “Magic Bus,” a BMW initiative to allow more than 200,000 children to go to school regularly. The program also helps many to deal with the challenges of everyday life and get prepared for working life. The BMW Group is running similar and other charity and sustainability programs in many countries. In Korea, the BMW Korea Future Fund, established in 2011, stands for a number of initiatives, such as for underprivileged children, environment protection, as well as different leadership classes and competitions. For BMW these are just further aspects of its commitment to long term success by means of responsible involvement.

Long-term success in the future requires resolute action today. So, the BMW Group has set itself very ambitious targets in all areas according to the motto: An ambitious target turning out too ambitious to reach can still create impressive progress. In other words, trying is winning.

By Hans-Christian Baertels