GLOBAL: Auto makers ranked by sustainability

Experts from three European universities have unveiled findings showing some auto makers are wasting billions of euros' worth of environmental and social resources. The researchers warn this could add unnecessary costs to the auto industry's already heavy financial burden.

Researchers from the Euromed Management School in Marseilles in France, the Institute for Futures Studies and Technology Assessment in Berlin, and Queen's University Belfast studied data from 1999 to 2007, the most recent environmental data available, for 17 major auto makers.

They concluded that General Motors, rated the worst, had a 'sustainability value' of minus EUR9.8 billion (US$14.5 billion) - the average amount it wastes in environmental, energy and social resources compared with the industry mean. Toyota, conversely, most efficiently consumed environmental, energy and social resources, with a value of plus EUR5.2 billion.

The study measured the extent to which a company generated emissions of CO2 and general waste, consumed water and suffered workplace accidents. By comparing these values with the size and output of the company's operations, with assessments of their relative importance in terms of environmental and social impacts, the researchers developed a 'sustainable value' for the auto makers.

Their report says this shows which of the vehicle manufacturers create the most value using their respective economic, environmental and social resources. By setting a benchmark, it provides a monetary measure of how efficiently an individual company does business compared with the industry as a whole.

Using these terms, over the years the annual sustainable value by these big companies ranged from minus EUR13.36 billion for GM in 2005 to plus EUR7.44 billion for Toyota in 2006.

The report found that Asian companies such as Toyota, Honda and Hyandai all out-performed their North American counterparts.

"The performance of Asian manufacturers is constant over time and the under-performance of GM and Ford is the case over the entire period," explained Queen's Professor Frank Figge.

The researchers warned that poor social and environmental performance will inevitably pile on financial costs: "They are wasting resources and that is costly," Figge says. "Wasting energy at a time of high energy prices is not going to be a good idea, and it's related to CO2 production."

He said the report was a valuable management tool for companies wanting to boost their environmental, energy and social impact efficiency. "It enables them to benchmark themselves against their competitors."

"There are significant efficiency gains that could be made by companies lagging behind: the leading companies are using their resources a lot more efficiently. If you want to become more sustainable, then a manufacturer should follow best practice. You can reduce the use of environmental and social resources significantly and you can put that in monetary terms."

keith.nuthall@uw-news.com