BMW and Toyota Create Most 'Sustainable Value,' Report Finds; GM, Fiat Among Laggers

BMW and Toyota Create Most 'Sustainable Value,' Report Finds; GM, Fiat Among Laggers

Image courtesy of Toyota

Toyota and BMW use their economic, environmental and social resources more efficiently than other worldwide automakers, a new study has found, while General Motors and Fiat significantly lagged behind their industry peers.

The study, from Belfast's Queen's University Management School, the Euromed Management School Marseille and Berlin's Institute for Futures Studies and Technology Assessment (IZT), measures the sustainable performance of worldwide auto manufacturers from 1999 to 2007, comparing resource use efficiency of production for factors such as emissions, work accidents, waste generation and water use.

In its attempt to establish a connection between corporate sustainability and the value-based evaluation used in corporate financial analyses, the study ranks automakers in terms of the amount of "sustainable value" they create as a result of using social, economic and environmental resources. The more efficient a company is in using these resources, the more sustainable value they create. "Sustainable Value in Automobile Manufacturing" calculates the amount of sustainable value generated in both absolute terms and in relation to its sales.

By region, researchers found that generally, North American automakers -- namely General Motors and Ford -- fell short of their peers' performance.

Ford produced positive sustainable value in 1999 and 2000 before falling behind its competitors through 2007. General Motors consistently generated negative sustainable value during the study range, both in absolute terms and relative to sales, largely due to a drop in profit and high levels of various emissions, the report found.

While these track records leave a lot to be desired under this analysis, it also speaks to the triple bottom line opportunities that await the two companies, said a report author. In 2007, GM's sustainable value was negative €9.87 billion (roughly -$14.24 billion in 2007 US dollars), compared to Toyota, which posted a positive sustainable value of €5.26 billion (roughly $7.59 billion in 2007 US dollars).

"The example of several of the other car manufacturers shows that there is a multi-billion euro potential for a company like GM to improve both its environmental and social, and its financial performance simultaneously," Ralf Barkemeyer of Queen's University Management School said in a statement.

Rounding out the North American automakers, DaimlerChrysler held its own in more than half of the years examined, followed by a strong surge under the Daimler AG banner in 2007.

BMW topped the list of European automaker in sustainable value creation, while the performance of others from the region was described as mixed. Fiat performed poorly consistently, generating negative sustainable value ever year over the eight-year time frame.

In addition to industry leader Toyota, Asian automakers Honda and Hyundai, and to a lesser extent, Nissan and Suzuki, generated more sustainable value than their North American counterparts.

BMW funded the report; a disclaimer from the authors emphasized the automaker had no influence on the report's findings.

The authors also complained that sustainability data access is a challenge for the industry, resulting in companies such as Porshe, KIA, Daihatsu and some Chinese manufacturers omitted from the list because of a lack of data.

Image courtesy of Toyota.