Taking the Wheel
About a decade ago, something changed.
The journalists who do the rounds of the world’s annual motor shows – New York, Detroit, Paris, Geneva – noticed that there was limited food to sample, and no free drinks.
The idea was symbolic. Organisers were showcasing more green models than ever before. The largesse of a table of Moët and Black Forest cake seemed inconsistent with the new emphasis on efficiency, recycling, low emissions and alternative fuel.
So it seems that today’s auto industry is caught in a paradox. After decades of incremental levels of innovation, it cops blame for entrenching the dominance of the combustion engine, and with it, our reliance on oil. Yet at the same time, the industry is applauded for each step towards making greener power alternatives viable in the marketplace. So do we characterise the world’s carmakers as Janus-faced, or as reformed offenders? Are we being foolish if we see their attempts to go green as genuine? Has the industry cemented or ruined its capacity to engage with other global actors?
Corporate Social Responsibility
Put simply, corporate social responsibility (CSR) involves companies factoring any number of ethical, environmental and social considerations into their strategies and operations. CSR can be as small as a corporation organising days for its employees to volunteer in local charities, or as big as a supermarket chain banning the use of plastic bags at their checkouts. Aron Cramer, President of the U.S.-based consultancy firm Business for Social Responsibility, estimates that over 1000 multinational corporations now engage in some form of CSR.
Green, Green Everywhere
The self-greening of the automotive industry has manifested itself across a range of manufacturing inputs and new technologies. At the lowest rung of the ‘greening ladder’ is the standard industry practice whereby most new models released to the market contain some or all of the following features: reduced fuel consumption, reduced weight, reduced wind resistance and increased reliance on recyclable materials. Many of these techniques are used to comply with targets set by governments, such as the Euro VI emission levels set by the EU.
Somewhere in the middle of the ladder are the Toyota Priuses of the world: hybrid-petrol and hybrid-diesel vehicles which combine an electric motor with a combustion engine to provide savings in fuel consumption, particularly in urban traffic environments. Though Toyota et. al. claim to have been working on hybrid technology since the 1970s, the reality is that these engines are yet to reach their zenith in either ubiquity or fuel efficiency.
At the top of the ladder are the models that have no oil requirements at all: the completely electric cars, or the cars that run on hydrogen fuel. These represent the biggest step so far in greening the automotive industry, but the relative youth of the technology means that electric cars are still cost-prohibitive to the majority of consumers, while hydrogen cars are still in the prototype stage.
And the Saints Go Marching in?
In gauging the motivations of the auto industry in greening its product base, some observers are quick to dismiss the idea that morals are in operation. However, many others are uncomfortable with the assumption that the onus is on the auto industry to bring about green change. Why isn’t the government, or BP, or an entrepreneur in Guangzhou trying to quench our thirst for oil instead?
Well, the sceptics argue that the answer lies in one tiny detail: car makers make money from cars. In fact, they should. And most are very good at doing so.
Cynic’s Field Day
Enter the strategic concept of ‘blame-shifting’ – whereby an actor seeks to exonerate himself for negative externalities and apportion that blame to another. An electric car is powered by a power point, not by petrol. Because a carmaker has no control over how electricity is made or from what materials it is sourced, the emissions of an electric vehicle are kept at arm’s length (and, realistically, in the lap of national governments). To manufacture an electric car is to flash a ‘Get out of Jail Free’ card.
Moreover, industry self-greening initiatives are seen as buying into individuals’ desires to advertise their own green behaviour, and such individuals are willing to pay an over-inflated price for the pleasure. On this view, even modest attempts at self-greening secure a neat little profit and paint the manufacturer’s logo a definitive shade of green. The reality is that these vehicles may not be as green as their manufacturers purport, or indeed, as their purchasers hope.
For this reason, some observers are highly critical of CSR. Ron Scollon, author of Analysing Public Discourse, warns that CSR “should be approached with caution because of the tendency inherent in it to pre-empt critique by a relatively shallow display of self-criticism”.
Jeremy Clarkson, host of the popular British program Top Gear, once made a similar point about the Toyota Prius. He described how its nickel-metal hydride battery was sourced from a mine in Canada, shipped to Europe to be treated, sent on to China to be assembled, and then finally shipped to Japan to be bolted into the car’s engine bay. The carbon footprint of this single aspect of the supply chain, he said, nullified any reduction in emissions put out by the fuel-efficient hybrid car once it was sold. Just how reputable Jeremy Clarkson is as a scientific source is open for debate, but the point he makes still augurs well: can CSR really be taken seriously, if its role is within wider games of blame-shifting and profiteering?
To Infinity and Beyond
So if CSR is not undertaken by the auto industry in good faith, what are the wider implications in terms of the industry’s future engagement in the global arena?
Firstly, there is a legitimacy issue. If CSR is exposed as the most successful PR coup since Charlie Sheen discovered YouTube, then the willingness of governments to bow to the demands of industry may be slight. Given that the rollout of electric and hydrogen vehicles requires the government’s strategic support, this is especially concerning. There is a role for government co-operation in building infrastructure like electric recharge stations, or introducing tax incentives to encourage the purchase of hybrids, or legislating to prevent fuel companies from engaging in discriminatory behaviour against hydrogen fuel suppliers.
Secondly, and on a related note, governments need automotive companies less than automotive companies need governments. Consider the experience of General Motors, recently rescued from the brink of extinction by a bail-out package from the U.S. government. If the CSR exercised by a company in the position of GM was proven groundless, that might be deemed an act of bad faith. This reduces the likelihood of government financial support in the future.
Thirdly, there is a reputation issue. Manufacturers rely on ‘brand’ and ‘image’. On a long-term view, manufacturer X could be shooting itself in the foot if its green credentials were dismantled and exposed as over-inflated hype and bad science. If consumers in coming decades are expected to take a leap of faith and invest in new vehicle technologies before their viability, reliability and day-to-day practicality are proven by the passage of time, then those consumers will require companies that they can trust. Shallow and meaningless CSR therefore makes bad long-term business sense too.
Retreating to the Middle Ground
Reconciling the cynic’s perspective is an alternative view with few qualifications but many attractions. Yes, green is relative. Yes, a green(er) product base has positive implications for brand loyalty and corporate engagement with its customers. Yes, modest greening makes money. And (even) yes, if the electric car becomes the mainstream alternative to the petrol engine, the blame is probably no longer in the automotive industry’s court. But these are not reasons to go so far as to dismiss the exercise of CSR by carmakers altogether.
The idea of the ‘triple bottom line’ (profit, people, the planet) still has merit, because many of the goals of the automotive industry of today converge: to continue to be profitable in a world where environmental concerns are on the rise in many nations, to remain competitive in a context of innovation and technology, and to carve out a long-term business future. CSR is like nothing seen before because today’s business environment is like nothing seen before.
As Michael Hill argues in his book The Public Policy Process, by engaging in cross-national investment and participating in worldwide financial markets, large corporations are now “thinking globally”. The notion that this global thinking should extend to legitimate environmental considerations is not a big conceptual jump to make.
In sum, it should not be assumed that the corporate sector is incapable of social responsibility. The ‘sustainable forestry mark’, a worldwide certification system that identifies paper and paper products sourced from recycled sources or plantation farms, was an initiative of the logging industry completely independent of government or NGO input. Far from prompting meaningful critique, to automatically equate ‘corporate’ with ‘evil’ is in fact as short-sighted as equating ‘corporate’ with ‘good’. The attraction of a more balanced approach to the location of CSR within the automotive sector seems obvious and timely.
Nicholas Findlater is in his third year of a combined Bachelor of Laws and Bachelor of International and Global Studies.
