Making our cities and communities more sustainable is considered one of the needed keys to addressing pressing global challenges, from economic crisis to climate change. In such massive movement, it is important to note that society must seriously aim for decarbonization, with industries doing their respective share in reducing emissions and hence mitigating the impacts of climate change.

The automotive sector is among those industries that are beginning to take such responsibility as it drives approximately 75% of total carbon emissions from transportation being consumed by road vehicles, as consulting firm McKinsey & Company noted.

As we live in what appears to be a more accelerated landscape, advanced technologies can negatively affect the environment and so heavily impact climate change as a result. Yet, the automotive industry is moving towards sustainable mobility, primarily through decarbonizing transport vehicles.

One of the seen main goals of decarbonizing transportation is the shift to electric vehicles (EVs), which are powered by batteries or renewable energy. EVs, as multinational accounting firms network RSM Global noted, are known for their “rapid acceleration, minimal maintenance, and extra luggage space” which provides increased performance to vehicles. More crucially, electric cars are seen to have also made net-zero possible in the future.

As early as 2015, sales of EVs are projected to be about 10%-20% by the year 2030; and currently, many of the biggest automotive companies, including Volvo, Mercedes and Bentley anticipated going fully electric by 2030.

The transformational shift may involve several changes, including changes to the supply chain, demand reduction, an increase in batteries and electric drives, and employment opportunities. However, as McKinsey observed, the shift has accelerated in 2020 when governments and cities are starting the process of decarbonization of road transport and inducing and adopting of sustainable mobility in the sector.

“The transition to net-zero emissions will need to be universal, involving all economic sectors and countries. In mobility, structural changes must accompany the technological transition. For consumers, upfront capital spending would increase, but the total cost of vehicle ownership would fall. New employment opportunities will open up, even as jobs are reallocated across activities,” McKinsey explained on its website.

On the bright side, despite the pandemic, which has caused disruption in the automotive sector, the global EV market is on a trend, as this type of vehicles becomes more cost-effective and as consumer demand is expected to increase quickly. McKinsey projected that EV sales have already exceeded 10% of new car sales and by 2030-2035, the automotive industry should be entirely electrified, and the expected demand for EVs would increase significantly if net-zero emissions are reached.

Also, to achieve carbon neutrality, the sector could develop vehicles using more eco-friendly materials that are both recyclable and renewable. As the attention of businesses turns to incorporating sustainability, the automotive sector’s attempt to build cleaner cars by using sustainable materials is seen to play a significant role.

Online automotive platform Autovista24 observed this decarbonization effort on the rise recently among automobile manufacturers. Replacing leather with what are called “vegan” leather, made from different natural resources like mushrooms or pineapple waste, is one such initiative. Swedish car maker Volvo announced its aim to adopt such materials in their vehicle range by 2030, while BMW reportedly collaborates with a company that creates a cactus-based biomaterial that can replace leather in seats and panels.

Aside from “vegan” leather, there is also plastic which can be recycled into another material for automotive manufacturing, from the dashboard to foam seats to the air bags of the vehicles.

“Plastic remains a popular material for car manufacturers as it reduces the weight and cost of vehicles while also increasing performance. Around a third of the 3,000 parts used in new vehicles are made from plastic, so recycling the product makes sense from an environmental point of view,” Autovista24 reported, adding that Audi is interested in recycling automotive plastic and previously got involved in a chemical-recycling pilot project in Germany.

Additionally, bio-based materials can also reduce weight and boost energy and emissions savings. The idea of reducing weight in vehicles to increase performance and car efficiency is the basis for most automotive companies.

Given the transformational shift as part of the decarbonization plan, ensuring resiliency is difficult. However, the automotive industry can use opportunities for collaboration and partnership as a strategy in moving forward to achieve sustainability.

First, a public-private partnership can open automotive value chain transparency, as stated by two executives from renowned car makers in an article in the World Economic Forum’s website. There is a strong need among public and private organizations to work together, thus corporate leaders must engage and collaborate with the government and vice versa to share information and work together for the benefit of all parties involved in the sector and to hasten the move toward net zero.

Second, to accelerate the zero-net transition, a sustainability footprint compass is necessary. The said executives advised the need to develop “a map of mobility-relevant standards, regulations, tools and collaborations” to discover opportunities for collaborations and establish their zero-net goals. The sustainable footprint compass is a guide to sustainability to make it easier for leaders to organize a plan and guide them to a common path for achieving sustainability. Often, it also helps keep track of the progress of organizations.

It is also important to note the significance of increasing value chain transparency in the sector. Leaders in the sector are encouraged to develop a toolkit that offers transparency on demand/supply balance, and regional consolidation, as well as business strategies to manage risks in the sector. Addressing upcoming difficulties while reaching sustainability targets can be possible if the sector can predict future value chain disruptions early on. — Angela Kiara S. Brillantes

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