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Sustainability in the Automotive Industry

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Contents Page 1.0 Executive Summary 2 2.0 Introduction 2 3.0 Ecological Influences on Business 3 3.1 Ecological Influences in the Automotive Industry 5 4.0 Ethical Influences on Business 6 4.1 Ethical Influences in the Automotive Industry 8 5.0 PESTEL Influences on Business 9 5.1 PESTEL Influences in the Automotive Industry 12 6.0 Conclusion 15 Bibliography 16 Appendix 1.0 Executive Summary This report aims to give the reader an insight into certain theories and drivers relating to sustainable development. The information used within this report has been sourced from lecture and tutorial notes and through personal research. This information has then been used to assess the automotive industry as a whole. Conclusions have been drawn were possible and are supported by researched information 2.0 Introduction Modern day influences and pressures from Government, society, environment and green pressure groups are continually reminding us that the environment that we live in is not sustainable. It is up to us to act now to ensure that we do all we can to safeguard the well being of the environment for the future. As it becomes visible that if businesses take an interest in their environment and what they can do to help to reduce emissions, pollution, wastage disposal etc and how much of an impact this can have on creating 'sustainable development', this in turn creates more pressures for businesses to conform. This can have many positive and negative effects such as increased costs (negative) or increased competitiveness (positive). All these possible pressure are influences will be discussed within in this report. This report aims to cover key issues that are affecting industries in today's environment, with emphasis on the automotive industry as our chosen topic. It is our objective to source Government statistics and industry benchmarks, and then to comment on how our chosen industry is trading in comparison to these. The main areas discussed will include ecological and ethical drivers for change within the automotive industry, a PESTEL analysis of this industry will also be undertaken to help give more insight into the matter. ...read more.


not always the case, for example, in some countries it is still legal to sell garments made with animal fur, yet not everyone would class this as ethical/moral. It is important for companies to recognise their practices and how they may be interpreted through the eyes of other people. It is also important for companies and industries as a whole to establish which stakeholder they have duties towards, depending on which stakeholders this may be, could increase or decrease pressures upon that industry to change for the ethical good of that certain stakeholder. The greatest driver for change in terms of ethics comes from consumers; this may be through avoidance, targeting, political action or direct action by demonstrating. There are many sources in which consumers can access information regarding the policies of companies, for example, consumer magazines such as Ethical Consumer or Which? The way in which business' can respond to this may be by increasing their ethical profile, by investing in community projects, providing a wider choice of products or even just by making information more available to it's consumers. In recent years a set of ethical indices has be created, known as FTSE4Good, this was established in July 2001 and "is about working out what is the globally accepted standard for companies and rewarding those that achieve that standard" Parker, G (2001). There are certain criteria which must be met to appear on the register, which is laid out in Appendix A. There are also exclusions from the register; these include, not being involved in nuclear power, weaponry or tobacco industries. FTSE4Good will be discussed in more detail below. 4.1 Ethical Influences in the Automotive Industry The FTSE4Good is a good indicator of how ethical the car industry is. The criteria that is set out by the FTSE governing board in order to determine the classifications of different industries, is listed in Appendix A. ...read more.


The cost of renewable hydrogen and biofuel is likely to be greater than today's fuels, but the efficiency of the fuel would be greatly improved, leading to lower consumption. This will involve massive new product and fuel infrastructure investment, obviously at a great cost to this industry, therefore creating a resistance to the change needed. The technology needed for this change is know as Hybrid technology, this saves fuel by storing energy and adjusting intelligently to each situation. A high-performance battery stores energy that is ordinarily wasted while driving or stopping, and then applies the stored energy when starting and to supplement engine power when accelerating. Since the system recharges itself, it never needs plugging in. The market leaders for this are Toyota, but many other companies are following suit. There are many benefits for hybrid technology, some of which include tax credits, savings in lifetime service costs, no need for recharging of battery and better performance. 6.0 Conclusion 1. Every aspect of the business environment impacts on the sustainable development of all industries. 2. The Government asserts significant pressures upon industries to change environmental policies; this is mainly done through legislation and taxation. 3. Customers are increasingly aware of the environmental impacts of industries and therefore demand their products to comply with this. This does not mean a loss in profit as it improves competitive advantage and in some cases reduces cost. 4. Industries are more likely to make changes when drivers have a direct impact upon their bottom line. 5. Just because an industry operates within the law, does not necessarily mean that they are acting ethically. 6. Consumers influence change ethically more than any other factor. 7. The political level which policies are addresses, are influenced by their significance. The more significant the driver for change, the higher the political level of debate. 8. To sustain the economy, you must ensure what resources are used are still available for the future. 9. Advances in technology are needed to ensure progression in regards to all aspects of business. This is important in the car industry, for example the development of hybrids. ...read more.

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