Analysis of the Level of Human and Ecological Sustainability in Companies

SUSTAINABILITY
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SUSTAINABILITY
Sustainable business practice is gradually gaining popularity and becoming a mega trend in today’s corporate world. This is due to a wide range of economic, environmental and social issues witnessed in the global community: - unequal wealth distribution, social inequality, climate change, ecological loss, rampant poverty, endangered species, unemployment, failing economics and more (Chungyalpa, 2019, p. 24). Adopting sustainable business practices can help solve most of these problems while improving the company’s impact on the external world. In return, the organization builds a positive relationship with stakeholders, employees and the community. In business, sustainability is a company's strategy to minimize negative impacts from its operations (Politis & Grigoroudis, 2022, p. 1). Examples include producing green or environmentally friendly products, improving energy management efficiency using alternative power sources, and deploying infrastructure that reduces greenhouse gas emissions, eliminates waste and preserves water resources.
The concept of business sustainability revolves around three pillars: economic, social and environmental (Politis & Grigoroudis, 2022, p. 3). The economic pillar focuses on corporate profitability and includes supply chain sustainability, corporate governance, compliance and accounting transparency and sustainability risk management (Politis & Grigoroudis, 2022, p. 3). The social pillar focuses on corporate social responsibility, while environmental sustainability focuses on the conservation of biodiversity (Chungyalpa, 2019, p. 25). Environmental sustainability attracts the most attention from businesses. It requires organizations to implement measures to conserve and protect flora and fauna. The foundations of the ecological pillar include saving energy, safeguarding water, using recyclable packaging, reusing paper, using sustainable transport, and reducing greenhouse emissions (Politis & Grigoroudis, 2022, p. 3). All companies across all industries are required with sustainability standards to establish a healthy business community and relationship.
This paper analyzes the level of human and ecological sustainability in the automotive industry, focusing on three companies: Tesla, Ford Motor Company and General Motors. The automotive industry has achieved long-term success through consistent innovation strategies, global supply chain efficiencies, strong branding, and motivated employees (Wellbrock et al.,2020, p. 2). Currently, this sector is witnessing radical upheaval. Mega trends like emission reduction, automated driving, shared mobility services, connected vehicles, and lightweight construction have benefited the industry (Wellbrock et al.,2020, p. 2). The increasing demand for green cars and innovative mobility solutions demonstrates the growing significance of sustainability. Some automakers have responded to these trends. For instance, they are increasing the number of electric vehicles and offering flexible mobile solutions (Wellbrock et al., 2020). However, achieving complete sustainability in the automobile industry requires additional plans and efforts. It remains a future goal for most companies in this sector. Key issues at the heart of this transformation include climate change and carbon emissions, digital responsibility and sustainability along the value chain.
Climate change and its impacts have forced policymakers to make carbon emission regulations more onerous (Wellbrock et al., 2020). This is to compel automobile firms to minimize carbon emissions during manufacturing. Another issue is digital sustainability. As autonomous vehicles become common, the attention will shift toward data security. As a result, car manufacturers and suppliers must define digital functionalities suitable for executing sustainable solutions (Wellbrock et al., 2020). At the same time, automobile companies need strict guidelines to comply with data laws. Sustainability along the value chain is equally a crucial issue. The continuous scarcity of natural resources increases the significance of a sustainable value chain to manufacturers. These value chains follow the principles of recycling and reusing, which help establish transparency along the supply chain, hence, ensuring sustainability (Wellbrock et al., 2020).
Case Studies
Tesla
Tesla Inc. is an automotive company located in Austin,Texas. The company designs, manufactures and sells electric vehicles and energy generation and storage systems. Founded in 2003, the company aims to accelerate the world’s transition to sustainable energy (Wang et al., 2021). Its vision is to establish the most enthralling car company by fostering the world’s transition to green vehicles. Recently, Fortune Magazine named Tesla Motors the world’s most innovative and valuable automaker. In 2021, the company had the most global plug-in and battery electric vehicle sales, capturing about 14% and 21%, respectively (Cao et al., 2021).
Tesla is also one of the largest suppliers of battery energy storage systems worldwide, with 3.99 gigawatt-hours (GWh) installed in 2021 (tesla.com, n.d). The company’s electric luxury cars retail between $42,000 – 119,990 as of 2023, depending on the model (tesla.com). The cheapest model is the Model 3, retailing at $42,990 (tesla.com, nd). Tesla's success is nothing short of a miracle for a car startup that has only existed for about two decades. In a recent market report, the company announced that it delivered about 1,313,581 vehicles to its customers in 2022, an almost five times increase in Tesla deliveries from 2017-2020 (tesla.com, n.d). Today, the company has a market capitalization of approximately $572.53 billion and has taken the lead in the electric vehicle market (tesla.com, n.d).
Ford Motor Company
Ford is an American multinational automotive company that designs, manufactures and services a range of automobiles, trucks, sport utility vehicles (SUV), commercial vehicles and electrified vehicles (Ford. com, n.d.). It also operates manufacturing plants, engineering centres, assembly facilities, and parts distribution centres worldwide. Founded in 1903, the company's mission is to improve quality of life by increasing accessibility and affordability of mobility (Ford. com, n.d.). Its vision is to become the world’s most reliable automotive company. Ford’s business value is rooted in its purpose to help create a better world.
As one of the leading automakers, Ford reported a financial performance consistent with the global market (Statista, n.d.). The company's revenue has been increasing in the last three years. In 2022, Ford recorded a revenue of $158 up from $136 billion in 2022 and $127 billion in 2021 (Statista, n.d.). With a production output of around 3.9 million vehicles and about 186,000 employees, Ford’s net income stands at $2.1 billion. Recently, the company increased its usage of renewable vehicle materials (Statista, n.d.). Ford reduced its global waste by 5.5% in 2018 and achieved a 14.5% reduction in water use ...