Consultative Report: Sustainability in the Automobile Industry

Sustainability is the ability of an organization or an industry to maintain its production and sales processes with the passage of time. It includes avoiding the usage of natural resources and deriving them to depletion, additionally, it promotes the balance between the various elements of ecology. The auto manufacturing industry is involved with the manufacturing and business of automobiles. They are involved with designing, developing, marketing and selling motor vehicles like cars, bikes, and cargo cars among others. The automobile industry is heavily affected by Industrialism 4.0, and the government's support has also helped them significantly (Yu et al., 2022, p.1). It is known to affect the quality of air, change in the climate, production of material waste, irreversible changes in biodiversity, along with energy and water depletion.

Purpose:

The purpose of the report is to define the sustainability issues in the automobile industry, specifically defining the issues of Toyota Australia. It would discuss the action plan devised by the company and provide possible suggestions for decreasing the effect on the environment. The main focus of the report is on the threat that the automobile industry poses to the environment, steps that have been taken to make the industry environmentally friendly and an action plan designed to reduce the effects of the automobile on the conservation of the environment.

Scope:

The scope of the report involves investigating the problems in the sustainability plans of the automobile industry, specifically focusing on Toyota Australia. It focuses on the action plan and steps taken by the company toward a more sustainable future.

Limitations:

The limitation of the report was that it was difficult to find the specific data for the company and the industry as there is a lack of study on this topic. Finding valid research papers that were published in the last five years was a tiresome task. Businesses have a huge responsibility to satisfy their stakeholders and make steps towards social and environmental development (Pfajfar et al., 2022, p.1). Social sustainability refers to focusing on the well-being of employees who are working for the company and the community on which the development of the organization is dependent. Lastly, environmental development refers to the ability of the organization to successfully maintain a balance between diverse parts of the ecology they are working with, to support the present condition of the environment along with securing future.

Background to the Auto manufacturing industry and Toyota Australia.

Toyota Australia, which designed cars like the Camry and Corolla, was established in 1963; since then, it has occupied an important position in the preference list of the Australian population. The reason for the popularity gained by Toyota Australia is its reputation for being extremely reliable and of excellent quality. The operation managers at Toyota Australia are often involved with making changes in the values of the company when they face more difficult times to make sure that they are adaptable and flexible (Samson & Swink, 2023). According to a survey Toyota Hilux was in the top 5 list of most delivered cars in 2023 with 61,111 sales and had an unrivalled seven-year reign as the best-selling car in Australia.

Toyota Australia is the representative of the auto manufacturer industry in this report. This industry bloomed in the twentieth century with the advancement in science and technology along with the increase in the living conditions of humankind that allowed people to afford luxuries and necessities. The automotive industry marked a new step of development for people but it brought with it a number of problems for the environment. Toyota and other companies have contributed to ceased production in the local industry because of the lack of governmental support, global strategic industries and volatility in exchange rates (Clibborn et al., 2020). The long-term effects included the drastic change in climate, loss of habitat, wildlife destruction and eradication of natural resources.

Identification of sustainability issues

Effects on the environment: Sustainability is regarded as a very important concept in the twentieth century. However, there is little focus on the importance of this topic (Wellbrock et al., 2020). In general, the sustainability issue includes plastic in the ocean, non-cooperating corporations, expensive management of common property, deforestation, soil erosion because of mining and other related processes, contamination of water resources, and the decline in the groundwater level.

Sustainability issues created by the industry: It also causes a threat of destruction of natural non-renewable resources that cause a crisis for future generations. Specifically, the auto manufacturing industry causes sustainability issues like greenhouse gas emissions, which are not just caused by the production of automobiles. Rather, it is increased with their products, that is, the automobiles like cars that make use of fossil fuels. It increases pollution by emitting pollutants into air, soil and water resources. According to Singh et al. (2022, p.1), environmental pollution has become a global issue that causes threats to every country.

Different problems included in the automobile industry: The manufacturing of automobiles also generates a large amount of toxic waste, resulting in the environment's degradation. Additionally, with all the problems, the industry also faces risking the human rights of their employees as it involves extraction and usage of critical and conflicting raw materials in the production procedure that could be fatal for their employees. Global warming has been continuously increasing because of the increase in the level of pollution that has forced every country to reconsider its environmental policies (Kumar et al., 2020, p.1). The auto manufacturing industry also involves an extremely complex supply chain with multiple facets involved each supplier would have diverse effects on the environment and adverse effects on sustainability. The production of one car takes approximately 40,000 gallons of water, with the painting procedure using the maximum water supply in the process. Along with this, many of the manufacturing industries also produce wastewater in the painting procedure, washing of automobiles, the production of airbags that are used in vehicles, and in the air conditioning system of cars, tyres and other components of the vehicle.

Along with the wasteful usage of water, the industry is also known to generate novel environmental problems, which include deforestation and damage to the ecosystem, as the manufacturing of cars would lead to the construction of roads, the establishment of factories and other transportation networks. Supply chain management in Toyota Australia is responsible for providing appropriate management strategies of materials that would benefit organizational structure (Abbas & Tong, 2023, p.1). The automobile industry also makes the most use of petroleum, which in itself is a significant non-renewable natural resource that requires hundreds of years to replenish; its extraction also causes adverse effects on the environment. This industry contributes to ozone depletion, air pollution, destruction of wildlife and ecosystems.

Relevant Theoretical Concepts and Application

Industrial Ecology: It involves the approach of Circular Economy, which focuses on the creation of a closed-loop procedure that would involve using waste as an input. The automobile industry has been facing multiple accusations of harming the environment. Hence, it has included a number of practices that promote and ensure the sustainability of the environment; examples of these practices include the circular economy that focuses on minimizing the damage that is caused to the environment. The circular economy has its basis in the ideological agenda which is dominated by technological and economic accounts (Corvellec et al., 2022, p.1). The circular economy has allowed the auto manufacturing industry to recycle and restore energy.

Descriptive ethics: It allows individuals to make a choice and function according to their preferences, companies make sure that their customers are satisfied along with solving moral dilemmas (Corvellec et al., 2022, p.07). The introduction of autonomous driving has also allowed companies to make sure that there are reduced human errors consequently reducing the chances of accidents and making the roads to be safer and more efficient.

Stakeholder theory: This theory involves the company considering the requirements of their stakeholders and making decisions that would satisfy their requirements while ensuring the satisfaction of their stakeholders. According to Gawusu et al. (2022, p.1), the concept of GSCM is determined by the environmental, social and economic aspects. Green supply chain management has reduced emissions that arise from the manufacturing process in the auto manufacturing industry. Many companies in the industry have also started using renewable sources of energy like wind turbines or solar panels that help them save non-renewable natural resources reserves and contribute to the sustainability of the environment.

Harmful chemicals: The chemicals used in the paints of automobiles have also been modified to mitigate the challenges in attaining an environmentally friendly way of manufacturing (Gaona et al., 2020).

Other measures opted by the industry: Companies involved in the auto manufacturing industries manufacturing automobiles have been making significant changes that allow them to take a step towards a more sustainable future, which includes the introduction of electric vehicles, and the development of hydrogen cell fuels. They are also using lightweight materials that let them reduce energy expenditure (Fan et al., 2021). Automobiles that contribute to saving the climate and reducing their effects on the environment have also been a big part of the discussion in the auto manufacturing industry (Kopelias et al., 2020). Automobile companies have also been involved in the conduction of supplier assessments as a way to mitigate their impact on the environment (Haleem et al., 2021).

3R Principle: This theory supports the reduction of excess usage of natural resources, along with reusing the resources instead of discarding them when it’s still usable and recycling the waste products. With the application of these methods, they have been able to preserve and protect the planet, lower energy consumption, and reduce waste contribution in landfills additionally reducing all types of pollution (Theissler et al., 2021). These efforts introduced in the auto manufacturing industry have allowed the industry to lower its impact on the environment and caused the backlash from customers to cool down as well.

Proposed Action Plan

The action plan proposed by Toyota is for sustainability and to reduce its impact on the environment includes various pointers:

They focus on business operations and modify them to design vehicles that would not impact climate in such a hazardous way.
Company works for the co-existence of the environment and economy and concentrates on building a close relationship with individuals and organizations that focus on the preservation of the environment. According to Tomlins et al. (2021, p.1), the company can only take a competitive advantage when it constantly incorporates innovation.
Toyota has discussed all the environmentally friendly ways of manufacturing, sales and marketing in their guiding principle number 3.
According to their guiding principle 2 they honour different cultures, customs and countries by accepting different communities and showing their respect towards them.
They have introduced cleaner technologies that satisfy society's need for a motor vehicle that will have less effect on the climate and biodiversity of their community.
The company also stand against the bribery offered by any business partner or other industries for introducing materials or promoting a product that will cause harm to the environment.
They have added a clear restricting policy against bribery in their guideline principle number one.
In their guideline principle 2, they have also discussed their contribution to society as a company and have defined the roles and responsibilities of their working staff to contribute individually to strengthen their community and contribute to their society (Toyota, 2024).
Toyota Australia has also aimed to reduce their carbon neutrality in the coming two decades.
The company have contributed to reducing water usage in the production process by partnering with the Nature Conservancy to release 132 million gallons of water to restore the Colorado River Delta Water.
They promote technologies that involve recycling procedures while simultaneously reducing the usage of limited resources to avoid exhaustion.

Recommendations

The effect of the auto manufacturing industry on the environment is significant and has a long-lasting impact. Therefore, the green management of the industry is a need in the current day and age, where customers are actively participating in making environmentally sustainable decisions (Awan et al., 2020, p.2). There are a few practices that could be promoted for the reduction of its effect on the environment, they include the introduction of electrically powered vehicles and technologies involved in the production instead of exhausting non-renewable natural resources like petroleum.

Understanding stakeholder expectations and their behaviour is necessary as it will facilitate the circular economy initiative (Awan et al., 2020, p.2). They can also implement the use of compressed natural gas (CNG), an environmentally friendly option that would release fewer pollutants into the air. The auto manufacturing industry can also invest in smart materials to reduce the production of unnecessary waste products it will also ensure the making of more fuel-efficient vehicles. Improvising their waste management techniques also helps them lessen the waste they send to landfills and wastelands. Manufacturing of vehicles that will operate in a climate-neutral way and contribute to the reduction of carbon emission in the lifecycle of the vehicle.

Conclusion

The main focus of the report was on the impact of the automobile industry on the environment, and example of Toyota Australia. The report along with discussing the problems that have been identified in the auto manufacturing industry, also discusses the steps that have been taken for the betterment of the industry and the suggestions that can be applied for making it more environmentally friendly.

References

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Assessment – 3: Consultative Report: Individual Corporate strategy

Executive Summary

Introduction