Key sustainability issues
Volkswagen (VW) is a German automobile manufacturer founded in 1937. The company’s headquarters are in Wolfsburg, Germany. VW is the largest car manufacturer in Europe, and it owns many other brands, including Audi, Bentley, Bugatti, Lamborghini, Porsche, and Ducati. The company has come under fire in recent years for many issues, including its role in the Diesel gate scandal, in which it was found to have cheated on emissions tests. VW has also been criticized for treating workers, particularly in its home country of Germany (Jung & Sharon, 2019, p.12). In 2018, a VW factory in Chattanooga, Tennessee, was the site of a significant unionization drive by the United Auto Workers (UAW). The UAW has accused VW of violating workers’ rights and has filed several unfair labor practice charges against the company.
The critical sustainability issues facing VW are its emissions scandal, its treatment of workers, and its environmental impact. The company has been working to address these issues and has made some progress, but there is still more that it can do. In 2015, it was revealed that VW had cheated on emissions tests for its diesel vehicles. The scandal, known as “Diesel gate,” led to the recall of millions of VW vehicles and the resignation of VW’s CEO, Martin Winterkorn (Jung & Sharon, 2019, p.14). European governments and we fined VW billions of dollars, which has set aside billions more to cover the cost of repairs and compensation for customers. The scandal has damaged VW’s reputation and led to a sales decline.
VW has also been accused of mistreating workers, particularly in its home country, Germany. The company has been criticized for its use of temporary workers, its anti-union policies, and its treatment of workers at its plants in China. In 2018, a VW factory in Chattanooga, Tennessee, was the site of a significant unionization drive by the United Auto Workers (UAW). The UAW has accused VW of violating workers’ rights and has filed several unfair labor practice charges against the company (Janssen, 2013, p.81). The company has been working to reduce its emissions and has set a goal of becoming carbon-neutral by 2050. VW has also been working to develop electric vehicles, and it plans to sell 1 million electric cars a year by 2025. Volkswagen’s (VW) operations and sustainability practices significantly impact the environment and communities where it operates. As a large, global company, its actions can influence other companies and organizations. Given its size and reach, it is important for VW to be a leader in sustainable practices and to align its operations with the United Nations Sustainable Development Goals (SDGs).
Evaluation of company performance
One SDG that is very important is Affordable and Clean Energy. There are many reasons why affordable and clean energy is important. Firstly, energy is essential for economic development and poverty reduction. Without access to energy, businesses cannot operate and people cannot cook, heat their homes or travel to work. Secondly, energy is a major source of greenhouse gas emissions. Burning fossil fuels such as coal, oil and gas releases carbon dioxide and other greenhouse gases into the atmosphere. Climate change is a major threat to human health, food security, water security, and economic growth. It is therefore essential to reduce greenhouse gas emissions by transitioning to cleaner forms of energy such as renewable energy.
There are many ways in which countries can transition to cleaner forms of energy. One way is by investing in renewable energy sources such as solar, wind and hydro power. Another way is by improving energy efficiency, for example by using more efficient appliances and insulation in homes and buildings. The company has a strong commitment to sustainable development and has set ambitious targets to reduce its environmental impact. For example, the company has set a target to reduce its CO2 emissions by 30% by 2025, compared to 2015 levels. The company is also investing heavily in electric vehicles and plans to have 50 fully electric models on the market by 2025.
Volkswagen Group’s commitment to sustainable development and its efforts to reduce its environmental impact are commendable. However, the company still has a long way to go in terms of transitioning to cleaner forms of energy. Volkswagen Group’s emissions were down by 4.3% in 2019 compared to 2018, but this is still a long way off the company’s target of reducing emissions by 30% by 2025. In order to meet its target, Volkswagen will need to invest more in renewable energy and electric vehicles. One of the company’s strengths is its strong commitment to sustainable development. This commitment is evident in its ambitious targets to reduce emissions and its investment in electric vehicles. Another strength is its efficient production processes. This shows that the company is becoming more efficient in its use of energy.
One of the company’s weaknesses is its reliance on fossil fuels. In 2019, Volkswagen Group’s emissions were down by 4.3% compared to 2018, but this is still a long way off the company’s target of reducing emissions by 30% by 2025. In order to meet its target, Volkswagen will need to invest more in renewable energy and electric vehicles. Volkswagen Group should continue its efforts to reduce its reliance on fossil fuels and to transition to cleaner forms of energy. The company should continue to invest in energy efficiency, for example by using more efficient appliances and insulation in homes and buildings. Another weakness is its lack of transparency. In 2019, Volkswagen was fined €1 billion by the European Commission for “deliberately” misleading consumers about the emissions of its cars. This lack of transparency could damage the company’s reputation and discourage consumers from buying its products.
Recommendations
In the short term, Volkswagen can do several things to improve its performance. It can invest in new technologies and processes to improve its manufacturing efficiency. Manufacturing efficiency measures how effectively a company produces its goods or services. There are various ways to improve manufacturing efficiency, but standard methods include investing in new technologies and processes, streamlining production, and reducing waste. Investing in new technologies and processes is one way to improve manufacturing efficiency. New technologies can help companies automate tasks, enhance communication and coordination, and increase accuracy and precision. Process improvements can help reduce production times, quality, waste, and costs. Streamlining production is another way to improve manufacturing efficiency. This can be done by eliminating unnecessary steps, streamlining the manufacturing process, and reducing inventory. Reducing waste is also vital for improving manufacturing efficiency. Waste can come from many sources, including raw materials, energy, water, and packaging. Reducing waste can help save money and resources, and it can also help improve the quality of the final product.
In the medium term, VW should focus on expanding its use of renewable energy. There are many reasons for this, but the chief among them is that renewable energy is a cleaner and more sustainable power source than fossil fuels. Additionally, renewable energy costs are falling rapidly, making it a more economically viable option for the company. Volkswagen has already made some progress in this area, with a goal of sourcing 30% of its power from renewable sources by 2025. However, this is not enough to meet the company’s long-term sustainability goals. To truly decarbonize its operations, Volkswagen needs to increase its use of renewable energy to 100%. This will require a significant investment in new infrastructure, but the benefits will be well worth it (Mačaitytė, 2018). Not only will this help Volkswagen to achieve its sustainability goals, but it will also position the company as a leader in the shift to a low-carbon economy. This will give it a competitive advantage in the long run as more and more companies are forced to adopt similar strategies.
Additionally, it will help to build trust with consumers, who are increasingly interested in supporting companies that are doing their part to mitigate climate change. The expansion of renewable energy is a daunting task, but it is one that Volkswagen must take on to achieve its long-term sustainability goals. With the right policies and investments, the company can transition to a low-carbon future and position itself as a leader.
In the long term, Volkswagen should focus on electric vehicles. Electric vehicles are the future of the automotive industry, and Volkswagen needs to position itself at the forefront of this transition. Electric vehicles are more efficient than gasoline-powered ones and emit zero emissions. This is important for the environment and public health (Blackwelder et al., 2016). Additionally, electric vehicles are becoming more and more affordable as the cost of batteries continues to fall. Volkswagen should focus on making its electric vehicles as affordable as possible to make them accessible to as many consumers as possible.
Additionally, the company should invest in the infrastructure needed to support electric vehicles, such as charging stations. This will require a significant investment, but it is necessary to ensure that electric vehicles are viable for consumers. In the long term, electric vehicles will dominate the automotive market, and Volkswagen needs to be prepared for this shift.
References
Blackwelder, B., Coleman, K., Colunga-Santoyo, S., Harrison, J.S. and Wozniak, D., (2016). The Volkswagen scandal.
Janssen, C.I., (2013). Corporate historical responsibility (CHR): Addressing a corporate past of forced labor at Volkswagen. Journal of Applied Communication Research, 41(1), pp.64-83.
Jung, J.C. & Sharon, E. (2019). The Volkswagen emissions scandal and its aftermath. Global business and organizational excellence, 38(4), 6-15.
Mačaitytė, I. and Virbašiūtė, G., 2018. Volkswagen emission scandal and corporate social responsibility–a case study.
Turna, G.B., (2022). How “Dieselgate” Changed Volkswagen: Rushing to Erase the Traces of Greenwashing. In Socially Responsible Consumption and Marketing in Practice (pp. 255–273). Springer, Singapore.
write