Introduction
The global automotive manufacturing industry has increasingly become challenging amidst soaring sustainability concerns. Sustainability concerns are becoming a significant issue not only among business organizations but also among nations, necessitating multinational companies like Bavarian Motor Works (BMW) to enhance their commitment to environmental stewardship and social responsibility. BMW is a leading automobile manufacturer, offering the world with premium automobiles, such as BMW, MINI, Rolls-Royce, and BMW Motorrad. Hence, its leadership in global automotive manufacturing has seen it committing to sustainability frameworks, such as aligning its supply chain with efficient clean energy while promoting renewable energy sources (SDG7). The present study examines BMW’s commitments to advancing affordable and clean energy, including its efforts to integrate SDG7 into its business operations to address the increasing environmental and social concerns. Although BMW has encountered massive challenges in aligning its operations with changing sustainability concerns, its commitments to sustainability align with advancing affordable and clean energy (SDG7), reflecting its concerns with environmental stewardship and corporate social responsibility.
Research Question
- How does BMW’s integration of renewable energy sources and electric mobility initiatives contribute to the advancement of affordable and clean energy (SDG7)?
PESTEL Analysis
Political Factors
Changes in government policies affect the competitiveness of the global automotive industry. Over the recent past, governments across the European Union, the US, and Asia have intensified carbon emission policies and regulations. As a result, the global governments have imposed carbon emission tasks, compelling multinational firms, such as MBW, to contribute towards combating carbon emissions (“BMW,” 2021). Unfortunately, while this policy is vital in addressing sustainability concerns, it has claimed a significant portion of the market’s revenue in terms of tax remittance to combat carbon emissions. Equally, government policies, such as taxation on the industry’s profitability, also influence the competitiveness of the global automotive manufacturing landscape. For instance, an increase in turnover taxes on automotive products limits the probability of firms like MBW.
Economic Factors
The prevailing economic factors, such as inflation, foreign currency exchange, and interest rates, affect the global automotive industry’s commitment to sustainability concerns. The inflation rates have been declining since 2022, indicating increasing purchasing power among automobile consumers (Trinh & Chung, 2023). An increase in consumer purchasing powers implied an increased sales revenue, leading to more carbon emission taxes committed to addressing sustainability concerns. Equally, an increase in revenue streams amidst increasing consumer purchasing powers necessitates intensive research and development geared towards identifying efficient production frameworks aligned with sustainable development goals.
Socio-Cultural Factors
Changing consumer tastes and preferences aligned with sustainability concerns play significant roles in defining the global automotive manufacturers’ alignment with sustainability goals. Unlike in the past, the current consumers are environmentally conscious, necessitating the production of sustainable automobiles aligning with their tastes and preferences (“BMW,” 2021). These changes have seen rampant emergence and dominance of companies like Tesla producing electric vehicles. Global consumers have deviated from consuming fossil fuel-driven automobiles to sustainable ones, such as cars using electricity and solar energy (Antonetti, 2020). Hence, leading firms like MBW have also aligned their production frameworks, including product design, to align with the hanging consumer tastes and preferences.
Technological Factors
Technological advancement, including the emergence of cutting-edge technologies, has seen several companies in the automotive sector embracing sustainability within their supply chains. One of the disruptive technologies that propelled deviation to sustainable production is the battery and renewable energy technology. Companies like MBW and Tesla have leveraged these technologies to manufacture sustainable cars, as they can now invent batteries with long power retention capacities (Sharma et al., 2021). Equally, leading automotive manufacturers, such as Toyota, have adopted advanced technologies like just-in-time inventory management systems to enhance efficiencies within their supply chain practices. Hence, these technologies have not only helped in redefining their production approaches but also enhanced production efficiencies.
Ecological Factors
Environmental concerns, such as climate change and its consequences, have increasingly become significant threats to global sustainability. As a result, governments and non-governmental institutions, such as the United Nations Environment Program (UNEP), cooperate to implement robust environmental sustainability regulations (Huan & Hong, 2021). The pilling environmental concerns have compelled leading automotive manufacturers, such as BMW, to integrate sustainable frameworks within their production processes. For instance, MBW has transitioned from fossil fuel-driven production plants to electricity and solar energy-driven production plants. The company has taken these initiatives to align its supply chain activities with the increasing environmental concerns.
Legal Factors
The increasing environmental sustainability regulations across the world have compelled automobile manufacturers to align their practices with sustainability strategies. The introduction of carbon-pricing regulations, which capture external costs based on the amount of emitted carbon gases, has compelled several companies to align their activities with environmental sustainability (Fallah et al., 2022). For instance, the cap-and-trade carbon-pricing system has encouraged more automobile manufacturers to embrace environmental sustainability frameworks to earn more revenues by allowing industries with low emissions to sell their extra carbon allowances to companies with extreme emission rates.
Findings
BMW acknowledges the emerging issues in the global automotive manufacturing industry, aligning its supply chain practices with environmental sustainability concerns to enhance competitiveness and sustainability. For instance, the company has developed a strategic development plan geared towards transitioning its production from fossil fuel-driven automobiles to producing automobiles using clean and renewable energies (Trinh & Chung, 2023). The company has also made significant progress in transitioning its production plants, transitioning from fossil fuel-driven plants to clean and renewable energy machines. These commitments have compelled BMW to invest in solar energy to help it attain the global sustainable development goals (SDG7).
Stakeholder Analysis
BMW’s commitment to clean and renewable energy has influenced diverse stakeholders, necessitating stakeholders like employees, consumers, investors, governments, and communities to align with its sustainability commitments. It has delved into the production of eco-friendly automobiles to align with environmentally savvy customers’ needs and preferences. Equally, its intensive commitments to transition from unsustainable practices have attracted environmentally conscious investors to help it realize its sustainability goals. The company’s commitment to sustainability practices ensures BMW aligns and complies with global governmental regulations (Lukin et al., 2022). It has invested in training and development to equip employees with the necessary skills and knowledge to align with its sustainability goals. BWM commits a significant portion of its profits to support communities, such as sponsoring tree planting to enhance environmental sustainability.
Reflection
Tadweer.ae website demonstrates this company is committed to sustainable practices. Hence, visiting this website has provided me with a vast knowledge regarding the importance of embracing sustainable objectives, including enhancing waste management and promoting resource conservation. I also realize the importance of advocating for clean and renewable energies, as this will help companies like BMW address the increasing depletion of oil reserves globally.
Conclusion
Overall, the analysis of BMW using PESTEL analysis demonstrates that it has vast commitments to sustainability practices, especially clean and renewable energies (SDG7). Its commitment to sustainable development goals aligns with environmental stewardship and corporate social responsibility, which encompasses addressing environmental concerns not only internally but also externally.
References
Antonetti, P. (2020). More than just a feeling: A research agenda for the study of consumer emotions following corporate social irresponsibility (CSI). Australasian Marketing Journal, 28(2), 67-70.https://doi.org/10.1016/j.ausmj.2020.01.005
BMW. (2021). Sustainability in every car BMW builds. https://www.bmw.com/en/innovation/sustainability-at-bmw.html
Fallah Shayan, N., Mohabbati-Kalejahi, N., Alavi, S., & Zahid, M. A. (2022). Sustainable development goals (SDGs) as a framework for corporate social responsibility (CSR). Sustainability, 14(3), 1–27.https://doi.org/10.3390/su14031222
Huan, N. Q., & Hong, T. T. T. (2021). Role of corporate social responsibility in sustainable energy development in emerging economy. International Journal of Energy Economics and Policy, 11(2), 172-186.http://dx.doi.org/10.32479/ijeep.10774
Lukin, E., Krajnović, A., & Bosna, J. (2022). Sustainability strategies and achieving SDGs: A comparative analysis of leading companies in the automotive industry. Sustainability, 14(1), 1-17.https://doi.org/10.3390/
Sharma, H. B., Vanapalli, K. R., Samal, B., Cheela, V. S., Dubey, B. K., & Bhattacharya, J. (2021). The circular economy approach in solid waste management system to achieve UN-SDGs: Solutions for post-COVID recovery. Science of the Total Environment, 800(1), 1–20.https://doi.org/10.1016%2Fj.scitotenv.2021.149605
Trinh, V. L., & Chung, C. K. (2023). Renewable energy for SDG-7 and sustainable electrical production, integration, industrial application, and globalization. Cleaner Engineering and Technology, 15,(1), 1-22.https://doi.org/10.1016/j.clet.2023.100657
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