Automakers have been actively pursuing social and environmental targets, from reducing greenhouse gas emissions to ensuring responsible sourcing and equal pay. While these initiatives are commendable, a recent report highlights a significant challenge: suppliers often lack actionable and measurable data, and automakers have widely varying reporting requirements.
The report, conducted by the Center for Automotive Research (CAR), reveals that vehicle manufacturers acknowledge the importance of open and consistent communication with their suppliers. However, the methods and frequency of such engagement differ considerably between manufacturers.
To address these disparities, vehicle manufacturers are encouraged to develop and communicate clear implementation plans to help suppliers align with sustainability targets. These plans should provide detailed guidance on operational modifications, strategic business practices, and the development of new offerings.
For instance, one vehicle manufacturer periodically conducts meetings with its suppliers through webinars, stakeholder dialogues, and leadership committees to ensure the achievement of both short- and long-term sustainability goals.
The report emphasizes the need for regular industry forums and other collaborative approaches to enhance understanding and alignment between automakers and suppliers regarding sustainability initiatives.
Furthermore, CAR suggests that automakers broaden their focus on sustainability efforts by engaging not only Tier 1 suppliers but also Tier 2, 3, and 4 suppliers. Including the entire supply chain is crucial for meeting climate commitments effectively.
While automakers stress the importance of making long-term investments in climate and sustainability goals, suppliers express the need for clearer guidance from automakers to facilitate such investments.
The report recommends that automakers enhance their collaboration by participating in cross-industry education, training, and knowledge-sharing initiatives before introducing new product categories. Pre-competitive forums are suggested as a means to advance climate activities for the entire automotive industry, reducing the burden on individual manufacturers and suppliers when defining sustainability and circularity solutions.
To further streamline sustainability efforts, the report proposes the standardization of reporting and measurements, improved supplier training on standardized metrics, and coordinated lobbying efforts to standardize regulations related to sustainability targets.
In a world where environmental and social concerns are paramount, the automotive industry’s commitment to sustainability can be truly transformative. However, it is only through improved communication, collaboration, and standardized approaches that automakers and suppliers can successfully navigate the road to a more sustainable future.