Porsche AG has declared to their 1300 suppliers that they must incorporate alternative energy options into their manufacturing products or lose the company as a partner. Porsche’s supply chain amounts to nearly 20% of the company’s overall emissions. That number is expected to reach upwards of 40% by 2030 if zero action is taken. This comes amid a worldwide push to initiate more sustainable projects and help curb the growing threat of climate change.
The company has created a sustainability mission and even has three vehicles that are considered carbon-neutral: the Taycan, 718, and 911. Their recent push for their supply chain to adopt renewable energy can aid in this mission and help the company stand out amongst other manufactures.
Sustainability is best defined as prosperity and improvement across all three pillars: environment, economic, and social. If a company is working to lower its environmental footprint but notoriously has poor work conditions and underpaid labor, then that company might be considered eco-friendly, but wouldn’t fall into the category of sustainability.
Porsche is one company that has successfully cornered the true meaning of sustainability and is actively working to address all three pillars with its long-term strategic plan. The plan consists of 5 key elements including, Decarbonization, Circular Economy, Diversity, Partner-to-Society, Supply Chain Responsibility, and Governance & Transparency. The company is also taking other large steps within this field, such as providing a second life for their traction batteries instead of disposal, providing a schooling program for employees, and even incorporating some of the United Nations Sustainable Development Goals into their initiatives.
Additionally, since Porsche has many warehouses and suppliers that are located in Europe, the push for carbon neutrality along the supply chain might not prove to be as difficult as one might assume. Europe has advanced significantly in the field of sustainability, meaning many companies and industries have already made the shift to incorporate sustainable initiatives into their work. Further, since the continent has shown an aggressive approach to fighting climate change, we can expect the Porsche suppliers located in Europe will most likely understand and accept this new requirement.
It will also help that the company itself has shown a great level of dedication to sustainability. With a member of the executive board, Uwe-Karsten Städter, even stating that “By using only renewable energy sources, our suppliers are following our example in our efforts to reach CO2-neutrality. We plan to have even more intensive talks with our partners in order to drive forward improvements in our sustainability. It is only by working together that we will be able to combat ongoing climate change."
A Market Surge
Porsche isn’t the first automobile manufacturing company to take significant action in the field of sustainability. Perhaps one of the most notable companies to do so is Tesla, the manufacturer that paved the way for the Electric Vehicle (EV). Other companies such as Volvo, Honda, Ford,
and Rolls Royce has also publicly announced some level of sustainable initiatives to lower their overall environmental footprint.
Perhaps one of the main shared goals amongst these companies is to reach not only carbon neutrality but climate neutrality. Carbon neutrality is defined as zero net emissions being released by a given facility, whereas climate neutrality is when that facility reaches zero increasing emissions.
With carbon neutrality, a company could simply purchase offsets or promise to plant a certain number of trees to reach this goal. Though not every company pushing for carbon neutrality is doing this, this is a possibility with some and is often considered a form of greenwashing. With climate neutrality, the company would have to make actual change within nearly every realm of operations to not release any greenhouse gasses, proving to be a far more difficult goal to achieve.
Porsche has certainly made efforts to reach its goal of carbon neutrality across its product line. If the company were to continue taking the steps above, we can expect that they will eventually achieve climate neutrality. Regardless, the dedication that Porsche has shown to make a difference across the environmental, economic, and social aspects is certainly admirable, and will hopefully encourage other manufacturing companies to increase their efforts.
The push for Porsche’s supply chain to incorporate renewable energy measures could potentially be the shift needed for all supply chains to also take this initiative to compete with each other. This ultimately will lead to the lowering of greenhouse gas emissions and making the automobile the most sustainable than it has ever been throughout time.