Sustainable Finance and Value Creation at BMW Group

SUSTAINABLE FINANCE
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PART A – VALUE CREATION SUMMARY
BMW is a German multinational company which manufactures automobiles and motorcycles. It
was found in 1916 and have its headquarters in Munich, Germany. It is the twelfth largest
producer of motor vehicles in the world. The BMW group believes in reinventing itself and with
new technology, it changes the shape of the industry and the world of automobiles. It desires
to change the entire sector permanently with innovative technologies.
Value creation is the primary objective of any business organisation. When the value is created
for customers, the revenue increases and when the value is created for the shareholders, the
price of stock/share increases and ensures future inflow of funds into the company ( Tantalo &
Priem, 2016). The BMW group have up to ten goals regarding its strategy till 2020 which
includes products and services, value creation and production, society and employees. By value
creation, they use resources to gain a competitive advantage which can last longer. Competitive
advantage benefits the company in creating higher value for the customers and itself.
[Source: https://www.slideshare.net/channelinstincts/value-creation-v2]
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The production of consumer goods is continuously increasing thus leading to increasing
emissions of pollutants and CO2. The vision of BMW group is to become the most sustainable
manufacturer and to achieve the same they are using only renewable energies at all the
locations across the world. In the supply chain of BMW, the environmental and social standards
are implemented and by this, they are contributing to the society, reducing the challenges
faced by it and also reducing their production cost and risk (Priem, et al. 2017). BMW Group has
taken various measures for the value creation so that the concept of sustainable management
can be followed; it will reduce the consumption of resources by 45% till 2020. They
continuously aim to increase their resource and energy efficiency and decrease the emission of
pollutants from production. Thus, it can also create a competitive advantage for BMW.
[Source: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/
ir/downloads/en/2016/BMW-Group-SustainableValueReport-2016--EN.pdf]
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