Evaluating Sustainability Challenges in the Global Automobile Industry

This report, prepared by a student and focusing on the automobile industry, examines key sustainability challenges such as increasing synthetic fuel usage, conventional engine reliance, unsuccessful carbon emission targets, energy loss, and rising emissions. The report analyzes these issues against the backdrop of Rolls Royce, a major car manufacturer, and discusses the industry's efforts to address them. It delves into the impacts of vehicle production and usage on the environment, society, and economy, highlighting the need for innovative solutions like electric vehicles while acknowledging their disadvantages. Furthermore, the report explores the challenges of meeting emission targets and the importance of technological advancements to improve fuel efficiency and reduce harmful emissions. It concludes with recommendations for the next fifty years, emphasizing the need for the industry to accelerate its efforts towards sustainable development.

Running head: BUSINESS ETHICS AND SUSTAINABILITY
New Horizon Consultancy
Name of the Student
Name of the University
Author note

1
BUSINESS ETHICS AND SUSTAINABILITY
Executive Summary
The automobile industry in UK has been one of the leading industries that have used
advanced technologies for brining innovation and sustainable developments for the wider
society. Bringing sustainable development refers to the effort of the organizations within the
industry for driving profitable development and at the same time achieving social, economic
and environmental influences. Therefore, a business is only considered to be sustainable
while it is managing the possible impacts for the environment, wider society and the
economy. The automobile industry has been making great effort to deal with the sustainable
developments for a long time. However, in this rapidly changing world, there are some major
challenges which can hinder the developments to a great extent. Therefore, it is important to
deal with such challenges while making effective strategies for the upcoming years as well.
Therefore, this report includes the discussion on the major sustainability challenges faced by
the global automobile industry and the measures that have already been taken for dealing
with such challenges against the backdrop of famous car manufacturing company, Rolls
Royce. Recommendations for next fifty years have been made accordingly.

2
BUSINESS ETHICS AND SUSTAINABILITY
Table of Contents
Introduction................................................................................................................................3
Background................................................................................................................................3
Key sustainability challenges faced by Automobile industry....................................................4
Increasing usage of vehicles run by synthetic fuels:..............................................................4
Usage of conventional ignition engine:..................................................................................5
Unsuccessful targets of carbon emission:...............................................................................6
Loss of Energy:.......................................................................................................................8
Continuously rising emission rate:.........................................................................................9
Electric vehicles as an alternative and its disadvantages:....................................................10
Conclusion................................................................................................................................12
Recommendations from an Ethics and Sustainability Consultant:..........................................13
Reference list............................................................................................................................16
Appendix:.................................................................................................................................20

3
BUSINESS ETHICS AND SUSTAINABILITY
Introduction
The sustainable evaluations need large investments in researching the managerial and
technical skills along with bringing innovations in the automobile industry. However, it needs
a long period of time before these measures are adapted with the production paradigm. The
European automobile industry has faced several environmental issues for many years now.
The automobile industry has been struggling for quite a long time because of the new
challenges that the entire industry is facing. There are numbers of environmental issues such
congestion, air pollution, jam etc. These factors have led to the big players of the industry
thinking twice before they fix their goals and objectives and the marketing ventures (Schöggl,
Baumgartner and Hofer 2017). Therefore, as an ethics and sustainability consultant, I will
discuss the major sustainability challenges that the automobile industry against the backdrop
of a major European car manufacturing company, Rolls Royce and recommend effective
measures for adapting in the next fifty years by the company and the entire industry as well.
Background
From the very beginning of the 20th century, several propulsion technologies started
developing within the Western world. Electric cars started entering the market, crop-based
and fossil fuel based cars started getting manufactured and it came to the global market for
the approval of customers (Abduaziz et al. 2015). Other than the electric cars, the vehicles
using gasoline oil and fossil diesel came dominating the roads. Eventually the consumers
developed interest for these alternative technologies such as hybrid and electric vehicles and
its demand started increasing mostly in countries such as Japan, USA and Europe (Sukitsch,
Engert and Baumgartner 2015). As soon as 21st century began, the hybrid vehicles were a
reality for the automobile industry. If the success of bringing alternative technologies can be
analysed, it can be seen that there are multiple reasons that contribute to it. The first and

4
BUSINESS ETHICS AND SUSTAINABILITY
foremost reason that contributes to the change towards a sustainable future of the automobile
industry is that the fundamental sense behind the proliferation and environmental innovation
emphasizing the automobile sector. The visible and immediate profits of mobility are a major
attraction of the contemporary society which also involves greater width and breadth within
the commercial and technological attention for moving goods and people for the best possible
utilitarian value (Al-Oqla et al. 2015). However the costs that are associated with mobility
tend to be neglected most of the times for maintaining the sound development. However,
while bringing a sustainable change, the automobile industry has faced several challenges.
Major such challenges are discussed below.
Key sustainability challenges faced by Automobile industry
As a whole the global automobile industry makes millions of trucks and cars each
year along with employing millions of individuals all around the world. It is quite evident that
the global automobile industry has a significant part to play within the international market
and it also has a huge impact on several other economic sectors in the world (Al-Oqla and
Sapuan 2014).
Increasing usage of vehicles run by synthetic fuels:
The automobile industry is also a large market for the steel industry, right after the
construction sectors as the automobile industry. There are huge amount of steel required for
producing the vehicles. Other than this industry, petrochemical, aluminium and glass
industries are also dependent on the automobile industry. Therefore the usage of these
materials in automobile industry is also increasing in a rapid pace as well. Each year
approximately seventy million cars enter the international automobile market. This is the
major reason that the automobile industry has become a continuous supplier of the services
and goods (Dunne et al. 2016). For every household in the first world countries, it is the

5
BUSINESS ETHICS AND SUSTAINABILITY
second most prioritized buy after a residence that eventually makes automobile industry more
significant in the global market. Therefore, following the mass manufacturing of cars, there
have also been introductions of motor vehicles which run on alternative or synthetic fuels
leading to a fast increase of the environmental pollution, congestion, CO2 emissions and
several major diseases such as lung cancer (Salvado et al. 2015). Therefore, this has led the
global automobile industry adopting, changing, mending and implementing measures for the
betterment of the world environment for dealing with this challenge.
Usage of conventional ignition engine:
The conventional internal ignition engines had only made sense in financial purpose
when the fuels were plentiful and cheap and the major impacts of burning fuels and
environmental pollutions were not understood by the society. With the beginning of 20th
century, the electric vehicles had emerged and became immensely popular. However they
have been declined after some point of time due to their low speed. However oil as a fuel still
accounts for more than ninety five percent of the international transportation (Habidin et al.
2015). It is also responsible for more that thirteen percent of the international green house gas
emission. Using oil as fuel causes immense environmental damages as the internal
combustion engines are accountable for the major share of air pollution (Jasinski, Meredith
and Kirwan 2015). Along with huge emission of carbon dioxide, the motor vehicles also
generate several hazardous chemicals such as sulphur oxide, nitrogen oxide and carbon
monoxide. It should be mentioned that the global automobile industry has been capable of
bringing various technologies for trying to limit the harmful chemicals, but transportation
utilizing the fossil fuels have not been able to eliminate the emission of such harmful
elements.

6
BUSINESS ETHICS AND SUSTAINABILITY
Unsuccessful targets of carbon emission:
There are regulators all around the globe which have been trying to set the target of
emissions of major harmful gasses such as nitrogen oxide, hydrocarbons, sulphur oxide,
particle matters and carbon monoxides. However different regions of the world have set
different targets and regulations for such harmful emissions, but the overall target and
message is crystal clear for the entire industry that it requires to curb the emission amount
drastically in order to save the world and build a sustainable future (Wells 2017). In this
purpose, the European automobile industry has been the most advanced. There has been a
fixed target for the year 2020 which indicates that any car that is coming in the market can
emit maximum of ninety five grams of carbon dioxide each km. For the year 2015, the
European automobile industry has fixed the target for 27% which was a straight 50%
reduction from the emission level of 2010. The targets for sulphur oxide and nitrogen oxides
had also been agreed as per the Gothenberg protocol (Nieuwenhuis, Vergragt and Wells
2017). The industry has also targeted to reduce the emission level within the year 2020. It
also aspires reducing the emission of sulphur oxide by 59% and nitrogen oxide by 42% along
with reducing the emission of dangerous pollutants at the same time. However, the targets are
difficult to meet for several vehicles using traditional engines and fossil fuels.
Not only the European automobile industry, but other countries have also taken
effective measures for dealing with the major sustainability challenges. The automobile
industry of USA has fixed their target for emission of carbon gas till 109 grams for each km
within the year 2025 which makes their carbon emission level of 2010 reducing almost to
half (Tukker et al. 2017). This figure of changing rate is quite remarkable; however it also
implies that the American automobile industry has the least motivated targets on an
international basis. Japan, China and other countries in Asian continents have set their targets
resembling to the European car industry (Pinkse, Bohnsack and Kolk 2014). However the

7
BUSINESS ETHICS AND SUSTAINABILITY
automobile industry will only be able to meet these targets if they find sustainable
alternatives for the traditional fuels and engines.
Figure 1: Targets of carbon emission across world
Source: Nieuwenhuis, Vergragt and Wells (2017)
The graph shows that most countries around the world have set their targets for next
few years according to the targets of European automobile industry. These targets also
indicate towards the significant challenges for the automobile industry and its investors. The
rate of change in curbing the harmful emissions also requires picking up the pace because the
innovative and new technologies are also required to become accustomed in the market
(Hahn et al. 2015). These technologies are the most significant ones as these tend to address
the major issue with the energy loss and internal combustion engine.

8
BUSINESS ETHICS AND SUSTAINABILITY
Loss of Energy:
Scientifically the most primary issue with the internal combustion engine is its major
lack in converting the energy. Figures show that nearly about 18 to 25% of energy coming
from the fuel of the cars tends to convert in the energy that helps the car move.
Figure 2: Energy loss in internal combustion engine
Source: Tukker et al. (2017)
This graph demonstrates that only 18 to 25% of the energy coming from the fuel of
the car is utilized for driving the car; therefore there is a huge amount of energy loss.
Therefore it can also be indicated that while the combustion engine is producing the
poisonous gases and pollutants, most of the fuel part is not even being utilized for powering
the car. The lost energy is a major challenge for the automobile industry along with the
requirement for reducing the emission of carbon and other harmful pollutants (Shafie-Khah et
al. 2016). Therefore these have also led the entire automobile industry facing environmental
issues if it wants to stick to the conventional diesel and petrol run engines. However with the
advancement of technologies, there are several ways of dealing with this issue. The turbo
chargers have improved the fuel competence; in addition to that the catalytic converters have

9
BUSINESS ETHICS AND SUSTAINABILITY
also been utilized for removing the harmful gas emissions and drive-train technology helps
addressing the issues with wasted energies (Hahn et al. 2015). In the present time, the these
technologies have contributed to significant improvements that are being made for the past
twenty years, however the industry analysts suggest that for the next twenty to fifty years the
automobile industry needs to gather speed for such improvements towards sustainable
developments. Rolls Royce has created their sustainability strategy by focusing on the
profitable development, innovation and convenience of the customers (Kannegiesser,
Günther and Gylfason 2014). However, in order to bring a better future, the company will
have to invest more for bringing the technological advancements which will help them
improve all the performance aspects and lead to a sustainable future.
Continuously rising emission rate:
Another challenge that the global automobile industry faces that: it is one of such few
industries where the rate of emission is always on rise. The main reason behind this is that it
is mostly dependent on oil as the fuel and there is a serious lack in finding substitution for
this industry (Wilhelm et al. 2016). The energy sectors has a major grip over the renewable
energies, however the transportation sector is mostly dependent on the oil consumption.

10
BUSINESS ETHICS AND SUSTAINABILITY
Figure 3: Oil usage in transportation sector
Source: Kannegiesser, Günther and Gylfason (2014)
Along with that the number of vehicles on road is also increasing in a rapid pace in
addition to the developments in the larger emerging markets in Latin America and Asia.
More cars are now brought to the road which eventually increase the targets for reducing
carbon emission and the miles driven; therefore all of these add up to a bigger challenge for
the automobile industry.
Electric vehicles as an alternative and its disadvantages:
The global automobile industry has been working on finding effective solutions to
such environmental challenges for a long time. A significant and long-term solution to this
issue of carbon emission and the ignition engine is the electric cars. The electric vehicles
have numbers of major advantages over the conventional engines. Firstly, the electric
vehicles do not waste as much energy as the conventional vehicles. These vehicles can

11
BUSINESS ETHICS AND SUSTAINABILITY
convert around 60% energy for powering the cars; therefore it is approximately more three
times efficient than any other conventional engines (Casals et al. 2016). Along with that the
electric cars do not exhaust any fume or any harmful pollutants such as sulphur oxide or
nitrogen oxides. The power of electricity is utilized for recharging these vehicles. The electric
vehicles can also utilize the renewable energies such as solar or wind energy; therefore the
emissions only take place while stemming the manufacturing procedure. However, while the
electric power produced from the conventional energy sources such as gas or coal, there are
still emissions of harmful elements. As suggested by Go, Wahab and Hishamuddin (2015) the
benefit of using the electric vehicles may vary across countries, however there is still doubt
whether the electric cars are providing opportunities considering the environmental
perspective. However mostly it has been a well-accepted fact that the extensive adoption of
the electric vehicles in addition to considering the increased renewable energy generation can
help the industry to achieve its target of reducing carbon emission to a great extent. Other
advantages of using electric cars are that these vehicles reduce the cost of fuel drastically and
they are quiet too (Zokaei et al. 2016). The luxury electric cars are also capable of providing
a nice driving experience. The low cost maintenance has also attracted consumers towards
these cars.
The electric vehicles have been an effective measure for the challenges automobile
industry has been facing for the past few years. However, there are still issues for adapting
the electric vehicles extensively such as its lack of variety and a serious lack in its refuelling
infrastructure. Also most of the electric cars have 100 miles range, even some are lower than
48 before the vehicles need to be recharged. The recharging time is longer than a car takes to
fill with fuel (Ruff 2015). However the hybrid electric vehicles are still dependent on the
internal combustion engines and refuelling. These vehicles cut off emissions to a great extent
and improve the fuel efficiency, but these are still incapable of performing that fully like the