Daimler's Sustainability: Decision Making and Reporting Analysis

This report provides an executive summary of Daimler's sustainability challenges, particularly focusing on the diesel emissions scandal and its impact on the company's reputation and market price. It introduces the importance of sustainability in the automotive industry and highlights the company's background, including its product lines and global presence. The report delves into specific sustainability issues, such as the use of refrigerants and emissions from vehicles, and their environmental impacts. It explores the sustainability reporting requirements and frameworks, such as ASX council and CPD, that can guide Daimler's decision-making. The report also analyzes the impact of these issues on the organization, including the decline in share price. Finally, it offers recommendations for Daimler to improve its sustainability practices and concludes with a summary of the key findings and suggestions for future actions. The report emphasizes the need for ethical and social responsibility in corporate practices and the adoption of sustainable alternatives.

RUNNING HEAD: Decision Making and Reporting for Sustainability
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Daimler
Decision Making and Reporting for Sustainability
(Student Name)
10/28/2018

Decision Making and Reporting for Sustainability 1
Executive Summary
Sustainability plays a prominent role in the environment. Most of the companies are not
adopting sustainability in their organization which greatly affected the environment as well
society. Daimler is one of the leading companies in the automotive industry, who mostly
work on Mercedes Benz. There are other more products which the company manufactured.
Some of the sustainability issues found in the company, as the company found guilty in
scandal case of diesel. The company was greatly affected by such case, as their reputation
was highly affected and the market price of the company was also fallen down. There is a
certain sustainability reporting framework which has been introduced by the government to
control over such issues such as ASX council, CPD and so on. These would help Daimler to
take a decision in their company according to the framework set by the government. In the
end, some of the recommendations have been provided in this report for the company to
maintain sustainability in their organization.

Decision Making and Reporting for Sustainability 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Background of the company......................................................................................................4
Sustainability Issue.....................................................................................................................4
Sustainability issue of Daimler...............................................................................................6
Impact on organization...............................................................................................................8
Sustainability Reporting Requirements....................................................................................11
Decision making...................................................................................................................13
Recommendations....................................................................................................................14
Conclusion................................................................................................................................16
References................................................................................................................................18

Decision Making and Reporting for Sustainability 3
Introduction
The sustainability is a practical loom in the commercial world, to ensure feasibility
and truthfulness in long-term by utilising the funds and plummeting ecological force without
compromising with product excellence, competitiveness, and profit margins (Epstein, 2018).
Sustainability maintains or manages a balanced approach to the environment, human health,
and better business management (Eizenberg & Jabareen, 2017). The concerns towards
environment have become increased for all the corporates with the rapid development of the
business economy. The corporates are majorly responsible for the environmental problems at
a greater level (Waas et al, 2014).
(Source: Macro Properties, 2018)
The business literature has forecasted that sustainability plays a prominent role in the
21st century. The business has to understand the social anticipation which comprises the
incorporated arrangement such as financial, communal, and ecological factors (Wood et al,
2014). It is the moral responsibility of the companies in the corporate world to use natural
resources and also explore new resources with sustainable alternatives (Clayton & Radcliffe,
2015). Some of the business still has not taken the ethics and social responsibility into
consideration. It has created a great impact on the environment by destroying the

Decision Making and Reporting for Sustainability 4
environment and their long-term benefits. The vendor must use renewable resources rather
than exhaust the funds which help to diminish pollution and harmful waste (Epstein, 2018).
Most of the organization is not utilizing the administration of the environment with
carefulness even though the firms do not appreciate and support the factors of the
environment into the strategic plan (Benn et al, 2014).
Most of the companies are facing issues in adopting sustainability in their
organization. In the following report, there will be a detailed analysis of sustainable issues
faced by the company Daimler, and the reason to adopt the sustainability in their
organization. The CEO of the organization need to know about the importance of the
sustainability and the issues they have faced by not adopting the sustainability in their
organization.
Background of the company
The company Daimler is one of the topmost automotive companies. It distributes into
Daimler Trucks, the Mercedes-Benz Cars, Daimler Financial Services, Mercedes-Benz Vans,
and Daimler Buses. It is the thirteen biggest car manufacturers in the world which was
founded in 1883 (Bruner, 2017).
(Source: Steelguru, 2018)

Decision Making and Reporting for Sustainability 5
The Daimler Group is of the largest manufacturer of first-class cars and also the world
largest producers of commercial vehicles at the worldwide level. It is an automotive group
with an assurance to fineness and the company has a goal to accomplish sustainable
development and industry-leading prosperity which increases the value of the company
(Spekman et al, 2017). The company has an aim to be world’s leading automotive companies
which is intended to inspire the customers with their brands, products, services as well as
strives to occupy the leading for sustainable drive systems (Andersen & Zaelke, 2017).
Sustainability Issues
In the recent scenario, human face a variety of serious sustainable development issues
and ecological issues which become one of the important topics among the individuals at the
global level. Sustainable expansion is a new sculpts of the expansion which has turn out to be
a inclination of societal expansion in most of the countries (Owusu & Asumadu-Sarkodie,
2016). The changes in the environment are mainly caused by individual developments and
innovations. The nature of the surroundings has transformed with the reason to overdo of
natural resources (Lieb & Lieb, 2010). Therefore, the environment of the earth has been
greatly damaged as well as made changes in the normal surroundings since individuals rely
on natural resources for the continued existence, and it may cause numerous resources to
drain (Anuar & Abdullah, 2016). The major concern which has been occurred is global
warming. The conservatory result increases the warmth of the earth, which is the main reason
for global warming (Andersson & Ohman, 2017).

Decision Making and Reporting for Sustainability 6
(Source: Ajino Moto, 2018)
All these ecological concerns direct to the devastation of the surroundings. The
industry of the automobile industry is one of the growing businesses in the recent timeline.
However, various researchers and analysts have concluded that the government of various
countries has also take participation in promoting their business in order to attract most of the
customers and in turn enhance the economy of the nation (Eagle et al, 2015). The main issue
that has been faced by automobile industries are based on the environmental and safety
related factors. It depends on finite planetary resources. The engines of the cars emit heat,
noise, and gasses which are inflecting the critical impact on the environment causes the
changes in climate as well as global dimming. The combustion of the fuel release CO2
(Carbon-dioxide) and also generate the greenhouse gasses in the atmosphere (Schaltegger &
Wagner, 2017). It has contributed its part in causing the global warming and the acidification
of the ocean. Some of the automobile industries have been found to release other poisonous
gasses in the whole environment which involve nitrogen dioxide, nitric oxide, and carbon
monoxide. The toxic organic compounds such as tetraethyl-lead, hydroxyl radicals, and
hydrocarbons are also emitted in the environment (Van Poeck et al, 2016). These factors
majorly contributed to cause the anthropogenic climate changes in the atmosphere which has
been analyzed by The Environmental Change Institute of Oxford. In most of the places, the
cirrus cloud has been perceived due to the over emission of water vapor. These are some of

Decision Making and Reporting for Sustainability 7
the environmental-related issues which have been faced by most of the industries in the
recent time. Moreover, most of the automobile industries have faced the sustainable issues
which occur due to the emitting noise and air pollution in the atmosphere (Howes et al,
2017).
Backyard Barometer is the primary information to trail the attitude of the nation near
the surroundings over a twenty year time; it mutual with the new Roy Morgan study of 1800
Australians. It presents that Australian have a very strong resemblance with the forest,
beaches, oceans, and natural world which carry more accomplishment to care for the usual
habitats of Australian (Whitelaw, 2018). In Australia, defending the Great Barrier Reef is the
major ecological concern with the review of the 94 percent that protection is important. Some
of the individuals have reviewed that generally state of the Great Barrier Reef is deteriorating
or getting of inferior quality while compared with the 10 years ago. Approximately half of the
Australian has respondent that the Reef is in the terminal turn down, with the coral bleaching
and weather modify which saw as the top two pressures (Esparon et al, 2015).
(Source: Guevarra, 2011)

Decision Making and Reporting for Sustainability 8
The logging, as well as clearing of land, is also destroying the natural habitats. Mining
and energy exploration has an issue of waste disposals such as dumping and toxic runoff. The
high density of urban areas is also putting a stress on the environment with the demand for
energy, the problem of waste disposal and pollution (Dover, 2018). These issues will still
remain at the forefront of political and everyday life. The climate change and the other
environmental issues have had a great impact on the political and on the economy in
Australia for several decades with the higher emission of carbon per capita (Higgins et al,
2018).
Sustainability issue of Daimler
The company Daimler faces the issue of sustainability. The company is going through
the potential encroachment measures from the Brussels subsequent to the company found
guilty in keep on using a super greenhouse gas in air conditioning system in their cars.
Mobile Air Conditioning (MAC) dictate obliges for the car companies of Europe to limit the
global warming potential (GWP) of their air conditioning refrigerants from 1st January 2006
to elements less than 150 times more influential than carbon dioxide. The substitution
refrigerant called as HFO-1234yf which had been validated by all of the European car
companies which also cover the German Automotive Association in which Daimler is a
member (Bovens, 2016). But it has been found that Daimler was not using the new
refrigerant which was replaced by the government of Europe. The company has a reviewed
that HFO-1234yf could be extremely combustible, as due to the demand of elevated security
at Mercedes-Benz, that chemical would not use in their product. Therefore, the company has
continued to use R134a refrigerant in its vehicles. Undoubtedly, HFO-1234yf is measured
mildly combustible but it has been passed for safe use by European regulators, the US
Environmental Protection, car companies, and other nationwide authorities. The new finding

Decision Making and Reporting for Sustainability 9
of Daimler Company has been challenged extensively and although the less colorfully by the
automobile industry of engineering society. Due to the installation of a defeat device by the
company, the actual operation of the cars releases NOx emissions higher than anticipated. As
a consequence, the company was needed to take back 4,900 cars across the world and 1370
thereof in Germany (Ewing, 2018).
One more case of the company has been found, the company has come under the case
of excessive emission in their vehicles. The transport Ministry of Germany has confirmed
that approximately 774,000 Mercedes-Benz vehicles in Europe were originated to be running
with the unauthorized “defeat” devices. Following this issue, the department has instructed
Daimler AG to pull 238,000 cars off from the roads of German. The article was run by the
Bild am Sonntag which is a local news outlet in Germany road about the company Daimler
that the software of the company was identifying that possibly will stop the flow of AdBlue
under few situation on its OM 501 truck engine. The Stuttgart, Germany based carmaker has
reviewed that the engines used in the Mercedes- Benz trucks, could exceed the emission of
nitrogen oxide gas under certain conditions. The company escaped expensive fines following
conversation with the Transport Minister and agreed to upgrade the diesel emission software
in Vito vans, the GLC sports utility vehicle, and C-Class sedan, for escaping the costly fines
(Stumpf, 2018). The Daimler was also sued by shareholders over whether the company has
misled the investors about the severity of the diesel emission scandal.
Impact on organization
Decline in Share Price
The scandal case of company directly impacted on the share price of the company. At
0836 GMT, the share price of Daimler was fallen down from 2.5 percent, at 61.19 euros,
underperforming the Stoxx 600 automobile index which was 0.48 percent lower. Therefore,

Decision Making and Reporting for Sustainability 10
the scandal case was done by a company directly impacted on the share price of the company
(Business News, 2017).
Impact on Reputation
Daimler is one of the biggest companies in the world. Any single mistake directly
affected the image of the company. The good reputation in the market is the crucial part of
the success in the competitive world. It helps in bringing the greater volume of investors and
client. The scandal case of the company ruined their image in the market. The shareholders
were dissatisfied from such case and they filed against the company to mislead the investors
about the rigorousness of the diesel emission scandal.
Legal Repercussions
It was the responsibility of the company to properly check the device in the vehicles
before realizing in the market. The company has failed to do so. This cause legal repercussion
against the company, as the company was instructed to take off 238,000 cars from the road of
Germany. The company has pleaded guilty by the transport ministry of the country to breach
the regulation of the country. The authority has imposed fine of around $2.30 billion for
conniving on the price and also passing the costs of emissions rules on to the customers
(Price, 2018).
Time and Amount on Re-fix the problem
From such scandals, the extra time and amount were unnecessarily invested by the
company to re-fix the problem. The company has taken off cars from the market which has
created a huge loss for the company. The company was ordered to make changes in the cars
in which huge amount has been invested unnecessarily. It cause loss of time and amount by
the company.

Decision Making and Reporting for Sustainability 11
Loss of Customer Faith
The scandal case of the company rued their image in the market. The customers have
lost their faith in the company. The company was known for their quality and services, but
from such case, it took time for the company to regain the faith of customer in the market. It
caused a fall in the share price of the company as well as loss of faith among customers
which also affect the price and demand of their vehicles. Therefore, it would be tough for the
company to regain the faith of the customers as well as investors. It was the responsibility of
the company to cater the quality product to the customers by not affecting the environment,
but they failed to do so.
Created Long-Term Orientation
The turbulent financial market, changing trade agreements, unable consumer
purchasing pattern, and incompatible communal policies make it highly tricky for the
company to act for the long-term. The scandal case of the company would create long-term
orientation for them.
Reaction of Investor
Every scandal case is to be expected to be eliciting few level of the short-term
response; therefore, the key significance for the market lies in the long-term belongings on
the shares. The consequence from the Daimler scandal in Germany is the best instance of
corporate scandal. The company was known for the quality but then had a great impact on the
sector and possibly for the asset in that part of the globe. From such scandal, the investors
assess the likely impacts of the business scandal on the precise stock. The shareholders have
sued the company for misleading them for the case of diesel emission scandal.
Resilience