A Mammoth Woolly
Sustainability has been termed a “woolly” matter – “woolly” meaning “confused, vague or lacking focus”. This is especially true for those who are tasked with actually building a Sustainable business. The increase in the scope of management awareness necessary to interpret and implement Sustainability as a set of actions applicable to a specific business is surely a mammoth woolly.
This post is continues a series of Case Studies that discuss how some firms have become widely recognized for their success in interpreting and implementing Sustainability. The actions taken by firms like BMW, the subject of this post, can provide useful insights for smaller manufacturing firms. Actually, larger firms like BMW provide more than just some sort of role model. The BMWs of the world have suppliers, and their suppliers have suppliers. The pursuit of Sustainability at the top of the food chain entails actions all the way down the food chain. If your firm is a supplier to – or wants to be eligible to be a supplier to – a global Sustainability leader like BMW…
Dow Jones Sustainability Index (DJSI World)
Everybody knows the Dow Jones 30 Industrials stock index. However, Dow Jones publishes a number of other investors’ indices, including a Global Sustainability index. In the indexing process, information on over 3,000 companies is divided into 24 categories, then each is ranked in nine aspects of Sustainability (examples include supply chain management, operational eco-efficiency and climate strategy).
As of last report (September 2014), BMW ranked #1 over-all and #1 in 7 of the 9 aspects mentioned above, in the Automotive and Components category. They blew away the pack for the eighth year in a row. Dow Jones’ rating methodology offers useful insight into how the financial industry looks at Sustainability.
BMW also publishes an annual Sustainable Value Report that explains the company’s top – down Sustainability program, its structure and implementation. It also reports on objectives and progress toward achieving them. The current report (for 2013) is 231 pages long – but it is easy to follow.
The Sustainable Value Report is organized as 6 six sections, each of which contains 3 to 6 subsections. The sections are:
>> Sustainability Management (sub-sections include risk management and compliance matters).
>> Product Responsibility (includes product safety and resource efficiency)
>> Group – wide Environmental Protection (includes energy consumption, materials utilization, water usage and biodiversity)
>> Supplier Management
>> Employees (includes occupational safety and health, training and diversity)
>> Corporate Citizenship
The BMW i3
Earlier this year, BMW introduced a new class of automobile. The new car, the BMW i3, was designed from the ground up with the whole woolly lot of Sustainability in mind. The BMW i3 is about the size of other BMW 3 – series cars. That, and the fact that the new car is clearly and obviously a BMW, is where comparison with the ordinary ends.
>> The BMW i3 is purpose built for urban electric driving. It sports 170 hp, accelerates from 0 to 60 mph in about 7 seconds and has a real – world range of 70 to 110 miles of city driving between battery charges.
>> The battery is mounted below the floor (like Tesla’s) and weight is distributed 50:50 front and rear. The low center of gravity, along with balanced weight distribution promise nimble handling in traffic. The car’s performance is such that even the car fanatics at Car & Driver magazine like the i3.
>> The frame is almost entirely aluminum and the passenger compartment makes extensive use of carbon fiber. As a result, the 170 horses have only about 2,900 pounds to power around. So fuel economy equates to about 138 mpge in the city and 111 mpge in highway driving.
>> The car makes extensive use of recycled materials, especially in the car’s interior. And BMW knows how the components of the i3 will be handled at the end of each vehicle’s useful life – cradle to cradle design!
For Smaller Manufacturers
The Case Studies posts are intended to provide examples for smaller manufacturers who are attempting to wring the wool out of Sustainability – that is, to create an operational definition of Sustainability that fits for them. Firms like BMW obviously are not smaller manufacturers. They do, however, condition market expectations as to what it means to be a Sustainable manufacturer, larger or smaller.
The BMW case offers three useful examples:
>> The Dow Jones Sustainability Index provides insight from the financial world on what Sustainability consists of, as seen from Wall Street. The index, its components and how firms are evaluated are worth serious study.
>> The BMW Sustainable Values Report describes how one manufacturer interprets and measures its own approaches to Sustainability. Information on BMW’s program is especially useful when studied in context of the Dow Jones framework.
>> The new BMW i3 automobile provides a “show me”, rather than a “tell me” example. The i3 is an exercise in applied Sustainability. Study of the new car provides practical insights as to Green product design, materials selection, manufacturing processes, Green product positioning, and on and on.
Thoughtful comments and experience reports are always encouraged.
P.S. Contact me when your firm confronts Sustainability.
BMW i3 photo is from the BMW i3 Press Kit.
 Definition of “woolly” from Encarta dictionary, which pops up from Microsoft Word.
 See the BMW i3 brochure: http://www.bmwusa.com/standard/content/Zmag.aspx?id=f8280d2f-0731-42d1-8156-7d3062bdbe39