The automotive industry is undergoing a significant transformation, with sustainability and electrification emerging as central pillars for its future. As cars contribute to more than 20% of national greenhouse gas emissions, the demand for cleaner, more sustainable alternatives is driving innovation.

Electric vehicles -EVs- are at the forefront of this change, offering substantial potential to mitigate emissions and reduce the carbon footprint of transportation. This report delves into the sustainability efforts of leading automotive brands -Tesla, Volkswagen, BMW, and Ford- evaluating their performance in key areas such as ecological impact, energy consumption, recycling rates, supply chain transparency, and long-term sustainability goals.

Introduction to BMW

BMW, a leading luxury automobile manufacturer, integrates performance, innovation, and sustainability to shape the automotive industry. Headquartered in Munich, Germany, the BMW Group reported USD 168.1 billion in revenue in 2023 and produced 2,554,183 light-duty vehicles globally. Known for its focus on driving dynamics and premium features, BMW appeals to consumers seeking both high performance and eco-friendliness.

Since its founding, BMW has been active in the electric vehicle (EV) market, incorporating advanced technology and luxury into its models. The company’s success is driven by innovation, operational efficiency, and a strong emphasis on sustainability. BMW holds a significant share of low-carbon vehicle sales, reflecting its commitment to a low-carbon future.

BMW’s strategy focuses on delivering high-performance vehicles that prioritize sustainability without compromising on luxury or driving experience. Beyond traditional automotive offerings, the company explores energy storage and other sustainable solutions. With a high share of low-carbon vehicle sales and strong commitments to a low-carbon transition, BMW is dedicated to shaping the future of mobility and reducing carbon emissions. The company’s clear vision and commitment to sustainability position it to maintain leadership in the global electric vehicle and clean energy markets.

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Criteria

Carbon Footprint, High

BMW is proactively aligning its operations with international sustainability objectives, such as the Paris Climate Agreement, to minimize its carbon footprint. The company is heavily investing in renewable energy for production, improving battery recycling processes, and advancing energy-efficient technologies. Although substantial progress has been made, Scope 3 emissions—which arise from the supply chain and the use of products—remain a considerable obstacle.

Ecological Impact, Medium

BMW embraces circular economy principles and responsibly sources materials to reduce environmental harm. In 2023, these efforts resulted in a 1.7 million-tonne reduction in CO2 emissions. However, challenges persist in mitigating the environmental damage caused by the extraction of key minerals like lithium, cobalt, and nickel, which are critical for electric vehicle batteries.

Energy Consumption, High

BMW’s production plants are entirely powered by renewable energy, utilizing cutting-edge technologies such as robotics and heat recovery systems to improve energy efficiency. One notable innovation, the Dual-Rotor Motor, has boosted energy performance by 20%. While the company’s achievements are impressive, there’s still an opportunity to set bolder energy reduction goals to enhance sustainability.

Freight Density, Medium

BMW has adopted more efficient logistics practices by integrating circular economy strategies and optimizing transportation. However, further data on freight density would help provide a clearer picture of the true effectiveness of these methods in achieving sustainability targets.

Recycling Rates, Medium

BMW is committed to reducing waste through material recycling, particularly through its collaboration with SK TES on a closed-loop battery recycling system. While this initiative plays a significant role in the company’s sustainability efforts, there are still opportunities to enhance the recyclability of products and increase transparency regarding the recycling process.

Saving Levels, Medium

BMW’s investments in low-carbon technologies, such as the Dual-Rotor Motor, have resulted in cost savings and a significant portion of the company’s revenue—15%—coming from its low-carbon business. The scaling of these technologies would further contribute to the company’s sustainability objectives.

Specific Product Monitoring, High

BMW employs lifecycle analysis (LCA) to assess the environmental impact of its electric vehicles (EVs). The company’s collaboration on battery recycling with SK TES illustrates a strong dedication to sustainability. However, more detailed tracking throughout the product’s lifecycle would increase transparency and better showcase its environmental benefits.

Supply Chain Waste, Medium

BMW is focused on reducing waste across its supply chain by sourcing materials responsibly and promoting the circular economy. Nevertheless, more initiatives are necessary to tackle waste reduction more comprehensively throughout the entire lifecycle of its products.

Sustainability Scorecards, High

BMW tracks its sustainability progress with comprehensive scorecards, which include targets like an 80% reduction in Scope 1 and 2 emissions by 2030. To further enhance reporting, the company could provide more transparency into its research and development processes and more information on the environmental impact of its products.

Water Management, Medium

BMW likely employs resource-conserving techniques, such as collecting rainwater and recycling wastewater, to manage water usage efficiently. However, more explicit water management strategies and goals would help provide a clearer picture of the company’s commitment to sustainability in this area.

Conclusion

BMW has made remarkable progress in pursuing sustainability, focusing on carbon footprint reduction, resource conservation, and circular economy practices.

While the company’s efforts are commendable, there are still several areas—such as water management, freight density, and supply chain waste—that require more attention to meet long-term environmental goals.

Related to other brands

Number of criteria met by each brand:

ESCP Business School Team

Research developed by five curious international ESCP Business School students who have worked together to successfully complete their consulting project. They analysed four brands in four different categories -24 brands: electric cars EV, dairy products, computers, personal care, luxury apparel, fast fashion-, according to 10 environmental criteria.

Sources

  • Tesla full annual report 2023
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  • The guardian: “About 500,000 trees cut down at site of Tesla gigafactory near Berlin. 22 aout 2024” (Damian Carrington and Ajit Niranjan in Berlin)
  • World benchmarking alliance: Automotive and Transportation Manufacturers Benchmark 2024
  • Volkswagen Group sustainability report 2023
  • Automotive logistics: “The many roads, fuels and tech leading to zero emission logistics at Volkswagen Group” (Christopher Ludwig)
  • Tech target: “7 biggest examples of greenwashing” (Tim Murphy)
  • EV Magazine: “Volkswagen’s EV Initiatives From Charging to Batteries” (Helen Sydney Adams)
  • World benchmarking alliance: Automotive and Transportation Manufacturers Benchmark 2024
  • BMW sustainability & Group report
  • Supply chain digital: “BMW Leads the Charge in Sustainable Battery Recycling” (Tom Chapman)
  • Eco news: “ wakes up the world from the hydrogen dream: The circle-shaped engine is the future” (Edwin O)
  • CapGemini: “The BMW Group strengthens its frontrunner position in sustainable supply chains” (client story)
  • World benchmarking alliance: Automotive and Transportation Manufacturers Benchmark 2024
  • Ford’s Integrated Sustainability and Financial Report 2024
  • Wired: “The Electric Explorer’s Nightmare Launch Shows Everything Ford Gets Right and Wrong About EVs” (Jeremy White)
  • The EV Report: “Ford Adjusts EV Strategy for Growth and Profitability”
  • TCD: “Ford enters new territory with game-changing battery tech: ‘This could reduce repair costs’” (Rick Kazmer)
  • World benchmarking alliance: Automotive and Transportation Manufacturers Benchmark 2024