CSR: What the automotive industry should really focus on

An increased pollution level in urban India has increased the focus on automobiles. The National Green Tribunal has recently introduced stringent limitations on old cars remaining on roads since vehicular pollution is seen as one of the primary causes of high pollution levels.

Also, a rash of high profile automobile accidents has put the focus on automotive safety as well as raised a debate on how to improve road safety. In an earlier piece we showed that a number of automotive companies advertise in a manner that compromises road safety.

For us, the automotive industry has been an interesting and ongoing area of study and interest. We have looked at Strategic Approach towards Automotive CSR and issues around automotive safety.

Considering the essential nature of this industry it is imperative to look at key issues that automotive companies need to worry about. The diagram below summarizes these issues.


We outline the key issues surrounding automotive industry in the diagram. The customer is at the center of the industry. Component manufacturers are central to automobile manufacturers as their primary activity is assembly. The produced vehicles need to be transported to reach the customers. An integral part of post-production is maintenance of vehicles, their resale and final disposal.

Consumer Mindset

We see the consumer at the centerpiece of the automotive industry. Her concerns range across three areas:

Automotive safety: Are the vehicles driven by her safe? Are they likely to crash easily? Will the airbags open at the right time? Will the vehicle burst into flames?

Road safety: Road safety is an incidental outcome of vehicle production. Drunken driving, unsafe road behavior and road rage are some of the key causes of our roads being unsafe. Automobile manufacturers provide vehicles in the hands of the driver and hence they owe to the society to support their training and constant education.

Environment orientation: Consumers are willing to contribute to the environment in many ways as they have become health conscious. There have been trends where people have started using carpooling services, are increasingly concerned about greener fuels and greener transport (bicycles / walking).

Key questions: How much do automobile manufacturers focus on safety? What initiatives do they take to promote responsible driving and proper road behavior? Can automotive companies promote healthier living options?

Air Pollution
Emissions from vehicles are a huge source of particulate emissions and pose health risks like respiratory problems. They lead to high levels of suspended particulates in the ambient air. In several Indian cities these exceed the air quality standards set by Central Pollution Control Board (CPCB). Sulphur dioxide, ammonia and suspended particulates in the air are higher than the CPCB standards. Also, India’s diesel-powered vehicles pump out exhaust gases with 10 times the carcinogenic particles found in gasoline exhaust.

Key questions: What can automotive companies do about reducing air pollution? Can automotive companies create products that reduce emissions from older vehicles at the exhaust level? Can automotive companies partner to research on vehicles that use less of hydrocarbons? What can automotive companies do to reduce pollution from trucks used in transportation?

Water Scarcity
The automotive industry is a major consumer of water for various production processes. According to some estimates, producing a car uses over 39,000 gallons of water.

Major water uses in automotive manufacturing include surface treatment and coating, paint spray booths, washing, rinsing, hosing, cooling, AC systems and boilers. The component-manufacturing segment has its own list of water intensive processes. The vehicle paint process uses the highest volumes of water as paints and coatings need to be regularly cleaned with water.

Key questions: What can automotive companies do reduce water usage? What activities can be undertaken by automotive companies to reuse and recycle water? Can automotive companies encourage service centers to reduce /recycle water usage?

Energy Efficiency & Renewables
In addition to optimizing energy, use of renewable energy is another key sustainability initiative that automotive manufacturers must consider.

Key questions: How can automotive companies move faster towards using renewable energy sources both for the production of vehicles as well as for powering the vehicles?

Waste Management

Auto manufacturing plants create a wide range of waste like production waste, scrap, end of life products. Materials extracted from vehicles have a major environmental impact and require a large amount of energy for production and disposal. Closed-loop recycling is a way of recycling into material that has parity with new resources, being used in the same type of products.

Key questions: How can automotive companies help reduce car scraps in land-fills by reusing metals? How do automotive companies’ reduce the harm caused to society waste disposal? How can automotive companies contribute towards reducing the ever-growing pile of junk vehicles?

Article coauthored with Utkarsh Majmudar and originally published in Economic Times.