The world’s leading automakers are not doing enough to reduce greenhouse gas emissions in line with international climate targets and are failing to address or even report on human rights issues, according to new assessments released by the World Benchmarking Alliance (WBA).
The assessments include an update to a report launched last year scoring over two dozen automakers on progress towards the low-carbon transition and other measures of climate action, as well as a new analysis on automakers’ human rights disclosures. These assessments or “benchmarks” are developed by the WBA, an independent collaboration of more than 170 global organizations which evaluates corporate performance according to the United Nations Sustainable Development Goals.
The auto sector — a major contributor to emissions driving the climate crisis — overall is not aligned with the goal prescribed in the 2015 Paris Agreement to limit global warming to well below 2 degrees Celsius, according to the WBA’s evaluation. Furthermore, this sector on average scored the lowest of any sector on the human rights assessment. This was the first year WBA examined the automotive industry in its corporate human rights benchmark.
A spokesperson for the Alliance for Automotive Innovation, a large trade association representing the global auto industry, did not immediately respond to a request for comment on these findings.
“Almost no correlation could be found between a company’s relative performance on either benchmark, suggesting an alarming disconnect between actions on climate and human rights issues,” Vicky Sins, who leads Decarbonization and Energy Transformation at WBA, told DeSmog via email. “Whilst we are not so surprised by these results, we find that the poor performance of companies in this crossover implies concerning lack of critical and necessary engagement on social issues and climate. Companies compartmentalizing these issues and not looking at it as an interconnected systems transformation in their ecosystem hampers progress overall.”
Worst performing industry in human rights evaluation
This year the auto sector was included for the first time in WBA’s Corporate Human Rights Benchmark (CHRB), which assesses over 200 of the world’s most influential companies on human rights disclosures, per guidelines in the UN Guiding Principles on Business and Human Rights. Examples of these disclosures include public commitments to respect human rights, corporate assessments of human rights risks associated with business operations, and clear channels to remedy human rights abuses.
The analysis of 30 car companies found the auto sector to be the worst performing corporate sector ever assessed by WBA’s human rights benchmark. No automaker scored above 50 percent on the benchmark, and half of the 30 companies scored under 10 percent, with an average score of 12 percent.
The evaluation reveals the auto industry’s overall failure to adequately disclose or even track human rights risks in supply chains. Human rights issues of concern in the auto supply chain, for example, include impacts from raw materials sourcing and forced and child labor. While the industry appears to be taking some steps on climate action (though not enough to align with Paris Agreement goals), its lack of attention to human rights issues shows the disconnect between addressing the climate crisis and protecting human rights for all, according to WBA.
“This is extremely alarming as a distinct requirement of the UN Paris Agreement is to achieve a ‘just transition’; a future where no one is left behind in the movement towards a net zero-carbon economy. Without consideration for human rights, we will only exacerbate existing inequalities and increase the potential for exploitation of already vulnerable groups,” Sins said in a press release.
Automakers Not Aligned With Paris Agreement
As DeSmog reported last year, the 2019 Automotive Benchmark revealed that the world’s largest auto manufacturers were not aligned with Paris climate targets and continued to prioritize gasoline vehicles despite starting to introduce zero emission vehicles (ZEVs) to their fleets.
The 2020 update evaluated 30 auto companies (compared to last year’s 25) and the findings were fairly consistent, indicating little has changed in terms of automakers stepping up climate action. The sector is still not aligned with the Paris Agreement target of limiting warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit) by century’s end. A 2018 UN report warned that failing to cap global temperature rise at around 1.5 degrees C (2.7 degrees F) would entail even more devastating consequences, such as higher sea levels, complete loss of coral reefs, and more deadly extreme weather events. Avoiding these consequences would require “rapid and far-reaching” transitions across all aspects of society, including transportation, according to the UN.
That transition is not yet happening in road transportation.
“While we see that most companies have some transition plans or an existing low-carbon vehicle on the market, they are not yet doing enough to reduce emissions on the levels needed to meet the well below 2-degree pathway,” WBA states.
Big auto knew, and car companies still are not prioritizing electric fleets
This evaluation of the auto sector’s performance on climate action comes in the wake of a groundbreaking investigation, first reported by E&E News and echoed by DeSmog, revealing that leading U.S. automakers Ford and General Motors (GM) both engaged in early climate science and were therefore on notice decades ago of the climate risks associated with petroleum-powered transport. But, as was the case with major oil companies, Ford and GM downplayed these risks publicly and participated in climate science disinformation campaigns while lobbying to stop climate policy responses, mainly through an influential industry group called the Global Climate Coalition.
Despite exiting that coalition at the turn of the 21st century, Ford and GM continue to stall when it comes to transitioning their businesses away from fossil fuel dependency, a trend that is observable across the auto industry. Low-carbon vehicles are starting to become more available on the marketplace, but car companies are not prioritizing them and these cleaner alternatives make up a minimal amount of total sales.
High-emitting vehicles (gas guzzlers) comprised over 90 percent of total sales in 2019 for 26 companies, according to the WBA’s latest assessment. “The biggest three companies by number of vehicles sold had small shares of low-carbon vehicles, with Volkswagen having a share of 1.2 percent, Toyota a share of 0.6 percent, and General Motors 1.4 percent. As the world moves to a low-carbon transportation system, these incumbents risk losing market share to disruptors such as Tesla unless they rapidly scale up their low-carbon vehicle sales,” the report states.
Sales of low-carbon vehicles, such as battery electric vehicles and plug-in hybrid vehicles, are on the rise, up from 0.27 percent of total sales in 2014 for the 30 auto companies assessed, to nearly 2.3 percent of total sales in 2019. But to be aligned with emissions reduction pathway of well below 2 degrees C, that 2019 percentage needed to be at 6.2 percent — meaning auto companies are still missing the mark on accelerating their sales of less-polluting vehicles.
Not only are electric vehicle (EV) sales not increasing quickly enough, but automakers do not appear to be doing enough to promote these vehicles. The WBA analysis found that 16 companies had no robust marketing or financial incentives to boost low-carbon vehicle sales. Automakers are not actively encouraging customers to adopt EVs, and as DeSmog previously reported, financial disclosure reports indicate that automakers rely on selling larger gas guzzlers for higher profit margins.
‘Urgent need’ for improvement from auto sector
Overall, the latest assessments from the World Benchmarking Alliance suggest that the auto industry has a long way to go in steering its business towards fully aligning with climate and human rights objectives. And given the rapid pace of the unfolding climate emergency, which has major implications for the health and well-being of over a billion people, time is running out.
“The pace of change is far too slow,” WBA’s Vicky Sins told DeSmog.
“Our belief is that companies cannot achieve a low-carbon transition by only selling electric vehicles or only looking at one aspect of their performance,” she added. “They need to concretely look at a systems transformation, which means that they should pay attention to several factors that matter in meeting their well below 2-degree pathway like: lobby towards policy that supports a climate positive future, rapidly increase sales of low-carbon vehicles, have more ambitious transition plans, influence the market shift, and showcase more transparency and accountability in their work.”
WBA further says there is an “urgent need for companies to improve and align their actions on human rights and climate change.”
This shift entails more environmentally sustainable, ethical, and transparent management of the automobile supply chain, for example, as well as concrete actions on the part of auto manufacturers to slash emissions across their fleets beyond merely setting targets that may or may not be achieved.
“Support from automotive companies for a full phaseout of the ICE [internal combustion engine] would be transformative,” WBA argues, adding: “An increasing number of the companies assessed are setting targets that aim for a high percentage of their sales to come from low-carbon vehicles, but this ambition needs to rapidly increase for the automotive sector to achieve the decarbonization required under the Paris Agreement’s goals.”