Relationship between profitability and sustainability
Dr. Gerd Leipold, a graduate in Oceanography and Executive Director of Greenpeace International from 2001 to 2009, was guest speaker at AUDI AG as part of the series of lectures entitled “Responsibility Perspective”. In Ingolstadt and Neckarsulm, he spoke about the connection between a sustainability and corporate strategy, and also about the challenges of the future and how they might be tackled.
During your visit to AUDI AG, you were able to learn a little about the company. What were your impressions?
I visited the production line and found it fascinating: complex, well organised, automated but at the same time personalised. It’s fantastic to see how individual customer requests interact with standardised production.
In your talks at Audi you spoke about corporate responsibility. What does this term mean to you?
To me, responsibility means that companies address the consequences of their actions and their products, and can do something to benefit society at the same time. They take responsibility for their products, their employees and for the regions in which their plants are located. Yet companies are not solely responsible for their products – consumers too bear some of the responsibility when they make a purchasing decision.
Corporate responsibility and car manufacturing – do you see a contradiction here?
No, a car is not a bad thing in itself, but it does have damaging side effects. And a company must take just as much responsibility for these side effects as it does for the necessary commercial success. Sustainability and profitability must go hand in hand. It’s no use doing the right thing if the company itself fails. It’s just as wrong to focus solely on profit and disregard the impact on society.
Where do you see the challenges of the future for car manufacturers? What are the important issues?
For me there are two big challenges: climate protection and mobility in major cities. The great advantage of the car is the personal freedom that it provides. The user can decide where to go and when – I personally prefer to go by bike, but the same applies to the car.
We must remember that around 20 percent of climate change is due to road traffic. That’s why climate protection is the greatest challenge facing every car manufacturer. These challenges are naturally even tougher for premium manufacturers than for makers of smaller models that are lighter and produce less CO2. But no matter whether it’s a large or small car: in light of climate change the combustion engine is not fit for the future in my view. There’s a simple thought experiment. Ask yourself the following question: “What would happen to the world if everyone were like me and used the same products?”
The second big challenge is the future of individual mobility. More and more people live in cities, many of them in megacities with millions of inhabitants. If everyone there had their own car, there would be a risk of total gridlock. The cities of the future are simply not big enough. Audi therefore has to tackle the challenge of making individual mobility future-proof with new concepts. One example is car sharing: Sharing a vehicle reduces the volume of traffic on the roads, as well as fuel consumption. Another positive effect is the social aspect of sharing the journey. Planning car sharing trips is no longer a problem with today’s modern communication technologies, such as mobile apps. This is a social innovation that Audi could do even more to promote in my view.
The car manufacturer has to address both of these questions. And there is no harm in admitting that the perfect solution has not yet been found. An honest answer enhances the credibility of a sustainably operating company.
You mentioned that sustainability is a responsibility shared by company and customers. What does it take to convince customers to change their behaviour?
I believe you can only convince people of something that you believe in yourself. If you don’t believe that we’re all responsible for the future then even the most professional communications will have no success.
Naturally, a company must respect the wishes of its customers and cannot produce products that do not meet market requirements. But purchasing behaviour and people’s needs do change and can be influenced. And this is where a company must decide whether or not it wants to inspire customers to buy the more sustainable product. An example: If I want to sell an electric car I have to present this form of mobility as a future trend that people have to be part of in order to keep up with social developments. As part of the giant VW Group, Audi should focus more on its strengths. The Group has a strong position among competitors, which it has made too little use of so far, to bring more sustainable cars on to the market.
What are the challenges for Audi in your opinion?
Audi must address changing customer requirements in the automotive sector, for instance. A car is no longer as important to young people as it was to the previous generation. Fewer have a driving licence and perhaps one day the brand of car will not be as important to them either. So in future, Audi will have to ask itself: How can we build the best product for society? How can we make climate-neutral cars? How is social reality – the way people live – changing? Innovation encompasses not only technology, but also social aspects. And ambitious goals are needed for any future project.
Are the steps taken by the automotive industry too small in your view?
In principle, every step is a good one. From a global perspective, the steps taken by the automotive industry are far too small. However, that doesn’t mean that it’s better to do nothing at all. It’s a difficult road and one for which we have little time. But once you’re already on the move, you can progress at a faster pace than if you’re starting from a standstill.