Environmental Issues and Policies at General Motors - Essay Example

Environmental issues and policies at General Motors General Motors (GM) was founded in 1908 and currently, it is the second largest automaker inthe world. General Motors has been the global leader in the automotive industry since its inception, but recently it was overtaken by Japanese automaker Toyota. The giant automaker employs over 284,000 people globally and its global headquarters is located in Detroit, US (GM, 2007a). The automaker manufactures trucks and cars in 35 countries distributed in all continents around the world. In 2007, the giant automaker sold over 8.3 million units globally under the wide brand range of its products in the car and truck portfolio (G M, 2007a). In the recent history, the motor industry has undergone many transformations arising from the changing supply and demand of energy and the increasing environmental concerns attributed to extensive use of petroleum products in the industry. These developments have made it necessary for the automakers develop and review environmental policies in their strategic plans in order to adapt with the current economic and environmental needs. Legislations affecting the organization In the last four decades, global policy makers have become increasingly concerned by the effect of human activities on the environment. Since the industrialization era, man has been exploiting natural resources at unprecedented rate and this raises concerns about the fate of the future generations. The overexploitation of natural resources especially non-renewable endowments has necessitated the need of developing alternative sources because in the distant future, non-renewable sources of energy such as petroleum products will become exhausted. Increased industrial and agricultural activities have also increased the demand and use of renewable natural resources, such as water and air (Vogler, 2007). Consequently, the quality of these resources has been compromised by high levels of pollution. According to Rogers, et al (2008) water pollution is one of the leading causes of the declining aquatic life and diversity. The effects of pollution on aquatic life affect man directly and indirectly. Some of the direct effects include declining catch of marine resources such as fish, shrimps among other products. This contributes to economic loss in addition to food insecurity. Scientists have established a direct relationship between industrial emissions and climate change. Increased level of industrialization has resulted to vast emission of greenhouse gases, such as carbon dioxide that causes global warming. The effects of global warming have been noted in different parts of the globe and the most remarkable change in raising of sea level due to melting of ice in the polar regions. This phenomenon exposes low laying regions to flooding, in addition to other climatic disasters, including more powerful, disastrous typhoons, and prolonged dry conditions in other regions (Rogers, et al. 2008). Motor industry plays a significant role in polluting the environment a condition Asefa (2005) attributes to large-scale use of petroleum products. Combustion of petroleum products in vehicle engines release toxic gases, including oxides of carbon, nitrogen and sulfur. These gases are acidic in nature and one of the immediate effects is the corrosion of buildings and metallic infrastructure, increasing acidity in water bodies in addition to causing respiratory problems in human beings. Moreover, sulfur and nitrogen oxides affect the growth of terrestrial plants by altering the pH of agricultural soils. Carbon dioxide is one of the major greenhouse gases that cause global warming and climatic change (Asefa, 2005). In this regard, motor vehicle industry plays a significant role in polluting the environment, leading to disruption of natural systems and processes. This situation undermines sustainability of nature, a situation that threatens the life of future generations. In perspective of the effect of economic development on the environment, the World Commission on Environment and Development was established in 1983 by the United Nations general assembly to reconcile between the two and promote sustainable development (Bartlett, 2006). The Brundland report published in 1987 following proceedings from the World Commission on Environment and Development laid the foundation of sustainable development, a practice that global leaders are increasingly advocating for its adoption in all sectors of economy. According to Bartlett (2006), sustainable development is the “development that meets the needs of the present without jeopardizing on the capacity of the future generations to meet their own needs.” In this regard, the definition of sustainable developments emphasized on two major aspects, which are needs and the importance of putting restrictions on economic activities to meet the needs of both the present and future generations. In 1990’s, the concept of sustainable development gained a lot of momentum in the industrial sector, including the motor industry mainly because of increased public awareness. In 1992, United Nations conference on environment and development took place in Rio de Janeiro, bringing together over 114 head of states and representatives from non-governmental organization. During the summit, christened “Earth summit”, Browett (1979) noted that the major resolution were the commission on sustainable development and the Rio declaration Agenda 21. Both of these agreements were structured to deal with sustainable development. The contents of Agenda 21 include a collection of agreements on prudent practices that would result to the achievement of the sustainable development in all sectors undertaken on the planet (Vogler, 2007). The activities contained in the Agenda 21 are structured under the developmental and environmental themes. These are classified into several criteria, including quality of life, efficient use of natural resources, protection of the global environment, and management of the human settlements in addition to sustainable economic growth (Vogler, 2007). The agenda acknowledges that the prevalence of chronic poverty in various parts of the world and improvement of living conditions by wasting the available natural resources do not amount to sustainable development. In addition, the agreement affirms that prudent management practices must be undertaken in both developing and developed countries. To ensure that all countries participated in the implementation of the Agenda 21 of the 1992 Rio de Janeiro Summit, they were required to formulate sustainable development strategy independently for their economies. The Kyoto conference on climate change that was held in Japan in 1997 provided the global community with the opportunity of enforcing practical measures of ensuring sustainable development. Researchers and scientists presented convincing reports on how the emission of greenhouse gases cause adverse environmental effects, including global warming and erratic weather patterns that undermined human security (Vogler, 2007). In this summit, Baumol and Litan (2007) noted that developed countries reached on an agreement on how to cut greenhouse gases emitted by their industries in order to mitigate the effects of climate change. This resulted to formulation of the now famous Kyoto protocol. During the Kyoto Conference, United States pledged to stabilize its greenhouse gases emissions, while European Union agreed to reduce emissions from its member states by about 15%. Eventually, most industrialized countries agreed on a trade off, whereby they agreed to reduce their greenhouse gas emissions by about 5.2% in the period from 2008-2012 (Rogers, et al, 2008). However, Kyoto protocol elicited different opinions from global policy makers because it did not elaborate on quantitative methods of ensuring that the industrialized countries complied with their pledge. It also failed to address the plight of developing and least developed countries that suffer the heaviest consequences of climate change. Main drivers for producing environmental policy at GM General Motors is under international obligation of ensuring sustainable development, by adopting and promoting healthy environmental practices, that reduce the amount of carbon emissions and other pollutants that affect natural and biological processes. The organization is a signatory to various international, national and local environmental bodies. National organizations include CERES, a leading coalition of environmental, investor and advocacy groups working for sustainable development in the United States. CERES comprises of companies committed to ensuring continuous improvement of the environment by ensuring that they strictly adhere with the stipulated environmental principles. In addition, CERES provides the automakers with solid environmental solutions to match with the dynamic environmental needs occurring around the globe (GM, 2002 b). In case of GM, CERES oversees the public accountability and public disclosure, stakeholder relationships in addition to the product performance of automobiles manufactured by the company. Public accountability relates to how the company commits and reports on its commitment to sustainable environmental practices to established reporting organizations, such as Global Reporting Initiative. CERES oversees the performance of GM‘s manufacturing plants, by investigating on whether they are committed to continuous environmental improvement practices, such air pollutants, energy use in the facility, handling of hazardous and non hazardous waste, and greenhouse gas emissions in addition to disposal of toxic chemicals. Moreover, the legislation oversees the product performance of GM, by investigating on parameters such as fuel economy of the manufactured vehicles. The legislation advocates for the development of energy efficient vehicles. Regarding stakeholder participation, GM is required to engage non-corporate stakeholders in formulating environmental decisions. This ensures a coordinated approach in tackling environmental issues (GM, 2002 b). The Energy and Environmental Strategy Board (EESB) is another local regulatory authority that determines the environmental aspects of the General Motors. According to GM (2002 b), the EESB is accountable for the formulation and implementation of the global energy and environmental strategy of the automaker in addition to development of the relevant corporate strategies to address these issues. In this regard, EESB is responsible for establishing energy and environmental strategies, approving or rejecting environmental and energy initiatives. Moreover, EESB conducts environmental assessment of the automaker since it has the overall responsibility of enforcing energy and environmental strategies. In particular, EESB is concerned with vehicle energy, emissions from vehicles, fuels, and environmental design. In addition, facilities energy, plant environment, vehicle pass by noise and global climate are under the jurisdiction of the EESB (GM, 2002 b). The World Wide Facilities Group in General Motors assists in the implementation of strategies developed by the EESB. At the global level, the Global Environmental Issues Team (GEIT) represents General Motors, which is responsible for ensuring that the company is complaint with global environmental policies in addition to setting benchmarks for reducing energy consumption and minimizing emissions. Among the legislation of this global team includes reduction of corporate energy consumption and ensuring energy efficiency of the vehicles manufactured by the company and in the manufacturing plants (GM, 2002 b). There are many statutory and regulatory programs issued by the government agencies to ensure compliance of the General Motor products and manufacturing plants. In the united states, Asefa (2005), notes that the automobile industry among many ventures are subject to state, federal and local authorities to ensure that they comply with the established environmental requirements. In this regard, the company is usually challenged by the government and the private sector regarding environmental compliance. Some of the statutes that affect the General Motors directly in the United States include Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act in addition to Comprehensive Environmental Response Compensation Liability Act. Other statutes include Toxic Substance Control Act, Occupational Safety and Health Act in addition to Hazardous Material Transportation Act (GM, 2007 a). Besides these regulations, General Motors faces external pressure, including the raising prices of fuel such as gasohol and petroleum products. Due to the price increase, the company is under pressure from the clientele to make fuel-efficient vehicles. In this regard, the company is motivated to produce fuel efficient and environmental friendly vehicles. Some of the main initiatives that the company has undertaken to attain these specifications include manufacturing electric and hybrid cars. In the current automobile industry, consumers are more informed about the profound effect that carbon emission have on the climate change. In this respect, they demand vehicles with minimal or no emissions (Baumol and Litan, 2007). The extensive manufacturing processes in General Motors plants require the use of toxic and hazardous materials that cause pollution of water bodies. In addition, the manufacturing process emits other pollutants that not only have long-term effects to the environment, but also to the immediate surroundings. Some of the short-term effects include causing complications such as respiratory disorders by inhaling toxic gases emitted in the manufacturing plants and vehicle exhausts such as nitrogen and sulfur oxides. Besides the toxic gaseous emissions, noise produced in the manufacturing plants causes disturbances especially in residential areas and other sensitive institutions including hospitals and learning institutions. A combination of these factors necessitated the need of formulating environmental policies in General Motors in order to address and provide sustainable solutions. Environmental policy of GM The environmental policy at General Motors comprises of five aspects, with the EARTH acronym (GM, 2007 a). They include compliance to Environmental laws, Avoid pollution, Reduce, reuse, and recycle, Teamwork to enhance continuous improvement and Healthy environmental community. This system of environmental policy requires constant and periodical assessments to ensure that the set targets are achieved within the allocated time frame to ensure continuous improvement of the company’s operations. Environmental laws component of the company’s policy entails strict adherence to the established regulations set by the government to ensure the preservation of the environment. In addition, the company participates in formulation of environmental laws in conjunction with the government and other stakeholders. Besides forming the policies, the company has the mandate to access the impacts of its products continuously and the manufacturing plants to the environment (GM, 2007 a). To ensure the compliance of the company to the established environmental laws especially outside the United States, General Motors apply various tools including expansion of the audit programs applied in the country in addition to enforcing the environmental management systems such as ISO 14001. Moreover, the company has well developed global performance yardstick designed of ensuring human health and environment especially countries that do not have well environmental and safety regulations. To ensure that the company has consistent and up to date knowledge about enforcement of environmental laws, it has a global stationary source of environmental issues team that is responsible for sharing knowledge across all the company’s facilities around the globe in addition to implementing the established laws (GM, 2002 b). For instance, the company has been able to comply with Environmental Planning and Community Right to Know (EPCRA) and the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) through reduction of spills and non-routine air emissions as shown in the table below Fig 1. Spills and non routine air emissions above federal reportable quantities in the us and Canada Year Land/water air Total 1999 2 3 5 2000 0 1 1 2001 0 0 0 (Source: GM, 2002 b) Avoiding pollution is another fundamental aspect of the company’s environmental policy. Due to the company’s nature of business, it uses various forms of energy and vast volumes of water. The main sources of energy include natural gas, oil, and coal, among other fossil fuels, electricity and other forms of energy. In addition, the company uses water from various sources such as rivers, underground wells, and lakes. General Motors has a global environmental metrics that determines the various forms of pollution occurring from energy and water use. These includes air pollution, which occurs from emissions of toxic gases, such as sulpur, nitrogen and carbon oxides, emitted in vehicle exhausts, in addition to volatile organic compounds applied in the company’s plants. Application of water results to water pollution in form of wastewater discharged from the company’s plants, heavy metals, in addition to hazardous and non hazardous wastes (GM, 2002 b). To mitigate water pollution the company has water and wastewater management programs that aim at reducing the volume of water used, treating wastewater in addition to recycling in the company’s operations. In North America region, General Motors set to reduce water use by 20% from 2000 using the1995 baseline. By the end of 2001, the company reduced water use by 29.2% and the company is in course of achieving the target. In addition, all manufacturing plants treats waste water before discharging them to the environment. To minimize pollution occurring from energy use, the company set goals of reducing energy consumption by 25% by 2008, from 1995 base (GM, 2002 b). By the end of 2001, the company had managed to reduce energy consumption by 17.9% reduction in the manufacturing plants located in North America (GM, 2002 b). Reducing waste, recycling and reuse is an important environmental policy at General Motors. The company reduced the volume of wastes generated in its plants by 1.3% in 2001 from 2000 but the volume of wastes generated by the company’s motor vehicles increased by 9% in the same period (GM, 2002 b). Fig 2: The Pie chart below indicates the wastes generated by the company in 2001, and the treatment methods applied. The total volume of waste generated in the period was 3,763,053 metric tons (Source, GM 2002 b) Analysis of GM Environmental policy In North America, General Motors has a 5-year strategic plan for reducing recycling and reusing wastes by 50%. Equally important, GM operations in the United States support the government initiative of reducing green house gas emissions by 18% by 2012(GM, 2007 b). According to GM (2002 a) the global General Motors facilities managed to reduce the emissions by about 9.6% in 2001 compared with 2000. The environmental policy of General Motors is strategic, but it is in adequate. However, the objectives are specific, measurable, achievable, and realistic and time bound. The environmental policy takes into account the emergent environmental and economic issues in respect to the utilization of the available resources. The policy of General Motors is strategic because it indicates that the company’s commitment to sustainable development in all its operations across the globe. However, it is inadequate because it does not have equal regional representation in all regions that the company operates. In context to reducing the energy consumption by the automaker, the environmental policy does not adequately address how the company would apply alternative and clean sources of energy in its products. In this case, the policy does not indicate specific measures that it would undertake to replace fossil fuels with clean sources of energy. This makes the goal of reducing carbon emissions unrealistic and unachievable by 2012 because it has not been matched with adequate measures to manufacture vehicles that use clean sources of energy, such as electricity and develop clean sources of energy. Recommendations The environmental policy of General Motors takes into consideration the emerging environmental, economic and social changes taking place around the world with different levels of commitment. The increasing costs of fuels in addition to the overreliance on fossil fuels threaten the sustainability of the automaker. Although the company intends to manufacture electric cars, it has not invested adequate resources and research for the venture. Therefore, there is no feasible replacement of oil with clean energy in the distant future. This undermines the company’s objective of consistently reducing air pollution and greenhouse gas emissions. To ensure that the company attains its environmental objectives, it is important to invest in research and development of electric cars. In addition, the company should install the necessary infrastructure such as charging stations. Conclusion Industrialization and other unsustainable human activities play a significant role in promoting climate and environmental changes. These activities threaten sustainability of natural resources that subsequently undermine life on the planet. To mitigate these effects, different organizations, including General Motors have formulated environmental policies to address the emerging and future environmental changes. General Motors environmental policy is strategically formulated to comply with environmental laws, reduce pollution, minimizing energy consumption, wastes and promoting recycling, and reuse practices. Although the company has established realistic period for achieving these strategies, heavy reliance on petroleum products undermines the capacity of the organization to achieve the objectives in the planned time. Moreover, lack of the industry’s commitment in developing wide range of alternative clean sources of energy has failed to provide a viable alternative to petroleum based fuels. However, the current initiative of manufacturing electric, hybrid cars, and improved waste management practices have resulted to considerable reduction of the greenhouse gas emissions emitted by the GM manufacturing plants and the manufactured vehicles. The increasing global prices of petroleum fuels should provide an incentive for developing clean and affordable sources of energy. References Asefa, S. (2005). The concept of sustainable development: An introduction. Michigan: Upjohn Institute for Employment Research. Bartlett, A. (2006). Reflections on sustainability, population growth, and the environment. Dordrecht: Springer. Baumol, W., and Litan, R. (2007). Good capitalism, bad capitalism, and the economics of growth and prosperity. New Haven: Yale University Press. Browett, J. (1979). Development, the diffusionist paradigm and geography. Progress in Human Geography 4(1), 32–59. GM. (2007 a). Case study: Responsibility, environment and energy. Michigan Department of Environmental Quality. Retrieved on 12 May, 2011, from: http://www.michigan.gov/documents/deq/deq-ess-p2tas-GMdelta_231489_7.pdf GM. (2002 b). Corporate responsibility and sustainability report: Environment and energy information. Retrieved on 10 May, 2011, from: http://sysdoc.doors.ch/GM/env.pdf Rogers, P., et al. (2008). An Introduction to sustainable development. London: Earthscan Vogler, J. (2007). The international politics of sustainable development. Cheltenham: Edward Elgar Publishing Limited. Read More