BMW unveils new 10-year climate plan, vows to slash emissions per vehicle by one-third

BMW is aiming to have a 25-model-strong EV portfolio by the end of 2023

The climate plan binds BMW to reducing the emissions associated with the manufacturing of vehicles by 80% within a decade, on a per-vehicle basis, while also cutting the emissions associated with the supply chain and vehicle use-phase by 20% and 40% respectively.

BMW claims that these reductions will collectively reduce the total emissions footprint of each of its vehicles by one-third within a decade – a reduction which is aligned with the Paris Agreement.

To drive decarbonisation in manufacturing, BMW is switching to 100% renewable energy at all production facilities by the end of 2020. It will also invest in digital technologies designed to improve energy efficiency and reduce material waste.

The automaker has already reduced manufacturing-related emissions by 70% since 2006 and claims that these learnings will help drive progress towards its new goal. It has not previously used carbon offsetting but will purchase carbon credits to cover residual Scope 1 (direct) and Scope 2 (power-related) emissions from 2021, as the new goal is more ambitious.

Regarding emissions associated with the vehicle use-phase, BMW is relying heavily on EVs and vehicles powered with green hydrogen fuel cells. It is hoping to have more than seven million EVs on roads by the end of the decade – two-thirds of them being pure-electric. To reach this milestone, it will launch five pure-electric vehicles by the end of 2021 and additional models in the coming years, resulting in a portfolio of 25 EV models by the end of 2023.

BMW launched an electric version of its Mini last year, six years after its previous EV launch – the i3.

As for supply chain emissions, the climate strategy will see BMW alter its supplier contracts. Suppliers will be required to measure and disclose their emissions footprint and outline the measures they are taking to decarbonise under the new contracts. Such a mandate has already been applied to battery cell suppliers, who are required to prove they are using 100% renewable energy.

Embedded sustainability

BMW’s chair Oliver Zipse said that meeting the new climate targets will require BMW to “anchor” sustainability in “all divisions, from administration and purchasing to development and production”.

He described this embedded model of sustainability as a “strategic decision” for the business, financially as well as environmentally, predicting that “sustainability and premium will be intrinsically linked in the future”. Such conclusions have previously been drawn by the likes of Positive Luxury, the body which certifies luxury brands across sectors including fashion, beauty and travel.

To evidence this shift in sustainability approach, BMW will begin producing an integrated report from 2021, aligning climate and financial reporting. It is not alone in taking this approach – a 2019 survey from the Carbon Trust found that two-thirds of UK businesses are planning to include climate risk and emissions figures in their annual financial or combined report.

“This not only sends a clear signal that we consider our business model and sustainability to be inseparable, but also that we will be subjecting our sustainability activities to even broader external and independent scrutiny than in the past – because transparency is the best way to strengthen credibility,” said Zipse.

Elsewhere, the new climate strategy includes a commitment to link the pay received by the Board and other executives to progress made against key environmental targets from next year. BMW has not yet confirmed what percentage of compensation will be linked.

Other businesses which have moved to link C-suite pay with decarbonisation progress in recent times include Shell and BP. However, this approach remains the exception rather than the norm, with just 10% of chief executive officers believed to have their bonuses linked to sustainability requirements.

Sarah George

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