General Motors’ Director of Sustainability, David Tulauskas, discusses topics that are top-of-mind with our stakeholders.
Q: How do you define sustainability at GM?
A: We know that for some stakeholders, “sustainability” is identified as being focused primarily on environmental impacts. As the content of this report reflects, we believe sustainability encompasses a wide range of social and economic issues, as well as environmental ones. GM’s global impact certainly includes the environmental performance of our vehicles and our facilities, but it goes much further. So we tend to think about our challenges and opportunities in a very holistic way. It's pretty clear that Earth – its people and its environment – make up one big shared system. GM has a role to play to make that system work more effectively for all of us.
Q: How does that view, as well as your strategy, align with support of the UN Sustainable Development Goals (SDGs)?
A: GM has long approached sustainability through a broad lens, with a strong emphasis on social, economic and environmental issues. The SDGs do a really good job of showing the connections between all of these interrelated dynamics. It’s clear that you cannot really achieve one SDG without working on them all. Today, for businesses like GM, there are much broader expectations for us to tackle problems beyond our traditional fence lines, and even our communities, and to take on a larger role to address these connected issues. That goes beyond the more traditional, obvious issues and ones that impact our bottom line. So we’re looking closely at the SDGs and how we can best integrate them into our strategy going forward. And we want to do it in a way that also works in concert with governments and their goals, while ensuring that our priorities align with theirs.
Q: Thinking about emerging sustainability trends, and some of the areas that are not traditionally associated with the automotive industry, which ones are the most relevant?
A: One notable area is deforestation, and the impact our supply chain has on the destruction of forests. Materials we use in manufacturing vehicles – mainly rubber and leather – can contribute to these impacts. The leather we use is a byproduct of beef agriculture. In some instances that could mean cutting down forests for grazing land. Our supply chain is certainly not the primary driver of cattle-related deforestation – but we recognize the connection. So as we think about selecting materials in our vehicles, and as consumers increasingly make purchase decisions based on sustainability considerations, we need to become more focused on those impacts and ways to mitigate them.
Q: Are there other trends that present opportunities to drive profitability and strengthen your business?
A: We see a lot of opportunity in the circular economy – going beyond waste reduction and recycling to find new ways to keep the molecules in materials at their highest value of circulation. One example is how we reuse batteries from the Chevy Volt that, with minimal processing, can become a new energy storage unit for renewable energy in our data center. Even more intriguing is to look at our manufacturing processes through that prism. For example, when we’re manufacturing the door of a pickup truck, there is a large piece of steel that is stamped out to create the window opening. The traditional approach would be to sell that piece for scrap where it is melted down, which requires a lot of energy to transport and process. Instead we’re looking at ways to sell those openings in their existing state, to repackage them for customers that need cold rolled steel for industrial or consumer products. When you reconsider your manufacturing processes in that way, it opens up a lot of opportunity to create new revenue streams and improve cost efficiency while also further reducing environmental impacts.
Q: A very significant 2015 event that will have broad global impact was COP21, which resulted in the Paris Agreement on the reduction of climate change. What role did GM play in the conference, and how will you be affected?
A: GM has advocated for climate policy for quite some time, so we were pleased to see nearly 200 parties come together to form consensus and adopt this agreement. It will accelerate the need for climate policy at the country level, and that’s something we’ve been advocating for. In terms of GM’s role, we were a signatory to the American Business Climate Pledge facilitated by the White House. In addition, our Chairman & CEO Mary Barra was one of 12 leaders in the automotive industry to sign a statement facilitated by the World Economic Forum in support of a positive outcome in Paris and for putting a value on carbon. Moreover, we’ve said that we see this as a road through Paris, not a road to Paris that ends there.
As far as the impact of the Paris Agreement on our business, it’s important to note that we are already a heavily regulated industry – more than 90 percent of our global sales are regulated in terms of fuel economy and GHG emissions. So we don’t anticipate a major new impact on sales of our products from COP21. But, longer term and more strategically, we have spoken out for putting a value on carbon and for climate policy that provides long-term stability in these markets so we can plan accordingly. The Paris Agreement adds momentum to reaching those objectives.
Q: How will the Agreement influence the way you manage your operating footprint?
A: It really underscores and reinforces our commitment to renewable energy. GM is already one of the top industrial users of renewables in the U.S. as well as globally. Well before Paris we were accelerating our efforts in this arena, and we’ve demonstrated there is a clear business case to do so. Today our strategy calls on us to build on that leadership. And one of the big takeaways from Paris was the very influential role of nonstate actors in this process, including businesses like GM, but also cities, the Council of Mayors and others. It’s a recognition that to achieve these objectives, to build the resilience of communities and to help them flourish, a lot of this work has to happen at the local level–one community and one company at a time. We also believe that this broader involvement helped give political leaders the confidence to move forward with the Agreement.
Q: 2016 marks the beginning of the joint process by NHTSA and the EPA to conduct a mid-term evaluation of the CAFE and GHG fuel economy standards for model years 2017-2025. As that initiative, which will produce a final rule by those agencies, gets underway, what is GM’s position?
A: We’re taking the same collaborative approach we took five years ago which resulted in GM’s agreement with and support for the program established at that time. We were part of the process and part of the solution and expect to play that role again. So we’ve already begun to engage key stakeholders to share our perspective and assure that the outcome continues to focus on vehicles that consumers want to drive. As this process unfolds, we think it is very important to try to achieve a fully harmonized regulatory program that aligns NHTSA’s fuel economy standards with the EPA’s GHG regulations. Today those regulations are not fully aligned, and harmonizing those requirements would be an important step forward that would benefit not just manufacturers, but also consumers and communities as well.
Q: In a market environment where the price of oil has dropped dramatically and gasoline is much cheaper at the pump, how is that affecting your commitment to electrification? What are you doing to encourage EV sales in this more challenging environment?
A: We have made a long-term commitment to electrification, and the market price of oil has not changed that commitment whatsoever. We see lower gasoline prices as a temporary phenomenon, and if history teaches us anything, it’s that energy market fluctuations – both up and down – are unpredictable. Moreover, the price of gas is not cheap everywhere, and in markets like Europe and China it’s still quite expensive. So our commitment is unchanged, and we’re focused on designing, engineering and marketing EVs that will resonate with customers. We remain excited about the opportunity to lead in this space.
Q: There is increasing interest among consumers and the media in autonomous vehicles. How do you see autonomous technology progressing, and what are the big challenges?
A: From strictly a technology perspective, many of the systems are well into development. But for autonomous vehicles to be viable on a mass market scale, there are a host of issues beyond technology that have to be addressed. Integrating the autonomous systems with the vehicle and with the infrastructure, developing a whole new set of traffic laws, policies and regulations, addressing insurance and liability issues – these are all areas where a lot of work remains to be done. There’s a great deal of learning we still need to do. The opportunity is exciting, and autonomous vehicles are on the horizon, but it’s going to take time.