Successful sustainability transformation is a collective endeavour that demands innovative, science-based collaboration between academia and industry. Striving towards Net Zero, the mutual learning and integration of their strengths are imperative. This chapter features the introductory discussion between Joachim Hornegger, President of FAU Erlangen-Nürnberg, and Oliver Zipse, Chairman of the Board of Management of BMW AG, exploring the why and how of collaborative efforts in Sect. 1.3. This chapter also serves as an introduction to the book, offering in Sect. 1.4 an overview of key topics on ‘The Road to Net Zero’. These range from science-based targets to integrated strategies, reporting, and the pivotal role of technological innovations. While not presenting a blueprint solution, the described transformation journey—‘Road to Net Zero’ in this book—outlines a roadmap and encourages robust university–industry collaboration.
1.1 A Collaborative Approach
This book is the outcome of a joint experiment—an experimental exercise in university–industry relationship building between our institutions: BMW and Friedrich-Alexander-Universität (FAU). To be sure, our institutions have always had good and trusting relationships between individual experts—long before our time in leadership roles. People at BMW and FAU have been involved in joint research projects, joint student mentoring, guest lectures, expert advice, talent exchanges, and more. In fact, we admire these multifaceted forms of collaboration based on individual expertise or serendipity. But we felt there could and should be more.
Could we somehow extend our collaborative relationships to jointly address aspects of one of the dominant challenges of our time, namely the sustainable transformation of organisations? How could we make this happen? Could we create an inspiring and inclusive journey for many? We wanted to start small but with a sustainable perspective. We wanted to start informally but with measurable results. We wanted to use pragmatic approaches with scientific rigour and practical relevance. Above all, however, we wanted to invite others to join us on our journey on ‘The Road to Net Zero’.1 The time to do so is now. So feel free to aim even higher: Be inspired.
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1.2 Be Inspired
Our ideas grew over a business lunch. Wouldn’t it be great, we wondered, if our teams could be part of our conversation, join the journey, and experience the same inspiration and learning that we had experienced at our first lunch? As a first step, we invited a range of experts from across our organisations to participate in a series of conversations on topics involving sustainability-driven business transformation, with Mission Net Zero in mind. It was inspiring to see the level of interest and engagement. Despite the pandemic, a total of nine conversations took place over the course of 2021. From FAU:
Prof. Dr.-Ing. Joachim Hornegger, President of FAU Erlangen-Nürnberg, opened the dialogue series with a discussion on the role of collaboration between academia and industry in addressing global sustainability challenges
Prof. Dr. Veronika Grimm, Head of the Chair of Economic Theory at FAU and member of the German Council of Economic Experts, engaged in a conversation on climate policies needed to meet the objectives of the Paris Agreement
Prof. Dr. Markus Beckmann, Head of the Chair for Corporate Sustainability Management, started a conversation on sustainability in corporate strategies
Prof. Dr. Thomas Fischer, Head of the Chair of Accounting and Management Control, focused on integrated sustainability reporting
Prof. Dr.-Ing. Sandro Wartzack, Head of the Institute of Engineering Design, looked at sustainability in product development
Prof. Dr. Kai-Ingo Voigt, Head of the Chair of Industrial Management, focused on sustainability in the supply chain
Prof. Dr.-Ing. Nico Hanenkamp, Head of the Institute of Resource and Energy Efficient Production Machines, engaged in a conversation on sustainability in production
Prof. Dr.-Ing. Joerg Franke, Head of the Institute of Factory Automation and Production Systems, focused on the future of e-mobility and was joined by
Prof. Dr. Peter Wasserscheid, Head of the Institute of Chemical Reaction Engineering and Director of the Helmholtz Institute Erlangen-Nürnberg, shared his expertise in hydrogen (H2)—the fuel of the future
The BMW Group was represented by Prof. Oliver Zipse, Chairman of the Board of Management of BMW AG, who was joined by:
Dr. Thomas Becker, VP of Sustainability and Mobility
Jonathan Townend, Head of Group Accounting & Reporting & Taxes
Dr. Peter Lamp, General Program Manager Battery Cell Technology & Fuel Cell
Dr. Jürgen Guldner, General Program Manager Hydrogen Technology
We all truly enjoyed the discussions, had them recorded, and initially published some short excerpts on the BMW website.2 The feedback motivated us to go one step further. We decided to publish them, with some additional context, to inspire others to join our journey and do better, dig deeper, engage and elaborate further.
This book does exactly that. It will not pave the Road to Net Zero. Instead, it will show you that your contributions, deep conversations, collaborative work, and commitment are needed to take the necessary steps. This book is not written as a blueprint solution to the challenge of our time (in fact, you may feel that it often only scratches the surface), but it aims to outline a Road to Net Zero and create collective engagement. This book is not a political statement from BMW or FAU. It is what it is: a collection of edited expert conversations, framed by some foundational thoughts and complemented by our ideas about the next steps. It can serve as a primer for shaping industry–university relationships, starting with matchmaking (or should we say ‘speed dating’) of experts from both worlds—academia and industry—driven by a common mission and committed to bridging their individual spheres of knowledge. Conversations can help build trusting relationships; they are the gateway to deeper discussions, constructive mutual criticism, promising projects, and joint steps that pave the Road to Net Zero.
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Our shared concern about climate change was the catalyst for our conversation. Now, we would like to invite you, the reader, to listen to our first exchange. The dialogue is about getting to know each other, exploring our positions and commitments, finding our common understanding and working out the complementarities of our institutions as a first step. You will find that we are beginning to feel our way along a road that was previously only imagined—an experience that has been equally fascinating, at times eye-opening and encouraging. We have identified a shared passion for open challenge-based collaboration, a shared interest in the promise and pitfalls of measurement (how can science help?), and confidence in the ability of our organisations to work fruitfully together on the sustainability challenge. This is where we started.
1.3 Expert Conversation on Joining Forces for Sustainability-Driven Transformation
Hornegger: Climate change is a serious issue that affects the lives of so many people. We simply have to address it to ensure that life on Earth, as we know it today, can continue. We all have a responsibility, especially those who lead a company, a university, or a larger group of people. FAU and BMW, the BMW Group, are certainly leaders in innovation—as well as in terms of climate protection, in terms of sustainability. BMW plays a sort of pioneering role in the automotive industry. What I would like to know, Mr. Zipse: At what point did you realise that this was a huge opportunity and, at the same time, a very demanding challenge?
Zipse: Professor Hornegger, thank you for the opportunity to speak to you today. Sustainability has been part of BMW’s DNA for many, many years. We had our first sustainability manager as early as back in the 1970s. At that time, the focus was on the impact of production on the environment. Then, in 2008/2009, we conceived a new product. It was the i3, and it was designed to be fully sustainable. That’s when the next step began: to put sustainability at the heart of BMW’s strategy. Now, we have taken the next step to underline our pioneering role. Sustainability is not just a ‘product thing’; it is at the core of our company strategy.
Hornegger: What is driving this development?
Zipse: Climate change is one factor, but sustainability is much more than climate change. There are several reasons for this: First, all resources are finite. So, if you are a major car manufacturer like us, you have to create a broader awareness, and you have to manage the resources. In addition, today, everything can be measured—through very cheap sensors, through the digitisation of our world. And when it’s measured, it’s transparent. Sustainability has a lot to do with transparency. These are some reasons why we decided to take the next step in our sustainability strategy.
Sustainability is an issue that affects every part of society. On a global scale, it affects every country, and science and scientific progress have a crucial role to play in understanding what it really means, in all its implications, in all its systemic features. What kind of role can science—and FAU in particular—play in making progress, in understanding what sustainability really means?
Hornegger: This is a very interesting question, because sustainability is not a closed field of research that we would deal with in a single department. It is an issue that cuts across the whole university, and it is present at different levels. If we look at basic research, we are trying to understand the fundamental mechanisms of nature. They have huge implications for sustainability. For example, how do you convert light energy into electrical energy?
Zipse: Understanding this question is very important for the renewable energies of the future.
Hornegger: Indeed. But merely understanding the basics is not enough. The second level is to use the knowledge gained from basic research to design new technologies and develop new approaches to solving practical problems. This is where we build systems; we develop new technologies, for example, to store hydrogen using chemical mechanisms. The third level, where we are very active, is closer to application. Here, too, we take an engineering approach: How can the technologies that work be scaled up for industrial use? Finally, the fourth level is equally important and characteristic of FAU: deep reflection. Here, we ask even broader questions: What is the economic impact? What is the impact on our society? How does it change the way we live and the way we interact with each other? In our FAU system, we have strong competencies at these different levels. I think we cover a very broad and well-connected spectrum where we can support our industrial partners with the needs they define and the problems they face.
Zipse: Would you underline a statement where we can say ‘one plus one equals three’ when we combine our activities?
Hornegger: Of course. I would even exaggerate a little and say that in this case, ‘one plus one equals eleven’ [laughter]. Just look at the strength of German engineering in industry and the strength of our university. It is not as if we at the FAU sit on an island and solve individual problems without looking to the right or left. We look at these problems in context; we think in terms of systems—we build systems. We also analyse the working systems and their effects. This holistic approach is the strength of our university—and is valued by many of our industry partners. It is also the basis of our innovation power.
Zipse: Well, and for Germany—and Bavaria in particular—to be a world leader in innovation, in industrial terms—you also mentioned the entire automotive industry, not only one car manufacturer here. I think there is a unique opportunity. Especially when we think about very complex systems, how to design them and how to understand them . . . science can play a big role as well in system integration methods.
Hornegger: That is also our experience. I think this is a clear advantage of our German engineering education system.
Zipse: So, let’s use it!
Hornegger: We will use it! Let us talk about how you have integrated sustainability into your company strategy. I can imagine that you faced a lot of challenges when you started discussing this. What was the biggest issue in your company regarding sustainability as part of BMW’s strategy?
Zipse: I can still remember the early days. I have been with the company for 30 years, and about 20 years ago, there was a discussion about how to combine sustainability with sporty cars. At first, it seemed like a contradiction. We then coined the term ‘Efficient Dynamics’. And look: We had cars that were very dynamic, but at the same time—compared to our industry competitors—the least polluting ones. There was indeed a way to combine efficiency with dynamics in our cars.
Hornegger: So, while others saw efficiency and dynamics as a trade-off, you squared the circle?
Zipse: I am convinced that it is possible to combine competing objectives into one strategy. I think it is possible to be a major industry player and, at the same time, make a significant contribution to sustainability. This has a lot to do with being a pioneer, and the biggest hurdle is articulating it. Recognising that it is important is one thing, but expressing it, formulating a strategy and putting it into your strategy process—I think that is the biggest hurdle. If there is real action behind it, once you have communicated it, you will get a lot of replication. People start talking about it, and they start multiplying it. This is a task for every manager: not only to understand, but also to start communicating. That is, by the way, why we’re sitting here.
Hornegger: Absolutely. Communication is key. You are relying on all of your 120,000 employees to buy into this concept. So, the transformation process is a very, very long-term transformation. How do you guide your employees through this process? How do you make them aware that this is one of the key strategic objectives you have defined?
Zipse: Well, I think by saying that this is the cornerstone of our strategy, and that it is not a contradiction: to build the best cars in the world, which are not only dynamic but also excellent to drive, and which have very low pollution impact. All our people are part of this new strategy. If you want them to be part of a new strategy, you need a lot of supporters. That, again, of course, means you have to talk about it and discuss it together. You have to explain it, of course. You cannot just propagate it. You have to implement through action, through setting targets.
Hornegger: Why is setting goals so important?
Zipse: I always say, ‘What gets measured, gets done’. Setting a clear target for 2030, not just 2050, is very important. It is not difficult to say that we will be carbon neutral by 2050, according to the Paris Climate Agreement. Of course, we will, but that is so far away. It is almost 30 years away. That is why I want to hold us accountable, to make progress that starts today. We have set targets for 2030. We have also made clear that it is not just about the emissions from our cars. It is also about our supply chain, our administrative processes, our contracts with suppliers, our own production. Our targets are obviously about the whole life cycle of the car. We take that fully into account. ‘Well to wheel’ is our strategy, not just the car itself.
Hornegger: Let us also talk a little bit about the link to research, to basic research and to universities. When we talk about sustainability and the transformation process, many, many questions still need to be answered by research, and universities can also contribute to the progress in this area. The ‘U’ in university somehow stands for ‘understanding’. FAU, as a whole, is a full-spectrum university, covering a wide range of different disciplines. They all contribute with their perspectives. Perhaps you could comment a little on that. What are your expectations regarding the cooperation between universities and industry?
Zipse: I think it is essential—not only for educational reasons—to build a bridge between science, education, the academic world, and management. Management today is becoming more and more science-based. Look at the coronavirus. In the search for a remedy, a science-based approach was taken. Good management is always linked to sound knowledge. Where does knowledge come from? A lot of it comes from universities—not just at the laboratory level, but also from systems thinking: How do whole systems work? What does sustainability mean for financial reporting? What does sustainability mean for education? How much do you need to spend on R&D to find the right solutions? I think there is a very close link and a lot of overlap between the scientific world and management.
Hornegger: How do you make this overlap work?
Zipse: I like the idea of science-based management. Our strategy is very much linked to an initiative called ‘Science-Based Targets’. Why is this important? Because today, you can measure almost anything. You can immediately correlate the effects of your management decisions with facts. So, good solutions are always measured against other good solutions based on evidence. That is why I am working—also as a member of the Fraunhofer Society—to build a bridge to science. Of course, this day here at the FAU is also very symbolic of building this bridge because being successful in science and being successful as an organisation are highly correlated.
Hornegger: I totally agree with you, Mr. Zipse. When you look at our university, there is always the question of how we define its goals. Do we want to look at research output? Do we want to look at the educational programmes? Do we look at the appreciation of our educational programme among students? These are typical measures that we accept to define our future goals. The fact that BMW and the BMW Group have made sustainability a strategic cornerstone is something that I will now take with me. I will also initiate deeper discussions within our system: What is the goal of our university in terms of sustainability? How do we measure it?
Zipse: Do you see a similar value, as we do, in setting targets and measuring progress?
Hornegger: I like your statement that ‘what you can measure really moves forward’. Well, in my experience, that is an insight I can support. If you can quantify things, you can show how they are changing and whether they are changing in the right direction. To be fair, we in universities are not very used to measuring performance and analysing whether we are on the right track. Here, I think we have a lot to learn from industry in terms of sustainability. In fact, our students are very motivated; our students are working hard on sustainability issues. They have developed a climate concept for our university. They presented it to the University Council, and they encouraged us to implement it at our university. They even pushed us to establish a Green Office, where we are looking at the goals they have set and what we can do next.
Zipse: This bottom-up student support for sustainability is very valuable.
Hornegger: Yes, and these steps are important to raise awareness in a system like FAU, where we also have about fifteen thousand employees. We are the second-largest employer in the region. In the cities of Nürnberg, Erlangen, and Fürth, we have a real responsibility. I appreciate this kind of input from you. I also think that sustainability can guide us in research. For example, our students are looking at issues such as electromobility or the challenges of hydrogen technology and how it can be applied to future drivetrains and energy systems. What approaches do you see working with us on the different levels, from basic research to the engineering, application, and reflection levels?
Zipse: Can I first make a brief statement about ‘you don’t measure at universities’? You grade every day. It is the toughest measurement you can imagine. Universities are actually used to measuring because they grade their students. I can still remember that grading was the biggest hurdle, you know, that you have to get good grades at the end …
Hornegger: Interesting. I never noticed that connection. Thanks for that comment!
Zipse: So, you are actually used to that. Now, let me try to answer about the similarities we have. Forty, fifty thousand students and staff together. That is a very large organisation. BMW has more than 150,000 employees worldwide on a global scale. Overall, the question is the same: How do you organise very large organisations? How do you set goals? Realistic targets? How do you manage progress? How do you manage change? How do you manage transformation? There are a few rules you need to follow to be successful.
Hornegger: I am all ears. What are these rules?
Zipse: The first thing is inclusion. You need a platform where all opinions can be expressed in order to find the best solution—especially at the university, where you have a lot of diverse knowledge. You have to have a platform where you—where everyone—can speak up and be part of a transformation process. The days of a small group—or, even worse, one person—deciding where to go are over. You can try that, but your progress will be very slow. So, I think inclusion is critical. Then, of course, how do you acquire new knowledge? How do you gather facts? You have to have a process for making decisions. You have to have a forum; you need meetings. Meeting management sounds very boring, but it is essential. How do you organise decision-making? If you don’t decide, you can make a lot of speeches and say, ‘We are transforming’. The question is: How and where do we decide and who participates? This speeds up processes enormously if you manage your meeting and decision-making platforms correctly.
Hornegger: What comes next?
Zipse: The third question is how do you communicate? The more you change, the more you have to communicate. People will follow as long as they know there is change. People will not follow if they do not know. This is all about internal communication, as well as external communication. We are very fortunate here because we have huge communication opportunities. Social media, regular press, internal media . . . and our team members, our employees, are multipliers of information. If you look at these three steps and take care that you do not leave any out, you will almost automatically be successful.
Hornegger: Is there still an ingredient missing?
Zipse: At the end of the day, of course, you have to love working with people. That applies equally to managers and university presidents. I see that here—you know, you work with bright young minds, and you want to involve them. I think those are very important ingredients.
Now, to come back to your question. I see a lot of opportunities to work together, especially in the engineering section, where everything is a technical application. Industry is a technical application. In fact, there is a strong connection as we combine knowledge discovery and academic processes with engineering applications in industry. I think there is also a strong link in training, in education, and in industrial projects. We should strengthen this bond in general—not only in Germany. Of course, we also have links with universities in Asia and universities in the United States. But we can do that here in Bavaria, first of all. We have enormous knowledge at the FAU, and we should use it.
Hornegger: You mentioned communication. Digitalisation got a huge boost with the Covid-19 pandemic. I have noticed here at our university that the distances between people have been reduced through the use of digital technologies.
Zipse: How has this boost in digital technology made a difference?
Hornegger: We are in touch with our deans more often. I can contact students immediately if I see a post on social media, where I feel I should talk to them and understand what is going on. Is this something that you also experience within the BMW Group? And are you also in the same situation as we are: Even after the Covid-19 pandemic, we want to maintain some of these tools on a regular basis and use them to improve the overall communication with our people at FAU and our partners worldwide.
Zipse: Absolutely. It was really a watershed moment. Now you have the technology and the software is there to communicate even if you are far apart. What we found was: Distancing leads to proximity. The further away you are, the greater the urge to talk, to communicate. We will use that because communication strengthens the organisation—whether you are sitting in the same room or in separate rooms. Everyone feels that, with digitalisation, you can organise yourself better.
Hornegger: For example?
Zipse: Let’s consider a workshop with 30 people. What do you normally do? You make a big introductory statement, and then you break into subgroups. Then everyone has to leave the room … and then you bring them back together and you do it again. If you use a modern videoconferencing system, it takes just one click to randomly divide the whole 30 people into six subgroups. You also know that you have exactly 15 minutes to discuss, and then you get them back. This is a hugely efficient tool for organising bigger groups. Didn’t we know it before? Well, we knew it, but we were not quick to use it.
Hornegger: Sometimes you need a disruption to change.
Zipse: That is true. And this change offers a real potential, new ways of working together. On the other hand, we must not forget: True innovation requires personal interaction. I am very much convinced of that. So, overall, the future will be a mix of remote collaboration, working from home, mobile offices, and face-to-face meetings. Of course, the world will be different in terms of how we work together after the pandemic. I am quite sure of that, and I see it as a positive step forward.
Hornegger: Speaking of moving forward, let us come back to mobility. This is one area in which we are very strong in Bavaria. We see it at the universities when we look at the education programmes and at the research activities, as well as in the automotive industry in Bavaria. When you look to the future: What is your vision for sustainability and mobility in the future?
Zipse: Individual mobility is a private industry worldwide. It’s different from public transport, which is not organised privately but by governments or municipalities. So linking individual mobility choices with societal demands raises issues of sustainability, especially when we look at the use of space. There is nothing sustainable about traffic jams, you know? I think the car industry has an important role to play in finding a solution to these issues, irrespective of the fact that it is privately organised and organised by market principles. And I think the companies of the future will be able to combine these two requirements: to have a profitable business model, to be privately organised according to market mechanisms and at the same time to contribute to the needs of society.
Hornegger: So, our current approach to mobility needs to change?
Zipse: We are not defenders of the current state of mobility. Nobody at BMW is a supporter of traffic jams. We want to have a solution where no one is stuck in traffic jams. So, I think that we have to bridge the gap between private mobility, being privately organised, having a profitable business model and being a member of society who provides solutions for society. Understanding and addressing this societal part becomes extremely important because almost everyone feels the negative effects of individual mobility. So, it’s our job to provide solutions to this obvious conflict that we face.
Hornegger: Well, you’ve drawn the arc from basic development in your company to societal issues, and that’s a perfect fit for FAU. We are a full-spectrum university that covers this wide range of different areas that you have mentioned. Oliver Zipse, thank you very much for this inspiring conversation.
Zipse: Thank you very much.
1.4 Outline of the Book
For the authors of the chapters in this book, the Road to Net Zero is a shared journey that requires discourse and learning. Guided by the same North Star, there are different, sometimes even competing, views on the precise route. Given the ambition of the goal and the complexity of the terrain, no single actor has the perfect solution. Therefore, the journey together requires joint efforts, the search for a balance between different objectives and smart ideas rather than pre-determined answers. It was with this in mind that the expert discussions between FAU and BMW, which form the core of each chapter in the book, were conducted. In designing the book, we were aware that we could not claim to be able to cover all the topics related to the sustainable transformation of organisations and companies towards Net Zero. Rather, the selection of topics reflects the thought processes that emerged from the expert conversations and that we would like to share with you.
Furthermore, the authors believe that the Road to Net Zero should not be understood as a linear process but rather as an iterative one, where each imperfect step, each iteration, represents an improvement in climate change mitigation. Similar to innovation processes, the overall vision is approached step by step, and the achievement of each iteration marks the beginning of a new cycle. Again, this is reflected in the choice of topics and the structure of the book, as shown in Fig. 1.1.
An illustration presents the outline of the road to net zero with 9 steps. Pioneering pathways, setting the course for net zero, crafting a corporate sustainability strategy, the future of corporate disclosure, and creating sustainable products are some of the steps.
Fig. 1.1
Outline of the Road to Net Zero
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Overall, the Road to Net Zero, as described in this book, is organised into three thematic clusters. Chapters 2–4 deal with issues that mainly concern corporate strategy, from setting sustainability goals to integrated strategy formulation and integrated reporting. Chapters 5–7 deal with the operational aspects of an OEM (Original Equipment Manufacturer or carmaker) in the automotive sector, where, in addition to product development, the upstream and downstream supply chains play an increasingly important role, as does carbon-neutral production. The third and final group of topics, in Chap. 8, looks at the technological developments that will significantly shape and drive the transformation of the automotive industry in the future. The final chapter concludes the book with a management summary and a research agenda.
After decades of climate monitoring and climate impact research, and with the growing awareness of the immense challenge facing humanity, the Paris Agreement represents the most important agreement to date showing how all nations can work together to responsibly mitigate climate change in the future. The Paris Agreement was therefore chosen as the starting point for this book. Looking at the Paris Agreement from the perspective of an organisation or business, several questions arise: What are key climate science foundations that inform the Paris Agreement? How can the 1.5 °C target be achieved not only by sovereign states but also by individual companies and organisations? How can national climate targets be broken down to lower organisational levels to set sustainability targets that reflect the current scientific projections? How do you set targets as a company or organisation that wants to transform its business model and operations in a way that is credible and responsible to both the climate and its employees? These and other challenges to setting sustainability targets are reflected in the second chapter of the book, ‘Setting the Course for Net Zero’, by Markus Beckmann, Gregor Zöttl, Veronika Grimm, Thomas Becker, Markus Schober, and Oliver Zipse.
In the past, it was considered sufficient for any company to set sustainability goals separate from its corporate strategy—often referred to as corporate social responsibility measures. However, today’s rapidly accelerating climate change requires a paradigm shift. Strategies that demonstrate a high level of maturity do not treat sustainability as a stand-alone add-on; rather, they integrate it into the way a company creates value. Achieving real lifecycle improvements requires integrated thinking that considers the entire value chain, not just the company’s operations. This type of integrated approach to sustainability permeates the entire strategy process. The process extends from strategy formulation, which requires reliable target setting, through strategy implementation, which needs an integrated management approach, to strategy evaluation, which calls for new ways of measuring and reporting. In the third chapter, ‘Crafting Corporate Sustainability Strategy’, Markus Beckmann, Thomas Becker, and Oliver Zipse outline how integrated thinking changes the entire strategy process.
The statement ‘What gets measured, gets done’ reflects the fact that the Road to Net Zero for companies and organisations is decisively influenced by new ways of reporting. As interest in a company’s sustainability strategy and performance grows, reporting on purely financial indicators is no longer sufficient to satisfy all stakeholder interests. While traditional reporting is primarily aimed at investors and thus provides information on the company’s financial performance, today’s companies require a broader focus on non-financial, sustainability-related aspects to meet the information needs of other stakeholders, such as employees, governments, or society. The transition to non-financial (sustainability) reporting has gradually evolved from voluntary standards with poor comparability to regulatory requirements for greater transparency. In the fourth chapter, ‘The Future of Corporate Disclosure’, Thomas M. Fischer, together with Oliver Zipse, Jennifer Adolph, Jonathan Townend, and Markus Schober, examine the transition from conventional to integrated reporting, while reflecting on recent legislation, the challenges of measuring and selecting non-financial and financial key performance indicators (KPIs) and the balancing of different stakeholder interests.
Reliable and credible sustainability targets, an integrated strategy and integrated reporting provide the roadmap for the path to Net Zero. With the introduction of electric vehicles, the majority of lifecycle emissions will shift from the use phase to the production phase. As a result, circular value chains play a key role in the operational transformation towards Net Zero and thus determine the second cluster of topics in the book. The transition to a circular economy starts with a new way of thinking about product development. Together with Oliver Zipse and Lena Ries, Sandro Wartzack opens the book’s second thematic cluster with Chap. 5, ‘Creating Sustainable Products’. The authors reflect on design for recycling, the replacement of scarce resources with secondary materials, and the introduction of natural materials, especially in interior design. Changes in consumer behaviour and the appearance of products with eco-efficient footprints are also discussed.
The discussion on sustainability in product development leads to the challenge of sourcing scarce and valuable resources. In particular, battery manufacturing and electric drivetrain manufacturing require materials that are available only in limited quantities and from only a few countries around the world. This increases the need for closed-loop supply chains where secondary materials can enter production. In addition, the Road to Net Zero depends heavily on suppliers far upstream in the supply chain, as science-based targets create responsibilities for the OEM throughout the entire supply chain. In addition to eco-efficient sourcing, the social dimension of raw material production must also be considered. In the sixth chapter, ‘Transforming Value Chains for Sustainability’, Kai-Ingo Voigt, Lothar Czaja, and Oliver Zipse reflect on these diverse challenges and show ways forward with practical examples from BMW and suggestions for future research.
Following the value chain downstream, a green factory can be seen as another crucial step in the transformation towards Net Zero at the operational level. Optimising production has been the focus of researchers and practitioners for more than two decades. Today, there is a consensus that sustainable manufacturing must cover the three dimensions of economic, environmental, and social aspects. While in the past the shift towards operational excellence was mainly driven within a factory, an integrated strategy approach now requires consideration across system boundaries again. The BMW iFactory is an example of a value-added network that is not simply a new production facility but combines lean systems, digitalisation technologies, and circular production processes to address the three dimensions of sustainable production. In the seventh chapter, ‘Sustainability in Manufacturing’, Nico Hanenkamp and Oliver Zipse together discuss the fundamentals of sustainable production and the latest advances in energy supply, circular processes, and manufacturing technologies.
Certainly, technological innovation provides new opportunities and impetus for further transformations on the Road to Net Zero. For this reason, Chap. 8, ‘The Power of Technological Innovation’, forms the third thematic cluster of this book and the ending/starting point of the Road to Net Zero, illustrated in Fig. 1.1. Technological innovations can trigger new strategies and goal adjustments that can take the continuous improvement cycle into a new round. The authors Jörg Franke, Peter Wasserscheid, Thorsten Ihne, Peter Lamp, Jürgen Guldner, and Oliver Zipse systematically analyse the drivetrains of the future. From the electric drivetrains to synfuel internal combustion engines (ICEs) and fuel cells, the authors discuss challenges and opportunities for each technology and outline possible future developments.
Ultimately, just as the development of new technological innovations depends on collaboration, so does an organisation’s overall effort to move towards Net Zero. Therefore, in addition to a research agenda, the final chapter of the book, ‘The Road to Net Zero and Beyond,’ authored by Markus Beckmann and Irene Feige, initially provides a summary of the preceding chapters, discussing shared themes and insights. It then extends its discussion beyond the Road to Net Zero, and in the outlook, delves into the relevance and value of university–industry partnerships, accentuating the importance of collaborative efforts in achieving Net Zero objectives. It explores innovative forms of collaboration to address this complex and time-critical global challenge and to jointly identify strategic pathways for sustainability-driven business transformation in the automotive industry.
Are you ready to join us on the Road to Net Zero? We would love to take you on our journey so that we can grow and learn from each other.
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In the remainder of this book, we employ capital letters when using the phrase “Road to Net Zero” to denote our understanding of sustainability-driven business transformation.
