Corporate Social Responsibility in Automotive Companies 1

Corporate Social Responsibility in Automotive Companies

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The evolution of CSR in the automotive industry

The automotive industry has seen a shift in how it approaches corporate social

responsibility (CSR) in recent years. This is due to several factors, including increasing pressure

from consumers and regulators to address environmental and social issues and the need to

improve its image in the wake of a series of high-profile scandals (Cetindamar, 2007). As a

result, CSR has become an essential part of the automotive industry’s strategy, with many

companies now incorporating it into their business models. This has led to several initiatives,

such as developing more fuel-efficient and environmentally-friendly vehicles, establishing

programs to reduce emissions from manufacturing plants, and creating recycling and reuse

programs for end-of-life vehicles (Cetindamar, 2007). While the automotive industry has made

progress in its CSR efforts, there is still room for improvement. In particular, the industry needs

to do more to address the issue of emissions from its manufacturing processes and the

environmental impact of its products throughout its lifetimes.

CSR challenges in the automotive industry

The automotive industry is facing several challenges when it comes to corporate social

responsibility. First and foremost, the industry is grappling with the issue of climate change and

its environmental impact (Cetindamar, 2007). The automotive industry is one of the most

significant contributors to greenhouse gas emissions and, as such, is under pressure to find ways

to reduce its environmental impact. Additionally, the automotive industry is also facing

challenges related to safety, both in terms of vehicle safety and employee safety (Cetindamar,

2007). With the rise of autonomous vehicles, the industry is also facing challenges related to the

ethical implications of this technology. Volkswagen is facing CSR challenges related to its

emissions scandal, while General Motors is facing challenges related to its ignition switch recall. 
Corporate Social Responsibility in Automotive Companies 3

CSR of Tesla Company

Tesla Company has been expanding and looking more at ways to be a better company

over time. Tesla's CEO Elon Musk feels that it is important for companies to invest into their

future- in this case, the coming generations (Baffour-Awuah, 2020). Many other corporations

have also taken up corporate social responsibility to make sure that future generations may have

better lives than the ones before them. Corporate social responsibility is a "moral obligation in

which businesses adhere to guidelines that benefit the public."(BusinessDictionary.com). It is

often implemented by many companies for many reasons. One of these reasons is to have

influence in politics and public affairs (Baffour-Awuah, 2020). In the case of Tesla, it was

influenced by its founder Elon Musk's beliefs on climate change and other environmental issues

that require immediate action. Tesla also implements environmental initiatives such as recycling

parts from their old cars for future use and donating old car batteries to energy storage

companies. Tesla has been looking for ways to help the environment and society as a whole. As

a result of these initiatives, Tesla ended up creating its own car recycling program (Baffour-

Awuah, 2020). The Tesla Fun Company also comes into play by making this program more fun

in exchange for used cars. They even make it a game amongst its employees to see how many

cars they can get in one day.

CSR of Volkswagen Company

Volkswagen company has a long history of being socially responsible. The company has

a Code of Conduct that outlines the company’s commitment to social responsibility. The Code of

Conduct is reviewed and updated regularly to ensure that it reflects the latest thinking on social

responsibility (Mačaitytė & Virbašiūtė, 2018). The company has developed a comprehensive

social responsibility program that includes environmental, safety, health, and community
Corporate Social Responsibility in Automotive Companies 4

initiatives. The program is designed to address the social and environmental impact of the

company’s operations (Mačaitytė & Virbašiūtė, 2018). Volkswagen Company has established a

Social Responsibility Fund to support social and environmental initiatives. The Fund is used to

finance projects that improve the social and environmental performance of the company.

CSR of General Motors Company

General Motors Company (GM) has long been committed to corporate social

responsibility (CSR). The company has a history of taking action to address social and

environmental issues, and it continues to do so today (Mahmud, Ding & Hasan, 2021). GM’s

approach to CSR is based on the belief that business can and should be a force for good in

society. The company strives to positively impact the communities where it operates and to

create value for all its stakeholders: employees, customers, suppliers, dealers, investors, and

society at large. GM’s CSR initiatives are focused on three key areas: environment, safety, and

inclusion & diversity.

Solutions to the challenges of CSR in General Motors Company

General Motors Company should increase its investment in renewable energy and electric

vehicles (Mahmud, Ding & Hasan, 2021). This would help reduce its environmental impact and

support the move towards a low-carbon economy. It can also increase its charitable giving,

particularly to organizations that support environmental causes or are working to reduce social

inequality. General Motors Company could increase transparency and communication around its

social and environmental initiatives. This helps build trust with stakeholders and shows that the

company is committed to making positive changes. The company should adopt more sustainable

business practices across its operations (Mahmud, Ding & Hasan, 2021). This could include

reducing waste, increasing recycling, and using more environmentally-friendly materials. The
Corporate Social Responsibility in Automotive Companies 5

company should work with other businesses, NGOs, and governments to promote sustainable

development and social responsibility. This could involve collaborating on initiatives, sharing

best practices, and raising awareness of critical issues.

Solutions to the challenges of CSR in the Volkswagen Company

A few potential solutions exist to help Volkswagen improve its corporate social

responsibility. They should Improve communication and transparency with stakeholders: One

way to help improve stakeholder confidence in Volkswagen would be to improve

communication and transparency around the company’s social and environmental initiatives.

This could involve regularly publishing reports on progress made, as well as holding open

forums or meetings where stakeholders can voice their concerns and ask questions (Mačaitytė &

Virbašiūtė, 2018). Volkswagen Company has to Increase focus on sustainable and responsible

business practices: Another way to help Volkswagen improve its corporate social responsibility

would be to increase its focus on sustainable and responsible business practices. This could

involve setting goals for reducing greenhouse gas emissions, increasing the use of renewable

energy, and sourcing materials from more sustainable suppliers. They should have to increase

funding for social and environmental initiatives: Volkswagen could also increase funding for

social and environmental initiatives, such as investing in electric vehicle infrastructure or

supporting programs that promote sustainable transportation (Mačaitytė & Virbašiūtė, 2018).

The other potential solution is to implement a corporate social responsibility program:

Volkswagen could also implement a corporate social responsibility program, which would

formalize the company’s commitment to social and environmental responsibility. This could

involve setting goals and reporting progress regularly, as well as implementing policies and
Corporate Social Responsibility in Automotive Companies 6

procedures to ensure that social and environmental considerations are considered in all

businesses.

After much deliberation, the Volkswagen Company has to decide that the most optimal

solution to its Corporate Social Responsibility challenges is to make changes in its operation

(Mačaitytė & Virbašiūtė, 2018). In particular, the company will focus on improving its

environmental and social practices. To start, Volkswagen will improve its environmental

practices by reducing its emissions of greenhouse gases and other pollutants (Mačaitytė &

Virbašiūtė, 2018). The company will also work to increase its renewable energy use and develop

more fuel-efficient vehicles. In addition, Volkswagen will focus on social responsibility by

creating programs to support employees, customers, and local communities. The company will

also work to improve its communication with stakeholders and to increase its transparency.

Alternative Solutions to the challenges of CSR in General Motors Company

After analyzing the different options, it is clear that the most optimal solution for General

Motors is to change its operations to address better its Corporate Social Responsibility

challenges (Mahmud, Ding & Hasan, 2021). Specifically, the company should focus on

increasing transparency and communication with stakeholders, improving working conditions

and environmental standards, and investing in community initiatives. By increasing transparency

and communication, General Motors can build trust with stakeholders and show that it is

committed to addressing its social and environmental impact (Mahmud, Ding & Hasan, 2021).

Furthermore, by improving working conditions and environmental standards, the company can

demonstrate its dedication to protecting the rights of workers and the environment. Finally, by

investing in community initiatives, General Motors can show that it cares about the well-being of

the communities in which it operates (Mahmud, Ding & Hasan, 2021). Implementing these
Corporate Social Responsibility in Automotive Companies 7

changes will be challenging, but they are necessary to address the challenges of Corporate Social

Responsibility. General Motors has a responsibility to its stakeholders, employees, and the

communities in which it operates, and it must take action to ensure that it meets these

responsibilities.

Solutions to the challenges of CSR in Tesla Company

There are a few key things that Tesla can do in order to improve its corporate social

responsibility: 

1. Increase transparency and communication with all stakeholders - This includes being clear and

concise about its environmental and social impact and what the company is doing to mitigate any

adverse effects. Tesla should also be proactive in sharing any positive impacts it is having, such

as through its innovation of sustainable energy products (Mahmud, Ding & Hasan, 2021). 

2. Make sure that sustainability is embedded into all business decisions. This means that Tesla

should consider the environmental and social impact of every decision made, from the

production of its products to how it operates its factories. 

3. Set ambitious targets for reducing its environmental and social impact - By setting goals and

working towards them, Tesla can show its commitment to making a positive difference. These

targets should be realistic and achievable so the company can be held accountable for meeting

them. 

4. Engage with stakeholders to get their feedback and input - Tesla should seek out the opinions

of those affected by its business, whether they are shareholders, employees, customers, or

community members. This will help the company identify areas where it can improve its social

responsibility. 
Corporate Social Responsibility in Automotive Companies 8

5. Continuously review and improve its social responsibility policies and practices - Tesla should

focus on something other than its laurels regarding corporate social responsibility. It should

always look for ways to improve its environmental and social performance.

Conclusion

In conclusion, the auto industry has come under increased scrutiny in recent years for its

environmental and social practices. As a result, many automakers have committed to improving

their corporate social responsibility (CSR) to address these concerns. There are a number of

ways that automotive companies can improve their CSR, such as reducing emissions, using more

sustainable materials, improving working conditions, and supporting communities. While some

progress has been made, there is still much room for improvement. Automakers that can

successfully implement these CSR initiatives will be well-positioned to win over consumers and

create a competitive advantage.

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References

Baffour-Awuah, D. (2020). The essence of Corporate Social Responsibility–Case Study of Tesla

Inc. Available at SSRN 3672317.

Cetindamar, D. (2007). Corporate social responsibility practices and environmentally responsible

behavior: The case of the United Nations Global Compact. Journal of business

Ethics, 76(2), 163-176.

Mačaitytė, I., & Virbašiūtė, G. (2018). Volkswagen emission scandal and corporate social

responsibility–a case study.

Mahmud, A., Ding, D., & Hasan, M. M. (2021). Corporate social responsibility: Business

responses to Coronavirus (COVID-19) pandemic. SAGE open, 11(1),

2158244020988710.