According to a survey of over 1,000 executives, automakers and suppliers are deprioritizing sustainability initiatives in their sourcing policies, shifting their attention towards reducing exposure to geopolitical risks after years of supply chain disruptions.
The survey, conducted by consulting group Capgemini, revealed a decline of 9-11 percentage points in the number of companies implementing sustainability initiatives. These initiatives include activities such as mapping their carbon footprint, optimizing routes to reduce emissions, and providing production information on origins and manufacturing.
Furthermore, the survey found that the average amount invested by suppliers in sustainability initiatives has decreased from $36.6 million in 2022 to $30.5 million in 2023. Shockingly, one-third of all surveyed companies admitted to lacking a comprehensive sustainability strategy.
The primary factors influencing supply chain decisions, as reported by respondents, were quality, geopolitical risk, cost, and resilience, with sustainability trailing behind.
Capgemini emphasized in its report, “The need to maintain continuity of operations will take priority over initiatives such as measuring carbon footprints, reducing emissions through route optimization, or increasing traceability.”
The survey encompassed 1,004 executives from global automotive companies, ranging from BYD and Ford to Lamborghini, with revenues exceeding $1 billion, as well as suppliers with a minimum of $500 million in revenue.
These findings align with recent statements from auto industry executives regarding ongoing supply chain challenges stemming from the COVID-19 pandemic, geopolitical tensions, semiconductor shortages, and escalating costs.