Editor's Note: BMW Group Vice President of Sustainability, Mobility Thomas Becker joined roughly 70 other business and policy leaders at the Institute for Business in Global Society (BiGS) roundtable on Europe's green transition in Paris last year. BMW is one of the world’s top auto manufacturers, marketing vehicles under the BMW, Mini, and Rolls-Royce brands. I sat down with Becker to explore BMW’s efforts to implement sustainability goals and practices throughout the company. This interview has been edited for length, clarity, and style.
–Barbara DeLollis, BiGS head of communications
What are consumers asking for? Are you listening to their demands for more sustainability?
It's very different between customer groups. If you look at our large European corporate customers, many of them have a sustainability agenda that includes the fleets they operate. That means they require lots of information on the embedded carbon in our cars, and they seek support operating them properly.
Private customers are different here: They often decide on the basis of acquisition costs and not on the basis of total cost of ownership. And for them, the individual situation with charging infrastructure is even more important. We see all of these motivations, and we have to meet all of their expectations.
What about investor expectations?
Investors need clarity — how you get to [Paris Agreement targets] and what you do to get there. We've defined since 2020 a clear strategy about not just the final product, but also our total responsibility and the whole scope of the greenhouse gas protocol. Transparency is a prerequisite for confidence and trust. Since 2021, we have provided a full picture, reporting sustainability like we report our financial performance. And we've seen a lot of positive feedback.
Can you talk about decentralized responsibility for reducing carbon emissions?
If you just have some sustainability specialists in corporate headquarters, you cannot implement targets properly. Our work is based on collaboration with many decentralized entities in purchasing, research and development, facilities management, and our production network. Many people have sustainability as part of their job.
It's about breaking down a corporate objective into each and every car and every component that is purchased. For example, making sure that when you purchase steel, the carbon footprint delivers on targets for that commodity and for its part of the product's footprint. You cannot do that with specialists who are only sustainability-focused. You have to make carbon footprint a piece of what people do among the many other things they're doing.
It starts with a very clear commitment from top management, so that everybody knows where we need to get, and people perceive these targets as set with what's feasible in mind. Acceptance is a result of people understanding what you want and seeing that it's properly thought through, ambitious but achievable, and that you're serious about actually getting it done.
Can you share a big victory that made you smile?
If you look at what you heard five or 10 years ago about how fast you could get carbon out of steel or aluminum or plastic, you wouldn't have heard a lot about what we actually do today. Competition and innovation are driving decarbonization forward. If a big customer group like the automotive sector wants lower carbon products, you get them. You see new players, new supply chains, and more competition.
Who would have thought, for example, that BMW would purchase aluminum from the United Arab Emirates? What you get from them is raw aluminum, made with solar energy. That would have been unexpected 10 years ago.
What concerns do you have about current practices impeding innovation and competition?
One issue is policies that say they're about environmental protection but are really about protecting markets. We're strong advocates of decarbonizing our supply chain wherever it is. We negotiate decarbonization contracts with battery suppliers in Europe, in China, and Korea, and have all these commitments audited by third parties.
We do not agree with the plan to link the carbon footprint of battery production to national electricity mixes across the board. This completely ignores the efforts of individual companies to create a solution that is as decarbonized as possible. … The push for greener supply works best if you have clearly accepted rules for how to document carbon footprint. You have to account for the reality of the individual product of the individual supplier.
How important are accurate and comprehensive global carbon accounting standards?
Globally agreed standards for carbon accounting are critical for getting us to Paris [Agreement targets].
The supply chain will be dominating our total carbon footprint in the coming years as a result of increasing electrification, where the tailpipe goes away. This is about managing thousands of companies' collective footprint. The old way of doing it is lifecycle assessment — we take average numbers and the best evidence we can get, and then produce a carbon footprint number.
At the moment, I'm afraid we have a huge architecture of disclosure built on a very weak foundation. Two companies that do the same thing will put out numbers, and you cannot compare them because the methods they've been applying are different.
Can you talk about the blind spots here?
How to calculate upstream emissions is more or less unregulated. The disclosures are based on global average figures for the carbon footprints of materials like nickel for batteries, aluminum, or steel. But producers use different energy sources, so an average cannot cover what they're actually doing. Everybody in the chain should measure the carbon they emit, with clear rules [on] how to do that. Then, it can get audited once, at the point the carbon is emitted.
With initiatives like E-liability, started by Bob Kaplan and many other scholars, we have an excellent foundation to use the logic of financial accounting to manage carbon more effectively than the logic of technical regulation.
We will need the support of players in the financial and accounting industry to help us. I believe firmly you could put this together within a year with the right 50 people working together. But you need a political impulse to get it done, and you need market forces to develop that.
We need clarity that when we use carbon accounting rules, they're broadly accepted in Brussels, Berlin, Washington, and Beijing. We have that situation for financial accounting, more or less, but we're far from that when it comes to carbon.