Image: Screenshot from GM 2023 Sustainability Report

The General Motors 2023 Sustainability Report — Mixed Results, Several Disappointments

May 13, 2024May 13, 20247 months ago Carolyn Fortuna 0 Comments

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General Motors has released its 2023 Sustainability Report, a sleek and glossy 84-page, feel-good publication that showcases the company’s commitment to work toward its carbon-neutral goals. The report highlights GM’s initiatives to accelerate electric vehicle (EV) adoption, forge strategic partnerships to enhance supply chain sustainability, and support the development of a future-ready grid powered by renewable energy.

GM says it is striving to reduce greenhouse gas emissions in pursuit of a zero-emissions future. The report provides insights into GM’s initiatives across key areas of focus, including environmental stewardship, innovation, social responsibility, and governance.

As part of the introduction to the sustainability report, GM chair and CEO Mary Barra described how sustainability is both good policy and good business. Sustainability, she says, is:

“… good for the company, for employees, and for recruiting and retaining the best people, people who will help us achieve our vision. We’ve made tremendous strides through our investments and innovations in electric and autonomous technology, and we’re going to expand our reach, especially with many important EV launches across a wide range of price points and segments this year.”

This is the same Mary Barra who announced it was full steam ahead for EVs, then cancelled the Chevy Bolt (which was popular and making money for the company), shuffled feet over battery plant delays, and, most recently, decided to slow the transition to EVs to pacify shareholders who look for short term gains.

In the report, the company says it sees change as an opportunity, a chance to “lead,” “provide the vehicles of tomorrow” today, and to “help solve some of society’s greatest challenges.” These are good PR snippets, but the essence of this sustainability report is much more murky.

Key Highlights from the GM 2023 Sustainability Report

A 1000-word article like this can only touch on some issues within the larger sustainability report. Key highlights from the report are as follows.

GM is joining the ZERO grid Initiative alongside other industry leaders and the Rocky Mountain Institute to drive progress toward a less carbon intensive, more reliable and affordable grid — RMI is committed to ending tailpipe emissions to create cleaner air, save millions of lives, and align the transportation sector with a 1.5ºC target. Their approach is through finance, policy, technology, and capacity.

GM reminds us in the sustainability report that it has plans to integrate the North American Charging Standard (NACS) into future GM EVs while also enabling access to more than 15,000 superchargers in 2024. Then again, with Tesla CEO Elon Musk’s recent layoffs of many of its Supercharger staff, the future of NACS access or expansion remains unclear.

GM says it will be expanding its commitment to the First Movers Coalition to be inclusive of steel, aluminum, concrete, and cement. The First Movers Coalition (FMC) advances the most critical, emerging climate technologies required to decarbonize the world’s heavy-emitting sectors. Today, the FMC is the world’s largest private sector, clean demand signal for emerging climate technologies.

The company also summarized how it is providing $64 million in grants to nearly 400 US-based nonprofits to help create inclusive solutions to social issues.

These are nice proclamations, yes, but the meat’s not there. The essence of the 2023 Sustainability Report is probably best boiled down to its goal-to-accomplishment ratio. Goal accomplishments below are listed from most promising to most lacking.

GM’s Sustainability Goal Accomplishment Rates

GM set a goal to divert more than 90% of its operational waste from landfills, incinerators, and energy recovery facilities by 2025 against a 2018 baseline. It is at 100% of goal. Congrats to GM for being able to digest waste in more sustainable ways. According to a George Washington University analysis, GM produces nearly 10 million vehicles annually with the help of 212,000 employees on 6 continents and does so while reusing or recycling 85% of its manufacturing waste generated worldwide. The analysis calls this diversion rate “impressive” due to its 131 landfill-free facilities, 90 of which are manufacturing facilities.

With regard to reducing Scope 1 and Scope 2 GHG emissions from its operations by 72% by 2035 against a 2018 baseline, GM has met 51% of the goal. The SEC now requires a mere baseline transparency around climate risks and emissions, and only “large accelerated filers” and “accelerated filers” must disclose Scope 1 and 2 emissions.

The GM goal to source 100% renewable electricity globally by 2035 is partially there, having achieved 39% of goal. In 2022, the company announced that it had finalized the energy sourcing agreements required to secure 100% of the energy needed to power all of its US sites with renewable electricity by end of 2025. They intend to pursue this goal by improving energy efficiency, sourcing renewables, addressing reliability and resiliency, and advocating for appropriate policies.

With the goal to reduce water intensity by 35% by 2035 against a 2010 baseline, the company has met 35% of that goal. GM is trying to meet this goal by focusing its water-saving efforts towards its manufacturing processes — reducing reliance on well water, instead purifying wastewater and reusing it for production, machining, and irrigation; levering stormwater collection for use in its cooling towers; and, conducting “water treasure hunts” to train employees in identifying opportunities to improve efficiencies and implement solution, among others.

The last 2 goals are real kickers, in that GM has so much work to do to reach the levels needed for their achievement.

The goal of eliminating tailpipe emissions from new US light-duty vehicles by 2035: 3% of goal. Three years ago the company said it would work with the Environmental Defense Fund to “develop a shared vision of an all-electric future and an aspiration to eliminate tailpipe emissions from new light-duty vehicles by 2035.” By late 2023, GM had outpaced the industry at selling more light trucks — while in that same time period its light trucks moved from 35% to 62% of sales. For GM that was a shift of 38% to 75%. GM has been falling behind industry efficiency gains in exactly the vehicles on which it has focused its market share, succumbing to the allure of internal combustion engine-powered profits. Any fines they could face from NHTSA will be minimal.

The least progress toward a goal in the 2023 GM Sustainability Report was in reducing Scope 3 GHG emissions from the use of sold products by 51% per vehicle kilometer by 2035 against a 2018 baseline: 0% of goal was achieved. The availability, quality, and reliability of Scope 3 data are a concern for many investors. While more organizations than ever are reaching into their value chains to understand the full GHG impact of their operations, most companies miss obvious emissions reduction opportunities because these emissions can affect the profitability that results from the emissions.

GM says the evolution of its products will increase Scope 3 emissions goals.

Continuing to expand battery production through Ultium Cells LLC
Collaborating with Tesla to integrate the North American Charging Standard (NACS) in their EVs
Investing in hydrogen fuel cell technology to reduce the carbon emissions of medium- and heavy-duty vehicles
Addressing the barriers to EV ownership in the United States through dealership education and engagement

Additionally — and importantly — its supply chain will need to product much better Scope 3 emissions results.

Inviting Tier I suppliers to sign the GM Supplier Pledge and enhance emissions tracking
Monitoring participating global Tier I and Tier II suppliers’ sustainability performance through CDP and EcoVadis
Promoting supplier CO2 emission reductions through Manufacture 2030
Contractually securing the battery raw materials to support its EV future
Continuing membership of the First Movers Coalition, demonstrating commitments to low-carbon steel, aluminum, concrete and cement, signaling a firm market demand for near-zero materials

As a whole, while the 2023 GM Sustainability Report did have some bright moments, the gaps are significant, with the few successes repeated for emphasis. Word-smithing really couldn’t mask the enormous amount of transitional efforts that will need to take place at GM over the next decade.