The automotive industry is a cornerstone of the global economy, playing a pivotal role in driving economic growth and innovation. It provides millions of jobs worldwide, from manufacturing and engineering to sales and maintenance, supporting livelihoods and communities. Moreover, the automotive industry is integral to modern transportation infrastructure, facilitating the movement of people and goods. This connectivity is essential for the functioning of other industries, enabling trade, tourism, and daily commuting.
And it is acknowledged that the automotive industry also has a significant impact on the environment. So, there is a need to balance the value that the automotive industry brings to the global economy and mobility with that of its environmental impact.
So far, car manufacturers and many allied industries have answered the call to be more sustainable. In recent years, there have been innovations in more fuel-efficient petrol engines that have fewer car emissions. Meanwhile, there are new entrants among automotive manufacturers who are exclusively offering either hybrid cars or fully electric vehicles. There are also some directions towards new forms of energy, such as hydrogen fuel cells.
Inchcape has long realised the importance of being a sustainable company. For our business, which is focused on automotive distribution, our ability to operate using sustainable methods is our means of contributing to lowering the overall impact of the automotive industry on the environment. We have made sustainability a core aspect of our business strategy, and we reflect the growing importance of environmental responsibility.
In the past several years, Inchcape has set ambitious targets for integrating sustainability into our operations, embedding environmental considerations into every aspect of the business, all while maintaining a growth-focused trajectory.
A Strategy to Accelerate Growth Responsibly
The foundation of Inchcape’s sustainability initiatives is encapsulated in our Accelerate Strategy. Because of measurable successes in the past years, we are primed to further strengthen our position as a major player in the automotive distribution industry. Thus, we expanded our existing strategy to become Accelerate+, a long-term growth plan that aligns with a sustainable business mindset.
Accelerate+ is, for us, a transformation of our business as we adapt to an evolving business environment. We were able to anticipate the changes in the automotive industry, such as the demand for new energy vehicles (NEV) and changes in regulatory dynamics brought about by the economic and social impact of climate change. Suffice to say, Inchcape has been working to adapt to changes, adopt new and sustainable business practices, and focus on growth.
A Business Case for Sustainability
A noteworthy example of our sustainability efforts are our solar projects that we started around many of our markets around the world. We installed over 40 solar panels on Inchcape sites for use in our power needs. These installations have significantly reduced our carbon footprint.
And this initiative also has other benefits, specifically on the financial side. We have a very clear view on solar panel investments and payback period, and so we began incorporating this into our overall business offering. For instance, in Hong Kong, Inchcape helped the largest public transport operator retrofit 1,000 buses with solar panels. These buses were able to operate with reduced fossil fuel consumption, ultimately reducing operational cost, while providing cool public transport in Hong Kong’s hot weather.
To further strengthen our resolve to be an operationally sustainable company, Inchcape integrated sustainability metrics into the company’s investment decisions so that we can always factor environmental considerations into every project. We evaluate not only the financial key performance indicators (KPIs) but also the environmental impact.
Inchcape’s Investment Committee, which meets monthly, requires all business units within the company to address both financial and environmental KPIs when they implement their projects. Asking them to align both the financial returns and CO2 footprint improvements emphasises our intention to make a positive business case on sustainability. You can see this in our vehicle processing facility in Australia, where we invested in water treatment plants to recycle water used in car washing. Our approach has led to innovative projects that blend financial practicality with environmental accountability.
Four Pillars of Responsible Business
All our sustainability initiatives, their impacts on our business and community, and more were detailed in our 2023 Sustainability Report, our first such publication on sustainability programs. It is here that our approach to sustainability is organised under four pillars: Planet, People, Places and Practices.
Under the first pillar, Planet; we recognise the environmental impact of our industry, and so we drive our efforts to address climate change, reduce our emissions, and transparently report on our effect on the environment. The second pillar is People; in which we aim to promote a safe and healthy working environment based on an inclusive and diverse culture. That means developing the talent and skills and creating a workplace focused on health, safety, and wellbeing.
The third pillar is Places; where we want to ensure that Inchcape’s presence can have positive benefits to communities through locally tailored initiatives. Lastly, we also focus on Practices; by operating ethically and responsibly. It is under this pillar that we focus on constantly strengthening our conduct, policies, and controls and respecting the regulations of the markets in which we operate.
The changes in the automotive industry that involve the reduction of environmental impacts and the recognition of our role in society are reflective of what is happening more widely as we all globally target a sustainable economy. It is in the best interests of not just Inchcape but of the automotive industry to continue putting more effort and investment into sustainable practices.
For Inchcape, it is ingrained in our DNA to continue to transform as an organisation, to continue being a responsible business, and to innovate to ensure a growth trajectory. We know that the small progress we achieve today will have a long-term impact on our business and on society.
Attributed to: Nicola Gear, APAC CFO and Regional Finance Director, Inchcape
