Mercedes-Benz to further integrate sustainability in operations, global supply chain

German luxury car marque Mercedes-Benz, which has defined its vision to globally achieve carbon neutrality by 2039, is eyeing sustainability in operations and global supply chain, as an effort to view sustainability from a holistic perspective.

At its Sustainability Dialogue India 2024 summit held in New Delhi on September 3, the company shed light on its sustainable business strategy that involves a multifaceted approach to address sustainable, social issues and governance challenges. 

According to Ola Källenius, Chairman, Mercedes-Benz, “At Mercedes-Benz, globally, we have set a course to achieve carbon neutrality by 2039. While we have made our operations and supply chains more sustainable, as a fast growing economy, India plays a crucial role in various sustainability matters.”

“Since the premiere of the Sustainability Dialogue in 2008 in Germany, we have initiated several projects such as the Sustainability Garage and BeVisioneers programme, among others to drive innovations and sustainability,” he added. 

According to Renata Jungo Brüngger, Member of the Board of Management, Integrity, Governance and Sustainability, Mercedes-Benz Group, "While Mercedes-Benz started working on sustainability a long time ago, the initial initiatives were not that focused. Today, sustainability within the organisation is a very multifaceted subject, and we are putting a sustainable business strategy in place to address sustainable, social issues and governance challenges".

“We have refocused our strategy and outlined six subjects - decarbonisation, resource usage and circularity, traffic safety, digital trust, human rights, and people - to drive a sustainable business which is more expensive than a non-sustainable business approach. We also have an advisory board taking care of sustainability and helping us implement our sustainable business strategy,” she added.

Ensuring sustainable supply chains

With electric vehicles (EVs) driving growing demand for materials such as Lithium, Cobalt, and Magnesium, the supply chains are set to witness challenges with respect to sourcing and sustainability. According to Brüngger, “which lead to difficult supply chains. As we manufacture premium products, we are closely looking at the supply chain to offer products built of completely sustainable materials that are also sourced and manufactured in compliance with human rights.

“We have over 40,000 suppliers in our supply chain, and we must do a risk-based assessment of various materials. We also adopt responsible sourcing standards for our suppliers to be part of the Mercedes-Benz supply chain,” she said.

“Our procurement and sourcing departmenta conduct several audits to ensure sustainability at out suppliers’ end,” Brüngger added.

In a panel discussion on the topic, Global Sustainability Trends and their Impact on the Indian Automotive Industry, Amitabh Kant, Sherpa G20, said, “It is incumbent upon India to be the first country to urbanise the process of decarbonisation. It is important to do this as we are the fifth-largest economy in the world, on our way to being the third-largest economy."

It is very important for India to make a quantum jump in sustainability just like we have leapfrogged in the area of mobility,” Kant added.

Kant explained that at a vehicle penetration level of 24-cars-per thousand people, if India were to emulate western countries and deepen its vehicle penetration, it is important for India to switch to electrification right at the beginning of this urbanisation phenomenon. 

“That is why the government is pushing electrification by virtue of the FAME and PLI schemes. 26 states have come up with an EV policy in India. And this is our moment to industrialise and decarbonise and become a global leader in the area of electric vehicles,” he said.

“I am quite certain that more innovative models are likely to come both from global and local vehicle manufacturers as India allows innovation at an enormous size and scale,” Kant added.

According to Manu Saale, MD, Mercedes-Benz Research and Development India (MBRDI), "For a company like Mercedes-Benz that sells 2 million cars around the world every year, the number of steps to decarbonise are quite a few. The chain is way bigger than what seems from the front."

"The challenge also arises from the vast range of products that we have. It is a huge set of technical and social topics driving sustainability. At MBRDI, we have a two-pronged approach to sustainability - sustainability mobility and environmental sustainability - and with sustainability agenda, we have found a renewed vision to develop technological solutions that help solve these realistic problems around the world," Saale said.