The
Impact of Climate Change on
Competitiveness and Value Creation
in the Automotive Industry
The purpose of the report is to help investors make better informed
decisions regarding automotive company stocks in light of emerging
“carbon constraints”—policy measures designed
to mitigate climate change by limiting emissions of carbon dioxide
(CO2) and other greenhouse gases. The report explores how carbon
constraints in global automotive markets may affect value creation
in 10 leading automotive companies between now and 2015, a timeframe
in which major technological and policy changes are possible.
The Original Equipment Manufacturers (OEMs) assessed are BMW,
DaimlerChrysler (DC), Ford, GM, Honda, Nissan, PSA, Renault, Toyota
and VW—the world’s largest independent automotive
companies. The geographical scope of the assessment is the United
States, European Union and Japanese markets, which together account
for nearly 70 percent of current global sales.
The report is the result of collaboration between SAM Sustainable
Asset Management and the World Resources Institute (WRI) - an
environmental research and policy organization based in Washington
D.C. Drawing on the respective strengths and expertise of the
two organizations, the report analyzes both the risks and opportunities
of carbon constraints, and then estimates the combined implications
for OEMs’ future earnings. The report is explicitly forward-looking,
focusing on the main factors affecting OEMs’ exposure to
carbon constraints, and drawing on the latest publicly available
information about the 10 assessed OEMs.
About the Authors:
- Duncan Austin is Senior Economist in the
Sustainable Enterprise Program at World Resources Institute.
- Niki Rosinski is Senior Sustainability Analyst
for Energy & Mobility at SAM Research Inc.
- Amanda Sauer is an Associate in the Sustainable
Enterprise Program at World Resources Institute.
- Colin Le Duc is Head of Research Operations
at SAM Research Inc.
For more information on WRI, please refer to: http://www.wri.org/
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A key challenge for investors, analysts, and
corporates is to determine what implications carbon constraints
have for earnings, return on invested capital (ROIC) and thus
shareholder value. A tool that translates results of Changing
Drivers into changes in forecast EBIT (earnings before interest
and taxes) for the period 2003 to 2015 can be downloaded here.
By changing parameters, the tool allows users to test sensitivity
of carmakers to carbon constraints as well as to key assumptions.
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