VolkswagenGreenwash Detector Research Report1.0 IntroductionIntensive competition across localand international markets has forced firms to invest intensively into themarketing of their goods and services. This is a proven way of creating acompetitive advantage as such promotions and advertising campaigns tend to attractmore customers. Furthermore, it differentiates firms from their competition,while enabling them to “adapt to growing society expectations on environmentalmanagement and social awareness” (Bazillier and Julien, 9). With the introductionof corporate social responsibility, firms have quickly adopted it in an attemptto increase their attraction to customers who reward socially responsiblefirms. In return, firms have attempted to turn to green-washing practices in anattempt to lure customers to buy and use their products. As a result, the firmor industry could appear environmental conscious, when in reality its operationshave opposing impacts on the environment.
It is upon this basis that this greenwashdetector research report critically analyzes greenwashing activities in the automobileindustry and in particular, the Volkswagen diesel emission scandal. 2.0 Accuracy of Social Responsibility Claim made byAutomobile Companies/ IndustryThe automobile industry has constantlybeen under pressure to “adapt to changes in environmental regulation on fueleconomy, and potentially, reduce the environmental impact of cars” (Amatulli, Michele,Matteo & Gianluigi, 139). These pressures arise both from the micro andmacro environment. For instance, with the increasing production of cars, it is evidentthat manufacturers all over the world monitor the amount of fuel consumption byreducing dependence on oil which is a non-renewable source of energy but alsohigh in carbon. There are also strict government regulations and other “benefitssuch as lenient taxation for auto firms who manufacture efficient vehicles” (Amatulliet al., 153). Another factor is the environmental concern and the increasedawareness of the need to conserve the environment.
Moreover, consumers arechanging their behavior in favor of environmental conscious automobilemanufacturers. Through this struggle, manufacturers are conducting research anddevelopment aimed at increasing fuel efficiency of their cars. For instance, Nissan, a Japaneseauto manufacturer introduced a new feature, known as Nissan Leaf which isadvertised as increasing the fuel efficiency of their Nissan brands. In theircommercial, it illustrated a scene of melting polar ice caps. This led to the movementof polar bears from their natural habitats towards the cities.
The bear arrivesin a suburban area where it finds a man about to drive off in a Nissan Leaf andgives him a bear hug. From the face value, this advertisement speaks topotential consumers on the fuel efficiency and environmental consciousness ofthe vehicle. The commercial also highlights the current focus on green productsand reduction of global warming, which has become an international practiceamong automobile manufacturers. Customers watching thesecommercials are often convinced and equally attracted to associate withproducts that guarantee to preserve natural habitats of animals and safeguardthe environment for the future. This is the reason why such commercials oftenattract high sales volume for auto manufacturers. A critical analysis of this commercialshows that the Nissan Leaf, just like most car brands aiming to beenvironmentally friendly has a lot of flaws.
For instance, the Nissan Leaf isonly convenient and practical for short distance travels and around cities becauseof its limited battery capacity which can support a charge for 100 miles orbetween 7 and 12 hours on full charge. Another issue is that charging stationsare limited to support charging of these cars. This leads to the question onthe involvement of a Nissan Leaf to reducing global warming. The reality isthat electricity used to charge the car is originated from natural gas and coalwhich are contributors to climate change. The accurate part is that electricand hybrid cars reduce amounts of carbon emissions but they do not completely adaptto the envisioned future. Another point of argument is that “automobilemanufacturers use rubber, chemicals, natural minerals, and other raw materialsthat pollute the environment indirectly and directly” (Smit & Elizabeth, 49).
This suggests that manufacturing and using any car contributes towardsenvironmental pollution and degradation. The entire transport industry has beenblamed for its environmental impact and forced to consider alternativeapproaches that create positive climate change. Moreover, one focus has beendirected towards the production of cars that consume less fuel and emit lesscarbon. Another case that builds and takes the center stage for this researchreport is the latest case of greenwashing by Volkswagen. 3.0 Research to Determine Extent of Misrepresentationof Situation in VW GreenwashAccording to Earth Day 2016 report,Volkswagen took the first position for greenwashing practices. This practicehas been deeply established in the belief that consumers are willing to paymore for firms that produce sustainable and environmentally friendly vehicles. Accordingto some individuals there is nothing clean or environment friendly about usingdiesel engines as they cause pollutions beyond legal limits.
This is provenwith the multiple class-action lawsuits against most automotive manufacturers.Mercedes-Benz was also in a lawsuit for its Blue-Tec vehicles marketingcampaign promoting them as environment friendly. In reality, they releasednitrogen oxides higher than legal limits allowed by Environmental Protection Agency.This was followed by “Volkswagensadmission that it had been involved in engineering deception after its engineersinstalled a cheat device” (Ewing, para 1; Lane, 33). This is an illegalsoftware that was installed in VW diesel engines to avoid being detected forhigh levels of nitrogen oxide emission. The scandal proceeded in September 2015after the firm had sold more than 11 million vehicles of this brand. It isbelieved that VW began making plans to misinform its customers in 2006 as itwanted to enter and increase its market shares in the USA against Toyota.
However,its engineers were unable to produce small engine cars that met Americanemission standards. (Siano, Agostino, Francesca & Sara, 27). It beganaggressive marketing in 2008 claiming to be a clean diesel engine. In 2013,West Virginia University conducted laboratory tests which showed that VWemitted more dangerous levels of nitrogen oxides. A follow up was made, and theinformation became public. VW was forced to recall affectedcars in Canada and the United States.
The public made a lot of noise on thecase which led to the collapse of stock prices, revenue and net income. Thecompany “admitted to charges for conspiring to violate a Clean Air Act anddefraud the US government” (Ewing, para 4). The result is that VW failed tojustify its commitment to producing environmentally friendly products that aregood for society.ConclusionResearch on the VW diesel scandal highlightsa case of greenwashing in the automobile industry. The report also justifiesother cases of green-washing where firms such as Nissan are involved in varyinglevels of greenwash.
Ultimately, the CEO of VW resigned and VW was charged witha billion-dollar settlement and had to offer many packages for all consumerswho purchased the 2.0 L diesel engines. The 3 options they offered was buyback,trade-in, or fix of emission problem with a cash incentive which allowed manyconsumers to get a price greater than the market value of the vehicle. Thesecases highlight the difficulty of achieving perfect ethical standards acrossmost industries, therefore bringing the concept of corporate socialresponsibility and its contribution to greenwashing.