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Abstract
This report aims to conduct a critical analysis on how Tesla manages to attain sustainable development goals through its effective corporate social responsibility strategies. Tesla Motors is a highly innovative automobile company. It was founded by Elon Musk, both the founder and CEO of Tesla. Musk and his team have a long desire in developing eco-friendly product in order to promote environmental sustainability. Tesla is now leading the automotive industry in terms of using advanced technology, outstanding design, green manufacturing process, and lean operations, etc, to attain environmental sustainability goals. Community and consumers are two important stakeholders in Tesla’s major corporate social responsibility strategies. Tesla is now promoting its solar panels and powerwall system to reduce the carbon emission in communities, Meanwhile, it also sells electric vehicle with its highly efficient powertrain system for consumers. The overall idea is that solar energy and electric energy can tremendously reduce the consumption of fossil fuels. The consumption of solar energy and electricity will not lead to the emission of carbon dioxide and other greenhouse gases (GHGs)
1.0 Introduction
Many traditional automobile producers are still heavily dependent on standard gas-powered cars and fossil fuels. Gasoline, diesel and other fossil fuels are non-renewable in nature. On one hand, fossil fuels are depleting very fast. It is predicted that the traditional energy sources may be used up by the end of this century. On the other hand, the incomplete combustion of fossil fuels will generate toxic air pollutants such as sulphur dioxide and carbon monoxide. The emission of carbon dioxide is also a dominant factor in leading to global warming. Thus, it is high necessary and essential for traditional car-makers to switch to producing electric vehicles to replace standard gas-powered cars. Even though EVs cannot sustain a very distant journey, Musk and his team still firmly believe that electric vehicles are the only option in promoting environmental sustainability. In the modern world, companies or organizations should not only focus on economic profits. It is also important to care about environmental conservation and environmental sustainability. as early as in 2015, United Nations Development Programme states that all UN member states and private sectors should take prompt actions to end poverty and protect environment through attaining 17 sustainable development goals (SDGs) as shown in figure 1. The 13th goal stipulates that all countries should take climate action to prevent global warming. The release of Greenhouse gases especially CO2 is the root cause in leading to global warming and extreme weather condition. Thus, many governments, companies from private sectors, non-for-profit organizations, environmental groups, etc, are trying desperately to reduce the emission of carbon dioxide. In this descriptive research , CSR and Sustainability practices of Tesla will be critically assessed.
Source Credit: UNDP, 2015
Fig 1: UN’s 17 Sustainable Development Goals.
2.0 Theories and Principles
2.1 Corporate Society Responsibility
By definition, corporate social responsibility is a continuing commitment or responsibility for a company or an organization to behave ethically and meanwhile contribute to economic development. A company or an organization should aim at improving the quality of life of the workplace and considering social benefits at large. Corporate social responsibility or CSR requires companies should acknowledge that be public accountable and responsible only for economic benefits but also their social and environmental performance. To be more specific, CSR is about companies manage their manufacturing or business processes in order to produce an overall positive impact on the society and environment as a whole.
According to Carroll (1999)., there are four dimensions of corporate social responsibility. They are including economic responsibilities, legal responsibilities, ethical responsibilities, ethical responsibilities and discretionary responsibilities. CSR strategies and practices should consider all the dimensions in order to attain sustainable development goals. Economic responsibilities mean that a company shall produce goods and services to earn economic profit. Legal responsibilities require companies to attain that economic profit within legal framework. Ethical responsibilities indicate that a company or an organization must operate with a license and be guided with codes of business ethics. Last, discretionary responsibility implies that CSR practices may be proposed to attain philanthropic purposes. Through implementing corporate social responsibility policies, companies or organizations can also gain tremendous profits. Jain (2013) points out that CSR practices can potentially improve employee loyalty and reduce turn-over rate. It can also ensure a higher productivity, brand image and reputation. Most importantly, CSR can promote environmental sustainability in a longer term.
2.2 Sustainable Engineering Principle
One major sustainable engineering principle in Tesla’s green manufacturing process is lean operation. Lean is an engineering principle that emphasizes on reducing wastes in the production(Cusumano, Nobeoka&Kentaro, 1998). In some sense, lean operations can be understood as preserving the value of products without less work. Generally speaking, lean operation is about increasing production capacity and efficiency with less time, inventory, space, labor and other critical resources. In order to conduct lean operations, Tesla has a Just-in-time or JIT process. A part of the intermediate product is processed immediately and then transferred to the next operation. Through eliminating waste procedures in the manufacturing, Tesla can reduce production time, energy consumption and improve productivity in the whole process.
3.0 Facts and Data results
Musk, the CEO of Tesla, believes that strategic CSR practices can help the company to attain environmental sustainability goals (Vance & Sanders, 2015). According to Tesla’s Impact Report 2018, Tesla’s CSR strategies will predominantly target at promoting sustainability and reduce carbon emission in communities and customers.
Tesla Motor’s CSR strategies is highly effective in promoting sustainability in target communities. Solarcity Corporation, for instance, is a subsidiary of Tesla Motors. The company specializes in producing solar panels, energy storage systems and solar energy solutions to all customers in order to reduce carbon emission. In 2016, Musk on behalf of Tesla announced that SolarCity would promote a new Solar Roof product. Photo-voltaic electric energy generating system is made up the existing roofs in the U.S communities. Tesla Powerwall 2, a home energy storage system is also introduced to store electricity converted by solar energy. Through promoting solar energy and energy storage products, Tesla manages to reduce carbon emission in the household consumption of energy. Tesla Powerwall series is a full integrated AC battery system for residential or other commercial use. The rechargeable lithium-ion batteries generate energy for the solar self-consumption, backup and time-based control. The working mechanism of solar panels can be illustrated as shown in figure 2 below.
Source Credit:Tesla, 2019
Fig 2: Typical Solar Panel System layout
The performance specification of the Tesla’s Powerwall can be shown in the table 1 below.
Table 1: Performance Specification of Power Wall
Source Credit: Tesla, 2019
Moreover, in order to reduce air pollution and the release of GHGs, Tesla is also promoting electric vehicle products with advanced power-train system to store electricity. Meanwhile, the power-train system is design in a way to be cost-efficient for customers. The outlook of power-train system can be observed from fig 3 below.