Leading car companies compete for the "carbon neutral" track Geely Automobile completed the construction of three zero-carbon factories ahead of schedule

Reporter Fang Chao and Quartz Jing report from Shanghai

"In the face of the increasingly severe global challenge of climate change, carbon peak and carbon neutrality have become a global consensus. Under the 'dual carbon' goal, major multinational car companies have formulated relevant sustainable development strategies. The White Paper on Sustainability in the Automotive Industry discloses.

The progress of car companies in practicing the "carbon neutrality" goal has also attracted attention from the outside world, and the reporter of "China Business Daily" recently learned from Geely Automobile that on April 26, Geely Automobile released the 2023 ESG report, which shows that in 2023, Geely Automobile's carbon emissions in the whole life cycle of bicycles will decrease by 12% compared with the base year of 2020, and the sales volume of new energy will exceed 487,000 units, and the construction goal of 3 zero-carbon factories will be completed ahead of schedule.

(Geely Automobile released its 2023 ESG report.) Image source: Geely Automobile)

"Geely Automobile has identified a clear path of sustainable development, outlining a blueprint for sustainable development in six directions: climate neutrality, nature benefit, global security, digital and intelligent innovation, co-prosperity development, governance and ethics, adhering to the principle of long-termism to win, exporting products, brands, technologies and values to the global market, and meeting people's increasingly diversified travel needs in a sustainable way. An Conghui, Chairman of Geely Automobile's Sustainable Development Committee, said.

New energy sales in 2023 increased by 48% year-on-year

In the context of new energy vehicles becoming an important path to achieve the "double carbon" goal, the development of car companies in the field of new energy vehicles has attracted considerable market attention.

According to the data of the Passenger Association, the cumulative wholesale sales of domestic new energy passenger vehicles in 2023 will be 8.864 million units, a year-on-year increase of 36.3%, in addition, the retail volume in 2023 will reach 7.736 million units, a year-on-year increase of 36.2%, and in terms of the penetration rate of new energy vehicles, the penetration rate of domestic new energy vehicles in 2023 will be 35.7%, an increase of 8.1 percentage points.

Taking Geely Automobile as an example, in 2023, Geely Automobile will launch 13 new energy products such as Geely Galaxy L7, Galaxy L6, Lynk & Co 08 EM-P, and Zeekr 007, with annual sales of more than 487,000 new energy vehicles, a year-on-year increase of more than 48%, and a new energy penetration rate of 29%, with a monthly penetration rate of more than 40%.

The reporter noted that since 2024, Geely Automobile's new energy vehicle sales are still increasing rapidly, and in March this year, Geely Automobile's new energy (including Geely, Lynk & Co, and Zeekr) sales reached 44,791, an increase of about 34% month-on-month and a year-on-year increase of more than 65%. From January to March, the cumulative sales of new energy vehicles were 144125, a year-on-year increase of about 143%.

At the same time, Geely Automobile actively promotes the green, low-carbon and sustainable development of the automotive industry with world-leading scientific and technological innovation, making new energy vehicles smarter, safer and more environmentally friendly. Geely Automobile introduced that with a number of leading technologies such as a new generation of Thor electric hybrid with a mass production thermal efficiency of up to 44.26% and the world's only 800-volt full-ecological solution, Geely Automobile has "successfully seized the commanding heights of core technologies such as intelligence, safety, and three electrics."

Geely Automobile also introduced that in 2023, it will also complete the development and application of 3 recycled plastic materials, 8 low-carbon and environmentally friendly materials and 7 leading lightweight technologies, and gradually put them into use on ZEEKR 001, Lynk & Co 08 EM-P, Geely Galaxy E8 and other products.

In addition, on the road to promoting sustainable development, the performance of leading car companies at the level of corporate governance is also quite important, and the joint credit report pointed out: "Since most of the listed companies in the automobile manufacturing industry have been established for a long time, they have higher requirements for automobile companies in terms of corporate governance." ”

"Good corporate governance is the premise of sustainable corporate development. Geely Automobile is firmly committed to the path of compliance development, taking the 'Global Corporate Governance Best Practices' as the benchmark, continuously optimizing the compliant, fair and transparent governance structure and ethics system, and at the same time continuing to make efforts in user privacy and security, public welfare model innovation, etc., to enhance the company's soft power with responsible business practices." Geely Automobile said.

According to the data released by Geely Automobile, in 2023, Geely Automobile will promote diversified development and improve its governance, with the proportion of independent non-executive directors increasing to 42%, the remuneration committee and nomination committee being 100% independent non-executive directors, and the proportion of female directors on the board of directors being 25%.

Drive the "zero-carbon" transformation of the upstream and downstream industrial chains

"Due to the special nature of car companies, the practice of sustainable development is full of challenges. According to the White Paper on Sustainability in the Automotive Industry, automotive companies need to focus not only on their own sustainability, but also on ensuring that the entire value chain also adheres to ESG sustainability standards.

"Giving full play to the industry endowment of the long and highly relevant value chain of the automobile manufacturing industry, Geely Automobile has extended the concept of sustainable development upstream and downstream, which not only effectively promotes the zero-carbon transformation of vehicle manufacturing, but also drives suppliers and other value chain partners to build a green and sustainable business ecology, significantly enhancing the sustainable competitiveness of the entire value chain. Geely Automobile said.

For example, on the vehicle manufacturing side, Geely Automobile released information showing that it has comprehensively promoted energy conservation and consumption reduction and clean energy replacement, and in 2023, the energy consumption and greenhouse gas emissions of a single vehicle in the vehicle base will be reduced by 13.98% and 53.66% respectively compared with 2020, and the existing 6 vehicle bases will use 100% renewable electricity.

"In 2023, we will also complete the certification of two zero-carbon factories in Baoji and Chengdu, and achieve the goal of building three or more zero-carbon factories in 2025 ahead of schedule. Geely Automobile also said that it is guided by natural benefits, and 10 vehicle bases have been rated as national green factories, and in 2023, the water consumption of a single vehicle in the vehicle base will decrease by 15.4% compared with the previous year, and the hazardous waste generation of a single vehicle in the vehicle base will decrease by 8.4%.

It is worth noting that in the process of promoting sustainable development, in addition to the factors of car companies themselves, how to better drive the upstream and downstream of the industry to jointly achieve green transformation is also a major challenge that car companies have to face.

"The supply chain of the automotive manufacturing industry is still overly dependent on fossil fuels, which poses a challenge to achieve the 'dual carbon' goal. In addition, the transformation of the industry will lead to a significant increase in capital expenditure, which will cause greater financial pressure and transformation risks. The joint credit report pointed out.

So, how did Geely Automobile overcome many challenges and drive the upstream and downstream industry chains to jointly "chase green"?

"For suppliers, Geely Automobile is making every effort to improve the risk-based due diligence management system, continuously improving the transparency and influence of value chain management, and on the other hand, actively guiding suppliers to practice ESG sustainable development. Geely Automobile said.

According to reports, in 2023, 85% of Geely Automobile's first-tier suppliers will be qualified to pass the sustainability self-assessment questionnaire, 100% of the newly admitted first-tier suppliers will complete ESG on-site audits (effective since August), and 120 first-tier suppliers will complete third-party ESG due diligence.

"Relying on its diversified leading strengths in innovation and technology, value chain synergy and social value creation, Geely Automobile is accelerating towards the goal of reducing carbon emissions throughout the life cycle of a single vehicle by more than 25% by 2025 and achieving carbon neutrality by 2045, working with industry chain partners to create a sustainable future and become a sustainable value benchmark for the automotive industry to practice ESG." The relevant person in charge of Geely Automobile said.

(Editor: Quartz Jing Review: Tong Haihua Proofreader: Yan Jingning)