What Are the Sustainability Practices of Volkswagen After the Greenwashing Event?

Executive Summary of Professional Development and Practice

This research was focus on Volkswagen and the greenwash event in which this particular company was involved in. the company cheated millions of people along with the government of the USA as the cars manufactured by the company had an inbuilt software which helped the vehicles of Volkswagen to manipulate pollution test. however, the truth was that the cars were producing pollutants that were way higher than allowed by the government of the United States. In this report, it was identified that the organization was liable for killing almost 60 people in the country because of the pollutants that were produced from the car's diesel engine. This, in turn, made the organization lose its customers. To undo its mistake the company had decided to deplete the CO2 emission in the organizations as well its product. In addition to this, the company vision for the future years is decarbonization which will help the company to focus on sustainable development.

Contents

Introduction.

Research Rationale.

Objective.

Methodology.

Findings.

Discussion.

Analysis.

Recommendation.

Conclusion.

Reference.

Introduction to Professional Development and Practice

Volkswagen is a German automobile organization which was founded in the year 1937. The headquarters of the company is situated in Wolfberg. This particular brand is the head of too many luxurious automobile brands such as Audi, SEAT, Porsche, Lamborghini, Bentley, Buggati, and many more (Annual Report 2015). However, being such a luxurious brand this particular group was entitled to a big fraud in the year 2015. The vehicles which came under Volkswagen were installed with engine control unit software, which was liable to violate the clean air act in the United States of America. All the cars which possessed this particular technology passed the testing process even if the car polluted the environment. The software was able to detect whenever the car was being tested and the ECU helped the car to cheat the test and pass. When the cars were moving in freeways this particular technology was shut down so that the car can attain higher fuel efficiency, greater power which caused way more pollution then it was allowed by the government of the United States of America. This particular technology was found and the company was asked to withdraw its cars from the market that led to the removal of 4, 82,000 cars. Apart from that, the United States federal law might also charge a fine of US $ 18 billion. In addition to that, some key players in the organization might even go to jail (Krall and Peng 2015).

It has been estimated that after the event took place the federal trade commission also joined the Environmental Protection Agency. The above-provided fines were charged for the US $18 billion and were charged for misleading advertising claims. This particular incident is likely to hinder the reputation of the renowned brand. According to many researchers, it has been identified that the taste and preference of the common consumer have shifted drastically and they have moved from the conventional mode of energy to green and safe energy and any organization which might hinder this particular perception might have to pay heavily.

Sustainable development is a very significant topic in the 21st century and every person or the company that does not follow sustainable development might have to pay heavily. The government is trying very hard from their end to protect the natural resources for future use. However, if other people are not serious about sustainable development then heavy fines or criminal punishment can be charged against them (Ideland and Malmberg 2015).

In this particular report, it will be observed what kind of sustainability process the organization has practiced after the greenwashing scenario that took place in the year 2015. The main aim of the research is to identify whether or not the company has changed its practice after the event that took place in the year 2015. Apart from that, the aftermath of the incident will be critically analyzed, to identify how the event impacted the organization and its functioning and what are the possible steps the organization can take to enhance its practice in years to come.

Research Rationale

The main reason behind choosing this particular topic is that the scenario of greenwashing that was caused by Volkswagen is still fresh making it a suitable target for our given research. This particular scenario was directly linked to the sustainability of the organization. If the scenario can be properly assessed we can identify what are the major problems that the company is facing and what are the steps that were taken by the organization to tackle the given problems. This also provides the opportunity to judge whether or not the company has taken any measures which might enhance its working as well as the brand image after the provided scenario.

Objective

Sustainable practices of Volkswagen.

Corporate Social Responsibility policies of Volkswagen.

Sustainable practices of Volkswagen after the greenwashing event.

Methodology of Professional Development and Practice

For this particular research, it was identified that the secondary qualitative research will be able to address the main aim of the report. Secondary research consists of materials that are not original that is, it has already written and published by some author. The secondary data consist of books, peer-reviewed journal articles, news articles, website articles, and company annual report. For this particular research, only those websites will be used that are reliable and can be trusted.

The main reason why secondary data is preferred for this particular research is the data can be easily accessed. With the advent of the internet, it has become very easy for people to get verified and original data with just a click. Earlier the people had to visit the local library or the wait for the edition of a journal in order to extract out the information that can be useful for their research topic or their report. In addition to this, the cost to acquire the secondary data is quite low as compared to other modes of data collection. This particular model of research is quite beneficial to understand whether or not the research question is answered or not. It becomes quite easy for the researcher to identify whether secondary data will be helpful for him or not. Even if the researcher has not ventured into a particular field he/she can easily look into journal articles to identify whether or not the particular research can be undertaken or not. secondary sources are the most used tool by the researches as this particular research type lets the researcher pave the way to his/her primary research and while doing so the researcher might find the answer he/she is looking for while conducting the research, which might conclude the research and the researcher does not have to bear the expenses of conducting primary research.

Primary research can become very difficult to conduct at times. Also, this particular model for conducting research is quite expensive in comparison with secondary research and also consumes a lot of crucial time of the researchers which might hinder the results of the research. The biggest reason why secondary research is preferred over primary research is mainly that there are chances that while conducting primary research the data collected may get hampered due to wrong answers answered across modes of data collection in the primary research.

While performing secondary research the researcher has the power to identify which secondary source should be undertaken for the research and which should not be taken. Secondary research always portrays as a section which deals with how the data was collected. The researcher can easily find if the results of the primary data are legitimate or not. if the results are legitimate the researcher can use the secondary resource for the study if the results are deemed too imperfect the researcher can dump the secondary research and try to find another research whose result can be trusted.

The reason for choosing qualitative research for this particular topic is that this particular research majorly deals with theoretical approaches to provide an answer to the research. Also, the quantitative approach cannot be deemed perfect for a research topic that is majorly focused on literary work. 

Qualitative research helps the researchers to identify the reason behind the choices of every individual that is connected with their particular research. While using qualitative research the researcher can come up with content that can be practically possible that is they can apply their theory in real-world situations and come out with answers that can help the society as well as the researcher.

Qualitative data is not issued for individuals, but many people at once. The researcher tries to deeply analyze the data so that he/she can come out with a solution that can help multiple people with the same type of problem. For qualitative general data is taken that is, a generalized problem is considered and the work is done accordingly. This helps the researcher to take a larger approach to solve a given problem.

Qualitative research does not bind the researcher using guidelines any researcher who is using this particular method for conducting research can start his/her research from any point, that is, the researcher can choose and event, statistics, fact or scenario to start his research unless and until the event or stats are related to the main aim of the research. This helps the researcher to create a database for the different conclusions that can be applied to the general population. This directly or indirectly impacts the flow of the research.

There is nothing wrong or right while conducting quantitative research, if the results of the research do not meet the researcher's expectations then also the researcher will use the data and try to add more data and the research more legitimate. In addition to this, it removes the barriers of biasness from the research and helps the researcher to get a result that is not hampered in any sense. Qualitative research always focuses on the main purpose of the result rather than the result. This helps the research to stay on track and also with the help of this research method the researcher can always focus on the bigger picture.

Just as secondary data this particular method is also cost-effective and in the little amount a lot of information can be extracted. As compared to any other process this particular process can be conducted in due time. The research can start with just a simple idea (Johnston 2017).

The information that is gathered using this particular research method helps the researcher to develop answers, products or different services that can be used to help the people. The research which is conducted taking the help of this particular method can also predict the results which can be directly or indirectly linked with the welfare of the people.

The benefits and the main reason to conduct secondary quantitative are given above.

Findings of Professional Development and Practice

According to the research conducted by Siano et al. (2017), stated that the organization has made major changes in the sustainable criteria as compared to events that led to the greenwashing incident. The company has shown significant commitment towards the reduction of C02 emissions. Also, the company wants to become the market leader in the context of environmental sustainability. According to the statements made by the company the organization wants to be seen as the automobile company which is most compatible with the environment in the coming years.

According to the sustainability report of Volkswagen (2017), the company stated that the main reason for the reduction of CO2 emission is mainly due to explicit climate change, along with that the company showed their major concerns about the scarcity of natural resources. According to the organization, it would reduce the CO2 emission by 30 per cent before 2025, to incorporate this future vision the company is trying to enhance the use of green energy in their operations so that the CO2 emission can be decreased significantly.

Crête (2016), identified in his research, after the group was exposed to the heinous crime of breaking the sustainability law some of the software engineers of the organization were used as scapegoats. However, further investigation proved the fact that the whole organization was responsible for this particular fiasco. According to the author, it will be very hard for the organization to function properly due to this error made by the organization. Also, it will take a lot of time to establish a brand image that was shattered by this particular event.

Cavico and Mujtaba (2016), estimated the probable consequences the scandal would lead to. According to the author, there needs to be a new approach of leadership in the organization which can help to motivate the employees towards ethical practices within the walls of the organization. The organization has to develop its reputation that might help the organization to pose a positive image to the stakeholders of the organization. Also, it will help the organization to rebuild its brand image that was lost after the incident. According to the CEO of the organization the main Aim and the biggest challenge for the organization is to change the culture of the organization. The CEO is trying to win the trust of all the stakeholders as this particular task is one of the most important tasks if the organization wants to flourish in the automobile industry.

The author also focuses on the aftermath of the event, the organization is trying to implement the government regulation into the operations of the organization so that it can implement the emission standards that are set by the United States government. Also, the organization has started to work on restoring its goodwill. The company has invested more than $ 1000 in the form of gift cards as well as roadside assistance for a time period of 3 years. However, Congress still thinks that the organization is still hiding some information that might hinder the sustainable laws made by the government of the United States of America.

 In another extensive research conducted by Dura (2019), the major impacts of the actions of Volkswagen were identified. The most prominent and the most deadly impact Volkswagen's action caused was death, multiple people. It has been observed by many researchers that NOx emissions are the major reason for premature death for those people who are suffering from respiratory diseases and cardiovascular disease. It has been identified that due to the increasing pollution that was caused by Volkswagen might have caused the death of almost 60 people in the United States by the end of the year 2016. In addition to this, it was estimated that 31 and 34 chronic bronchitis and heart disease were also recorded in the United States, these particular cases were directly linked with the pollution that was caused by Volkswagen cars. Also, the nitrogen emission that is being caused by Volkswagen has majorly impacted the environment which was the main reason for acid rain throughout the continent.

Volkswagen sales were significantly affected by this particular event. The organization was planning to enjoy heavy profits by using these unethical practices. However, the tables turned and the organization had to incur losses of almost 33 billion US dollars.

Whiteman and Hoster (2015), observed that before the Paris summit it was estimated that after the Volkswagen emission testing scandal should be more strict and an international framework should be provided. The organization which follows these frameworks should be rewarded handsomely and the organization that did not adhere to the rule and regulations should be severely punished. According to this particular piece of study, the Volkswagen scenario should be entertained as an Enron moment for sustainability measurements and valuations which can be compared. Multiple programs are launched by the world business council for sustainable development can easily capture factors that might adversely affect the environment of the world. All the government has to incorporate these laws into their regulatory books so that organizations can be punished if they try to harm the environment.

Discussion on Professional Development and Practice

Throughout the report, various elements were identified that were directly or indirectly related to the greenwashing event in the year 2015. Greenwashing was an unethical practice by the organization so that the company can enjoy heavy profits. However, the organization was caught red-handed in the act and had to apologize publicly. The organization tried to impose all the blame on some of the software engineers working for the organization. It was evident that these employees were made the scapegoat for the top management. Although, after further investigation, it was identified that some of the prominent members were also included in this fiasco.

The cars manufactured by the organization were easily able to pass the pollution test, but they were related to 60 deaths in the year 2016. Although, these deaths cannot be directly linked with the organization according to different researches the main pollutant that was released from the vehicles was nitrogen oxide and carbon dioxide which are the main reason for premature death in many countries. The research conducted in Germany identified that almost 6000 people die prematurely because of the pollutants that are excreted from the diesel engine (Phys ORG 2018). According to a report by WHO (2020), almost 4.2 million people die worldwide due to air pollution. These facts impose major questions on the moral values of the Volkswagen.

This disastrous scenario made the readers think about the promises made by the government in their sustainability and CSR annual report of 2015. According to the report, the organization has claimed that it is the most sustainable automotive company in the whole world. The main areas where the organization focused according to the report were Health, corporate responsibility, intelligent mobility and networking, environmental products, climate products, etc. the most ironic part about this annual report is that it broke most of the agendas that are stated in the report. As stated above it can be witnessed that the organization is liable to cause premature death. Also, according to the report the company majorly focuses on climate and environmental protection which was deemed incorrect by the actions of the organization.

It has been identified that the diesel engine is the most prominent element that is liable for climate change as well as environmental problems. According to the reports, black carbon particles that are can be found in the vehicle's exhaust are said to cause 3200 times more damage to the climate than carbon dioxide. If an individual is constantly exposed to black carbon particles it is quite probable that the individual will develop the heart-based disease and in extreme cases lung cancer (The World Bank 2014).

In recent reports, it has been identified that Volkswagen is trying to change its pattern and help save the environment according to the CEO of the company the government is investing heavily in order to decrease the CO2 emission from its products as well as industry. The organizations are trying to win back the support of the loyal customer which was lost after the greenwash scenario. To do so the organization is trying to show that they are considerate about the natural resource and the environment. According to the latest report, the agenda of the company is to focus on decarbonization, as it will provide the company an edge over its competitors. The organization has become more sensitive towards the environment it can be clearly stated through the agenda of the year 2019 (Sustainability Report 2019). The company is focusing more on sustainable development as compared to previous years. 

Decarbonization has turned into policy in Europe. Currently, it focuses on energy efficiency and renewable. However, the government is thinking of moving the policy to other sectors as well. One of the prominent sectors where this particular policy will be imposed will be the automobile sector (Robinson 2017).

The company is trying to provide complete protection to the environment, by completely modifying its products and services. The company is not focusing on only one aspect of the operation. It considers the complete chain of operations. As the group works in multiple sectors it does not want to harm its reputation further. The organization is trying to minimize its errors significantly. According, to the new articles published by the organization. It identifies that the organization is trying to eliminate the risks which can be caused by environmental burden. This clearly shows the organization is on the right path to build its lost goodwill (Volkswagen 2020).

There still lacks transparency issues with the organization. According to the top management of the organization, the culture of the organization is the main component to the company's success and after the event, the whole management was shattered, the company is still trying to mend itself for the event that took place in 2015. Although the organization has promised the government to follow the rules and regulation there is no action which can justify the words of the organization. Volkswagen group follows a centralized form of leadership, which makes it very difficult for anyone to amend changes in the organization. The employees working in the organization are resistant to the changes because of which it becomes quite important for the organization to change the mode of leadership in the organization so that the employees can change for the better (Kiley 2017).

Analysis of Professional Development and Practice

  • The organization has made great efforts to enhance its sustainable development. The company is trying to reduce carbon dioxide emission from its cars as well as its production facilities, the main reason why the company is trying to reduce the CO2 emission is the main contributor to climate emission throughout the world. CO 2 is seen as a major contributor to influence the environment (WHO, 2020). That is if this particular element is not controlled the organization can never fulfill its mission of sustainable development. Also, the company is concerned about the non-renewable resources which are not abundant in nature. The main aim to reduce carbon dioxide emissions from their vehicles can only be fulfilled if the natural resources are used responsibly.
  • In the other finding, it was identified that the top management used some of the software engineers of the firm as a scapegoat these practices can be easily seen in many organizations as the top management does not want to spoil its reputation as the company can be judged by its top management. Also, it is easy for the top management to manipulate and use people who do not have that much power in the organization (Pattanaik 2015).
  • The next article provided detailed aftermath of the greenwashing scenario. This particular finding showed that the company brand image took the most damage after the events. The brand image was shattered so badly that even the loyal customers of the organization were moving to their competitors’. The consumers felt cheated and disheartened after the events that unfolded. This particular article showed the company’s efforts to undo their mistake. The company tried to enhance its customer loyalty program by providing the customers with 3 years of roadside assistance and gift cards, though it might seem trivial slowly and gradually the organization might bring back the customer base that it used to have. In this particular article, the author also tried to show that the Volkswagen is still not clean and is hiding something from the rest of the world because of which the congressmen in the United States parliament are chasing the CEO of the organization to find the complete truth about the company(Watson et al 2015).
  • In one of the researcher, it was estimated that the pollution caused by the Volkswagen were liable to the deaths of multiple people. According to many reports, the material that was emitted from the diesel engine was liable for the premature death for people who were suffering from heart diseases or incorporated problems in breathing. It was also identified that people who are exposed to the pollution caused by this machinery can become a patient suffering from lung cancer (Kholod and Evans 2016). Many researchers have provided proof for this particular assumption. According to the researcher, many people die prematurely because they are always exposed to the pollutants derived from the diesel engine. The technology used by the organization turned into a fiasco. As many people suffered greatly and these were not at all related to the organizations and were common people living a simple life with some minor diseases. The company had to incur heavy losses and it was estimated because of this childish act of theirs the company had lost up to 33 billion US dollars.
  • The last paper talked about strict policies that should be imposed on people that do not follow sustainable development. And the people should be rewarded even if they take small initiative. This particular approach is good because. Business is said to have given and take relationship if the government is providing some incentives it is quite sure that the organization might take the bait and start working towards a greener future but it can also turn negative for firms that do not want to work towards a greener future (Schmieg et al. 2018).

Recommendation on Professional Development and Practice

The organization should try to enhance its customer relationship as after the event took place many of the potential clients of the company has been disarrayed and moved towards Volkswagen’s competitors. However, this is not going to be an easy task for the organization to rebuild the brand image. And the United Nation Congress is not making it easy for the company to function easily, as according to the congress, Volkswagen has still not come clean and is hiding something. The main reason why congress is so suspicious about the operation of the organization is that still, Volkswagen does not portray complete transparency in its operation (Glazer 2016).

The organization should try to enhance its decarbonization process as soon as possible so that the competitors of the company does not take advantage of the position in which the company is currently in. however, it was also identified that there were multiple problems with the operations of the firm as several vehicles had to be returned to the factory after sending it to the market due to multiple faults that were identified when the cars were sent to the real market (Newsroom 2019).

 According to the researcher, the company can sell one of its firms and post a bond that portrays that event like these will never occur again from the company's side. Although this particular method can only be used as a last case scenario this is one of the most reliable methods which can instantly help the company to gain the customer base which was lost due to greed. However, this particular method might itself pose a loss, but it can significantly help the organization to regain trust and after some time the company can purchase the brand again (Zhou 2016).

The company should also look into its competitor’s sustainable development process so that it can identify where the company is going wrong. Toyota is said have the biggest customer base, and most of the customers are happy with the working of Toyota (Auto insurance saving, 2020).

Conclusion on Professional Development and Practice

The main of this report was to identify what were the different sustainable practices that were used by Volkswagen before and after greenwashing events and what was the aftermath of the events. In this particular report, it was identified that the company was using unfair practices in order to attain a higher rank in the market. In doing so the organization was trying to manipulate the pollution test. The Volkswagen car had an inbuilt system that at the time of the testing would decrease the number of pollutants released in the atmosphere. However, when the car was operating the highways or freeways, the pollution level was way higher than authorized by the government of the United States of America. This was done to enhance the performance of the car while keeping fuel consumption stable. When the government found out about the tricks that were being played by the Volkswagen it immediately took actions and sent back the cars that were using this cheap trick to deceive the system which was in place to check whether the car was in a good condition to run in the American road or not.

In this report it was identified that after the company was caught in this fiasco, it tried to blame all the wrongdoing onto some of the software engineers that were working in the organization, however, it turned out that some of the top management was also involved in this particular act. This act of the organization made the organization to lose its customer base to its competitors, according to many researchers after this fiasco took place the sales of the company's product were affected greatly. And the sales were observed to be an all-time low.

The company tried to save its goodwill by publically apologizing, but the damage had already been done. In order to undo some of the mistakes, the company tried to invest money in the sustainable development of the firm and customer loyalty program. In addition to this, the company announced that it is going to work on decarbonization from their engines so that the company can provide a sustainable future to the rest of the world. However, it is ironic that even after the fiasco the company produced the sustainable development report which showed that the company was working for the good health of the people as well as the environment, but on the contrary, it was estimated that almost 60 people died prematurely because of the pollution caused by the company’s vehicles.

The company should try to enhance its customer relationships and try to enhance customer loyalty programs so that it can achieve the trust that the company has lost within the past few years. Also, the company should identify all the factors which might seem a bad practice to the rest of the world it can be in terms of pollution or handling situations. The goodwill of the organization has already been hindered if any more situation arises it is probable that the organization will have to face heavy losses.

Reference for Professional Development and Practice

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Auto insurance saving. 2020. Toyota is Once Again the Car Brand With Best Public Image, Sells the Most Hybrid Vehicles, & the Best Toyota’s of All Time [Online]. https://www.autoinsuresavings.org/toyota-car-brand-best-public-image/ (Accessed 19 MAY 2020)

Cavico, D.F.J. and Mujtaba, B.G., 2016. Volkswagen emissions scandal: A global case study of legal, ethical, and practical consequences and recommendations for sustainable management. Global Journal of Research in Business & Management Vol4(2).

Crête, R., 2016. The Volkswagen scandal from the viewpoint of corporate governance. European Journal of Risk Regulation7(1), pp.25-31.

DURA, C., 2019. THE VOLKSWAGEN EMISSIONS SCANDAL–FACTS, FIGURES AND EFFECTS. Annals of the University of Petroşani21, pp.35-48.

Glazer. R. 2016. The Biggest Lesson from Volkswagen: Culture Dictates Behavior [Online]. https://www.entrepreneur.com/article/254178

Ideland, M. and Malmberg, C., 2015. Governing ‘eco-certified children’through pastoral power: critical perspectives on education for sustainable development. Environmental Education Research21(2), pp.173-182.

Johnston, M.P., 2017. Secondary data analysis: A method of which the time has come. Qualitative and quantitative methods in libraries3(3), pp.619-626.

Kholod, N. and Evans, M., 2016. Reducing black carbon emissions from diesel vehicles in Russia: An assessment and policy recommendations. Environmental Science & Policy56, pp.1-8.

KIley. D. 2017. VW Shareholders Demand Transparency That Is Not Coming [Online]. forbes.com/sites/davidkiley5/2017/05/11/vw-shareholders-demand-transparency-that-is-not-coming/#670b9abe65c4 (Accessed 19 May 2020)

Krall, J.R. and Peng, R.D., 2015. The Volkswagen scandal: Deception, driving and deaths. Significance12(6), pp.12-15.

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Pattanaik. D. 2015. Organizations need scapegoats to take responsibility for failures[Online]. https://economictimes.indiatimes.com/organizations-need-scapegoats-to-take-responsibility-for-failures/articleshow/45977333.cms?from=mdr (Accessed 19 May 2020)

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Schmieg, G., Meyer, E., Schrickel, I., Herberg, J., Caniglia, G., Vilsmaier, U., Laubichler, M., Hörl, E. and Lang, D., 2018. Modeling normativity in sustainability: a comparison of the sustainable development goals, the Paris agreement, and the papal encyclical. Sustainability science13(3), pp.785-796.

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