Importance of Environmental Sustainability Practices in Business

Operations: A Case Study of Nissan Motors Ltd.

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 Table of Contents

Stage 1 – Literature Review............................................................................................................1

2.1 Chapter Introduction..............................................................................................................1

2.2 Environmental Sustainability Practices: Concepts and Definitions.......................................1

2.2.1 Defining Environmental Sustainability...........................................................................1

2.2.2 Environmental Sustainability Practices in Business.......................................................2

2.3 The Automobile Industry and Environmental Sustainability................................................3

2.3.1 Environmental Challenges in the Automobile Industry..................................................3

2.3.2. Regulatory Frameworks and Industry Initiatives...........................................................5

2.4 Benefits of Environmental Sustainability Practices in the Automobile Industry..................6

2.4.1 Cost Savings and Efficiency:..........................................................................................6

2.4.2 Reputation and Consumer Demand:................................................................................6

2.5 Challenges and Barriers in Implementation...........................................................................7

2.5.1 Technological Challenges:..............................................................................................7

2.5.2 Supply Chain Complexities:............................................................................................7

2.6 Literature Gap........................................................................................................................8

2.7 Chapter Summary..................................................................................................................8

References......................................................................................................................................10

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Stage 1 – Literature Review
2.1 Chapter Introduction
In the last decade, the obligation of environmental sustainability performance in business
operations has progressed exponentially, with the worldwide community acknowledging the
pressing prerequisite to discuss about environmental challenges. This literature review emphases
on the dominant significance of implying environmental sustainability practices, with a specific
emphasis on their association with the automobile industry. As climate change, environmental
degradation and resource scarcity continue to direct global apprehensions, this review discovers
how organisations, especially those in the dynamic automobile division, are retorting to these
challenges (Akhtar et al., 2017). By investigating recent research and changes in this embryonic
landscape, it purposes to highlight on the indispensable role that environmental sustainability
circulates in shaping modern corporate strategies and operations.

2.2 Environmental Sustainability Practices: Concepts and Definitions

2.2.1 Defining Environmental Sustainability
Environmental sustainability is an idea that revolves around conserving and improving the health
of the earth while concurrently fulfilling human needs and confirming economic success. Fauzi
et al. (2021) opined that it incorporates the accountable management of properties and the
decrease of ecological harm to uphold a harmonious stability between economic success,
ecological well-being and social responsibility. At its core, environmental sustainability is about
acknowledging that the actions of people have impacts on the environment and the future
generations (Jorsfeldt, Hvolby and Nguyen, 2016). To explain environmental sustainability more
broadly, numerous key principles and characteristics can be measured.

1. Resource Stewardship: This principle focuses on the responsible and competent use of
resources to guarantee their accessibility for extant and upcoming generations. According to
Khan et al. (2021), sustainable agriculture, for example, includes practices that shield soil
quality, minimize chemical inputs and conserve water, thus continuing the efficiency of
farmland while protecting ecosystems. Responsible forestry emphases on harvesting timber
while conserving biodiversity and forest health (Khan, Yu and Farooq, 2022). Water resource

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 conservation purposes to avert overuse and pollution of water sources, acknowledging their
vigorous importance for human subsistence and ecosystem functioning.
2. Pollution Prevention: Pollution prevention is a fundamental aspect of environmental
sustainability. It comprises strategies to curtail or eradicate pollutants that damage the human
health and environment (Duric and Potocnik Topler, 2021). This comprises plummeting
emissions from industrial operations and transportation, restricting waste through responsible
disposal and recycling, and implementing cleaner technologies and processes. Evangelista
(2014) argued that pollution prevention confirms that pollutants such as air pollutants, waste
products and hazardous chemicals are managed and abridged, reducing their harmful effects
on the environment.
3. Climate Action: While climate change has become a burning global concern, environmental
sustainability demands actions to decrease greenhouse gas discharges, transition to renewable
energy sources and promote energy efficiency (Evangelista and Durst, 2015). These actions
are important for extenuating the effects of climate change, such as extreme weather events,
rising global temperatures and sea-level rise. Longoni, Golini and Cagliano (2014) share their
notion that executing climate action strategies not only benefits combat environmental
degradation but also lessens reliance on fossil fuels and their allied economic and
environmental costs.

2.2.2 Environmental Sustainability Practices in Business

Environmental sustainability applications in business incorporate a wide series of strategies
intended to reducing the ecological footprint of actions while upholding economic feasibility.
These practices include:

1. Green Supply Chains: In repercussion to environmental apprehensions, organisations are

overhauling their supply chain management to reduce their ecological footprint. One of the
key aspects include Sustainable Sourcing by partnering with suppliers who perform
sustainable practices, such as reducing environmental impacts and responsible resource
extraction and fair labour throughout the supply chain (Cai, Chen and Bose, 2013). Another
aspect is Transportation Efficiency by minimalizing transportation distances and improving
logistics to restrict emissions associated with shipping that reduce both costs and the carbon
footprint. Eco-friendly Packaging is another aspect of green supply chain by adopting

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 sustainable packaging materials that lessen waste and lower transportation-related discharges
(Dao, Langella and Carbo, 2011).
2. Circular Economy: Transformation to a circular economy is a prerequisite in sustainability
efforts that features reuse, recycling, refurbishment and waste reduction in the whole process
(Roxas and Chadee, 2016). Promoting product and material reusability is seen in applications
like refillable containers and modular product designs. Recycling can be ensured by
maximizing material recovery from waste products through conserving resources and
efficient recycling processes (Petrini and Pozzebon, 2009). People can extend product
lifespans by refurbishing and upgrading rather than replacing and discarding. Waste
Reduction can be ensured by optimizing resource utilization and minimizing waste
generation, decreasing environmental impacts across the product lifecycle.
3. Eco-friendly Product Design: Sustainable product design encompasses various strategies
including Recyclability, Lightweight Material, Energy Efficiency, Consumer Appeal. Product
Recyclability can be increased by designing products for easy disassembly and recycling,
reducing resource consumption and waste. Opting for lightweight materials, eco-friendly
materials are used to cut manufacturing energy usage and improve product fuel competence
(Lam and Lai, 2015). Organisations incorporates features for improved energy efficiency,
which lowers carbon emissions and decreases operational energy consumption. Nowadays,
organisations develop products that resonate with environmentally conscious consumers,
enhancing brand status and sales while tapping into increasing sustainability-oriented
markets (Piyathanavong et al., 2019). Sustainable design aligns with a shift in business
landscape centred on environmental responsibility.

2.3 The Automobile Industry and Environmental Sustainability

2.3.1 Environmental Challenges in the Automobile Industry
Environmental challenges in the automobile industry are major concern in the current time. This
segment is a significant contributor to environmental problems, mainly due to its resource
consumption, high greenhouse gas emissions and pollution.

1. Greenhouse Gas Emissions: Old-style modelled vehicles which are powered by internal
combustion engines burn fossil fuels, such as diesel and gasoline, which release noteworthy
quantities of carbon dioxide (CO2) into the air. Carbon dioxide (CO 2) is a powerful

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 greenhouse gas, and its accretion in the atmosphere is a prime reason of global warming and
climate change (Tang et al., 2022). The significances embrace rising global temperatures,
extreme weather events and melting polar ice. In response to the environmental problems
posed by these emissions, regulatory authorities have strengthened inspection and launched
strict regulations on vehicle emissions to decrease the industry's involvement to global
warming (Martinez et al., 2019).
2. Resource Depletion: The manufacturing of automobiles necessitates substantial funds,
including raw materials like steel, plastics, aluminium and energy for production. The
abstraction and processing of these properties can have undesirable environmental
influences, including habitat destruction, deforestation, and soil and water pollution (Cowan
et al., 2010). The market for these resources creates considerable pressure on their
availability and can lead to the reduction of limited resources. Moreover, the energy-
intensive characteristic of automobile manufacturing results in environmental degradation
and resource scarcity, highlighting the need for sustainable application and resource-efficient
technologies (Moxen and Strachan, 2017).
3. Air and Water Pollution: Findings from Parry (2012) indicates that from the production of
vehicles and the operation and driving of vehicles produce contaminants into the
environment that results in air and water pollution. Tailpipe emissions such as burning of
engines in vehicles release a variety of toxins, including Carbon Monoxide (CO), Volatile
Organic Compounds (VOCs), Nitrogen Oxides (NOx), Hydrocarbons (HC), and Particulate
Matter (PM) into the air, that create smog formation and pose health risks, particularly
respiratory complications (Annunziata et al., 2018). Additionally, toxic substances from the
release of engines such as Formaldehyde, Benzene, and Polycyclic Aromatic Hydrocarbons
(PAHs) can have detrimental health issues and can cause to the formation of dangerous air
pollutants.
Similarly, pollutants from vehicles can cause water pollution by polluting water sources
through runoff. While driving a vehicle, it results in the accretion of several substances on
road sides, including heavy metals, oil, and rubber particles (Jorsfeldt, Hvolby and Nguyen,
2016). When it rains, these materials are washed into stormwater systems and can ultimately
find their way into lakes, rivers and oceans that contributes water pollution (Fauzi et al.,
2021). In the production process of automobiles, it comprises various industrial procedures

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 that can pollute water sources. These processes may comprise of painting, metalworking, and
the use of several solvents and chemicals, which can lead to the release of contaminants into
waterways.
This contamination disturbs aquatic ecosystems and can damage both human health and
aquatic life. Addressing these pollution problems is fundamental to environmental
sustainability, as minimizing pollutants and emissions is a prerequisite for a healthier
environment.
4. Urban Congestion: The production of vehicles in city areas can lead to amplified traffic
congestion. This overcrowding of vehicles not only causes polluted air quality but also
generates disorganisations in transportation systems and puts stress on substructure (Azevedo
et al., 2012). Due to traffic congestion, people have to spent more time in traffic jams, more
fuel consumption, and increasing air pollution in cities. Moreover, it increases to
infrastructure maintenance costs and stresses urban planning efforts. Wagner and Svensson
(2020) suggest that sustainable urban transportation systems, including public transport and
the elevation of substitute modes of transportation like cycling and walking, are essential
components of minimizing urban congestion and decreasing the societal and environmental
impacts allied with it.

2.3.2. Regulatory Frameworks and Industry Initiatives

Since there are environmental challenges in the automobile industry, regulatory frameworks and
industry-led initiatives are incorporated by the government to drive the sustainability practices.

Regulatory Frameworks: Government regulations worldwide have forced fuel efficiency

requirements and sterner emission standards (Wikstrom, 2010). For example, the Corporate
Average Fuel Economy (CAFE) standards, CO2 Emissions Targets in the United Kingdom and
Euro emissions standards in Europe have forced automakers to manufacture more fuel-efficient
and less-polluting automobiles (Khatter et al., 2021). These protocols not only decrease the
industry's environmental effect but also generate incentives for innovation.

Industry Initiatives: Industry associations, automobile manufacturers and non-governmental

organizations have launched numerous sustainability steps. These embrace certifications like the
development of electric vehicle infrastructure, ISO 14001, LEED for green manufacturing
services, "Zero Waste" goals, End-of-Life Vehicle Management and collaborative efforts to

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research and improvements sustainable technologies (Kumar and Christodoulopoulou, 2014).
Manufacturers are gradually capitalising in hybrid and electric vehicles to meet both regulatory
requirements and varying consumer demands for sustainable transportation options. Many
corporations are devoting to the expansion and production of electric vehicles and alternate fuel
automobiles, minimizing the dependence on fossil fuels and decreasing greenhouse gas
emissions (Roxas and Chadee, 2016). Several car manufacturers have united hybrid technology
into the product lines and using the technologies such as turbocharging, direct injection, and
lightweight materials.

2.4 Benefits of Environmental Sustainability Practices in the Automobile

Industry
2.4.1 Cost Savings and Efficiency:
According to Leonidou et al. (2017), organisations that participate in the environmental
sustainability practices in the automobile industry can get benefits of significant operational
efficiency and cost savings. Sustainable practices like waste reduction, energy-efficient
manufacturing and improved supply chain management can lessen operating expenses
(Annunziata et al., 2018). Energy-efficient production mechanism can decrease energy costs and
boost operational efficiency. Additionally, recycling efforts and waste reduction minimize
disposal expenditures. Overall, sustainable practices contribute to leaner and more cost-effective
processes, profiting both the environment and the bottom line. Cost savings also allow
automobile businesses to invest in further sustainability enterprises and research and
development processes, strengthening their obligation to long-term environmental responsibility.

2.4.2 Reputation and Consumer Demand:

Brand reputation of the organisations and consumer demand are closely linked to the
environmental sustainability practices in the automobile industry. Moxen and Strachan (2017)
suggested that corporations with strong sustainability authorisations attain increased consumer
trust and a positive brand image. As customers become more environmentally aware, there is a
rising preference for eco-friendly products and services, including automobiles. Evangelista
(2014) also opined, corporations that are well-recognized for their sustainability practices can tap
into a larger market share, reinforced by consumers who actively pursue to environmentally
responsible options. Furthermore, governments and organizations often award customers with

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incentives who purchase green vehicles, increasing even more consumer demand (Cai, Chen and
Bose, 2013). A strong consumer demand and positive brand reputation not only increase sales
but also progress the long-term profitability and viability of automobile manufacturers who are
committed to environmental sustainability.

2.5 Challenges and Barriers in Implementation

2.5.1 Technological Challenges:
The automobile industry encounters significant technological development in its search of
environmental sustainability. According to Dao, Langella and Carbo (2011), transformation to
the sustainable practices often stresses innovative technologies, mainly in the progress of
alternative fuel sources and Electric Vehicles (EVs). These technologies necessitate huge amount
of research and investment. EVs, for instance, depend on electric motors, advanced batteries and
charging infrastructure, which creates technical hurdles in terms of battery efficiency, range and
charging speed (Evangelista and Durst, 2015). Moreover, the shift toward improved
aerodynamics, lightweight materials and smart energy management systems demands current
technological advancements. These challenges require substantial research and development,
impacting both the expenditure and timing of bringing sustainable technologies to automobile
market.

2.5.2 Supply Chain Complexities:

Sustainability efforts in the automobile industry spread throughout the supply chain, leading to
complications in confirming transparency and compliance. Cooperating with many suppliers,
often in different geographical locations, surges challenges in monitoring and implementing
sustainability standards (Jorsfeldt, Hvolby and Nguyen, 2016). Confirming that resources are
responsibly obtained, manufactured, and transported according to environmental and ethical
standards can be logistically multifaceted. Regulatory differences across areas further obscure
supply chain management. Corporations must circumnavigate a web of certification,
acquiescence and reporting requirements, all while matching sustainability and cost-efficiency
(Khan et al., 2021). Developing transparent, effective, and environmentally responsible supply
chains is required but necessitates robust communication, meticulous coordination and
sometimes a comprehensive reconfiguration of established practices.

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2.6 Literature Gap
The above developed literature on environmental sustainability in the automobile industry comes
with valuable insights but there are several areas which are unexplored. These gaps comprise the
need for in-depth research that quantifies the environmental and financial influences of
sustainability activities, technology's embryonic role in addressing environmental challenges, an
exploration of the dynamic relationship between regulatory frameworks and industry-led
sustainability efforts and strategies for managing global sustainable supply chains (Robertson,
2021). Bridging these gaps would be helpful to a more comprehensive thoughts of the ever-
evolving role of environmental sustainability in determining business strategies and practices,
particularly within the framework of the automobile industry. Additionally, there are some areas
which are unexplored due to shortage of time, resources and accessibility. Also, it is exploratory
research, so there might be some methodological shortcomings which might be analysed using
other quantitative research methods to get precise and accurate decisions on the topic. There are
some other external factors such as geographical factors, geopolitical factors, economic,
environmental factors in which people have no control and these factors might affect
researcher’s decision (Zikmund, Babin and Griffin, 2013).

2.7 Chapter Summary

In the dynamic current business landscape, the incorporation of environmental sustainability
performances into actions has arisen as a dominant concern. This review underlines the
significance of these practices, predominantly within the automobile industry, where
environmental issues and consumer demands have congregated to reform the industry's course.
As resource depletion, climate change, and pollution continue to loom large, organisations must
implement strategies that hold both economic viability and ecological responsibility.

The benefits of such practices are multidimensional, with improved operational efficiency, cost
savings and heightened consumer demand and brand reputation standing out as key benefits. Yet,
there are problems to overcome, from regulatory compliance and supply chain complexities to
technological advancements and stakeholder coordination.

Sustainability in business operations is not a choice but an obligation in the present and future.
Implementing environmental responsibility is helpful for the long-term success and relevance of
businesses operations, positioning them with a developing global attention on sustainability and

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indicating their commitment to the well-being of both the planet and its people. By identifying
these challenges head-on, business organisations can contribute to a greener, more sustainable
world and confirm their stable competitiveness in a fast-changing marketplace.

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