Intensive competition across local
and international markets has forced firms to invest intensively into the
marketing of their goods and services. This is a proven way of creating a
competitive advantage as such promotions and advertising campaigns tend to attract
more customers. Furthermore, it differentiates firms from their competition,
while enabling them to “adapt to growing society expectations on environmental
management and social awareness” (Bazillier and Julien, 9). With the introduction
of corporate social responsibility, firms have quickly adopted it in an attempt
to increase their attraction to customers who reward socially responsible
firms. In return, firms have attempted to turn to green-washing practices in an
attempt to lure customers to buy and use their products. As a result, the firm
or industry could appear environmental conscious, when in reality its operations
have opposing impacts on the environment. It is upon this basis that this greenwash
detector research report critically analyzes greenwashing activities in the automobile
industry and in particular, the Volkswagen diesel emission scandal.


Accuracy of Social Responsibility Claim made by
Automobile Companies/ Industry

The automobile industry has constantly
been under pressure to “adapt to changes in environmental regulation on fuel
economy, and potentially, reduce the environmental impact of cars” (Amatulli, Michele,
Matteo & Gianluigi, 139). These pressures arise both from the micro and
macro environment. For instance, with the increasing production of cars, it is evident
that manufacturers all over the world monitor the amount of fuel consumption by
reducing dependence on oil which is a non-renewable source of energy but also
high in carbon. There are also strict government regulations and other “benefits
such as lenient taxation for auto firms who manufacture efficient vehicles” (Amatulli
et al., 153). Another factor is the environmental concern and the increased
awareness of the need to conserve the environment. Moreover, consumers are
changing their behavior in favor of environmental conscious automobile
manufacturers. Through this struggle, manufacturers are conducting research and
development aimed at increasing fuel efficiency of their cars.

For instance, Nissan, a Japanese
auto manufacturer introduced a new vehicle, known as Nissan Leaf which is
advertised as increasing the fuel efficiency of their Nissan brands. In their
commercial, it illustrated a scene of melting polar ice caps. This led to the movement
of polar bears from their natural habitats towards the cities. The bear arrives
in a suburban area where it finds a man about to drive off in a Nissan Leaf and
gives him a bear hug. From the face value, this advertisement speaks to
potential consumers on the fuel efficiency and environmental consciousness of
the vehicle. The commercial also highlights the current focus on green products
and reduction of global warming, which has become an international practice
among automobile manufacturers.


Customers watching these
commercials are often convinced and equally attracted to associate with
products that guarantee to preserve natural habitats of animals and safeguard
the environment for the future. This is the reason why such commercials often
attract high sales volume for auto manufacturers. A critical analysis of this commercial
shows that the Nissan Leaf, just like most car brands aiming to be
environmentally friendly has a lot of flaws. For instance, the Nissan Leaf is
only convenient and practical for short distance travels and around cities because
of its limited battery capacity which can support a charge for 100 miles or
between 7 and 12 hours on full charge. Another issue is that charging stations
are limited to support charging of these cars. This leads to the question on
the involvement of a Nissan Leaf to reducing global warming. The reality is
that electricity used to charge the car is originated from natural gas and coal
which are contributors to climate change.


The accurate part is that electric
and hybrid cars reduce amounts of carbon emissions but they do not completely adapt
to the envisioned future. Another point of argument is that “automobile
manufacturers use rubber, chemicals, natural minerals, and other raw materials
that pollute the environment indirectly and directly” (Smit & Elizabeth, 49).

This suggests that manufacturing and using any car contributes towards
environmental pollution and degradation. The entire transport industry has been
blamed for its environmental impact and forced to consider alternative
approaches that create positive climate change. Moreover, one focus has been
directed towards the production of cars that consume less fuel and emit less
carbon. Another case that builds and takes the center stage for this research
report is the latest case of greenwashing by Volkswagen.


Research to Determine Extent of Misrepresentation
of Situation in VW Greenwash

According to Earth Day 2016 report,
Volkswagen took the first position for greenwashing practices. This practice
has been deeply established in the belief that consumers are willing to pay
more for firms that produce sustainable and environmentally friendly vehicles. According
to some individuals there is nothing clean or environment friendly about using
diesel engines as they cause pollutions beyond legal limits. This is proven
with the multiple lawsuits against many automotive manufacturers. Mercedes-Benz
was also in a lawsuit for its Blue-Tec vehicles marketing campaign promoting
them as environment friendly. In reality, they released nitrogen oxides higher
than legal limits allowed by Environmental Protection Agency.

This was followed by “Volkswagens
admission that it had been involved in engineering deception after its engineers
installed a cheat device” (Ewing, para 1; Lane, 33). This is an illegal
software that was installed in VW diesel engines to avoid being detected for
high levels of nitrogen oxide emission. The scandal proceeded in September 2015
after the firm had sold more than 11 million vehicles of this brand. It is
believed that VW began making plans to misinform its customers in 2006 as it
wanted to enter and increase its market shares in the USA against Toyota. However,
its engineers were unable to produce small engine cars that met American
emission standards. (Siano, Agostino, Francesca & Sara, 27). It began
aggressive marketing in 2008 claiming to be a clean diesel engine. In 2013,
West Virginia University conducted laboratory tests which showed that VW
emitted more dangerous levels of nitrogen oxides. A follow up was made, and the
information became public.

VW was forced to recall affected
cars in Canada and the United States. The public made a lot of noise on the
case which led to the collapse of stock prices, revenue and net income. The
company “admitted to charges for conspiring to violate a Clean Air Act and
defraud the US government” (Ewing, para 4). The result is that VW failed to
justify its commitment to producing environmentally friendly products that are
good for society.


Research on the VW diesel scandal highlights
a case of greenwashing in the automobile industry. The report also justifies
other cases of green-washing where firms such as Nissan are involved in varying
levels of greenwash. Ultimately, the CEO of VW resigned and VW was charged with
a billion-dollar settlement and had to offer many packages for all consumers
who 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 many
consumers to get a price greater than the market value of the vehicle. These
cases highlight the difficulty of achieving perfect ethical standards across
most industries, therefore bringing the concept of corporate social
responsibility and its contribution to greenwashing.


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