Driven by stricter regulations and customer sentiment, environmental issues are fast rising up the list of priorities for businesses in all industries.
The automotive sector is at the cutting edge of this drive to sustainability, with manufacturers, some by choice and some more by obligation, recreating their entire business models. In a greener, more ethical mould.
Setting the pace, Volvo has pledged to be fully carbon neutral by 2040, Volkswagen Group aims to get there a decade later, while Toyota has targeted a 90% reduction in CO2 by the same year. But while these may be among the standard bearers, each manufacturer is on the same journey, and where OEMs go the aftermarket inevitably follows.
In December, Whaley Bridge Accident repair Centre became the first UK body shop to secure PAS2060 accreditation. PAS2060 is the only globally recognised carbon neutral accreditation and recognises not just the steps a company has already taken but will continue taking to reduce its environmental impact. But while it may have been first, it will certainly not be last.
Pressure on repairers to become more environmentally aware is now coming from both sides.
On the retail front. A trend to bully ethically has been growing for a number of years as society has tuned in to the environmental crisis. Research conducted by Getty Images found that 84% of UK consumers said the environment as a key concern for them, with half saying they now try to buy only from brands they consider to be environmentally responsible.
Companies around the world that have gone green already promote this to gain a competitive advantage, and as more follow suit those who are left behind will begin to stand out in a negative way.
Dan Brown, automotive and logistics corporate sector director at SWR Newstar, which provides a full waste management solution for more than 350 body shops, said, “Consumers are becoming much more aware of the ‘green credentials’ of their providers. By taking a pro-active approach to sustainability, they will be able to appeal to a wider range of customers.”
But as real as this green peer pressure may be, body shops may soon have a far more tangible reason to address and reduce their emissions.
The UK is committed to become carbon neutral by 2050. To achieve this target government is seeing ever tougher emissions targets for large organisations. Why does this impact individual repairers? Because they are implicated by association.
Emissions are measured in three ways Ð directly, those produced on site; indirectly, those produced offsite to support onsite operations, such as electricity, and finally, those produced in all other business activities, such as workforce commutes and, crucially, for the aftermarket supply chains.
“With the UK becoming a Net Zero Carbon emissions nation by 2050, business providers, including insurance companies and OEMs will have clear carbon reduction targets to achieve,” said Brown. “Their supply chain and partners will be included within these strategies and there will be increasing pressure from business providers for body shops to demonstrate how they are working towards these goals too.”
For body shops already facing seemingly impossible challenges in terms of technology and training, tacking their carbon footprint now, too, can seem like a bridge too far. But it needn’t be. A sub-sector of environmental experts to help companies address their environmental issues is booming in the UK, but even without their help, there are easy wins available.
The aftermarket is notorious for the amount of waste it produces, but actually this is an area of great opportunity, both environmentally and economically. Managed badly, waste disposal is a huge expense. Managed well, it can even be turned into an additional revenue stream.
ENN Recycling works with more than 100 body shops, collecting and recycling more than 100 tonnes of plastic waste from car bumpers alone every single week. Director Eddie North said, “The main incentive for any business to recycle is a financial one; the cost of rubbish collections rises each year due to landfill taxes, and accident repair centres build-up large quantities of bulky waste which won’t fit into their wheelie bins. There’s real incentive to find a cheaper alternative, as much of this waste can be collected for free, due to the relatively high scrap value of the waste.”
There are obvious challenges, the complexity of materials being used in cars now among them. For example, pedestrian airbags use a blend of materials that need to be isolated before they can be recycled. Without the time or expertise, many body shops put the whole unit in to general waste.
Skid trays, crash panels, wheel arch liners and headlights are also recyclable, but being different polymers makes them difficult to separate and often they, too, end up in general waste.
But each time this happens body shops incur additional costs. A container of recycling costs 65% as much as a container of general waste, so every recyclable item sent to general waste adds a 35% cost. Body shops could make substantial savings by implementing a more effective recycling policy, Moreover, simply by loading metal skips efficiently can maximise the tonnage per collection which increases the chance of a rebate, while at the same time reducing transport costs.
Green parts are another area where repairers can make considerable savings while also reducing their carbon footprint. For some while this was an opportunity that was not exploited, mainly because of customer sentiment.
In many cases customers baulked at the idea of recycled parts being used in the repair of their vehicles, but as they have grown increasingly environmentally conscious, attitudes have shifted.
Ian Hill, managing director of Hills Salvage and Recycling, said, “All businesses have a corporate and social responsibility towards the environment and reducing our collective carbon footprint. The general public is pushing this agenda, resulting in much less friction around fitting a green part. We’re not just reducing the manufacturing of a new part, we are taking genuine OEM parts and putting them back to work, in some cases avoiding a vehicle becoming a total loss, resulting in potentially more waste.”
The erosion of manufacturer discounts coupled with the longer lag time in deliveries of OEM parts are further arguments for the use of green parts, which can be as much as 90% cheaper.”
“For our key insurers and body shops we have a fulfilment rate of over 65%,” Hill said. “Combine that with an average saving of 55% against recommended retail price and the immediate financial benefits for a repairer are there to see. Combine the cost savings, the environmental benefit and the quality assurances into the equation and repairers are being offered a solution that can make a huge difference to their business. So, if they want to make money and their customers save money whilst making a positive environmental impact, then green pars are the natural place to start.”
Our course, body shops are under intense financial and time restrictions. But by taking a step back and gaining a better understanding their environmental impact, they can identify the steps that will have the greatest positive impact.
SWR Newstar’s Brown concluded, “All businesses can do more to be more sustainable, but it is key to firstly understand the areas within your control that will have the greatest impact. The body shop industry is working under a lot of pressure, with hourly rates being squeezed and cost of repair increasing, meaning any investment in new systems or technologies to improve sustainability must provide a return. The best approach is to analyse what you can control and what will have the biggest impact for the resource you have available.“ To be carbon neutral is to measure your carbon footprint and then offset it by investing in environmental initiatives. Net Zero, which is what the UK has to achieve by 2050 requires an 80% reduction in emissions, with the remaining 20% being offset.