Fiat reports comprehensively, but would benefit from more depth and less width

The most pressing sustainability issue for car manufacturers is reducing exhaust CO₂ emissions. On opening the Fiat sustainability report, this is the key issue stakeholders are looking for and, on the surface at least, the 2011 report delivers in spades.

The Fiat group boasts the lowest average fleet emissions in Europe. Bold targets aim to maintain Fiat’s leadership position in 2012 and double the number of models with emissions below 100g of CO₂/km by 2014. And the group’s ambition is not limited to the relatively small and fuel-efficient Fiat branded cars. Targets – although less ambitious – are also in place for Chrysler, Ferrari and Maserati, with two of the three brands expressing a fleet-wide goal.

A graphical breakdown of the group’s average fleet CO₂ emissions in Europe offers useful context. And the percentage of Fiat cars bought by customers in different CO₂ emission brackets gives readers a sense of performance and customer take-up.

But some omissions cloud the picture. It’s not clear how the group has achieved this low level for fleet emissions in Europe. Is it simply because Fiat cars – which make up the majority of the group’s sales – are small and light, making low emissions more achievable than for companies selling larger, heavier vehicles?

The role of CO₂ emissions from Ferrari and Maserati is unclear. If the relatively low volumes sold, compared with Fiats, makes them insignificant to the Group’s CO₂ average, this could be explained.

And the group’s performance in the US is hardly inspiring. Chrysler, in which the Fiat group acquired a majority stake in 2011, reports performance as sales-weighted average fuel economy. This remained flat for the fleet, with some improvement for passenger cars. With no CO₂ data available for the Chrysler fleet until 2012, it’s difficult to compare progress across different markets. A candid discussion of the challenges each brand faces would aid transparency.

Long term goals

Readers would also benefit from a view of the group’s performance in the context of progress against European regulations for vehicle emissions for 2015 and 2020. This would also help to give a better understanding of the group’s long-term ambitions. How close is Fiat to meeting European regulations for CO₂ emissions in 2015 and 2020? As its competitors strive to meet these regulations, does the group aim to go beyond regulations to maintain leadership in this critical area? Can the ambitions of each brand be brought together to make a coherent plan across all markets for the group up to 2020?

Despite these gaps, the discussion on technologies being pursued to lower CO₂ emissions and achieve “ecological mobility” receives generous coverage. But in the context of a weighty 268-page report, it’s difficult to identify this – or any other issue – as a priority for the group. With detailed coverage of the full range of economic, social and environmental issues, it’s difficult to know where to start.

Much of the corporate information could be moved online, cutting the length of the PDF. A link to the group’s annual report, for instance, would remove the need for a detailed description of joint ventures and the corporate risk management model in the “economic dimension” section.

It is clear the group carefully considers all aspects of the impact of its products as the report goes on to describe how Fiat is working to improve product safety, reduce noise pollution, promote better traffic management, tackle conflict minerals in the supply chain and encourage customers to drive responsibly and save fuel. Similar breadth of discussion and detailed data is provided on the company’s own social performance and operational environmental impacts.

With so much information presented, Fiat should be commended for its transparency. But this strength is also the report’s weakness, as it feels a bit like an exercise in meeting multiple GRI indicators. Fiat is rewarded for its efforts with a GRI application level A+.

What is missing is a clear list of material issues and prioritisation of what matters most to the company. The Fiat group’s sustainability plan for 2010 to 2014 is certainly thorough, containing hundreds of actions and indicators in 10 areas.

Fiat could pack a much stronger punch by focusing on a smaller number of high level, strategic and long-term targets beyond 2014 to help stakeholders understand the group’s sustainability priorities and review its progress. With the newly acquired majority stake in Chrysler and the recent demerger with Fiat Industrial, 2012 could be the year for the group to develop an ambitious plan beyond 2014 for all four of its brands. 

Snapshot

Follows GRI?                         To the letter. GRI Application Level A+.

Assured?                     Yes, against GRI reporting guidelines and AA1000 AccountAbility principles.

Materiality analysis?   All material issues are covered in depth but none are prioritised.

Goals?                         Fiat’s “sustainability plan” includes high level statements of ambition.

Targets?                       The sustainability plan contains indicators and targets for 2010-2014.

Stakeholder input?      External views included but not closely related to Fiat’s business.

Seeks feedback?         Yes

Key strengths?            Breadth and depth of reporting.

Chief weakness?         Overlong and lack of issue prioritisation.

Pleasant surprise?        Targets for managing the social impact of its products, including reducing noise pollution and encouraging customers to drive responsibly and reduce traffic.

Ellie Austin is a senior consultant at Context.