Accelerate GHG emissions abatement There are a number of actions that companies can take to reduce GHG emissions as part of an integrated approach to transport and energy decarbonization and electrification. Companies can: Decarbonize heat and power sources: –Electrify heat production or switch to low- carbon fuels. –Innovate to decarbonize welding processes by using gas. –Increase the use of renewables for vehicle manufacturing and assembly, ensuring procurement is in line with standard due diligence and economic requirements, and embeds criteria to identify projects that optimize environmental sustainability, social equity and climate resilience.172,173,174 For example, Volvo Cars already use 98% renewable electricity in their own operations,175 and Toyota and Volkswagen Group also use 100% renewable electricity across at least all EU production sites.176,177 Optimize production processes: –Energy efficiency could represent over half of carbon emission reduction contributions across all industries by 2050. Energy also accounts for at least 5% of an average manufacturing company’s costs, and energy efficiency measures could save between 10% and 20% of those costs. –To achieve energy savings, companies can improve the sizing, control, optimization and retrofitting of existing carbon-intensive equipment; implement energy management systems and standards; install energy recovery systems, such as waste heat recovery; and establish smart use strategies and optimize equipment. –For example, Mahindra installed a unit to recover and re-use waste heat from chassis production pre-treatment, which resulted in a 23% reduction in natural gas consumption by their hot water generator.178 Decarbonize logistics and transport for materials and completed vehicles: –Optimize routes and use efficiency, and collaborate with other automotive companies and industries to identify transport-sharing opportunities. –Use lower-impact transport options where possible. For example, companies like Volkswagen Group are already using rail instead of heavy goods vehicles (HGVs).179 –Use low-carbon fuel substitutes (such as ethanol, natural gas, biofuels, hydrogen and electricity) in HGVs and support shipping providers to transition to low-carbon or carbon- free fuels. See the World Economic Forum’s The “No-Excuse” Framework to Accelerate the Path to Net-Zero Manufacturing and Value Chains report for more detail. The World Business Council for Sustainable Development’s (WBCSD) Switch platform also provides access to knowledge support and tools for companies decarbonizing and electrifying buildings, transport and energy.180 Key materials include steel, aluminium, battery materials, polymers, rubber and leather. Expand circularity and innovate to avoid and reduce material waste across the value chain The circular economy has the potential to reduce life cycle emissions per passenger kilometre (km) by up to 75% by 2030.181 Circularity also presents an opportunity to improve profitability by approximately 1.5 times across the value chain and to increase revenues per vehicle by around 10 times over the life cycle to 15-20 times its sales price. New circularity value pools mainly materialize in life cycle services (e.g. repair, reuse, remanufacturing and recycling) and as-a-service models (e.g. leasing/subscription, car sharing and mobility-as-a-service).182,183 To reduce material use, in particular primary and non-renewable material use, and capture these new value pools, automotive companies can: –Establish circular inputs, working towards circular material stock where all materials are 100% recyclable, and starting with select materials (e.g. aluminium).3.2 Avoid and reduce impacts from materialsPriority action 2 Nature Positive: Role of the Automotive Sector 32

Nature Positive Role of the Automotive Sector