Nature Positive Role of the Automotive Sector

Executive summary The automotive sector plays a critical role in the transition to a nature-positive world. In 2023, global vehicle production reached 94 million,1 contributing 3% of global gross domestic product (GDP),2 and the sector is projected to grow rapidly at a rate of 6-7% annually until 2030.3,4 This growth is fuelled by a growing global middle class, an expansion of emerging markets and a shift in consumer preferences towards sustainable mobility. The shift can be seen in the surge of electric vehicle (EV) sales from 1 million to 14 million per year between 2017 and 2023.5 This progress is supported by governments across the world, with 43 countries collectively committed to accelerating the transition towards 100% zero- emissions vehicles.6 These goals have also been integrated into national policies in key markets, including the EU, the UK, Canada and the US, which aim to scale up zero-emissions vehicles and circularity.7 Despite these efforts, the automotive sector still contributes to biodiversity loss through pollution, water use, land-use change and greenhouse gas (GHG) emissions across its entire value chain – from material sourcing to vehicle manufacturing and end-of-life management. This report summarizes the sector’s key impacts and dependencies on nature and sets out priority actions that corporate leaders can take to transform their businesses. These include:1. Avoid and reduce impacts from operations: Improve water stewardship, avoid and reduce pollution, strengthen biodiversity assessment, planning and management, and accelerate GHG emissions abatement. 2. Avoid and reduce impacts from materials: Expand circularity, innovate to avoid and reduce material waste across the value chain, engage with suppliers and source responsibly. 3. Transform product offering: Transition from internal combustion engine (ICE) vehicles to battery electric vehicles (BEVs) and other alternative solutions, expand into new business models like mobility- or component-as-a-service models and influence customer behaviour. 4. Conserve and restore nature: Support nature conservation and restoration with Indigenous Peoples and local communities, and invest in innovative biodiversity financing mechanisms. 5. Drive cross-sector collaboration: Embrace standards and transparency, educate customers, support downstream networks, scale up transition infrastructure and call on governments to strengthen nature- related policy. These priority actions could unlock more than $960 billion worth of annual business opportunities by 2030 for companies operating across the sector’s value chain, presenting significant possibilities for the automotive sector in the new nature- positive economy. There is an urgent need for the automotive sector to contribute to the nature-positive transition, to reduce its impacts on nature and unlock new opportunities. Nature Positive: Role of the Automotive Sector 6