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January 31, 2002
Report Criticizes GM's Poor Fuel Efficiency, Applauds Its Other Environmental Efforts
    by William Baue

CERES reported on GM's environmental record, praising the majority of the carmaker's initiatives but condemning its failure to improve overall fuel efficiency in its fleet.

When future generations consider causes for the global environmental crisis of the late 20th and early 21st centuries, they will likely finger the sports utility vehicle (SUV) as a primary culprit. Our ancestors will be hard-pressed to explain the popularity of these fuel-inefficient vehicles, especially amongst urban yuppies who seemingly had little reason for SUVs' off-road capabilities. However, such questions may not have to wait for the future

Yesterday, the Coalition for Environmentally Responsible Economies released the CERES Performance Review of General Motors Corporation. The report praised General Motors (ticker: GM) for meeting or exceeding CERES's expectations for reducing factory emissions, reporting transparently on environmental performance, and engaging external stakeholders in environmental initiatives. However, the report strongly criticized GM's failure to reduce carbon dioxide emissions in its overall fleet of vehicles.

"GM has shown, historically, its commitment to the environment," said Elizabeth Lowery, GM vice president for environment and energy. "We've improved our fuel efficiency model by model while still responding to market demands for larger utility vehicles."

The report covered the period between 1994 and 1999. In the former year, GM set precedent by becoming the first Fortune 50 manufacturing company to endorse the CERES Principles, a ten-point code of corporate environmental conduct. During this time period, U.S. production of fuel-efficient cars decreased while production of gas-guzzling trucks, such as SUVs, increased. GM production mirrored this trend, such that fuel efficiency gains in cars were offset by the larger proportion of trucks in its fleet.

GM counterbalanced the negativity of its lack of progress in boosting fuel efficiency by distinguishing itself in most of the other categories the report assessed. The report noted that GM matches or leads other auto producers in fuel economy for comparable models. It also lauded GM for reducing emissions at plants, increasing the recycled content in its vehicles, and increasing the recyclability of its vehicles.

In the public accountability category, GM has published eight annual environmental reports, extending their range to address environmental performance throughout the company's supply chain. As for external stakeholder engagement, GM vocally supported the Global Reporting Initiative (GRI), which promotes sustainability reporting.

The report looked toward the future, similarly praising GM's research into fuel cell technology.

"Our AUTOnomy fuel cell concept vehicle provides a vision of the potential of the coming hydrogen economy in a way that respects the environment and creates the path to non-petroleum and renewable energy sources without constraining economic growth," said Ms. Lowery. "It is just a matter of time before we're able to bring those products to market while continuing to satisfy our customers."

However, members of CERES, which represents over $300 billion in invested capital, echoed voices in the national debate over the proper balance between present and future solutions to the automobile emissions dilemma. Fuel cell research clearly needs to continue, but not at the cost of improving current fuel efficiency.

"The development of technology that is both cutting edge and has great potential for the environment is a welcome sign to our investors," said CERES board member Ariane Van Buren, of the Interfaith Center on Corporate Responsibility, a New York City-based coalition of investors. "But there is significant risk in continuing to contribute to long-term issues like pollution, oil dependence, and climate change. We want to see GM apply the same 'can-do' spirit to increasing the fuel economy of the many cars they're putting on the road now."


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