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CORPORATE REPUTATION AND CSR OF BMW

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Executive Summary

The BMW holds the second position in the best CSR reputations globally. BMW is

known for employing R&D, and manufacturing to make their business sustainable. This

report provides a critical evaluation of the CR approach of BMW. The report has been made

with the aim of testing the CR approach and to find out if the CR approach of BMW

measures up to best practice CR. This research indicates that BMW heavily invests on their

CR approach. BMW has been continuously engaged with upcoming trends. CR serves as an

instrument of competitive strength and sustainable growth. BMW manages its CSR and

manufacturing well-efficient cars. It is anticipated that the research and development of

BMW would bring innovations and would bring down the CO2 emissions. These

achievements would help BMW to increase its competitive strength and meet the

expectations of the society well.

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Table Of Contents

Executive Summary...................................................................................................................2

Introduction................................................................................................................................4

Discussion..................................................................................................................................4

Corporate Reputation: Quantitative Survey Findings CSR....................................................4

Communication: Qualitative Website Analysis.....................................................................4

Findings..................................................................................................................................4

Conclusion..................................................................................................................................4

References..................................................................................................................................4

Appendices.................................................................................................................................4
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Introduction

This report will explore the concepts of corporate responsibilities of BMW Group,

founded back in 1913. The primary aim of this report is to find out the Corporate Social

Responsibility and Corporate Reputation of BMW. Companies that promote CSR are more

likely to receive the benefits of their good initiatives. It helps in increasing brand awareness;

it also promotes efforts from the employees. This report would also discuss about the

quantitative survey findings and qualitative website analysis of BMW. Then the findings

would be critically evaluated in the later part of this report. BMW is one of the biggest

companies with an annual turnover of £94.2 billion located in Germany. BMW is among the

top fifteen car manufacturers of the world.

Discussion

In Corporate social responsibly, the BMW is one of the most prominent and world

leaders. CSR has become an integral part of the company operations. As per the survey

reports, according to 76% of the executives CSR the contribution of CSR is positive to long

term value of shareholder. According to 55% of the executives sustainability contributes

towards building a strong reputation for the companies. As per the sustainable value report of

2014 by BMW, their policy on CSR ‘taking responsibility for everything that they do is an

integral part of they see themselves’ (Bmwgroup, 2014). BMW presents all the corporate

initiatives to their shareholders in a sustainable value report on an annual basis. With

sustainable reports, BMW Group influence all their stake holders globally. As they include

their shareholders and all the stake holders in the process, thus it helps them to avoid any

negative impressions on the company image (Bmwgroup, 2022). The stakeholders help

BMW Group to avoid any potential negative impacts.

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Corporate Reputation: Quantitative Survey Findings

BMW stated its net profit jumped to 12.46 billion euros from 3.86 billion euros in

2020. Revenue jumped 12.4% on a year-over-year basis to 111.24 billion euros (Cnbc, 2022).

The vehicle deliveries of BMW including SUVs, rose 8.4% from its Covid-19 challenged

results, to 2.5 million vehicles despite the manufacturing disruptions related to global

shortage of semiconductor chips (Cnbc, 2022). The sales of electrified vehicles of BMW

were over 328000 in 2021, 70% up from the 2020 results. The electric vehicles components

and architectures of the company rose 10.7% to 6.3 billion euros (Cnbc, 2022).

The global revenue of BMW in 2021 stood at around 111.2 billion euros (Statista,

2022). Post the 2008-2009 disaster, BMW has its surpassed pre-cash revenue and earnings

before interest and taxes by 2010. In the united states BMW is the third automobile brand

with quarterly sales surpassing 93033 units. The mini brand of BMW accounted for 40.2% of

its United States sale in 2018 (Statista, 2022). BMW has further announced to double its

electric vehicles sales within next two years. I would further increase the sale of electric

vehicle of the company in Europe which is stood at 1%. The global electric fleet is expected

to grow to 127 million by 2030 (Cnbc, 2022).

The sales of motorcycles rose 14.8% in 2021, to 194000. This units operating profit

margin rose to 8.3% from 4.5% in 2020 (Cnbc, 2022). The operating profit margin (OPM) in

the automotive segment of BMW, rose to 10.3% in 2021 from 2.7% in 2020 and 4.9% in

2019 prior to the Covid-19 (Yahoo finance, 2022).

Communication: Qualitative Analysis

As per the annual sustainability report of BMW, the CSR approach of BMW is

consisting of terms like corporate citizenship, sustainability management, environmental

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protection, product responsibility, employee management, and supply chain management.

Although the term does not appear often on the webpage of BMW (Bmwgroup, 2022).

To be the most sustainable company in the automobile sector, BMW focuses on the 3

key areas: Business, environment and social. This approach is also referred as the three pillar

model of sustainability (Purvis et al., 2019). The sustainability management of BMW

depends on decision making, environmental radar, transparent communication and value

chain.

Sustainability principle of BMW

BMW is a part of the Dow jones sustainability group index; it is an important index

for companies with sustainable management. BMW is the leader of the automobile sector in

this index. As a leader in the industry BMW is committed to applying sustainability to the

best of their efforts to increase the company value. According to the top management of the

company the ambition of BMW is to be the be the most sustainable company to secure the

future growth and gain competitive advantage. BMW focuses on the probable issues of the

company may face in the future, with the aim of developing global and local perspective to

meet the company expectations.

Environment protection

One of the key philosophies of BMW is to use the company resources with caution.

The BMW is concerned with ecological optimization of productions and products. Further

BMW focuses towards fuel consumption reduction of the fleet. By optimizing the weight of

cars with lightweight construction and smart technology engines, BMW can accomplish the

goal. Also recycling and environmental requirements are integrated in the product making

process from BMW using tools Life cycle assessment and design for recycling. BMW always

work towards recycling used cars with the help of technologies.

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To ensure that the production units of BMW are environment friendly, the production

plants of BMW are certified under EMAS, ISO 14001.

Employee considerations

BMW offers its employees attractive salary packages and benefits along with

excellent working conditions like: friendly environment, high-end technologies, holiday

packages, etc. This makes BMW one of the most attractive companies to work. The BMW

provide its employees with health benefits and lifestyle facilities like: sports activities, fitness

courses, stress management, nutrition seminars, etc. International campaigns like: healthy

drinking, safe walking portray how small changes are responsible to improve the overall

lifestyle of people.

Human rights

BMW is involved in social programs, that promotes various social issues, for

example, opposing violence, promoting road safety, working towards raising awareness of

the importance of education, etc. As per the CSR value report 2021, BMW promotes social

inclusions and cross-cultural understandings. Being a global corporation, the BMW is

working from many years to promote understanding between groups, religions, etc. BMW

also recognizes volunteer works of its employees with social responsibility award since 2011.

Findings

As the BMW states, corporate sustainable management is an integral part of the

company strategy. The CSM fulfil the voluntary standards of the company and helps them

implementing the global reporting initiative. The leaders and executives of BMW put the

same effort to design the car and also into engineering. The culture of BMW can be described

as a formulaic innovative management. BMW is rapidly cultivating its culture towards a

sustainable business (Bmwgroup, 2022).

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BMW understands that employees are its most crucial asset. This finding is supported

by the benefits BMW provider to its employees in the form of pensions, remuneration, and

work-life balance. To effectively maintain CSR a sustainable business is very crucial, as the

CFO of BMW Mr. Sean Noonan stated: BMW regard sustainability as a positive and lasting

effort towards its economic success (Szkudlarek, 2022). Within this culture, the sustainability

consists of efficient use of the company resources and a lower amount of CO2 emissions.

With this statement BMW emphasize on the holistic method that is good for the society and

also for the business. BMW want to improve their waste separation process by discovering

further reuse and recycling options for different waste types (Szkudlarek, 2022).

To make sure the highest recycle rate BMW uses 5 step hierarchical model by the

European Union.

Prevention

Reducing and avoiding waste creation wherever possible to ensure green

environment.

Reuse

Reusing any reusable material when possible to increase the reusing rate.

Recycle

If the material is not appropriate for reusing, then recycling the item to use in the

production cycle.

Recovery of energy

The materials that are non-recyclable are mostly incinerated.

Disposal
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The materials that neither reusable nor recyclable are disposed.

Further to ensure the success of their waste policy, BMW measures its waste policy

every year.

Conclusion

In terms of environment protection, BMW has improved its plants and the quality of

vehicles. BMW has also created a friendly atmosphere for its employees with attractive salary

package. However, CSR is not limited to doing well with the employees, CSR refer to

serving the society with everything it requires. As a major portion of the society are interested

towards motorized sports, the participation of BMW in this segment is a contribution to the

motor sports which is also a part of the CSR of BMW. It is known the BMW that to survive

in the long run an evolutionary approach is required thus BMW further strengthens its

portfolio with advancements in technology. The company is also working towards hydrogen

engines which may bring some great changes in the automobile industry. It is a part of their

CSR activity as it would benefit the humanity. BMW also contributes to the CSR by

promoting traffic safety. With all these points it can be said that BMW shows a healthy

interest towards helping the society, benefit its employees, and benefit its customers with

various initiatives towards CSR.

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References

Bmwgroup 2022, ‘BMW Group Report 2021’, Retrieved 26 March 2022,

https://www.bmwgroup.com/en.html

Purvis, B., Mao, Y., & Robinson, D. (2019). Three pillars of sustainability: in search of

conceptual origins. Sustainability science, 14(3), 681-695.

https://link.springer.com/article/10.1007/s11625-018-0627-5

Bmwgroup 2014, ‘SUSTAINABLE VALUE REPORT 2014’, Retrieved 26 March 2022,

https://www.bmwgroup.com/content/dam/grpw/websites/bmwgroup_com/responsibili

ty/downloads/en/2014/BMW_Group_SVR2014_EN.pdf

Europa 2008, ‘Official Journal of the European Union, L 312’, Retrieved 26 March 2022,

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?

uri=OJ:L:2008:312:FULL&from=EN

Szkudlarek, B. (2022). An Interview with Milena Pighi, Head of Corporate Social

Responsibility at the BMW Group. In Advances in Global Leadership. Emerald

Publishing Limited. https://www.emerald.com/insight/content/doi/10.1108/S1535-

120320220000014015

Statista 2022, ‘Global revenue of BMW Group from FY 2007 to FY 2021’, Retrieved 26

March 2022, https://www.statista.com/statistics/264340/global-revenue-of-bmw-

group/

Yahoo finance 2022, ‘Bayerische Motoren Werke Aktiengesellschaft (BMW.DE)’, Retrieved

26 March 2022, https://finance.yahoo.com/quote/BMW.DE/financials?p=BMW.DE

Cnbc 2022, ‘BMW says 2021 profit surged as it favored higher-margin vehicles during chip

shortage’, Retrieved 26 March 2022, https://www.cnbc.com/2022/03/10/bmw-says-

2021-profit-surged-as-it-favored-higher-margin-vehicles-during-chip-shortage.html
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Appendices

Figure 1: Income Statement

(Source: Yahoo Finance)

Figure 2: Income Statement

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(Source: Yahoo Finance)

Figure 3: Balance Sheet

(Source: Yahoo Finance)

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Figure 4: Cash Flow

(Source: Yahoo Finance)