The dieselgate scandal has sent share prices plummeting and led investors to demand explanations about the role of the 115 lobbyists employed by car manufacturers in Brussels. Journal de l’Environnement reports.
For as long as the consequences were limited to the environment and public health, institutional investors were prepared to turn a blind eye to Volkswagen’s fraud.
But scandals are bad for the bottom line. And since the revelation that Volkswagen fitted some of their cars with software designed to cheat emissions tests, accompanied by the fact that they are now recalling 11 million vehicles, share prices are in free-fall.
Volkswagen’s share price has halved since August. But they are not alone. Other big car manufacturers are also suffering from a crisis of confidence in the sector: Renault (-21%), PSA Peugeot Citroën -17%), Daimler (-16%), Toyota (-13%), BMW (-9%). For shareholders, the situation is dire.
A group of 19 major investors in the ShareAction coalition, including AXA and four Swedish pension funds, have recently addressed a letter to nine of the biggest car companies, asking them to explain their lobbying positions on emissions standards, particularly in the United States and the European Union, where the rules are currently being revised.
The letter also called on manufacturers to provide details of their relations with regulators concerning emissions standards and the amounts of money they give to professional associations, like the European Automobile Manufacturers’ Association (ACEA).
In other words, they asked: should we expect more scandals?
115 car lobbyists in Brussels
This question is anything but trivial. The big car manufacturers finished mid-table in a ranking of ‘lobbying quality’ published by the NGO InfluenceMap. According to the NGO, many car companies spend significant sums of money to convince regulators of their support for emissions standards, whilst actively working to ensure these standards remain weak.
A recent study by Greenpeace revealed that car manufacturers in the EU spent €13 million on lobbying in 2014, and employed 155 full-time lobbyists in Brussels, many of whom have access to the European Parliament.
The ACEA also accepted that emissions tests should more closely resemble real-world driving conditions, but asked the European Union to implement the new standards progressively – a concession already ruled out by the NGO Transport and Environment (T&E).
“The VW scandal has shown industry’s ability to cheat or manipulate the emissions legislation on an unprecedented scale. Manufacturers have also successfully delayed and tried to weaken the RDE proposals. It is now time for member states to ensure cars are as clean on the road as in the laboratory,” T&E wrote in a letter to the European Commission.
On the road and in the lab
A Commission proposal adopted in May 2015 will require car manufacturers to start measuring their on-road emissions of nitrogen oxides (NOx) for new models from January next year. These on-road tests will be carried out in parallel with the current laboratory tests, and will become compulsory for all vehicles from September 2017.
The current laboratory emission limit of 80 milligrams per kilometre will also be applied on the road. Contrary to the original proposal from 2012, the Commission plans to allow vehicles to exceed the limit by 60% for the first two years (until September 2019).