Safe before Green! The Greening of Volvo Cars in the 1970s–1990s

Ann-Kristin Bergquist,Mattias Näsman

doi:10.1017/eso.2021.23

Abstract

Although the automobile industry has served as the backbone of much business history scholarship, business historians have paid little attention to this industry’s actions concerning the complex of environmental issues that took hold in the 1960s. Volvo represents a captivating case study to gain insight into why the automobile industry’s growth has been difficult to align with the shift toward environmental sustainability. Although Volvo pioneered the exhaust emission control technology on the U.S. market in the 1970s and gained an international reputation for high environmental and safety standards in the decades that followed, the company was unable to seriously address climate change in the 1990s. This article identifies several key factors impacting the automobile industry’s passive response to environmental challenges—for instance, weak and asymmetric emission control regulations on international markets, consumer preferences for larger cars (SUVs) in the 1990s, and a lack of systematic regulatory pressure to shift from fossil fuels and the internal combustion engine. In the case of Volvo, world leadership in safety standards, rather than low carbon emissions, constituted the company’s competitive advantage as climate change emerged as one of the most critical environmental issues in the 1990s.

Highlights

Degradation of the natural environment, with the climate crisis as the broadest and most fundamental threat, today cuts across the global automobile industry
CO2 emissions—which is a proxy for fuel intensity—from Volvo’s cars dropped only 9 percent between 1970 and 1995.144 The goal to reduce the fuel intensity of cars sold within the EU was later changed to 25 percent for the period 1995–2008, which followed from a voluntary agreement between members of the European Automobile Manufacturers Association (ACEA) and the European Commission
Over the three decades covered by this article, it becomes clear that government regulatory pressure was the primary driver behind Volvo’s initiatives to innovate in exhaust emission control technologies

Summary

Introduction

Degradation of the natural environment, with the climate crisis as the broadest and most fundamental threat, today cuts across the global automobile industry. In 1979, when the Swedish Royal Commission on Exhaust Emissions discussed the possible introduction of U.S standards requiring catalytic converters and unleaded gasoline in Sweden, Volvo strongly opposed this, even though the company already had the technology available.111. The European Council, Commission, and Parliament decided upon similar standards for all new cars in 1989, effective from 1992, including the smaller cars that had been allowed more lax requirements by a council decision in 1985.117 According to Vogel, difficulties in finding common ground for regulation in the EU mainly rested on the fact that there were differences in automobile production among the member states, as well as in their experiences with the American market and catalytic converters.118. The Alliance of Automobile Manufacturers, a trade group that represents manufacturers selling 70 percent of all new vehicles in the United States, used an loose definition of “electrification.”171

Conclusions

Findings

19. Luxembourg