IAJBS 23rd Annual World Forum University of Namur, Namur, Belgium

Experience level: 
Sharlene McEvoy

Corporate Social Responsibility and CAFÉ Standards: Should Auto Makers Seek to Water Down Fuel Economy Requirements?

ABSTRACT: Congress required the National Highway Traffic Safety Administration to develop standards for increasing the fuel efficiency of cars beginning in 1975 in the wake of the Arab oil embargo. The Environmental Protection Agency began regulating greenhouse gas emissions in 2007. In 2012, the government set a target of 54.5 mpg by 2025. Automakers object to this standard claiming that it is too stringent and that because gas prices have fallen in recent years, consumers are buying trucks and SUVs, not hybrids and electric vehicles which in the United States make up only 3.5% of car purchases. In Mid-March, President Trump announced that he intends to roll back the requirements with the cooperation of his EPA Administrator Scott Pruitt and Transportation Secretary Elaine Chao. This paper discusses the role of corporate social responsibility to protect the environment which has been a long term goal as opposed to making profits from the sale of gas guzzlers. Should not American auto makers continue to develop fuel efficient vehicles despite the weakening of standards as good corporate citizens and for the long term health of the planet, eschewing short term gain?