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Renault: A little engine that could

By William D Alessandro on August 11, 2010 at 2:32pm.


The fourth largest automaker is travelling down the unpaved road of integrated reporting.  Though they have not completely connected the dotted lines between environmental and social accounting, and their financial performance results, Renault is working hard to go the extra mile on sustainability. 

The company can ill afford to do less.

The group, comprising Renault, Dacia, and Renault Samsung Motors, is not really number four in the industry.  The unique, intimate alliance of the Renault Group plus Nissan qualifies for that position.  (Renault owns 44.3% of Nissan.)  The Renault Group made only 2,032,565 passenger vehicles in 2009 — far fewer than it must to succeed in global competition.  The company is in eleventh place measured by Reuters in terms of market capitalization.  By comparison, BMW is twice as large.  Renault lags behind Fiat and ahead of Suzuki.

Another caveat for sustainability analysts concerns the assortment of disclosures Renault has posted on its web site.  The group’s 2009 integrated Annual Report (86 pages containing 42 two-page layouts) tells the Renault story in one-paragraph snippets and with plenty of pictures.

Apart from the sales and financial performance results, there are no data tables whatsoever and just three solitary graphs.  One shows a decline in the Renault Group’s workforce; another the size of global carmakers relative to each other; and the third a shareowner profile — the French state still holds 15.01% of the stock, which is only 0.01% more than Nissan has. 

The annual report, however, is not the one to pore over.  The essential text is the 310 page 2009 Registration Document.  EU disclosure requirements for prospectuses are cross referenced in a table in an annex, as are the Global Reporting Initiative (GRI) indicators and the Global Compact principles.  In the body of the registration document, items that relate to GRI directives are marked with a glyph. 

Easily missed (the annual report makes no mention of it), but definitely not to be overlooked, is the sustainable development section on the group’s international web site.  Among the many items on the information-rich and cleanly organized menu is a clickable data map featuring details about Renault’s facilities individually, including their emissions. 

At the start of the 2009 academic year, Renault opened a sustainable mobility institute at the Paris Institute of Technology.  Headed by Yean-Yves Le Coz, the director of sustainable mobility for the motor company, the intention is to promote research and train top executives and scientists on electric vehicle systems.  The institute’s web site provides a panorama of thoughts and initiatives from around the world on the subject of personal transportation and electric vehicles.


“One would really have to try hard to find fault with the information provided by Renault,” says Aldo Sicurani, general secretary of the French Federation of Investment Clubs.  He is one of nine members of a shareholder consulting committee and is quoted in the annual report.

Sicurani’s assessment is fair.  Renault’s lucid interpretations of triple-bottom-line challenges measure up against any you may have read before.  The achievement is especially laudable given the fact that Renault’s marquee is non-existent in North America’s English-speaking economies.  Even though its cars are made in 18 countries, France remains Renault’s heartland with 14 industrial plants out of a global total of 37.

The structural defect in the communications strategy is that Renault’s messages are not squarely aligned in any one of the reports.

The annual report best illuminates the €4 billion expenditure made to date by the Renault-Nissan alliance on engineering and manufacturing of batteries and electric vehicles.  However, Renault’s social and environmental platform is unrecognizable without reading through the lengthy registration document.  The company’s sustainable development web pages and associated links pop up surprising facts not always found in either of the official documents.

A simple solution - better directions and road signs on where to go and what to find - seems to have eluded the reporting team.


When it comes to the integrity of reporting, Renault stalls somewhat short of the mark.

The audit by environmental experts from Deloitte & Associes and Ernst & Young covers the water consumption, liquid discharges, waste, and air emissions at industrial subsidiaries and support sites in which Renault holds a stake of at least 50%.  The auditors find that the analysis required by local regulations at some sites is not frequent enough to ensure the data for water discharges (suspended solids, oxidizable material, and heavy metals).

None of the other environmental and social information is assured or verified.

Renault makes note of the fact that they submit all advertising projects to France’s regulatory authority.  Yet we can learn from other sources that Renault has fallen afoul of the UK’s independent Advertising Standards Authority on more than one occasion.

A national press ad for electric vehicles described Renault’s plan to put four such models on the road by the end of 2012.  Despite a qualification in the small print, the claim of 90% better CO2 emissions compared with a diesel model was judged to be misleading.  The assertion was based on the French electric generation mix, which is not representative of the savings in the UK.
A TV ad for Renault contained a voice-over stating, “From next year, Renault will launch a range of zero emission vehicles to drive the car forward again”.  Not true if the vehicles are charged from conventional energy sources, the standards authority ruled.  Renault stumbled on similar ground back in 2008 when advertising its Eco2 (economical and ecological) label.

Repeat violations raise red flags particularly when the company does not mention violations in its public disclosures. 

Renault’s 2009 annual report features an oversized painting of a concept electric vehicle parked on the shore next to a megawatt-sized wind turbine.  In real life such an auto is more likely to be charged by one of the nuclear power stations operated by Électricité de France with whom Renault is working closely.

On the matter of quality, Renault reports that the Romanian carmaker Dacia and Samsung Motors in South Korea, acquired in 1999 and 2000, respectively, topped independent reliability rankings in 2009.  One would not expect to learn - and Renault does not tell - that it has the third worst record of faults out of 32 companies in a UK study by the magazine What Car? and the insurance company Warranty Direct.  Renault placed 29th in last year’s annual survey.

No one is perfect.  Still, the point of corporate sustainability reporting is to give a well-rounded and balanced picture.

1. Visitors cannot be forced to read everything, but be sure they know exactly what they are missing.
2. When it matters where Renault ends and Nissan begins, draw the lines clearly.
3. Take the high road when reporting on the sustainability of EVs.  Be the go-to company for the inside story, including the gory details.

William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters.  He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.