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Assessment: Sustainable Business Development – group This assessment explores the significance of business models for sustainability and the opportunity for business model innovation in substantially improving sustainability performance

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Assessment: Sustainable Business Development – group This assessment explores the significance of business models for sustainability and the opportunity for business model innovation in substantially improving sustainability performance. Working with your group you will analyse one organisation according to the UTS phase model (as in assessment 1) and then develop at least three recommendations based on adapted or new business models (using resources provided and including those listed below) which have the potential to substantially improve the organisation’s social and ecological performance in the context of the organisation’s most material impacts. This is an opportunity to be creative, but your recommendations must be feasible! In developing your recommendations your group must: 1. Summarise the organisation’s most material social and environmental impacts and/or areas of performance, drawing on information from the organisation and the frameworks, tools and other resources discussed in the subject. 2. Briefly characterise the current activities of the organisation according to the dimensions and stages of the UTS phase model. (You need to complete this part). 3. Develop at least three specific recommendations to improve the organisation’s social and environmental sustainability which rely on adapted or new business models*. 4. Include how you would evaluate and measure the impact/performance improvement. 5. Identify any conditions or drivers in the business landscape that are required to enable your organisation to adopt your recommendations. The deliverable is for your team to develop an annotated PowerPoint presentation deck. This deck should be constructed as an informal pitch to your peers in the subject summarising your analysis and recommendations. The PowerPoint deck is the only deliverable. It must contain extensive notes in the notes section to support the key points in the slides. *Use the two resources available on the Week 7 Canvas page: Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. 2014. A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65: 42-56. Lüdeke-Freund, F., Massa, L., Bocken, N., Brent, A., & Musango, J. 2016. Business Models for Shared Value: Main Report: Network for Business Sustainability South Africa. Assessment criteria Assessment will be according to the following criteria – note the emphasis on the critical perspective expected and the quality of your recommendations. This assessment requires and in-depth assessment of the organisation and its material social and environmental impacts and/or areas of performance, and a detailed engagement with theoretical and other resources on sustainable business models. • • • Critical analysis of business sustainability (20%) Validation and quality of professional recommendations for business development (35%) Application of key theoretical concepts to inform decision making in a professional context (45%) Q&A Q: Will there be time allocated to this groupwork in tutorials? A: Yes – I have allocated time in weeks 6 and 8. Groups will need to collaborate on this assignment outside of these tutorial slots using technology/platforms of choice. Q: Can the team make general suggestions on improving the organisation’s sustainability performance? A: No. The point of this assessment is to explore the concept of sustainable business models, using the resources provided. Q: How should the presentation be structured? A: It’s up to you. A straightforward approach will be to follow the structure of the questions, but you are free to take a different approach. Q: How many slides? A: As many as you think appropriate, but you are limited by the presentation format in that each team member must present and the presentation should be no longer than 3 minutes per person. Q: Is there a separate report required? A: No, just the annotated PowerPoint presentation deck. Q: Can we use a technology other than PowerPoint, such as Prezi? A: Maybe. Ensure that you can: 1) upload a hard copy of the presentation by the due date – not a link; and 2) that you can present via Zoom. Sustainable Business Development Presentation– individual You will present your recommendations for assessment 2 (above) during the scheduled tutorial times (and potentially also the lecture times in need). You will present as part of a group but will receive an individual mark. All team members must participate to be eligible for the mark. The presentation should be no longer than 3 minutes per person. Group members must specify the presentation order in their report. SUBJECT OUTLINE 21832 Managing for Sustainability Course area UTS: Business Delivery Autumn 2021; City Credit points 6cp Result type Grade and marks Subject coordinator Dr Tim Williams Tim.m.williams@uts.edu.au Teaching staff Dr Tim Williams Subject description This subject provides students with a framework for incorporating sustainability into business strategies and practices of organisations including supply chains. It provides an opportunity to systematically understand the relationship between business, wider society and the natural environment. It provides essential skills for future managers to transform complex sustainability challenges into business opportunities. Subject learning objectives (SLOs) Upon successful completion of this subject students should be able to: 1. examine contributing factors to the sustainability problems faced by society and the planet 2. analyse the key elements of human and environmental sustainability which have implications for organisational decision-makers, including corporate managers 3. discuss the cultural and strategic challenges faced by organisations in adopting sustainability strategies and practices in relation to stakeholders 4. evaluate the relationship between environmental/social risk and corporate performance 5. apply key concepts and techniques of voluntary reporting, sustainable business models and certification systems that could progress organisations towards social and environmental sustainability Contribution to the development of graduate attributes Understanding stakeholder relationships for sustainability is fundamental to the development of lasting, high-performance organisations in the rapidly changing business, ecological and social environment of today. Managing for Sustainability provides participants with the skills, concepts and systematic body of knowledge required to incorporate sustainability issues into organisational strategies and practices. The subject develops students' ability to critically assess their existing frames of reference when it comes to analysing inter- and intra- organisational sustainability. It aims to develop the necessary skills in stakeholder dialogue and management for participants to work in an innovative fashion towards making organisations more sustainable, while sustaining the natural environment and society. The subject integrates concepts and techniques from disciplinary areas ranging from operations and supply chain management, human resource management, strategy and the sociology of risk, emphasising their practical application in the workplace through the use of case studies, role plays, stakeholder dialogue activities, scenario planning and video analysis. Finally, the subject explores new business models emerging in the sustainable economy, such as the Circular Economy, and the implications of these models for management in relation to business model innovation, developing sustainable supply networks and transformation change. This subject contributes to the development of the following graduate attribute: Attitudes and values 13/02/2021 (Autumn 2021) © University of Technology Sydney Page 1 of 6 Teaching and learning strategies Classes adopt a blended learning approach that combines inquiry based and experiential learning techniques. Through a flipped learning approach students are directed to access pre-read materials for each main content area. During the first weeks of the session, students will answer several short answer questions through an online module and receive feedback in their Week 3 workshop. Lectures are delivered in a dialogic style to maximize critical engagement with the foundation concepts. Students experience collaborative learning experiences through engagement in-class with role plays, systems mapping activities, case studies, scenario modelling, stakeholder dialogue and simulation exercises. Teams develop during session and create a sustainable business development plan through in-class creative brainstorming activities and they continue the development of this project outside of class time. Several classes will be delivered in an online format and students will engage with the learning materials and complete assessment items. The learning management system is used to share information and encourage interaction between staff and students. Content (topics) Concepts of sustainability Drivers of business sustainability Models of sustainable business Sustainable design, procurement, production and supply chain management Evaluating and Managing risk in sustainable organisations and supply networks Relationships between human and ecological sustainability Leadership and change for sustainability Sustainable consumption and new business models Assessment The Management Discipline Group has the following policy regarding the late submission of assessments WITHOUT an approved extension: Late assignments submitted without an extension will accrue a penalty of 10% per day, based on the total value of the assignment. For example, if an assignment is worth 40%, the late penalty will result in a deduction of 4 marks per day the assignment is late. Marks will be deducted as full points off the awarded mark. Late penalties are applied up to a maximum of five (5) days after the due date (i.e. the maximum late penalty is 50%). Assignments submitted more than 5 days late will receive a mark of zero (0). Assessment task 1: Sustainable Business Analysis (Individual) Objective(s): This addresses subject learning objective(s): 3, 4 and 5 This addresses program learning objectives(s): .2 Weight: 60% Task: In this assessment your task is to critically assess and compare and contrast the current sustainability approach and performance of two contemporary Australian organisations using the UTS phase model (of organisational change for corporate sustainability) which underpins the subject. The full details for this assessment task can be found in the assessment task guide on Canvas. Due: To be submitted through Turnitin. Due 23:59 Sunday 18 April 13/02/2021 (Autumn 2021) © University of Technology Sydney Page 2 of 6 Assessment task 2: Sustainability Business Development Report (Group) Objective(s): This addresses subject learning objective(s): 1 and 2 Weight: 30% Task: This assessment explores the significance of business models for sustainability and the opportunity for business model innovation. Working with your group you will analyse one organisation according to the UTS phase model (as in assessment 1) and then develop at least three recommendations based on adapted or new business models (using resources provided) which have the potential to substantially improve the organisation’s social and ecological performance in the context of the organisation’s most material impacts. Full details for this assessment task can be found in the assessment task guide on Canvas Length: Maximum of 20 Powerpoint slides annotated with supporting text and references in the notes pages. Due: 11.59pm Sunday 9 May 2021 The assignment is to be submitted by one group member to Canvas Assessment task 3: Sustainable Business Development Presentation (Individual) Objective(s): This addresses subject learning objective(s): 1 and 2 Weight: 10% Task: Groups will present the recommendations for assessment 2 during the scheduled tutorial time in weeks 11 and 12. You will present as part of a group but will receive an individual mark. All team members must participate to be eligible for the mark. Full details regarding the assessment are in the assessment task guide on Canvas. Due: To be held during your designated tutorial on 11 or 18 May. Minimum requirements Students must achieve at least 50% of the subject’s total marks in order to pass the subject. Required texts Benn, S., Edwards, M., & Williams, T. M. 2018. Organizational change for corporate sustainability (Fourth edition). Abingdon, Oxon; New York, NY: Routledge. Additional required weekly readings and other recommended resources are available on Canvas in weekly modules and the reading list Academic liaison officer Dr Robert Czernkowski, Accounting Discipline Group, telephone 9514 3736 Dr Mario Fiorini, Economics Discipline Group, telephone 9514 3339 Dr Otto Konstandatos, Finance Discipline Group, telephone 9514 7758 Dr Kyuseop Kwak, Marketing Discipline Group, telephone 9514 3150 Associate Professor Nico Schulenkorf, Management Discipline Group, telephone 9514 5368 Any arrangements should be negotiated within the first six weeks of session. 13/02/2021 (Autumn 2021) © University of Technology Sydney Page 3 of 6 Support Student Services Unit/Counselling: Student Services provides a range of free and confidential professional services to support different aspects of your life and learning at UTS. These services include counselling for personal and learning problems or issues. 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Students who need to develop their written and/or spoken English should make use of the free services offered by HELPS, including academic language workshops, vacation intensive courses, drop-in consultations, individual appointments and Conversations@UTS. HELPS is located in Student Services, Building 1, Level 5, Room 25 (CB01.05.25). Study skills/learning support: If you are experiencing difficulty with your studies or need to develop the necessary study skills you require for your course, there is a host of useful information and websites to help you on the UTS Business School, Study and Assessment Resource website. Links on how to write better, study more effectively, available support services/staff to help, how to complete assignments; as well as tips for successful study and online study skills resources can all be accessed. In addition, HELPS provides self-help resources. 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University staff will not respond to email from any other email accounts for currently enrolled students. 13/02/2021 (Autumn 2021) © University of Technology Sydney Page 6 of 6 201 8 I M P A C T R E P O R T TA B L E O F C O N T E N T S INTRODUCTION 03 MISSION 04 0 1 / P R O D U C T I M PAC T 06 E N V I R O N M E N TA L I M PA C T RESILIENCE OF THE GRID A C C E S S T O S U S TA I N A B L E E N E R G Y BUILDING THE SAFEST CARS FROM THE GROUND UP 0 2 / O P E R AT I O N A L I M PA C T 15 GREENHOUSE GAS INVENTORY ENERGY EFFICIENCY S U S TA I N A B L E E N E R G Y FA C T O R Y P R O F I L E S A N D G R I D M I X E S SUPERCHARGERS C A S E S T U DY : F R E M O N T FA C T O R Y C A S E S T U DY : G I G A FA C T O R Y 1 0 3 / S U P P LY C H A I N 31 RESPONSIBLE SOURCING C O B A LT CONFLICT MINERALS Certain statements in this report, SUPPLIER DIVERSITY including statements regarding future development plans, are forward-looking statements that are 0 4 / E M P L O Y E E S A N D C U LT U R E 35 subject to risks and uncertainties. These forward-looking statements B E C O M I N G T H E S A F E S T C A R FA C T O R Y I N T H E W O R L D are based on management’s current T H E S A F E S T C A R S F O R C U S TO M E R S A N D E M P LOY E E S expectations. Various important factors could cause actual results R E WA R D I N G T H E I N D I V I D U A L to differ materially, including the DIVERSITY AND INCLUSION risks identified in our U.S. Securities E M P L OY E E M O B I L I T Y A N D T R A N S P O R TAT I O N P R O G R A M S and Exchange Commission filings. Tesla disclaims any obligation to update any forward-looking statement contained in this report. E D U C AT I O N C O R P O R AT E G O V E R N A N C E D R I V E N B Y S U S TA I N A B I L I T Y 02 INTRODUCTION Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles could be better, quicker and more fun to drive than gasoline cars. Today, we build not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. We believe the faster the world stops relying on fossil fuels and moves towards a zero-emissions future, the better. Tesla’s products offer a complete solution – sustainable generation, storage and usage – all capable of being powered by the sun. We envision a world powered by solar energy, running on batteries and transported by all-electric cars. By design, Tesla’s products are sustainable, and we’re working hard to build them in a sustainable way too. We’re publishing our very first Impact Report measuring the impacts of our products and operations on the environment and our communities. We recognize there’s still much to be done. As we grow and prove to the world that a business rooted in sustainability can also be successful, we will continue to improve our processes and report on our progress in future Impact Reports. THE TESLA TEAM I M PAC T R E P O R T 03 MISSION Tesla’s mission is to accelerate the world’s transition to sustainable energy. G LO B A L G R E E N H O U S E Climate change is reaching alarming levels – in large part due to GAS (GHG) EMISSIONS emissions from burning fossil fuels for transportation and electricity BY ECONOMIC SECTOR generation. In 2016, carbon dioxide (CO2) concentration levels Global GHG emissions are increasing at an accelerating rate. Annual GHG permanently exceeded the 400 parts per million threshold, a level emissions have approximately doubled that many climate scientists believe will have a catastrophic impact over the past 50 years to over 35 on the environment. Worse, global CO2 emissions are increasing at an gigatons per year. Energy use through electricity and heat production (25%) accelerating rate. Annual CO2 emissions have approximately doubled and transportation (14%) together over the past 50 years to over 35 gigatons per year. The path that the drive these GHG emissions. world currently is on is unsustainable and unwise. The world cannot reduce CO2 emissions without addressing energy generation and consumption. And the world cannot address its energy Electricity & 25% habits without directly reducing emissions in the transportation and power sectors. This issue is Tesla’s entire reason for existing. We are Heat Production* focused on creating a complete power and transportation ecosystem Agriculture, Forestry 24% & Other Land Use Industry 21% Transportation* 14% Other Energy 10% from solar generation and energy storage to all-electric vehicles. The first step in our Master Plan was to build an all-electric sports car (the Tesla Roadster) to prove that people didn’t need to compromise performance, speed or comfort to drive all-electric. From there, we designed the world’s first-ever premium all-electric sedan from the ground up, Model S, our Model X SUV, and an affordable vehicle for Buildings *Tesla-related sectors 6% the mass market, Model 3. As part of Master Plan, Part Deux, we introduced Tesla Semi, an all-electric truck that delivers massive savings in energy costs, performance, efficiency and reliability. 04 MISSION We recognize that we cannot achieve our mission alone, so we decided to open source Tesla patents, making them accessible to anyone who wants to design and build electric vehicles. To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy products that enable homeowners, businesses and utilities to produce and manage renewable energy generation, storage and consumption. Homeowners can install solar panels or Solar Roof to power their home using 100% renewable energy and store that energy in Powerwall, which makes electricity available during peak energy-use periods to help them save money and provides power during grid outages. Meanwhile, utilities and businesses can use Powerpack – an infinitely scalable energy storage system that provides greater control, efficiency and reliability across the electric grid. Combined with a 13 MW photovoltaic array, the 52 MWh Powerpack system in Kaua’i stores solar energy captured Renewable energy generation and storage are critical components of during the day and feeds it to the grid to developing microgrids — an increasingly important means of delivering help reduce the amount of diesel power reliable and sustainable electricity around the world. As deployment of generation needed to meet the island’s electricity demand. This system is helping the Kaua’i Island Utility Cooperative meet its goal of using renewable resources to generate at least half of the island’s electricity by the end of 2019. I M PAC T R E P O R T Tesla’s products continues to accelerate, we can scale the adoption of renewable energy, cost-effectively modernize our aging infrastructure (and become less reliant on it) and improve the resilience of the electric grid to benefit everyone. 05 01 P R O D U C T I M P A C T 06 S U S TA I N A B L E A N D The foundation of Tesla’s mission rests first and foremost on our products. SUPERIOR PRODUCTS Our focus from the beginning has been to develop products that are not F O R E V E R YO N E only sustainable, but superior to fossil-fuel alternatives, as many believe that choosing sustainable products requires consumers to compromise on price or performance. Tesla’s all-electric vehicles combine performance, safety and efficiency, making them the best cars in the world, while Tesla’s energy generation and storage products power both urban and remote communities with reliable, affordable energy. E N V I R O N M E N TA L Transportation and electricity production are two of the largest sources I M PA C T of GHG emissions, making up more than half of all U.S. emissions. Tesla’s ecosystem (solar, batteries and vehicles) aims to reduce the environmental impacts of transportation, electricity production and energy use by people, homes, businesses and the grid. In 2006, prior to the launch of the Tesla Roadster, there was no viable all-electric vehicle option on the market. Now, 12 years later, there are over 3M electric vehicles on the road globally, with more being produced Powerwall is a rechargeable lithium-ion battery that integrates with solar to every day. The auto industry is moving towards electrification, and store excess energy generated during governments around the world have recognized the harmful impact of the day and make electricity available internal combustion engine (ICE) vehicle emissions and have started when homeowners need it — for example, during grid outages and when the sun is not shining. I M PAC T R E P O R T to take concrete steps towards making the future more environmentally friendly and sustainable. 07 E N V I R O N M E N TA L Over 550K Tesla vehicles have been sold, and they have driven over I M PA C T 10B miles to date, resulting in a combined savings of over 4M metric tons of CO2. This is the equivalent of saving emissions from being released into the environment from over 500K ICE vehicles with a fuel economy of 22 miles per gallon (MPG). Tesla’s Supercharger network — the fastest and most extensive charging network in the world — has delivered over 595 Gigawatt- 550,000+ Tesla vehicles sold hours (GWhs) of energy, saving the equivalent of over 75M gallons of gasoline. That’s enough gasoline for the average ICE vehicle with a fuel economy of 22 MPG to travel round trip from Los Angeles 10,000,000,000+ to New York City over 290K times. Miles driven As of February 2019, Tesla Energy has installed over 3.5 Gigawatts of 4,000,000+ Metric tons of CO2 saved Tesla began delivering its first mass- solar installations and has cumulatively generated over 13 Terawatthours (TWhs) of 100% clean, emissions-free electricity. To put 13 TWhs in perspective, this amount of energy could supply the annual residential market vehicle, Model 3, in July 2017. electricity consumption for the entire state of Connecticut. Over their Like every Tesla, Model 3 combines entire expected use life of 35+ years, these solar installations are range, performance, safety and technology — accelerating from 0-60 mph in a mere 3.2 seconds. expected to generate 86.5 TWh of energy, which is enough electricity to power all of Washington D.C. for almost a decade. 08 E N V I R O N M E N TA L I M PA C T A L L -T I M E T E S L A E N E R G Y C O N S U M P T I O N V S . G E N E R AT I O N Telsa’s solar electricity generation has far exceeded the amount of energy the entire Tesla vehicle fleet on the road has consumed to date. MODEL S, X 5.26 TWh AND 3 ENERGY CONSUMPTION TESLA 13.25 TWh SOLAR ENERGY G E N E R AT I O N TWh 0 1 2 3 4 5 6 7 8 9 10 11 12 13 The World Health Organization estimates greenhouse gases and harmful air pollutants, such as particulate matter, ozone, nitrogen dioxide and sulfur dioxide, cause over 7M premature deaths around the globe each year. Reducing the use of fossil fuels for transportation and electricity generation decreases the risk of cardiovascular disease, respiratory disease and stroke in both developed and undeveloped countries. While many recognize the impact that power generation has on CO2 emissions, power generation’s impact on water consumption is less appreciated. Power generation is one of the leading causes of water withdrawal in the U.S., as water for thermoelectric power is used in generating electricity with steam-driven turbine generators and also to cool the power-producing equipment. So every kilowatt-hour (kWh) of clean solar energy produced not only lowers CO2 emissions, but also lowers water consumption. I M PAC T R E P O R T 09 RESILIENCE Solar and energy storage systems don’t just provide clean, zero- OF THE GRID emission energy, they also improve the reliability and resilience of the electric grid. For example, in the event of an electric grid outage, energy storage systems can immediately provide power to homes, communities and businesses. When Hurricane Maria struck Puerto Rico in September 2017, destroying thousands of homes and cutting electric grid power on the island, the initial emergency response was focused on deploying diesel generators to provide temporary electricity. In addition to releasing harmful emissions and requiring constant refueling and maintenance, these generators were extremely loud and not designed to run for long periods, so many failed. In response, Tesla provided over 1K battery Tesla batteries combined with existing solar arrays on the island of Culebra in Puerto Rico provide clean energy for communities nearby. storage systems paired with solar panels to deliver reliable and emissions-free electricity to over 660 locations throughout Puerto Rico, such as the Hospital del Niño Children’s Hospital in San Juan. 10 RESILIENCE In addition to providing back-up power during an electric grid outage, OF THE GRID the combination of solar and energy storage systems provides communities the flexibility of using the solar power when needed. Battery energy storage systems also smooth out the variable peaks and valleys in electricity demand, thus reducing both peak demand costs and the operational costs for utilities of generating power during peak periods. This solution is also offsetting the need to overbuild infrastructure, such as peaker power plants — some of the world’s dirtiest and least stable polluting energy generators — to meet the highest demand hours of the year. In December 2017, Tesla turned on the world’s largest lithium-ion battery in South Australia. A 50-year storm had damaged critical infrastructure in this region, causing a statewide blackout and leaving 1.7M residents without electricity. As a result, the local government looked for a sustainable solution to ensure energy security for all residents, and Tesla, with the developer, Neoen, were selected to work on this project. Tesla provided a 100 MW / 129 MWh Powerpack system Powerpacks in South Australia to be paired with Neoen’s Hornsdale Wind Farm near Jamestown and charge using wind energy from the completed the project in less than 100 days. Just a few weeks after, Hornsdale Wind Farm — providing when a major coal-fired power plant failed, Tesla’s battery system not only a sustainable solution to the region’s energy needs, but also was activated in mere milliseconds to help stabilize the electric grid. helping to solve power shortages, This grid scale energy storage project is an example of a zero-emissions reduce intermittencies and manage summer electricity peak load to improve the infrastructure’s reliability. I M PAC T R E P O R T solution that is helping to reduce power outages and improving the reliability of South Australia’s electrical infrastructure. 11 ACC E S S TO More than 1B people worldwide do not have access to electricity, and S U S TA I N A B L E many that do get their electricity from polluting sources such as coal ENERGY or fossil fuels. Tesla is bringing sustainable and affordable energy solutions to communities around the world. On the island of Ta’u in American Samoa, Tesla created a microgrid consisting of over 5.3K solar panels and 60 Powerpack systems, which is capable of powering Ta’u Island in American Samoa used 100% of the island on clean energy for 3 full days without sun. Today, diesel generators as their main source instead of burning almost 110K gallons of diesel per year, paying for of power for many years, leaving the rising fuel and related transportation costs and having to face negative residents vulnerable to blackouts when diesel supplies were low. To solve this, Tesla paired solar with Powerpacks health impacts, nearly 900 residents of Ta’u benefit from clean, affordable and reliable energy year round. to power homes, schools, the local hospital and other facilities to deliver 100% clean energy around the clock 1.4 MW 3 days 100% to the entire community. of solar generation of energy without the sun coverage of the island 12 BUILDING THE Improving occupant safety has always been key to our mission, SAFEST CARS FROM because vehicle safety is essential to mass all-electric vehicle adoption. THE GROUND UP When we set out to build our first full-sized vehicle, Model S, we positioned the battery pack and electric motors beneath the floor of the vehicle to give it an extremely low center of gravity, greatly reducing the risk of rollover while enhancing handling and performance. Today, all Tesla vehicles feature this same battery placement. MODEL 3 SPOTLIGHT The National Highway Traffic Safety Administration awarded Model 3 a 5-star safety rating in every category and sub- category, making it one of the safest cars on the road. Another benefit of Tesla vehicles is improved frontal impact safety due to our vehicles’ front trunk. The entire front end of the vehicle becomes a superior crumple zone since there is no gasoline engine block. This design improves impact absorption in the event of a crash, and the area doubles as an extra storage space. Beneath our vehicles, F R O N TA L C R A S H the titanium underbody shield consists of a ¼-inch ballistic grade aluminum armor plate that protects the battery pack. SIDE CRASH Based on the advanced architecture of Model S and Model X, we R O L LOV E R engineered Model 3 to be the safest car built to date. In addition to its near 50/50 weight distribution, Model 3 was also designed with an extremely low polar moment of inertia, meaning its heaviest O V E R A L L R AT I N G components are located closer to the car’s center of gravity. Even though Model 3 has no engine, its performance is similar to a “midF R O N T- I M PA C T engine car” due to its centered battery pack and the fact that Model PROTECTION 3’s rear motor is placed slightly in front of the rear axle rather than S I D E - I M PA C T PROTECTION LOW E ST R O L LOV E R R I S K behind it. Not only does this architecture add to the overall agility and handling of the car, it also improves the capability of stability control by minimizing rotational kinetic energy. After testing Model 3 as part of its New Car Assessment Program through a series of crash tests used to calculate the likelihood of serious bodily injury for front, side and rollover crashes, the National Highway Traffic Safety Administration (NHTSA) awarded Model 3 a perfect 5-star safety rating in every category and sub-category. I M PAC T R E P O R T 13 BUILDING THE Our commitment to safety is why all Tesla vehicles built since October SAFEST CARS FROM 2016 come with a suite of external cameras, sensors and onboard THE GROUND UP computing that enable advanced safety features like Automatic Emergency Braking, Lane Departure Warning, Forward and Side Collision Warning, Obstacle-Aware Acceleration, blind spot warnings and more. These features are made possible by our Autopilot hardware and software system, which is an advanced driver assistance tool that provides an additional layer of safety that two eyes alone would not have and helps make highway driving more enjoyable. We believe that All new Tesla vehicles have the hardware the unique combination of passive safety, active safety, and automated needed for full self-driving capability at driving is crucial for keeping not just Tesla drivers and passengers a safety level substantially greater than safe, but all drivers on the road. that of a human driver. Eight surround cameras provide 360° visibility around the car, complemented by 12 ultrasonic sensors. A 250-meter forward-facing radar with enhanced processing provides additional data about the car’s surroundings on a redundant wavelength that is able to see through heavy rain, fog, dust and even the car ahead. In Q1 2019, we registered one accident for every 2.87M miles driven in which drivers had Autopilot engaged. For those driving without Autopilot, we registered one accident for every 1.76M miles driven. By comparison, NHTSA’s most recent data shows that in the United States there is an automobile crash every 436K miles. 14 02 O P E R A T I O N A L I M PAC T R E P O R T I M P A C T 15 BUILDING A While the everyday use of Tesla products by consumers has by far the S U S TA I N A B L E biggest environmental impact, we also care deeply about operating FUTURE IN A S U S TA I N A B L E WAY our business and manufacturing our products in a sustainable way. Tesla has expanded its global manufacturing, charging, sales and service footprint rapidly in recent years. Keeping track of our various operational impacts allows us to implement efficiency improvements that simultaneously reduce our impact on the environment and lower operational costs. GREENHOUSE GAS Global CO2 levels in the atmosphere are higher than ever. It is an (GHG) INVENTORY unsustainable trend that drives Tesla’s mission to accelerate the world’s transition to sustainable energy. In 2017, Tesla established a baseline global carbon impact footprint across manufacturing, retail, distribution, sales, Supercharger, energy, warehouse and office facilities. For this baseline year, Tesla focused on tracking electricity and natural gas usage for our sites. Moving forward, we will continue to build out this data, which will help us set specific targets with the goal of driving down our GHG footprint on a perproduct basis as we continue to grow our business. 2 0 1 7 G L O B A L C A R B O N I M PA C T Direct Emissions Indirect Emissions Emissions from sources owned Emissions that are a consequence of Tesla activities, but or controlled by Tesla occur at sources owned or controlled by other entities. SUPERCHARGER 64 N E T WO R K SALES, SERVICE 39 & DELIVERY 33 ENERGY O P E R AT I O N S 146 FA C I L I T I E S THOUSAND METRIC TONS (CO2e) 0 20 40 60 80 100 120 140 16 ENERGY EFFICIENCY Energy efficiency plays an important role in Tesla’s long-term sustainable energy goal, and through active retrofitting of our existing facilities and the construction of new, more efficient facilities, we are working to reduce our energy use every day. In our Fremont Factory, the installation of LED lighting, as well as efficiency improvements to manufacturing systems such as compressed air, castings, injection molding, water test booth and cooling towers, combined with a new energy-efficient paint shop, have resulted in over 10 GWhs of energy savings over the last 5 years. These savings are the equivalent of the annual electricity consumption of almost 1K U.S. households. As a result of many improvements, the energy usage at the Fremont Factory per vehicle manufactured has decreased by 19% compared to 2016. In 2017, we established our energy-use baseline for the Fremont Factory. We have started the process of gathering energy intensity data for all of our main manufacturing locations and plan to add that information to the Impact Report in the future. S U S TA I N A B L E E N E R G Y Sustainability is at the heart of everything we do. In the same way our customers are adopting zero-emissions lifestyles by using solar energy systems, battery storage and all-electric vehicles, Tesla is also installing sustainable energy systems at our own facilities to utilize renewable energy generation and storage where possible. As we continue to ramp production of Tesla products, we are committed to making significant progress towards our goal of operating global Tesla manufacturing, vehicle charging and other operations using 100% renewable energy. I M PAC T R E P O R T 17 F R E M O N T FA C T O R Y Tesla purchased the Fremont plant in 2010 and completed a significant $3 billion modernization of the site to create one of the most advanced PRODUCT 1 MW / 2 MWh Powerpack Battery manufacturing facilities in the world. Originally built in the 1960s, the Fremont Factory contains 5.3M sq ft of manufacturing and office space — the equivalent of over 90 American football fields. The original A P P L I C AT I O N Peak Shaving roof layout and building infrastructure make solar deployment on-site challenging, but our long-term plan is to install rooftop solar panels at this site where possible. The Fremont Factory is also home to one of our first battery installations, originally commissioned in 2015. The Tesla builds every Model S, Model X and Model 3 at its factory in Fremont, where some vehicle components are also manufactured. In addition to the 10K+ employees at this factory, hundreds of robots are located throughout the facility, including on the Model 3 production line. Fremont Factory battery pack system monitors the facility’s energy use throughout the day and cuts back the amount of electricity taken from the grid during peak hours. This also helps to decrease demand on the local electric grid in addition to reducing the facility’s energy costs, as electricity purchased during peak hours is priced at a premium. 18 L AT H R O P FA C T O R Y With 431K sq ft of manufacturing space, Tesla’s Lathrop facility in California hosts computer numerical control (CNC) operations, PRODUCT 2 MW / 4 MWh Powerpack Battery machining and castings manufacturing. Located 50 miles from our Fremont Factory, the Lathrop facility features an installed battery operation that helps reduce peak energy consumption, alleviating A P P L I C AT I O N Peak Shaving T I L B U R G FA C T O R Y PRODUCT 3.4 MW Solar Array stress on the electricity grid during heavy-use times and minimizing the dependence on peaker power plants. Tesla’s Tilburg Factory in the Netherlands serves as the local assembly, quality testing and distribution point for Model S and Model X vehicles sold in the European Union (EU). The Tilburg Factory houses a 3.4 MW solar array that consists of almost 10.5K solar modules. This solar system generates enough electricity to meet the Tilburg Factory’s A P P L I C AT I O N Facility’s Energy Needs energy needs throughout most of the year. To put the magnitude of the installation in perspective, it is the size of almost 3 European football fields and between July 2017 to June 2018 generated an amount of electricity that would have been sufficient to power 942 Opened in 2013, Tesla’s Tilburg Factory households in the region. In other words, the solar power captured in the Netherlands spans 11-acres, houses by this system from that same time period would be sufficient to a rooftop solar array and features an indoor driving track, quality control stations and several assembly lines. I M PAC T R E P O R T meet the energy needs for electric vehicles to drive a combined total of over 16.7M km (10.4M miles). 19 G I G A FA C T O R Y 1 Unlike our Fremont Factory which was purchased and renovated, Tesla designed and built from the ground up our Gigafactory 1, a battery and PRODUCT Solar Array Under construction motor manufacturing facility in Sparks, Nevada, allowing us to design and implement sustainable solutions throughout the site from the beginning. Gigafactory 1 began mass production of lithium-ion battery A P P L I C AT I O N Facility’s Energy Needs cells in January 2017 and started manufacturing Model 3 battery packs and drive units in mid-2018. At 15M sq ft, Gigafactory 1 will be the world's largest building by footprint when completed and will eventually be powered by 100% renewable energy sources. Tesla built Gigafactory 1 with an efficient lighting design utilizing high-efficiency LED light fixtures combined with an optimized layout that reduces the facility’s overall electrical load. Gigafactory 1’s current lighting power density is 0.45 watts per sq ft, which is 65% less than the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) lighting design allowance of 1.3 watts per sq ft for a manufacturing facility. In the course of 30 days, the facility’s lighting system can save 144 MWhs of energy – enough energy for a Model S to drive 480K miles. Designed to be a net-zero energy factory upon completion, the facility will have the largest rooftop solar array in the world, with roughly 200K solar panels. Solar installation is already underway, in addition to a microgrid R&D facility. G I G A FA C T O R Y 2 Tesla’s Gigafactory 2 in Buffalo, New York, is located on the remediated RiverBend brownfield site that was previously home to Republic Steel until its closure in 1984. As an abandoned heavy industrial site, the land suffered from a long history of extensive environmental contamination and required significant rehabilitation before being put to its new use. During Gigafactory 2’s construction, old steel manufacturing debris removed from the site included everything from old rail boxcars to contaminated slag in the soil. Now, the brownfield is restored and home to a new 1.2M sq ft clean energy manufacturing complex where Tesla’s solar energy products are made. The facility is symbolic of the comprehensive clean up and transformation of the adjacent Buffalo River, which is now valued as an environmental, economic and community resource. 20 G I G A FA C T O R Y 2 The facility’s sustainability efforts include recycling 100% of any recyclable wood that comes into the plant, as well as reusing or recycling 90% of the plastic pallets provided by suppliers. Tesla is also working with local recyclers to develop a more robust recycling program that will continue to be implemented as the facility’s production grows. FA C T O R Y P R O F I L E S Tesla’s manufacturing facilities in California (Fremont Factory), Nevada AND GRID MIXES (Gigafactory 1) and New York (Gigafactory 2) are located within some of the cleanest electricity grid mixes and most aggressive Renewable Portfolio Standard (RPS) Policies in the U.S. In states such as Nevada, which derives 11% of its energy from solar, or New York, which generates 18% of its energy from hydropower, Tesla is able to purchase electricity with a low-carbon footprint. S TAT E R E N E WA B L E P O R T F O L I O S TA N DA R D S By 2030 By 2045 60% 100% CALIFORNIA RPS Currently ~30% 0 By 2025 N E VA D A R P S Currently ~18% 0 100% 25% By 2030 Gigafactory 2 currently produces solar N E W YO R K R P S cells and modules. Currently ~20% I M PAC T R E P O R T 0 50% 100% 21 SUPERCHARGERS Building a charging system that enables quick, convenient and longdistance travel is critical to the mass adoption of electric vehicles. In 2012, we opened our very first Supercharger station and have since deployed over 12K Superchargers, building out the world’s fastest and most extensive charging network for Tesla vehicle owners. Superchargers are strategically placed to allow owners to take long road trips with minimal stops and are located near restaurants, coffee shops, markets and other convenient amenities. With charging speeds up to 120 kW, the typical driver charges for about 30 minutes before continuing their journey. 12,800+ While the electricity grid varies from region to region, charging electric Superchargers globally vehicles is cleaner than ever. In the U.S., coal has historically been the dominant energy source for generating electricity, but in the last 1,400+ Supercharger Stations decade, coal power has declined significantly. Instead, energy generated by sustainable sources has grown rapidly, accounting for an estimated 70% of new electric generation capacity in 2017. Many 36 Countries with Superchargers U.S. states have been making significant investments in new renewable energy resources now that they are competitively priced with fossil fuel resources. For example, California generated approximately 30% 99% U.S. population within 150 miles of a Supercharger of its electricity needs from renewable energy sources in 2017, up from 12% in 2009, and the state is targeting 60% by 2030. To put this in perspective, GHG emissions from charging an average all-electric vehicle in the U.S. is equivalent to the emissions that would be 40-stall Supercharger station in Kettleman City, California with solar panels. produced by a conventional ICE vehicle that gets a fuel economy of 80 MPG. Keep in mind, the average ICE vehicle gets around 22 MPG. 22 Even when electric vehicles are charged in regions that derive much of SUPERCHARGERS their electricity from the burning of fossil fuels, the electricity production needed to charge electric vehicles is still considerably less harmful to the S TAT E O F T E X A S A N N U A L EMISSIONS PER VEHICLE ( L B S O F C 0 2 E Q U I VA L E N T ) environment than filling up an ICE vehicle gas tank. For example, as of July 2018, according to the U.S. Department of Energy’s Alternative Fuels Data Center, even in Texas — one of the states with the highest amount 10K of electricity coming from fossil fuels at 75% — emissions related to the production of electricity used in electric vehicles are still over 22% lower 5K than gasoline cars and almost 5% lower than plug-in hybrid vehicles. 0 In states with a much higher proportion of electricity generated from Gasoline 12K renewable energy generation, such as California, the effect of lower emissions from driving electric vehicles as compared to gasoline or Plug-in Hybrid Hybrid 7K 6.5K plug-in hybrid vehicles is far greater. The reality is that while burning gasoline won’t get cleaner, driving on electricity continues to get cleaner — all while delivering immediate health and environmental benefits. All Electric Tesla’s Supercharger station in Arlington, Texas. 5K Governments around the world are recognizing the harmful impact of ICE vehicle emissions, with Norway, India, France and others aiming to ban sales of ICE vehicles as soon as the next decade. As more regions adopt sustainable energy solutions, emissions related to electric vehicle charging will decrease even further. All Tesla vehicles produce significantly less CO2 than any gasoline-powered competitor – and if an electric vehicle is powered by solar energy, essentially no CO2 is produced at all. In the EU, where Tesla has the option to select local energy providers, over 85% of energy delivered by our Superchargers is produced by clean, low-carbon energy sources, including solar, wind and hydropower. In the future, as we continue to expand our global charging network, our goal is to strategically pair solar and battery storage at as many Supercharger stations as possible. I M PAC T R E P O R T 23 C A S E S T U DY : As a manufacturing company, minimizing waste at Tesla goes beyond SPOTLIGHT ON recycling office and café consumables. Whether via reuse, recycling or F R E M O N T FA C T O R Y compost, efforts to divert material waste from ending up in a landfill or a waste-to-energy facility are found throughout all Tesla manufacturing, service and office facilities. In 2016, the Fremont Factory was certified as a “Zero Waste” facility, and was recognized for our commitment to recycling and product reuse. In 2017, the Fremont Factory diverted over 93% of waste from landfills to recycling or to a waste-to-energy facility. Our on-site recycling center allows the “commoditization” of different recyclable materials. M AT E R I A L S R E C YC L I N G 1.9M Pounds of organics sent for compost 2,900 tons Plastic recycled at Fremont in 2017, a 9% year-over-year increase Balers enable us to generate recycling revenue from cardboard and to turn loose films and bubble wrap into recyclable commodities. Styrofoam densifiers convert a small room’s worth of foam into a dense brick of hard plastic the size of a briefcase. This 50:1 densification ratio converts a commodity we previously had to pay to get rid of into a revenue-generating recyclable. despite challenges in the global market for recycled plastics. We streamlined the recycling process for metal scraps from our stamping presses that create metal parts for Model S, Model X and Model 3 by The Fremont Factory was originally using an online bidding platform to provide local and international home to General Motors (GM) from recyclers easier access to our scrap metals. Decommissioned and 1962-82, and then GM and Toyota’s scrapped materials, such as charging equipment, motor components, partnership, New United Motor Manufacturing, Inc. (NUMMI), from wiring, metal casings, wheel rims and more, are also recycled through 1984-2009, when the partnership this platform. This systematic categorization of scrapped materials ended. Tesla purchased the facility in 2010 and is working to nearly double its size to almost 10M sq ft. enables significant economic recovery for Tesla from parts otherwise destined for the landfill or a scrapyard. 24 ON-SITE PRODUCT When we first opened the Fremont Factory in 2010, Tesla operations RE-USE STORE were a fraction of the total footprint. As areas within the facility expand, we send parts that are no longer needed to an onsite “store” where these items can be used by other Tesla teams. For example, surplus eye-wash station signs from the Fremont Factory were made available to a new area opening within our Lathrop facility. This reuse effort has resulted in millions of dollars in avoided costs, and contributes significantly to our efforts to divert as much waste as possible from landfills. WAT E R Through efficiency improvements and water reuse systems, we work to lower the per-product water usage in our manufacturing process. In addition, water reduction efforts are included in our sales, service and delivery facilities. Where possible, our service technicians use a waterless car wash method to maintain Tesla vehicles while minimizing environmental impacts. Throughout the Fremont Factory, water use per vehicle manufactured dropped by 9% from 2016 to 2017. In 2017, we established a water-use baseline for our manufacturing and support operations. During the same period, global water use was 8.77 m3 per vehicle. As we increase production in coming years, we expect water use per vehicle to decrease significantly. Our main manufacturing facilities are not only looking to increase water-use efficiencies, but also to improve wastewater and stormwater management. These projects include reverse osmosis and distilled water system installations to improve water quality and to allow existing water sources to be recycled and reused in other processing areas such as the closed-loop system of our facilities’ cooling towers. Projects in development include water mapping to identify opportunities for either recycling or increased passes in our closed-loop systems as well as leak identification. At Gigafactory 2, Tesla is dedicated to making our production activities supportive of the comprehensive cleanup and transformation of the Buffalo River and to ensure the waterway remains a rich environmental, economic and community resource. I M PAC T R E P O R T 25 B AT T E R Y R E C YC L I N G A common question we hear is, “What happens to Tesla vehicle battery packs once they reach their end of life?” An important distinction between fossil fuels and lithium-ion batteries as an energy source is that while fossil fuels are extracted and used once, the materials in a lithium-ion battery are recyclable. When petroleum is pumped out of the ground, chemically refined and then burned, it releases harmful emissions into the atmosphere that are not recovered for reuse. Battery materials, in contrast, are refined and put into a cell, and will still remain at the end of their life, when they can be recycled to recover its valuable materials for reuse over and over again. Since Tesla battery packs are made to last many years, we are only just starting to receive these batteries back from the field. Currently, most of the batteries for recycling come to us through R&D, manufacturing, quality control and service operations. Today, we work with third-party recyclers around the world to process all scrap and end-of-life batteries to recover valuable metals. Our recycling partners work with us to ensure that non-valuable or non-recoverable materials from the batteries are disposed of responsibly. At Gigafactory 1, Tesla is developing a unique battery recycling system that will process both battery manufacturing scrap and end-of-life batteries. Through this system, the recovery of critical minerals such as lithium and cobalt will be maximized along with the recovery of all metals used in the battery cell, such as copper, aluminum and steel. All of these materials will be recovered in forms optimized for new battery material production. The closed-loop battery recycling process at Gigafactory 1 presents a compelling solution to move energy supply away from the fossil-fuel based practice of take, make and burn, to a more circular model of recycling end-of-life batteries for reuse over and over again. From an economic perspective, we expect to recognize significant savings over the long term, as the costs associated with large-scale battery material recovery and recycling will be far lower than purchasing and transporting new materials. 26 C A S E S T U DY : Tesla first broke ground on Gigafactory 1 in 2014, providing the G I G A FA C T O R Y 1 — opportunity to build a truly sustainable facility from the ground up. S U S TA I N A B L E BY DESIGN Located in Sparks, Nevada, the facility is being built in phases so that Tesla and our partners can manufacture inside the finished sections as we continue to expand. This phased approach allows us to learn and continuously improve our construction and operational techniques as we drive down the cost of battery production. As with many of our manufacturing processes, Tesla applies first-principles thinking to 2014 rendering of Gigafactory 1, achieve efficiencies across all areas of Gigafactory 1, translating into prior to Tesla beginning construction lower operating costs. Since batteries remain the costliest part of on the 3.2K-acre site. Tesla is currently building a solar array on the rooftop to power the factory with sunlight. electric vehicles, these efficiencies are ultimately reflected in the cost of the final product, allowing us to get more vehicles to consumers. R O O F T O P S O L A R A R R AY WAT E R S T O R A G E A N D R E - U S E SYST E M I M PAC T R E P O R T 27 E L I M I N AT I N G N AT U R A L One unique aspect of Gigafactory 1 is that there is no natural gas GAS LINES: MAXIMIZING line within the factory. Tesla made this decision at the design stage H E AT R E C O V E R Y because we wanted a sustainably-powered facility with no on-site combustion of fossil fuels. While challenging to achieve from a design perspective due to manufacturing processes that require high levels of energy or heat (like high-temperature ovens), Tesla engineered thermal systems to maximize heat recovery resulting in significant energy efficiency gains compared to standard industrial designs. This included using heat pumps to upgrade low-temperature waste heat from manufacturing, thus reducing the energy used to heat the facility by over 80% compared to traditional electric heaters and is expected to save over 16K MWh in the winter season. The facility also has a heat exchanger system to recover more than 60% of the heat from the exhaust of industrial ovens. BRINGING THE OUTSIDE Several battery manufacturing areas throughout the facility require very I N : O U R N AT U R A L low levels of humidity during production (