Reducing Carbon Emissions
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45 2020 SUSTAINABILITY REPORT REDUCING CARBON EMISSIONS OUR OPPORTUNITIES → P roviding the engineering talent, manufacturing scale and customer insight necessary to lead in an electric future → C hanging consumer perceptions of what EVs can be with new OUR CHALLENGES product introductions in a range of segments, from small crossovers to → In creasing consumer adoption SUVs and trucks of EVs → C ontinuing our strong sales → A chieving price and range parity performance of increasingly more between EVs and ICE vehicles, efficient cars, SUVs and trucks to especially in periods of low support our investments in EVs oil prices → U sing our scale to accelerate the → E stablishing collaborative and transition to renewable energy coordinated public/private partnerships to oversee the national buildout of charging infrastructure → E nsuring adequate policy on infrastructure to continue renewable energy investments IN THIS SECTION Carbon Emissions Management 46 Vehicle Emissions 48 Operational Emissions 60 46 2020 SUSTAINABILITY REPORT REDUCING CARBON EMISSIONS Carbon Emissions Management General Motors takes the challenge of climate change seriously, and it is a driving force behind our vision of a future with zero emissions. We’re committed to achieving this vision in a timeframe limiting global temperature rise to 1.5°C or well below 2°C that aligns with climate science. That’s why GM has compared to preindustrial temperatures. These targets announced plans to become carbon neutral in our global are termed science-based targets (SBTs). products and operations by 2040. Making progress toward these goals will address the most significant sources of GM submitted and SBTi has approved a commitment carbon emissions that we may be able to impact, including to reduce absolute Scope 1 and 2 GHG emissions from vehicle emissions, which currently represent 75% of the our operations 71.4% by 2035 from a 2018 base year emissions we are trying to reduce, and our manufacturing and to reduce Scope 3 GHG emissions intensity from operations, which are responsible for 2%. To reach carbon use of sold products of light-duty vehicles 50.4% per neutrality in our operations, we have a goal to source 100% vehicle kilometer by 2035 from a 2018 base year. The renewable energy globally by 2035, five years earlier than base year of 2018 was chosen as it represents the most our previous commitment made in 2020 and 15 years recent verified annual dataset that correlates to normal sooner than our original target. production without major pandemic or other disruptions. Our plans to achieve carbon neutrality are aligned To hold ourselves accountable, GM also signed the with the Science Based Targets (SBTi) consortium of Business Ambition Pledge for 1.5°C, an urgent call organizations that include CDP, the World Wide Fund for to action from a global coalition of UN agencies and Nature, the World Resources Institute and the UN Global business and industry leaders to urge limiting global Compact. Organizations can play their part in combating temperature rise to 1.5°C above preindustrial levels climate change by setting GHG emissions reduction and reach net-zero emissions by 2050. Together, these targets that are aligned with reduction pathways for actions will help establish a safer and better world. 2035 2035 2040 GM aspires to eliminate GM commits to 100% renewable GM aspires to be carbon tailpipe emissions from energy for electricity to power neutral in global products new light-duty vehicles. global facilities. and operations. 47 2020 ESG IMPACT2020 REPORT SUSTAINABILITY PAGEREPORT XX Reducing Carbon Emissions As we work toward achieving carbon neutrality, we remain We believe it is important that committed to transparent disclosure of GHG emissions and actions we are taking to reduce them globally. We we understand the concerns of reaffirm these points with our global employees and other our stakeholders as we continue stakeholders, including policymakers, regulators and shareholders. We are currently advocating for state to advocate for a National Zero and federal policies that support EV adoption and will Emissions Vehicle policy to support be necessary for achieving our aspiration. Read more about this effort in the Public Policy section of this report the transition to electric vehicles. on page 26. Managing Climate Change Risk As a result, we believe it is important that we understand Climate change has been incorporated into our enterprise the concerns of our stakeholders as we continue to risk management framework. This designation ensures advocate for a National Zero Emissions Vehicle policy to that these issues are considered in our decision-making support the transition to electric vehicles. Read more on processes. Our consideration of climate change page 26. Today, as part of this transition, we identify and has helped us understand and clarify the risks and monitor climate change risks on a regular basis across opportunities in our transition to an all-electric future. our business. The Board and its Committees receive We recognize that certain consumers are increasingly updates regarding climate-related risks, and directors aware of the need to limit climate change, and that this factor such risks into various strategic considerations, awareness will influence their purchases and brand including those related to EV execution, battery cost and perceptions going forward. Climate change concerns product portfolio reviews requiring capital expenditures. are also likely to drive new policy and regulations, as We believe that these efforts help position GM to better well as political and economic pressures to reduce anticipate, detect and address climate change risks emissions throughout the manufacturing value chain. going forward. 48 2020 SUSTAINABILITY REPORT REDUCING CARBON EMISSIONS Vehicle Emissions HUMMER EV → The vehicles we sell represent 75% of the CO2 emissions that we are trying to address. Our vision is a future with zero tailpipe emissions that will help create a more sustainable planet. General Motors' future is an all-electric one—and it EV Commitments could be here sooner than many think. In early 2021, Our global commitment to realize an all-electric, we announced our aspiration to eliminate tailpipe zero-emissions future—from battery chemistry and emissions from new light-duty vehicles by 2035. By architecture to safety validation and infrastructure— leveraging battery electric vehicles (EVs) and other requires unprecedented investment in people and zero-emissions technology, we will work to offer an EV for resources. This is why we’ve announced our intent every customer, including crossovers, SUVs, trucks and to allocate more than $27 billion in capital and sedans across a range of price points. GM is prepared to engineering resources to EV and autonomous vehicle (AV) deliver and is committed to programs between 2020 and 2025. For the first time, winning the EV race. GM will spend more on EVs and AVs than on gasoline- We have what it takes to and diesel-powered vehicle development during that do so and are rapidly five-year period. 2035 building a competitive The year by which we advantage in EV, software These investments will pay off in short order. We will aspire to eliminate vehicle integration introduce 30 new global EVs by the end of 2025. Two- tailpipe emissions from and manufacturing. thirds of our new EVs will be available in the U.S. and new light-duty vehicles. approximately 40% of the company’s U.S., entries will To this end, we announced be battery electric vehicles (BEVs) by the end of 2025. a new growth strategy in Cadillac, GMC, Chevrolet and Buick brands will all 2020 designed around delivering world-class customer be represented. experiences. This strategy includes a new, dedicated EV organization called EV Growth Operations. This To do so, we are pulling a total of 12 new EV launches dedicated team will be entirely focused on driving mass ahead of schedule, with some moving forward by more consumer adoption of EVs and will be led by a newly than 30 months. This accelerated timeline requires a appointed Chief EV Officer. This EV team will combine revamped vehicle development process. During 2020, startup agility with the strength of the GM team and the HUMMER EV team cut development time nearly in will be empowered to minimize complexity and make half by leveraging virtual engineering and the simplicity decisions fast. This is more than a reorganization; it is and flexibility of the Ultium system. This achievement part of a broader cultural transformation to position GM has massive implications: we expect to cut development to lead in the future of mobility. Along with our dedicated time of our future EVs by nearly 50% over current EV EV organization, our integrated strategy is a competitive development time today. advantage for GM. 49 2020 ESG IMPACT2020 REPORT SUSTAINABILITY PAGEREPORT XX Reducing Carbon Emissions We are positioned to design, engineer and 50% approximate reduction produce EVs for every style and price point and in development time for invest in ways to make the EV experience as future EVs. convenient and easy as possible. To realize our zero emissions future, we need millions of EVs on the road, which is why we are committed to fighting for EV market share until we are number-one in North America. We aim to achieve margins similar to or higher than our Internal Combustion Engine (ICE) business and to exceed our previous target of selling 1 million vehicles globally by mid-decade. Advancing Battery Technology The heart of our EV strategy is a highly flexible global EV platform powered by our proprietary Ultium batteries. This platform and propulsion system can power transportation across all price points, luxury vehicles, work trucks and high-performance vehicles. As a result, GM can compete for nearly every customer type and preference in the market. Some vehicles built on this platform will be capable of offering: GM's Ultium-based lineup will use less than one quarter • G M-estimated range of up to 450 miles on some models of the propulsion combinations currently used for when fully charged.