Sustainability and change in the automotive industry : How regulations on environmental sustainability are implemented in companies and leading to change

Abstract: The general concert towards environmental sustainability has grown over the last few years. Pressure on firms from lawmakers request conformity with new regulations to ensure environmentally sustainable business operations. This study researches the implementation process of environmental sustainability regulations and the influencing factors in the automotive industry with two exploratory case studies on firms in Germany and Croatia. This research reveals the influencing power firms’ have on the policymakers in their regulations design leading to information inequality among competitors. Also, firms’ different management involvement and structure of the implementation process does not indicate the firms’ sustainability strategy. Environmental sustainability strategy can lead to long term benefits, however requires short-term investments, whereas the industry and competition pressurizes the firms on costs, leading to firms facing a choice between short term competitiveness and environmental sustainability. In order to conform with regulations, firms implement change through modifications and adaptation of products through new technologies.