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Volkswagen: The Real Kick Is To The Human Connection In Business

This article is more than 8 years old.

In a world striving for better corporate governance in business and leadership in the interests of every human being - both stockholder and stakeholder - perhaps we should thank Volkswagen.

Its brazen exploitation of consumers in the name of profits has drawn together disparate voices: on climate change, on the rights of the average citizen/consumer/car buyer not to be cheated, but also not to die from emission fumes. Never have I seen more journalists in the U.K. who couldn't normally give (what we in Britain call ) "a toss" about so-called #sustainability stories take the moral high ground on this mass deception.

As, indeed they should - although "business fraud" still sits in a separate box from "Environmental, Social And Governance Issues (ESG) and Sustainability." We urgently need a new language for better media coverage of standards in business, and a recognition that ESG is all about risk, and should not be in its own little box at all.

The Volkswagen group now says it has set aside €6.5 billion ($7.2 billion) to deal with the costs it may face as a result of fitting 11 million diesel vehicles worldwide with a device to cheat emissions tests. It is the world's largest car maker by cars sold, so it carries a burden of standard for the industry as a whole. And take a look at its share price, two days into the revelations and pity the shareholders.

Volkswagen share price 1 day Source: Yahoo Finance September 22, 2015

In terms of costs, as Bloomberg reports, "the $18 billion figure being bandied about is probably too high, but the tab will be in the billions."

This interview by Bloomberg quoted by Autonews sums it up on the consumer front: "John Decker bought his 2013 Volkswagen Jetta diesel thinking he was doing his part to improve the environment and reduce his carbon footprint. Now that the German automaker has admitted its claims about the model’s performance were false, he just wants the company to buy it back from him.“I feel completely deceived by Volkswagen,” Decker, of Sacramento, Calif., said in an interview. “I’m extremely upset about it. I feel defrauded.”

Big business spends a great deal of money on its marketing and advertising budgets, often equating these with Corporate Social Responsibility (CSR) and in pursuit of "engagement." But Volkswagen here has a golden opportunity to engage with 'defrauded' customers. Instead, at time of writing, its CEO Martin Winterkorn, apologized - but did not resign - yet.

There are no trophies for any business arrogant enough to believe it could deceive just about everyone - from consumer to regulator. Volkswagen may, indeed have done us all a favor in setting a trend for demanding more - as consumers, shareholders, stakeholders and just plain citizens.