How One Manufacturer Is Aiming to Achieve Net Zero at Net Zero Cost

Giti Tire operates in one of the toughest spots in manufacturing: the middle market. Headquartered in Singapore with major operations in Indonesia, China, and the U.S., it competes against premium brands above and low-cost players below across 130 countries. It must deliver strong performance at an attractive price, with no room for inefficiency. Over the last three years, the company has reduced emissions across its operations and supply chain while simultaneously improving margins. It’s achieving net zero at net zero cost—not through offsets or accounting tricks, but by treating sustainability as integral to how it competes. This matters because Giti represents the vast middle of global manufacturing: companies that can’t afford luxury pricing and can’t compete on cost alone. If sustainability works here, it can work almost anywhere. One of us (Donald) is an MIT professor who’s studied Giti’s sustainability strategy; the other (Chong Hau) is the company’s chief sustainability officer. We’ve collaborated on a study of Giti’s approach and identified four initiatives that align environmental impact with business value. Each hits the business model from a different angle: value proposition, value chain, and value capture. More importantly, each uses practical steps any company can replicate. Why Tires Matter for Climate Two realities shape the sustainability challenge in tires. First, the environmental footprint stretches across the entire life cycle—from raw materials (natural and synthetic rubber, carbon black, steel) to factory energy use, road performance, and end-of-life disposal. Second, most emissions occur downstream. While factory emissions matter, the largest share happens when the tire is in use. Rolling resistance—the energy required to keep a tire moving—drives both fuel consumption and climate impact. This means product performance isn’t separate from sustainability—it’s a primary factor in sustainability. Giti’s drive toward net-zero operations reflects both external pressure and internal commitment. Giti’s group chairman, Enki Tan, has consistently supported balancing profitability with responsible environmental and social practices. But the company’s approach is practical, not ideological. Every sustainability initiative must strengthen the business. Here’s how they did it: 1. Embed sustainability in continuous improvement. At Giti’s Anhui facility, engineers refined the vulcanization stage by reducing the thickness of the rubber bladder. This simple modification improved heat transfer and shortened cycle times without compromising quality. The result: lower natural-gas consumption, reduced rubber use, a material drop in CO₂ emissions, and more than $100,000 in annual savings from lower energy and material inputs. This works because it targets operational efficiency within existing equipment. That approach requires no major capital investment and results in immediate reduction in variable costs and additional freed capacity. And it builds internal confidence by proving that environmental gains reinforce cost and speed advantages rather than conflict with them. To replicate: Conduct a focused review of your highest-energy or longest-cycle processes. Ask how you’d redesign them if carbon pricing directly hit your P&L tomorrow. Prioritize adjustments that reduce time, temperature, or material thickness while maintaining quality. Track unit cost, energy intensity, and cycle time to translate improvements into financial and environmental outcomes. Early wins build momentum. 2. Turn compliance into market access. The EU Deforestation Regulation (EUDR) requires companies selling into Europe to prove their raw materials are deforestation-free and traceable to origin. For tire makers, that means natural rubber—a commodity with structural deforestation and social risks across Southeast Asian supply chains. Giti anticipated this shift and established end-to-end traceability by integrating farm-level data into its quality and procurement systems. When the EUDR’s enforcement date was postponed from 2024 to 2025 following industry pushback, Giti stuck to the original timeline. Crucially, the company embedded supplier assurance within its existing quality-assurance function rather than creating a separate unit. This kept incremental compliance costs low while reinforcing core systems. The payoff extended beyond regulatory readiness. Early compliance enhanced Giti’s credibility with European automakers, who invited the company to compete for original-equipment opportunities it wouldn’t have accessed otherwise. Farmers and processors in its network became more attractive suppliers to multiple buyers, strengthening the entire ecosystem. To replicate: Identify your most material raw-material risks and the most stringent regulatory or customer requirements emerging in your markets. Build targeted traceability at these pressure points—enough to meet your most demanding buyer’s expectations. Position these capabilities as part of your sales proposition, backed by evidence rather than assurances. As carbon and biodiversity credit markets mature, verified sustainable producers will access new revenue streams, improving economics for suppliers and manufacturers. 3. Design for customer impact, not just factory emissions. Rolling resistance accounts for roughly one-third of fuel use in trucking and up to one-fifth in passenger vehicles. Any reduction translates into immediate mileage gains and lower emissions—benefits customers notice and value. Giti is developing compounds and constructions engineered to reduce rolling resistance. These designs demand R&D investment and sometimes higher-grade materials, but the value proposition is direct: improved fuel efficiency, reduced emissions, and often longer tire life. This combination enables premium pricing and strengthens relationships with fleet customers who monitor performance closely. This matters because use-phase improvements help customers lower their Scope 3 emissions, a metric increasingly influential in multinational procurement decisions. When competitors under-invest in performance, positioning the product as high-value rather than merely “green” builds differentiation. To replicate: Quantify total cost of ownership for your customers and design products that materially shift that profile. Work with lead customers—particularly fleets with precise fuel or energy measurement capability—to validate savings and share performance data. Market outcomes jointly. Sustained campaigns promoting durable, efficiency-enhancing products build acceptance across markets. 4. Reimagine logistics with electric autonomy. In late 2024, Giti partnered with a local technology firm to test autonomous electric-vehicle delivery between urban warehouses and service shops. The pilot has expanded to dozens of dealers and hundreds of storefronts, with plans to reach multiple cities. These autonomous EVs lower both fuel and labor costs on predictable routes while improving delivery frequency and service quality. The approach works because autonomous electric vehicles are economical on dense corridors with frequent, short-haul movements. It also positions Giti to understand smart-city logistics—a competency increasingly relevant as rapidly growing markets explore car-lite districts and new mobility patterns. To replicate: Identify dense corridors where frequent, short-haul movements make electrification economical. Start with supervised autonomy or remote-assist operations within defined geofences, supported by digital infrastructure for real-time routing, inventory visibility, and automated dispatch. Track cost per drop, on-time performance, and emissions per delivery to translate operational data into commercial and environmental outcomes. Look Across Your Business Model In Giti’s case, each of the four initiatives strengthens a different dimension of its business model: Value proposition: Better fuel economy and reliable delivery are benefits customers notice and sometimes pay for. Value chain: Leaner processes, traceable inputs, and digitized logistics reduce waste and risk. Value capture: Verified compliance wins bids. Measurable total-cost-of-ownership savings justify price. Efficiency gains flow to the bottom line. None of these depend on subsidies or speculative technologies. They combine practical steps—process tweaks, data integration, targeted R&D, focused pilots—with tight feedback loops measuring energy use, cycle time, total cost of ownership (TCO), and on-time delivery. This is how sustainability becomes integral to how a business competes, not a side program. How to Get Started If you want to follow this approach, use this operating system: Reframe the brief. Replace “sustainability costs money” with “our job is to cut emissions and improve economics.” Make sustainability synonymous with performance. Concentrate where you operate. Target operational waste—heat, pressure, friction, repetition. Use 60- to 90-day sprints to create success stories with clear baselines and measurable efficiency gains. Leverage what you do best. Apply your existing strengths to amplify sustainability impact. If you excel at regulatory compliance, build systems once to the highest standard and replicate them across markets—proof of compliance becomes proof of leadership. If design and engineering are core capabilities, embed sustainability into products so performance and emissions reduction reinforce each other. If marketing is your strength, turn verified performance into differentiation that commands premiums. Align with incentives. Focus where sustainability improves cost, revenue, or risk. Make green growth self-funding. Track what matters. Scale what performs. Monitor capital cost, recurring cost savings, new revenue, risk reduction, and future options alongside emissions reductions per unit. Scale initiatives that clear thresholds across these dimensions. Sunset those that don’t. . . . The most important change is in mindset, which is an integral part of Giti’s comprehensive training programs to upskill employees. When you treat sustainability as integral to your business model—like safety or quality—you unlock different ideas and different math. You see where the business model wants to go: toward products that lower customers’ TCO, supply chains trusted by the toughest buyers, and operations that waste less energy and time. Giti Tire’s experience proves that the path to net zero need not be a financial sacrifice. With the right framing and disciplined execution, companies can build competitive advantage while reducing emissions.

How One Manufacturer Is Aiming to Achieve Net Zero at Net Zero Cost

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