While this is not a new topic, the ESG in fleet management is gaining more and more space in society, mainly due to the effects of climate change.
In this way, talking about ESG in fleets becomes increasingly essential, especially when it comes to ethics in companies.
What does your company do to ensure a more sustainable world? A fairer world? A more responsible world?
Nowadays, customers already notice in companies of any sector how they develop their economic activities, discuss and improve their roles as transforming agents of society, leaving aside the idea that the corporate sector is only fueled by profit.
Therefore, taking the company commitment for ethics, promoting diversity, caring for the environment and much more.
Want to know everything about ESG in fleet management? Then read on!
What is ESG and how does it affect the fleet industry?
How can ESG be worked on by fleet managers and applied in their management?
What are the benefits of ESG in fleet management?
What are the ESG challenges for fleet management?
What is ESG and how does it affect the fleet industry?
The acronym ESG comes from the terms Environmental, Social and Governance, or, in Portuguese, Environment, Society and Corporate Governance. Therefore, the term consists of a set of good practices to be adopted and followed in the company, in order to comply with its three aspects:
Also read: Biofuel: what is it, what are the advantages and why use it in your fleet?
- Environment: includes practices related to saving water, energy efficiency, reducing carbon emissions into the atmosphere, recycling, among others.
In this way, these practices aim to minimize the environmental impacts in the business chains, determining parameters for carbon emissions, waste management and use of natural resources.
This is all to reduce the imminent possibility of scarcity of natural resources and climate threats, therefore, sustainability increasingly gains competitive advantage within organizations.
- Social: matters such as labor legislation, safety at work, human conditions and diversity and inclusion in the work environment.
Therefore, these issues are strongly related to the human capital of organizations in order to boost social inclusion and diversity in the company, as well as an investment in a healthy work environment that directly impacts productivity and better results. - Governance: relates to work ethics and transparency, such as what measures are employed to prevent corruption in the company.
Therefore, good governance practices include transparency mechanisms that contribute positively to corporate reputation, Besides the competitive advantage to the business in the market.
In this way, it is possible to conclude that the ESG has a direct relationship with the fleet management optimization and with the reliability of its customers.
In summary, nowadays the tendency is for companies to prioritize their responsibility more than the products and services offered by them.
Read more: Ensure traffic safety
A great example of this would be in the cosmetics sector, where many customers demand that the products are not tested on animals, are not produced by slave labor in underdeveloped countries and that they are recyclable.
How can ESG be worked on by fleet managers and applied in their management?
To implement ESG in fleet companies, it is necessary to map and document the company's activities and processes. However, it is important to emphasize that the ESG must be a set of practices to be worked on continuously and with specific methods and objectives, not just with isolated issues.
Read more: 7 mistakes you can't make in Fleet Policy
For this, your fleet management must have a well-structured planning of actions and integrate the purpose with the core activity of the company.
Therefore, it is important for the company to define goals to be met by the ESG, as well as to define strategies and make the organization's employees also help to meet them.
An example that is usually worked on at the beginning of these implementations is understanding how save water, electricity and reduce the number of prints of paper documents.
The reduction of Co2 is also a constant debate that has been taking up more and more space in our environment, mainly to reduce the impacts of global warming on our atmosphere.
Another point of great importance for ESG within fleet management is the vehicle demobilization na reverse logistic, that is, how are automobiles that are no longer used by your company disposed of?
Therefore, it is essential to adopt practices that ensure the safe and sustainable disposal of the automobile.
In addition, in the social aspect, ensuring the safety of your drivers while working and driving your vehicles is more than necessary.
In addition, in relation to employees, it is necessary to carry out checks on the turnover rate of professionals. If it is high, it is a sign that something is not right and urgently needs correction, in line with ESG practices at fleet management.
Therefore, ESG practices in fleet management are:
Sustainability:
- Reduction in the emission of polluting gases such as CO²
- Vehicle maintenance and prevention
- Conscious supply and reduction of fuel consumption
Social:
- Reduction in the index of risky behavior in traffic
- Technology to save lives
Governance and Processes:
- Clear and efficient Fleet Policy
- Management of Fines and other indicators
- Safety culture that must be worked on at the base
Those who believe that governance has no role in fleet management are also mistaken, as it is a success factor in any ESG implementation. It is through it that leadership encourages its employees, with a culture that praises values related to sustainability and work safety, for example.
Also read: Understand Proconve and how it impacts your fleet management
What are the benefits of ESG in fleet management?
When implemented continuously and effectively in fleet management, good ESG practices can bring strategic opportunities, mainly as the search for a competitive differential that is aligned with the values of its clients.
In addition, ESG practices are essential for companies that want to maintain a good image with your audience. This can be noticed by the new generations of consumers who increasingly prefer to buy from companies that care about factors such as the environment and working conditions, for example.
Read more: Speed monitoring technology ensures safety and economy
A clear example of this is the cancellation era we are living in, that is, how an improper positioning or attitude can generate a gigantic loss of brand value for the company.
Therefore, companies that use ESG to drive their business are less likely to lose their brand value, even becoming reference in the sector in which it operates. As a result, companies are also able to attract and retain talent.
Finally, the impact of ESG on fleets is such that it generates tangible and intangible benefits to the business, such as:
- Improve financial performance
- Increases investor confidence
- Ensures consumer loyalty
- Increases talent retention and satisfaction
- Reduces costs and waste
- ensures transparency
- Mitigate the risks
- And much more
What are the ESG challenges for fleet management?
Not having a strategy that puts ESG into practice, as well as only having a sustainability narrative in theory leaves the company extremely exposed to risks, since the information that must be included in the ESG report goes beyond the usual financial data and even of sustainability.
In this way, one must reflect the general and honest objectives of your business, as well as the company's vision, mission and values.
However, in order to apply this concept in practice, there are many challenges to be overcome, including:
- Measure the results: measuring the results from sustainable, social and governance actions is still a challenge, which tends to leave companies somewhat in doubt as to whether or not they are suitable for ESG.
- Sustainable development agenda: in relation to 17 sustainable development goals, it is up to companies to define their analysis horizon, track their value chains, maintain assertive communication and assess the impacts of their business, which goes far beyond financial aspects, but which is still an obstacle for many organizations.
- Update: the ESG update in recent years has been huge, even in corporations that already applied their corporate, socioeconomic and sustainable governance practices have not yet entered the new rules related to ESG.
- Awareness: Debates on the ESG pillars must be constant and have a large space during superior decisions, in addition to being deep in the company's organizational culture, so that everyone can be aligned on the same agenda.
- Choice of strategies: it seems simple but it is still a problem, since many companies do not know any ESG practices that can be easily incorporated into the company's routine, such as waste management, for example.
Well, to further enhance your ESG practices in your fleet management, having a Telemetry System is essential, especially in the Social aspect to keep your employees safe.
Also read: Stay ahead of ESG with a fleet management system
Want to know more about how this type of software can help your business? Then get to know Golfleet Telemetry:
