Forget the detractors — ESG makes business sense in the world of physical operations

Forget the detractors —?ESG makes business sense in the world of physical operations?

ESG —?or environmental, social, and governance to spell it out in full — is rarely out of the news these days. Especially after the subject became turbocharged earlier this summer when electric car giant Tesla was ejected from the S&P 500 ESG Index.

What followed was a snowstorm of headlines that only intensified after Elon Musk branded ESG a ‘scam’.??

Since then, opinions have split, and views have hardened between those that share Mr Musk’s views and those who believe ESG is the right way to do business.?

It is against this backdrop that I wrote an article for diginomica — ESG is more than just a report tool – it’s the results that count — that leaned heavily on the publication of Samsara’s inaugural ESG report.?

“Whatever your personal view,” I wrote, “ESG reporting does have its place. Because if nothing else, it brings into focus the good work that is being done to increase the safety, efficiency, and sustainability of businesses — and areas that need more work.”

When it comes to ESG, it’s the results that count

And that’s important because our customers’ businesses revolve around transport and machinery where the safety of their workforce is paramount and there is a real desire to cut emissions.?

In fact, this is something that comes out loud and clear from the more recent publication of our in-depth State of Connected Operations report published in June.??

The key takeaway for many people from that report is the fact that the physical operations —?those businesses and originations where vehicles and machinery are pivotal —?are at a ‘tipping point’ with the new industrial workforce demanding “easy-to-use tools and systems that are in line with the modern technologies they use every day.”

“And as advances in technology make it possible to capture more data from more assets and connect it to the cloud, we are seeing physical operations digitise and transform into connected operations,” said the report, “organisations with end-to-end visibility across their operations that are more efficient, sustainable, and safe.”?

Smart tech is pivotal to ESG success

Efficiency. Sustainability. Safety. Three things mentioned at the end of the last quote.? All instrumental to the ESG narrative. And all essential to the successful running of a modern physical operation. Why? Because it’s impossible to detach all three.?

Using technology to be more fuel efficient by cutting engine idling or lead-footed driving — that’s not just good for business, it’s good for emissions.

Using technology to manage the adoption and operational management of electric vehicles across fleets isn’t just good for the environment, it can make real business sense too.?

And using smart technology such as AI-enabled connected dash cams to improve safety —?it’s a no brainer.?

One of those quoted in the report is Karli Anderson, EVP, Chief Environmental, Safety & Governance Officer and Head of Investor Relations at Summit Materials, which operates in the US and Canada.?

?“To achieve our goal of net-zero emissions by 2050, we transformed how we monitor fuel usage and idling across our fleet,” said Anderson. “Now, we are targeting savings of approximately $1 million per year and a reduction in our CO2 emissions from our transport vehicles.”

ESG makes good business sense?

To me, it speaks volumes because it shows how ESG and good business sense are inseparable. And the message is getting through to a sector that has been criticised for playing catch-up in this area.?

Our Connected Operations report found that while only a third of businesses in physical operations have a sustainability program in place, almost one in three plan to implement a sustainability program by the end of 2022. And nearly all —?nine in ten —?plan to implement one by the end of 2023.?

It’s not just societal expectations driving this change. It’s business sense.?

The issue is no longer around whether or when to invest in sustainability. The question is, how are you going to survive if you don’t??