ESG Within Last Mile Delivery

ESG is a critical acronym for 3 crucial parts of corporate responsibility for businesses: Environmental, Social, and Governance. Each aspect speaks to the business’s wellbeing and has a significant impact on its growth and potential risks.

In recent years, global challenges have been increasing along with the growing awareness of the need for more sustainable and responsible business practices. Some of these challenges include social issues, climate change, and limited resources. Companies are forced to meet financial pressures while also implementing new capabilities to fight some of the challenges arising. Eight in 10 supply chain executives are increasing their sustainable operations efforts according to a 2022 global EY study. The study surveyed 525 executives on their sustainability practices. Executives are realizing it is increasingly important to think about the long-term impact when implementing suitability goals. This includes long-term monetary implications when working to achieve more sustainable results.

In order to set effective ESG goals, data must be at the forefront of initiatives. For example, building a strategy for reducing carbon emissions based on vehicle data. According to the World Economic Forum, reusing and recycling products, improved efficiency, and the use of renewable energy can reduce around 40% of emissions within supply chains. This ties into cloud technology and AI efforts that help give insights into business processes they may not have been looked at otherwise. So, the push for more ESG initiatives in companies gives the opportunity to strengthen many processes as well as add new ones. There will be some tradeoffs and potential cost adjustments, but the future outcomes measure up in achieving more sustainable supply changes through leveraging technology. To achieve ESG standards we can set phases to implement goals through reviewing and testing data. Implementing more sustainable practices can be a daunting task, we can identify how strong ESG initiatives can link to value creation. According to McKinsey & Company, effective ESG compliance links to:

1.       Facilitating top line growth

2.       Reducing costs

3.       Minimizing regulatory and legal interventions

4.       Increasing employee productivity

5.       Optimizing investment and capital expenditures