Transportation increasingly integrated with ESG criteria

The role of companies in society has evolved greatly over time, especially in recent years, in which companies, whatever their sector, are required to make a greater commitment to their environment, mainly in terms of sustainability. As a result, their activities are constantly under review, whether by institutions or by citizens themselves, who are increasingly concerned about the role companies play in the environment.

What is the ESG?

With that in mind, it is essential that we understand the importance of ESG (Environmental, Social, and Governance) criteria in companies, creating a new paradigm in organizations at the beginning of the 21st century.

To some, ESG may sound strange, while others have been applying it for some time, but the truth is that it is a premise that has been used since the end of the last century, coinciding with the publication in 1994 of John Elkington's book 'Cannibals with forks'. In it, he stressed that companies had to start being accountable not only for its economic impact but also for its environmental and social impact.

Why is ESG relevant to a company?

The concept has become increasingly relevant becoming a central theme for the UN. But what exactly does each of the contents refer to?  

  • E for Environmental: refers to companies' management of its direct and indirect environmental impacts, care for the environment, biodiversity,  look for reducing the global CO2 emission sources, climate change, and its contribution to a decarbonized economy.  

  • S for Social: the management that companies make of the people who form part of its teams, as well as suppliers, in the promotion of decent employment, equal opportunity and work-life balance policies, training, respect for human rights, and the prohibition of child labor.  

  • G for Governance: companies' commitment to good governance, codes of ethics and conduct, transparency and anti-corruption of the board of directors and the management team.  

ESG has gained relevance as CSR (Corporate Social Responsibility) legislation has increased. Moreover, in recent years new needs have become apparent, such as a greater need for transparency, derived mainly from the 2008 economic crisis, in which various pressure groups, from financial institutions to citizens themselves, began to demand more detailed explanations of their activities from organizations to avoid repeating situations like the one experienced then. That is why a good ESG policy should give companies a differential value compared to the competition, as well as help to prevent possible risks associated with activities in environmental, social, governance sectors, or employee management issues. These companies are more attractive to new talent, as well as to investors, who in recent years have been demanding greater commitment from companies to curb and mitigate climate change, drive the transition to a decarbonized economy, and contribute to addressing social challenges as well as reducing inequality.

How to integrate ESG criteria in a transport company?

Before moving on, we should emphasize that the application of ESG criteria is not only reserved for large corporations but can be carried out by any small company. To do so, it must have a team responsible for ensuring that the actions implemented are successful, establishing a sustainability plan that covers all the topics mentioned above and that constantly monitors them.  

In that sense, a simple step is the reduction of CO2 emissions. Many factors come into play here but one of those that can play a major role in leveraging resources is the use of intelligent systems. Such software can help to reduce empty kilometers, optimize routes and, as a result, save fuel and  carbon footprint emissions.  

This is where freight exchanges such as Teleroute come into play. By connecting supply and demand  and  ensuring carriers in need of cargo are travelling fully loaded, Teleroute not only reduces   costs to its users but also promotes a greener option of load moving.  Having access to this information means a transport company's daily activity can be managed more sustainably, with multiple alternatives for procurement, thereby reducing the distance traveled without a load.

Moreover,  the use of such tools saves search time, as it is fully customized, and also guarantees in real-time the choice of a route that will be fully efficient. And latest, but not least, is vital that companies must count with an accident prevention and employee welfare, promoting accident prevention programs to emphasize safety, strengthen Pillar S (social) and confirm its role as a transforming agent in society.

The world is already moving towards a more sustainable reality. And road freight transport is no exception.