Today’s customers expect more than just delivering the goods on time, rather they expect the companies including the logistics ones to operate responsively, efficiently keeping in mind the Environment and other Social and Governance perspectives.
ESG stands for Environmental, Social, and Governance. It offers a set of guidelines and standards that a company implements in its internal policies to comply with the regulatory standards. And hence, today sustainability is not just a strategy to execute but it's a core part of MOVER operations. The logistics industry is also positively impacted to a great extent by the evolution of ESG compliance. With the logistics sector booming to its maximum potential, complying with the ESG standards will not only be a mere requirement but offer abundant growth opportunities. ESG in India is making companies stand out in this competitive era.
The future of the logistics industry is quite promising with the ESG as companies have a competitive advantage in logistics. For instance, if one logistic company is offering services at an affordable price and also taking care of the environment with the usage of eco-friendly transportation and the other is offering the same prices but not considering environmental needs, then people will be more inclined towards using the services of the first company. This blog will not only answer the importance of ESG compliance but also its transformative involvement with the logistics sector.
Three Pillars Of ESG
ESG is based on three of its foundational pillars Environmental, Social, and Governance. If a company needs to be ESG compliant, it has to abide by all these three pillars of ESG compliance.
Environmental
This criterion focuses on how a company is impacting the environment and what risk management strategies it is implementing to reduce it. Most companies emit carbon footprints and it's very important to manage it. Also, the environmental factor keeps a keen eye on how the company is addressing climate change, toxic chemicals, and other waste being exposed to the environment. In addition to that, how an innovative sustainability effort can bring a change in the environment is being addressed with this pillar.
Social
Everybody must be treated equally in the workplace. The social dimension of the ESG principle focuses on how a company can improve its social impact and relationships. These relationships can be with customers, colleagues, employees, and other stakeholders. This is a major concept that focuses on workplace inclusion and ethics for people of different races and LGBTQIA+ equality.
Governance
The governance section focuses on how a company is being managed and how the entire management is being led to work positively in different situations that come their way. It is more inclined towards corporate transparency and observes that everyone’s rights are getting due importance in the company.
How ESG Is Important For Logistics?
Logistics companies can position themselves as market leaders by setting up benchmarks for sustainable environmental, social and governance goals. ESG is helping logistics go far and beyond their traditional working methodologies and incorporate innovative logistics options to meet consumer needs. ESG is helping the logistics industry to transform its business strategies to cater to the needs of consumers and investors. ESG gives a push to the logistics sector to get more inclination towards sustainable supply chain management. Moreover, for logistics, ESG is more about reducing carbon footprint, adhering to fair labor practices, and enhancing transparency towards business operations.
Logistics companies have a large fleet of vehicles that emit a huge amount of polluted gases in the environment. Nowadays, everyone is using the logistics services in one way or the other. For instance, people use logistics services not only to deliver their products but also while shifting their house by availing the packers and movers services. In this way, logistics has become a part of the everyday life of consumers. So, integrating ESG compliance is of great importance in the compliance industry.
How To Implement ESG Principles in Logistics?
The logistics company needs to go green and implement the ESG compliance principles to stand apart and get a competitive advantage in logistics. Logistic companies can integrate ESG principles in their day-to-day operations in multiple ways. Below are some of the effective ways in which a logistics company can integrate ESG principles.
Design A Well-Defined ESG Strategy
ESG compliance has different meanings for different companies. For the logistics company, the company needs to define how ESG looks for them and what are the goals they want to accomplish. Make sure to go ahead with conducting the materiality assessment and see what are the most relevant issues related to the logistics sector and how they can be implemented in the company's operational activities.
Focus on Innovative Solutions
Logistic companies can go ahead and invest in green solutions like eco-friendly transportation. In addition to that investing in technologies involving energy efficiency in logistics is also a great option to focus on. In the logistics sector, a lot of parcels get transferred from one place to another regularly. Sustainable supply chain management techniques like innovative packaging solutions can also help to clean the environment to a great extent. This will not only minimize the wastage generated from packages but also help in environmental sustainability.
Maintain transparency with the stakeholders
Implementing ESG compliance is not important until and unless there are no improvements made to it. If you are using this compliance technique in the logistics business, you must connect with your customers, suppliers, and other investors to seek their feedback. Once you receive the feedback, you can report the ESG performance and seek ways to improve the performance to meet the customer's requirements.
Challenges Of Integrating ESG with Logistics
Integrating ESG with the logistics is not as easy as it seems to be. Many challenges come in the logistics company's way while integrating ESG with the logistics. Below are a few of the ways that pose challenges in integrating ESG with the logistics industry.
Complex Supply Chain
In the logistics sector, there are a large number of operations that involve dealing with various stakeholders. In the ESG compliance environment, it is very difficult to ensure that every entity in the supply chain follows the ESG standards. This issue can be resolved if logistic companies implement an effective supply chain management system and require only specific ESG criteria to be met by the stakeholders.
Large Implementation Costs
Kickstarting with environment-friendly options like eco-friendly transportation at the first instance is quite an expensive affair. If there is some small logistics company, it becomes a challenge for the company to initially go ahead and start with the big investment. To cut down this issue, financial options can be explored that can assist in investing in eco-friendly solutions.
Extensive Data Management
When it comes to ESG, there is a lot of data that needs to be managed. Managing a high scale of data becomes a tedious task as the logistics sector has a lot of data to handle. If the data is not managed appropriately, it will lead to inaccurate reporting and ultimately customers will lose their trust in the brand. To overcome this situation, logistic companies can go ahead and invest in advanced data management tools that will bring more transparency to the operations.
Ensuring ESG Compliance
For the logistics front, it is difficult to keep a tab that both the ends including consumers and the brand itself are abiding by the ESG standards. It becomes a great challenge when logistics needs to go in the less regulated areas. This problem can be resolved if crystal clear ESG requirements are defined for both parties and regular assessments take place to check if the requirements are meeting or not.
How MOVER is Redefining ESG for Logistics Industry
MOVER, one of the fastest growing parcel and courier delivery apps in India is redefining the business practices to drive the green transformation and embracing the sustainable operations on a day to day basis. Given that 85% of our energy requirements are still dependent on fossil fuel and the transition to the new energy methods like electric, green hydrogen will take longer to get the tangible effect on the transport industry, it is vital for MOVER as well to play its part as a responsible logistic company in India.
Introduction of Electric Fleet in Last Mile Delivery
The logistics industry plays a prominent role in increasing greenhouse gasses with a large number of emissions from vehicles. This has impacted the climate to a great extent. However, most logistic companies are coming up with innovative logistics solutions to fight against this hurdle. We at MOVER are contributing to greener logistics with sustainable operations with electric vehicles. The introduction of electric 3 wheeler loader mini trucks and electric 2 wheelers to perform last mile deliveries for our clients who want trucks rental or chota hathi on rent in Gurgaon or other cities are examples of this.
Adhering To Fair Labor Practices
Implementing fair labor practices is of great importance in any sector. On similar grounds, MOVER uniformalize the pricing for all the driver partners. With the help of technology, we make sure the order fares are disbursed instantly. We also pay the drivers partners the good will amount in case the order stands canceled after the driver partners reaches the pick up location. We ensure that we follow the responsible sourcing and ethical labor standards.
Net Zero Status by 2047 with Sustainable Operations
With tech being the core of everything we do, we want to ensure we get to the net zero status by 2047. We use route optimization in all our delivery operations which means efficiency gains and greenhouse emissions are less. The use of plastic carton boxes and reusable fabric sheets for packaging in packers and movers operations makes our logistics operations sustainable for us and the earth.
What Is ESG Reporting?
ESG reporting is one of the most crucial steps in ESG compliance. ESG reporting in India implies disclosing all the organization’s information related to operations and risks that cover the three pillars of ESG including environmental stewardship, social responsibility, and corporate governance. This report acts as a mirror for the investors to see how their values align with the company’s operations. In addition to that, this will help the investors to see how the company is performing with ESG compliance and how effectively it is managing all the factors of ESG.
ESG scores play a predominant role in determining the economic condition of the company. Investors pay close attention to the report and see whether your brand is capable of getting the investments or not. If a company is not complying with the ESG principles, it tends to get a lower score which shows the investors that the company is not a good one for investment. Many reputed organizations take up the task of assessing the ESG scores so that investors get a clear picture of ESG scores.
The main aim of the ESG data is not only to give a clear picture to investors on where they should invest in the future but also to build a relationship of trust with the company. In addition to that, it brings a lot of transparency to the entire ESG process.
Final Thoughts
The future of logistics in India is quite promising when integrated with innovative ESG principles. These ESG principles will help logistic companies to stand out among others. Moreover, while implementing ESG compliance strategies, they will gain a superior level of consumer trust. Integrating ESG in logistics will bring more transparency and showcase the trust of the customers. Nowadays, logistics services have become a household name. Whether a person wants some urgent parcel to be delivered from one place to another or wants to shift their entire house, logistics services will come to the rescue and hence leveraging ESG compliance will not only make the logistics affordable for the customers but will also protect the environment to a great extent. It's a great time for all the logistic companies to come forward and implement the power of ESG compliance in their business.
