Uniting corporate strategy, ESG imperatives, and stakeholder value in a transformative era

It’s a known fact that the Transportation and Logistics (T&L) is a significant contributor to GHG emissions hence the integration, adoption and building of ESG as part of business and culture of the company is imperative.

Incorporating Environmental, Social, and Governance (ESG) principles into the corporate strategy is becoming increasingly essential in today's corporate landscape.

Incorporating Environmental, Social, and Governance (ESG) principles into the corporate strategy is becoming increasingly essential in today’s corporate landscape. The evolving definition of corporate success now includes not only financial stability but also the impact on our planet and its people. This shift is driven by regulatory requirements, like the BRSR (Business Responsibility and Sustainability Reporting) mandate for top 1000 listed companies in India, and a growing expectation from stakeholders for corporate accountability and positive impact. 

It’s a known fact that the Transportation and Logistics (T&L) is a significant contributor to GHG emissions hence the integration, adoption and building of ESG as part of business and culture of the company is imperative. As India moves towards a GDP of USD 5 Tn, T&L sector will play a major role.  In the bargain, it will end up being a major contributor to carbon emissions and environmental degradation. The global transportation sector, a significant energy consumer, accounts for 25% of the world’s energy consumption and 28% of greenhouse gas emissions, underscoring the urgent need for sustainable practices.

Large freight vehicles in India, despite constituting less than 3% of the vehicle population, have a disproportionate impact, consuming 64% of the nation’s diesel and contributing to 34% of road transport emissions. 

To address these challenges, India is taking proactive steps, including – the adoption of alternative fuels, encouraging multimodal transportation, and investing in Zero Emission Technologies (ZET). However, the transition to sustainable practices faces hurdles such as the high cost of Electric Vehicles (EVs), low volume capacity, and the lack of infrastructure for commercial vehicle charging.

In response to these challenges, TCI’s collaboration with IIM Bangalore to establish the TCI-IIMB Supply Chain Sustainability lab is a notable initiative. This lab aims to empower the ecosystem with tools, research, and solutions for sustainable logistics. The lab’s efforts are part of a broader movement towards embedding purpose within the organizational DNA, balancing financial success with environmental stewardship and social responsibility.

In addition, the focus is on:

1. Fleet Modernization: Transitioning to more fuel-efficient and electric vehicles to lower direct emissions.

2. Renewable Energy: Shifting facility power sources to renewables like solar and wind energy to cut down on indirect emissions.

3. Sustainable Supply Chains: Working with vendors and partners to encourage sustainable practices, reducing Scope 3 emissions.

4. Technology and Innovation: Adopting new technologies & digitalizing operations like billing & POD, contributing to emission reduction.

5. Education and Engagement: Training employees on ESG practices and engaging stakeholders to foster a culture of sustainability.

These efforts promote social well-being and uphold high governance standards, setting a benchmark in the industry.

The task at hand for boards and management is to ensure their strategies are infused with a genuine ‘purpose’ that transcends traditional business goals, connects all stakeholders, an awakening which has dawned upon rather rudely on all nations as well as all enterprises. However, there’s an opportunity to “restore & return” back to nature, society; lay the foundation for the future generations, and make organizations “responsible towards ESG” to the spirit and letter of the word.

Source: Financial Express‍