In recent years, there has been a strategic prioritisation of environmental, social and governance (ESG) factors across all areas of business operations and industries. None the least in fleet management.

ESG in fleet management presents a huge opportunity. From reduced carbon emissions to enhanced employee safety, ESG and fleet operations go hand-in-hand. Unlocking an understanding of compliance requirements enables business leaders to set clear goals and make smarter fleet investment decisions.

Understanding environment, social and governance in fleet management

Environment, social and governance in fleet management measure a fleet’s sustainability and ethical impact, evaluating practices such as:

• Environment: Reducing vehicle carbon emissions, efficient routing and eco-driving training.
• Social: Fair labour conditions and worker health and safety.
• Governance: Transparency in emissions reporting and data privacy.

Max Girault, Chief Commercial Officer, Inauro, explains that while ESG compliance reporting may become more rigorous in the future, there are currently no strict guidelines. 

“Compliance is currently a combination of end customer reporting requirements and expectations from stakeholders up the chain of command,” he says. “Understanding client and stakeholder compliance requirements is critical in order to generate the right level of data.”

Depending on stakeholder requirements, there are a range of key compliance drivers for ESG in fleet management. These can include:

• Monitoring and reporting fleet Co2 emissions and setting targets to reduce them over time.
• Choosing vehicles with higher fuel efficiency standards and phasing out older models.
• Establishing training, inspection protocols and telematics tracking to maximise driver wellbeing and accident avoidance.
• Implementing comprehensive sustainability policies – including environment, HR and ethics – across the fleet operation.
• Utilising renewable energy and biofuels and acquiring credits to offset fleet emissions.
• Procuring fleet vehicles and supplies from vendors with sustainable sourcing and labour practices.

Operational efficiency, such as improving fuel economy and decreasing overhead costs, are some of the benefits of ESG compliance in fleet management.

The benefits of ESG compliance in fleet management

There is no doubt that fleet management intersects with climate change, air pollution, driver wellbeing and other ESG issues. The business case for prioritising sustainability is a strong one. Beyond upholding and responding to corporate responsibility values, ESG compliance in fleet management offers tangible benefits. 

Attracting investors and customers

As stakeholders increasingly prioritise sustainability, strong ESG credentials allow fleets to tap into growing pools of impact and ESG-focused investors. It also meets rising consumer demand for eco-friendly vendors. 

Operational efficiency

Sustainable fleet practices help to improve fuel economy, reduce downtime and decrease overhead costs over the long term. These practices include preventative maintenance, route optimisation, vehicle rightsizing and driver training.

Regulatory compliance

Proactively adopting ESG policies ensures agility to comply with tightening emissions rules, fuel efficiency, standards, reporting requirements and other emerging regulations. This avoids potential business disruptions and related fines.

Reputation and brand management

Leading on sustainability and social issues builds consumer trust, employee pride and community goodwill. This is invaluable for a positive brand reputation.

Talent attraction and retention

ESG helps to attract top talent looking for an employer with strong corporate social responsibility and environmental commitment. The social aspect of ESG, including driver wellbeing, also helps to foster employee satisfaction and engagement.

The challenges of ESG compliance in fleet management

As beneficial as it is, implementing ESG in fleet management is not without its challenges. 

Internally, budget constraints and competing business priorities dictate the resources available to implement ESG compliance. A lack of awareness around sustainability best practices can slow action. Resistance from consumers not prepared for the flow on effects of ESG, such as price changes, can also have an impact.

The most significant challenges come in the form of keeping pace with the evolving regulatory landscape. This is compounded by inconsistent reporting standards and access to data and metrics.

ESG helps to attract top talent looking for an employer with strong corporate social responsibility and environmental commitment.

How technology is shaping ESG compliance in fleet management

Technology is an invaluable tool for fleets to benchmark, monitor and optimise their ESG compliance in trucking and fleet management. From accurate tracking of fuel usage, costs and emissions, and other key metrics to identify opportunities for efficiency, telemetry has come a long way. Meanwhile, artificial intelligence and data analytics provide granular visibility into environmental and social impact to drive strategy. 

“Take fuel emissions as an example,” says Max. “While most modern assets have an accessible measure of fuel burned, there is no common standard to represent and report fuel used. This is complicated by the use of multiple telemetry solutions across a fleet.

Max explains that while ESG has always driven the importance of telematics in fleet management, this will only become more prevalent in the future. Technology will enable completely transparent supply chains in the future, placing real-time data in customer’s hands. 

“There is now a greater need to accurately report on ESG to support the social licence to operate and compliance to customer requirements,” Max says.

“This is where a platform like Perspio™ starts providing value. It ensures a common way to interact with these values – or calculate the ones that are missing – to best support reporting requirements.”

Technology is an invaluable tool for businesses to benchmark, monitor and optimise their ESG compliance in trucking and fleet management.

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Interested in gaining clearer insights into your fleet’s ESG footprint? Inauro can assist. Get in touch with our experts today.