The term ESG has become quite widespread in the corporate world. Companies that only generate returns for their shareholders, without bringing value to society, without caring for the environment and without ensuring ethical and responsible management, are considered risky companies.
Because it is intensive in the use of fuels and labor, the logistics segment has great potential to implement actions on the ESG – Environment, Social and Governance fronts.
Research carried out by ILOS in 2022 with Logistics Operators (LOs) operating in Brazil shows that most of them (81%) developed a Sustainability Area within the organization.
Companies that monitor specific indicators, with defined goals and objectives, are more advanced in this area. Of the total, 30% of Logistics Operators have these sustainability goals and 19% have incorporated such goals within a broader area, which encompasses different ESG actions.
Figure 1: Do Logistics Operators in Brazil have a Sustainability Area? (% of answers)
Source: ILOS Institute and ABOL - Profile of Logistics Operators 2022
The indicators and targets used may vary from company to company. However, it has become common for large companies to monitor greenhouse gas (GHG) emissions and the use of renewable energy, among other indicators. For publicly traded companies that need to present their results to investors, Sustainability Reports began to integrate Financial Reports and ESG goals also started to be disclosed regularly.
With regard to social actions, safety at work is one of the main items on the sustainable agenda of Logistics Operators operating in Brazil, being on the agenda of 76% of them. This is because the transport activity, one of the most carried out by OLs, can bring risks inherent to the profession of truck driver, such as traffic accidents and cargo theft, important problems that must be fought and minimized in Brazil.
Still in the social sphere, the OLs have sought greater diversity in hiring, as well as hiring members from communities surrounding their facilities.
In turn, anti-corruption actions are on the governance agenda of 72% of the OLs.
As for environmental actions, the search for reduction, reuse and recycling, as well as the reduction of pollutant emissions, is on the agenda of most OLs.
Figure 2: Sustainable initiatives of Logistics Operators in Brazil (% of LOs that carry out each type of action)
Source: ILOS Institute and ABOL - Profile of Logistics Operators 2022
Finally, it is worth noting that there are actions that, in addition to reducing environmental impacts, also bring good financial results for companies. It is about reducing logistical inefficiencies, which potentially reduce the use of fuel and energy without reducing the volume handled. Examples of reducing inefficiencies include optimizing routes to reduce trips, increasing consolidation of loads in the same transport operation, increasing the internal use of vehicles, using the most appropriate modes for each load profile, review of the logistics network, optimizing the location of warehouses and cross-dockings, among other actions that bring great potential for reducing costs in supply chains and are also great allies in reducing environmental impacts.
Companies that seek logistical efficiency will certainly be contributing to make their businesses more sustainable, as well as the environment.
References
ILOS (20/03/2010) - Sustainability is free: an approach to a sustainable supply chain
ILOS (19/07/2022) - Efficiency and sustainability go hand in hand in logistics
ILOS (20/06/2011) - Environmental sustainability in the Supply Chain
JSL - Sustainability
Tegma – Our commitments to the environment
Exam (13/05/2022) - What is ESG, the acronym that has become synonymous with sustainability
This article was published in Technology on 28/10/2022
Maria Fernanda Hijjar
https://ilos.com.brExecutive Partner of ILOS, holds a master's degree and a degree in Production Engineering from the Federal University of Rio de Janeiro (UFRJ). With more than 10 years of experience in the field of Logistics and Supply Chain, working on several projects, management and participation in research associated with the subject. She has more than 20 articles in newspapers, magazines, periodicals and congress annals, being co-author of several titles in the COPPEAD Collection by Atlas publishing house and in the Panorama Logístico Collection ILOS and CEL / COPPEAD.
