‘Environment’ – a spotlight on the ‘E’ in ESG
Environmental, Social & Governance (ESG) compliance is a hot topic for organizations globally. This is particularly true since the introduction of the Corporate Sustainability Reporting Directive (CSRD) which has brought many more companies – in the EU and beyond – into the scope of ESG reporting.
ESG compliance requires companies to measure, act, and report on their impact on the planet in terms of safety and sustainability. Here, we look at the “environmental” requirements from a mobility perspective.
ESG, an overview
ESG stands for Environmental, Social & Governance. These are the three “pillars” in an ESG reporting framework.
For organizations, ESG compliance means adhering to the laws, rules, regulations, policies etc, that are in existence around ESG. And ESG reporting refers to the disclosure of information about the company’s operations in relation to ESG.
What ESG laws are in existence?
The most significant piece of ESG legislation is the EU’s CSRD, which requires large companies and listed SMEs to publish reports on their ESG activities. Some non-EU companies must report if they generate over EUR 150 million on the EU market. The CSRD has brought sustainability reporting in line with financial reporting to drive accountability and transparency while promoting sustainable practices and investments.
CSRD is already in force, applicable to the 2024 financial year. This means that the first CSRD reports will be published in 2025, starting with large enterprise companies.
Many countries around the world have now introduced ESG legislation, but because of its size and comprehensive nature, the CSRD is regarded as something of a benchmark. And it’s the CSRD that we use at Greater Than as our point of reference.
Why the focus on the environment?
The United Nations has declared climate change as the “defining crisis of our time” and says it is happening even more quickly than we feared.
Science tells us that climate change is irrefutable. But it also informs us that it’s not too late. With a collective global effort, we CAN make a difference. And technology is at the heart of driving positive change.
Transportation contributes to approximately 20% of total world emissions, and road transport accounts for approximately 75% of transport emissions. Therefore, utilizing technology to reduce emissions from road travel has the potential to make a real difference to climate change. And it’s why the environment plays such an important role within ESG compliance.
How sustainable driving can reduce total world emissions by 2%
Understanding environmental factors for ESG compliance
There are many factors that contribute to a company’s environmental footprint; one of these being greenhouse gas emissions. To comply with CSRD from a mobility perspective, companies need to report CO2 emissions data in line with the GHG Protocol.
The GHG Protocol is the world’s most widely used greenhouse gas accounting standard which sets out how emissions data should be calculated across scopes 1, 2, and 3. This means that, to fulfil ESG compliance, companies need to consider the environmental impact of their own operations AND those across their value chains.
What is meant by scopes 1, 2, 3?
The Greenhouse Gas Protocol classifies an organization’s CO2 emissions into three scopes:
Scope 1: Direct emissions – company vehicles (ICE)
Scope 2: Indirect emissions from bought electricity – company vehicles (EV)
Scope 3: Indirect emissions – travel to/from work and transportation of goods upstream/downstream
For many organizations, scope 3 emissions account for most of their emissions. Therefore, measuring and acting upon their scope 3 emissions can make a real difference to an organization’s overall impact on the planet.
Get started with environmental data for ESG compliance
Greater Than enables you to easily uncover climate impact insights from your existing data to fulfil the mobility requirements of ESG reporting. We do this by using artificial intelligence (AI) to convert your existing GPS driving data (from a telematics system, connected car, app, etc.) into climate impact.
Uniquely, our AI can identify the driver influence on climate impact. In other words, how a person’s driving influences CO2 emissions/ energy consumption, including EV battery usage. And, we can do this across scopes 1, 2, and 3, ensuring you have the climate impact data you need to fulfil ESG compliance.
Leverage quality data to measure, act, and report
ESG compliance is about more than just measuring environmental impact; it’s also about acting to reduce impact and reporting on progress.
Here’s where our AI insights are so valuable. Using only your existing driving data, our AI can uncover:
- Climate impact as a score, % or in absolute grams
- Total CO2 emissions across your fleet or driving population
- Average CO2 emissions per driver
- Avoided CO2 emissions as a result of eco-driving
- CO2 emissions vs benchmarks (e.g. world average, country average)
Thanks to the uniqueness of our scoring, our AI harmonizes GPS data from any source and is agnostic of location or vehicle type. This makes it easy to benchmark performance across mixed fleets and quickly pinpoint areas for improvements to help reduce CO2 emissions and optimize EV battery usage.
Here’s an example of the difference AI can make in measuring environmental impact. In a fleet with mixed vehicle types, a driver of a large truck will always have a higher overall climate impact than the driver of a small car. BUT, the driver of the car might have the least eco-friendly driving style. How do you measure that? Because our AI measures driver influence, it can pinpoint that difference and identify ways for climate impact to be reduced.
Our ready-made solution for ESG compliance
When you use our ESG Compliance Package you get everything you need to get ahead with ESG reporting. This includes the tools to measure your organization’s environmental and social performance as well as the tools to act on it. Not only that, but we compile your organization’s data into ready-made annual reports that can be used for ESG compliance (digital format) as well as marketing (PDF format).
The solution is unique because:
- It measures driver influence on environmental impact
- It harmonizes data across difference sources and service providers
- It identifies areas for improvement
To learn more about addressing the mobility requirements of ESG reporting, including environmental and social impact, please book a meeting with me.
