Organisations Embrace ESG Practices Across Operations For Sustainability

By Nitin Agrawal October 19, 2023

Companies make their warehouses green, which entails using energy-efficient solutions and solar energy for all captive requirements

Organisations Embrace ESG Practices Across Operations For Sustainability
Organisations have also turned their focus to effective management of hazardous substances. Shutterstock

Today, ESG is one of the strategic pillars of every significant organisation so much so that sustainability initiatives are part of companies’ objectives and employees’ compensation schemes. Organisations are incorporating ESG into their long-term incentive structures to ensure that the interests of the organisation, society, and environment are a key part of delivering value to stakeholders. 

Sustainable Product Packaging:  

Firms are turning to sustainable alternatives to reduce the environmental impact of packaging in all phases of the product life cycle. To do so, they are engaging designers, procurers, and suppliers and selecting materials that have a high recyclable content, and/or efficient materials that have a minimal environmental impact from responsible sources. Also, they are using more than 80% recycled paper, and more than 50% of recycled content when using Polyethylene terephthalate (PET) plastic. In addition, they are getting their suppliers on board with their sustainability plans.

Working with Suppliers 

Increasingly, businesses are making suppliers part of their sustainability programme mes by having them commit to sustainable standards and behaviours. These include suppliers’ labour human rights, and the introduction of robust health and safety, environment, ethics, and management practices. Companies are also engaging with suppliers to reduce the latter’s carbon footprint, cut the use of hazardous substances, and solid waste, and manage water better. They are also proactively initiating, developing, and supporting Greenhouse Gas (GHG) emission-reduction activities at supplier sites through partnerships with programme mes such as the Carbon Disclosure Project (CDP) Supply Chain. Furthermore, they are having suppliers commit to Science-Based Targets to reduce GHG emissions. Importantly, they are monitoring supplier compliance through a system of regular audits. And only suppliers who are able to deliver on the sustainability commitments / targets remain on the list as preferred suppliers. 

Targeting Carbon carbon-neutral operations Globally 

Companies are trying to make their - and their suppliers’ - global operations carbon-neutral. This means that GHG emissions from their manufacturing facilities - scope 1 and 2 emissions - non-industrial locations - scope 1 and 2 emissions - upstream and downstream logistics activities - scope 3 emissions - and business travel - scope 3 emissions – are on their way to becoming carbon neutral. Firms are also investing in carbon-offsetting projects to balance unavoidable residual emissions. 

Managing Hazardous Substances Effectively 

Organisations have also turned their focus to effective management of hazardous substances. They are ensuring the safe management of chemicals to minimize the risks to the environment, society, and to their employees. When there are threats to human safety or the environment from chemical elements such as mercury, volatile organic compounds (VOC), and other restricted substances, businesses proactively search for effective alternatives. They are also ensuring that zero waste ends up in landfills and are keeping the recycling rate as high as possible. They're also practising waste segregation, waste awareness and recycling programme mes. 

Building a Safe and Healthy Workplace 

Safety starts at the workplace. That’s why companies are building a safe and healthy workplace by focusing on making injury prevention capabilities at sites reach a capability of zero TRC-total recordable cases. They are also improving safety equipment, warehousing safety, behavioural safety, and identifying hazards and eliminating them. 

Transforming Logistics and Business Travel 

To become more sustainable, organisations are using hybrid and fully electric vehicles for business travel and are cutting down on air travel. They are also engaging in cross-industry collaboration and striving to lower the carbon footprint of their freight transport and investing & partnering with operators using Zero Carbon fuels. For local freights, they are turning to green fuel (CNG and Electric) powered vehicles. Also, they are switching to using 100% renewable energy. 
Companies also making their warehouses green by turning to green warehousing, which entails using energy-efficient solutions and solar energy for all captive requirements. 

ESG factors will play a bigger role in the future - to the benefit of humanity. ESG factor not only help gauge a business's robustness and long-term competitiveness but also drive business growth. Hence, strong ESG scores are synonymous with a well-run and efficient business. Suffusing the world’s supply chains with ESG factors will have a net positive effect on business, the planet, and the life of everyone on Earth.

(Nitin Agrawal, Head of Supply Chain, Signify Innovations India.)