ESG is more than just a report tool – it’s the results that count

The fallout following the removal of Tesla from the S&P 500 ESG Index in May was always going to make headlines. Even those behind the decision admitted as much when they asked: “how can a company whose self-declared mission is to ‘accelerate the world’s transition to sustainable energy’ not make the cut in an ESG index?” before going on to list their “many reasons” to oust Tesla.

Not surprisingly, what followed was a succession of stories that has reignited the debate around the whole topic of ESG (Environmental, Social and Governance). The headlines speak for themselves.

The Wall Street Journal ran with Elon Musk Calls ESG ‘An Outrageous Scam’ After Tesla Was Removed From Index, while Reuters published an analysis piece entitled Musk’s ESG attack spotlights $35 trillion industry confusion.

The FT was more succinct with its Elon vs ESG splash.

Whichever way you look at it, S&P’s decision has divided opinion. And while some people have been busy taking sides, for others, the news has merely shone a light on the whole area of ESG.

ESG focuses the mind on things other than P&L

Recently, diginomica ran a story that discusses how modern IT solutions – such as cloud computing and the harnessing of real-time data solutions - can help businesses hit their ESG objectives and impact the bottom line.

While another report from a conference in Germany – published before the Tesla / S&P contretemps – revealed one contributor’s “healthy scepticism about ESG reporting” before adding that it was “mixed with a pragmatic realization that at least reporting the data is better than nothing.”

Whatever your personal view, ESG reporting does have its place. Because if nothing else, it brings into focus the good work that is being done to increase the safety, efficiency, and sustainability of businesses – and areas that need more work.

Take the issue of technology - and the impact it’s making in the logistics and haulage industries - especially around the area of safety.

The inclusion of IoT-connected cameras in the cabs of trucks, vans and buses means that fleet managers can keep an eye on their drivers while they’re out on the road.

Forward-facing dash cams can capture real-time footage of what’s happening in traffic and highlight areas such as harsh braking or tailgating.

Real world ESG delivering real world results

Driver-facing cameras embedded with AI can also monitor the behaviour of those behind the wheel, spotting risky traits such as distracted driving – using a mobile phone, for example - or the failure to wear a seatbelt.

And all this real-time data can be sent back to fleet managers in real time and used as part of their ongoing safety initiatives. It may be a neat application of tried and tested technology, but it’s the results that count.

Summit Materials, a Denver, Colorado-based construction materials company with a strong ESG culture, reported a 33% decrease in preventable vehicle accidents when it installed video cameras in its fleet.

Another US-based operator – this time run by Georgia-based Athens-Clarke County - saw a 50% reduction in harsh driving events when it installed connected cameras in its local government vehicles.

The impact of connected technology

When it comes to connected technology helping to reduce accidents and improve the safety of drivers and other road users, the data speaks for itself. And yet, there are still those who remain unconvinced.

A report in the Telegraph recently revealed that Amazon has begun installing AI cameras in its delivery vans in the UK to monitor driver habits. This received a less than welcome response from the GMB Union – which represents around 500,000 workers in the UK – which argued that while it had “no issue” in principle with cameras recording what happens on the road, cameras in the cab, it said, were “a major distraction”.

For its part, Amazon explained that the cameras were introduced to “keep drivers and communities safe” before adding that a similar move in the US had seen a 48% decrease in accidents.

Trust the data

While people are perfectly free to debate the issues around ESG, it’s hard to argue against data such as this and the real impact it has on individual lives.

Indeed, the whole issue is pulled into sharp focus with the recent publication of sobering data by the National Highway Traffic Safety Administration in the US, which estimates that 42,915 people died in motor vehicle traffic crashes last year, a 10.5% increase from the 38,824 fatalities in 2020.

The figures from the US federal agency are the highest number of fatalities since 2005 and the largest annual percentage increase on record. The data also found that fatalities in multi-vehicle crashes were up 16% and deaths involving at least one large truck were up 13%.

If connected AI-enabled cameras that watch drivers as well as the road can help dramatically reduce accidents, then that has to be a good thing. If improving road safety among the logistics and haulage industry is part of a broader ESG strategy, then so be it. For all the words that are written about ESG, sometimes it’s the results that count.