MAKING MOBILITY GREENER

This article is featured on the Worldwide ERC® Mobility blog. 

 Sustainability efforts, inclusive of ESG (environmental, social, and governance) assessments, have become more prevalent within the mobility industry. Over the course of the last several years, sustainability has moved up in the priority rankings, demonstrating a greater urgency for global businesses to understand the impact of relocation programs on the environment.

As concerns over the effects of climate change continue to grow, global mobility professionals have begun to play a more active role in helping their respective organizations achieve both governmental and corporate sustainability goals.

Additionally, more and more organizations are venturing to build sustainability into their mission statements as a means to be more attractive to new talent. To remain competitive in the market, the integration, compliance, and longevity of sustainability practices are crucial.

Green Practices on the Rise

In 2022, Worldwide ERC® released its research report, “The Road to Sustainability,” comprised of feedback from 900 chief human resources officers and senior human resources leaders at multinational firms regarding their plans to achieve their organization’s sustainability objectives. Mounting pressures from executive leadership, customers, and staff have prompted global mobility professionals to engage in sustainability practices on a deeper level.

The report revealed key data points, which drew a strong correlation between intentional sustainability practices and large-scale improvements in the mobility sector. Nearly all research study participants confirmed the existence of a sustainability strategy approved by company leadership. Of those that did not yet have a strategy, over 69% stated that a formal strategy was in the works.

Beyond the breakdown of sustainability efforts among survey participants, the report laid out planning considerations that remain top of mind for global mobility and relocation professionals. The considerations include leveraging supplier networks for additional support in reaching established goals, avoiding major reductions in employee relocations, devising a public policy strategy, and integrating digitalization.

As the world recovered from the COVID-19 pandemic, there came a widespread opportunity to re-evaluate ways to reduce mobility’s carbon footprint. Using paperless file management, relying on hybrid or electric vehicles, and encouraging more eco-friendly housing practices all qualified as tangible steps in giving the industry a greener edge. Moreover, global supply chain disruptions because of the pandemic further supported the need for wider adoption of sustainability practices. COVID-19 proved an inciting incident for leaders to streamline supply chain operations and minimize further operational failure risks.​

[Redacted], vice president of content and research with [Redacted], says that, while complex, there has been more of a concerted effort to calculate the scale of the mobility industry’s environmental impact.

“We work in a very disparate industry, which makes data collection more difficult,” she says. “However, we are consistently doing our own calculations in an effort to track our industry’s carbon footprint in a more productive and accurate way. For example, we know that the hotel industry is laser-focused on this type of in-depth data tracking, but it becomes tricky to discern from the data available when people are using hotels, or alternative accommodations like corporate housing, for leisure versus relocation. That is something we’re looking to refine as we move forward.”

Understanding and Integrating ESG

ESG is transforming the corporate sustainability landscape within the mobility industry; however, many organizations face challenges in determining how to get their footing as they set goals to lessen their environmental impact. The origins of ESG stem from a wave of outside investors who sought to pledge funds to organizations that incorporated sustainability into their business operations.

The integration of ESG has become more prevalent, due especially to the impact of the pandemic. ESG, in conjunction with specific sustainability objectives, keeps organizations accountable for their efforts. It serves as a means to help leaders implement reasonable measurements for their goals, reach specific performance milestones, conduct audits, and ensure compliance. Additionally, ESG acts as a failsafe for business investors, helping them avoid major losses should companies behave in a risky manner, as well as ensures ethical behavior.

[Redacted] says that, for [Redacted], ESG has made its way to the forefront in the company’s strategic planning.

“ESG became a formal initiative for us in 2021and was driven, first and foremost, by several external factors,” she says. “The conversation around sustainability was heating up, so we proceeded to define specific goals for ourselves. Our environmental goal was tied to the reduction of greenhouse gases. Our social goal encompassed intentional action in the diversity, equity, and inclusion space. Despite already being compliant on the governance side, we committed to ongoing relationship-building with our clients, which included protecting their environmental interests.”

According to [redacted], implementing ESG practices improves sustainability outcomes. While many start by instituting sustainability goals, a more practical approach is to establish specific processes to measure progress first.

“Documentation matters,” she says. “Good intentions are important, but companies need to prove that they are doing everything that they can to fulfill their commitments. Get as many of your policies and practices in place, and then it will become easier to identify what can be done relative to sustainability.”​

[Redacted], client services project manager, and [Redacted], executive vice president for the Americas, with [redacted], shared that their organization’s journey with ESG began in 2013. “ESG is important to Altair for many reasons,” she says. “What started as awareness of our own impact has now become a mission. The more we learned about being accountable for what we do in the world, the more interested we became in how we impacted it. Over the last few years, the need for action from all organizations has increased. We want to do our part and inspire our team members, supplier partners, and clients to be aware of what we can do together to make the world a better place in the global mobility industry and beyond.”

As the years have passed, [redacted] has become fixated on improving reporting mechanics to inspire greater confidence when sharing findings with key stakeholders.

“We began reporting greenhouse gas emissions data in 2022 and plan to report even more in 2023,” she says. “We have gone through the steps of awareness, discovery, disclosure, and management, but now we are venturing to share details of our journey with our team members and supplier partners. Our net-zero target, which we plan to publish this year, is zero percent for Scopes 1 and 2 by 2025 and Scope 3 by 2035.”

Measuring ESG

When implementing ESG practices, organizations employ specific measurement units to track progress against their targets. With over a decade of experience in the ESG space, [redacted] has devised an elaborate system to measure advancement toward its goals so that information is readily available to share with leaders and board members.

“At [redacted], our sustainability targets are reviewed and updated quarterly,” Potts says. “This year, we presented our ESG achievements and future goals to our leadership and management teams. We are also in the process of sharing that inspirational presentation with all of our team members. Education and awareness are core tenets of this mission.”

[Redacted] has held a Silver ESG rating since 2013 with EcoVadis, a business sustainability ratings provider, which evaluates the policies, measures, and reporting published by companies concerning environmental, labor practices and human rights, fair business practices, and sustainable procurement issues.

“We are proud to say our overall ratings score has increased every year since we began this process with EcoVadis,” she says. “Since 2019, Altair has provided climate change reporting to CDP, a global disclosure system for environmental impacts. In 2022, our score improved to a B-, which is their Management Level ranking.

Additionally, we received the top score of an A at the Leadership Level ranking in these specific categories: Governance and Business Strategy, Financial Planning and Scenario Analysis.”

While it is important to acknowledge major thresholds of progress, she says that incremental improvement with small, intentional steps is what helps organizations reach their sustainability goals in the long-term.

“Let’s say, for example, we want to start with lower water usage or the elimination of plastics within corporate housing. There are task lists available to help people pledge responsible behavior,” she says. “You can understand what your current greenhouse gas emissions are without an immediate and dramatic reduction. Once you become consistent in your commitments and general awareness, you can measure progress and report out results more effectively.”

Expanding Responsibility to Advance Sustainable Practices

Efforts to improve environmental impact encompass an organization’s ability to involve all employees, not just senior leadership. Companies like [redacted] have developed specific work groups to extend the sustainability conversation and determine the next best steps to advance its goals.

“We formed an ESG Committee, which consists of senior leaders from human resources, reporting, compliance, operations, and supply chain,” she says. “This committee is responsible for determining our net-zero goal based on science-based targets, formulating sustainable development goals (SDGs) in accordance with the 17 SDGs from the UN Global Compact, developing key performance indicators, creating our annual ESG Report, and reviewing and adjusting targets and metrics on an ongoing basis.”

Beyond the larger committee, [redacted] launched individual subcommittees. Since its inception, the company’s Environmental Team has gathered annual data for greenhouse gas emissions (GHG) for Scopes 1, 2, and 3, developed environmental requirements for its third-party supplier partners, and created environmental reporting to be used as part of their annual ESG Plan.

Additionally, they created the Team Member Resource Group LIFE (Lean In For the Environment) in 2022, which aims to raise awareness and inspire action to make positive environmental decisions. [Redacted] has also laid plans to offer training for its supplier partners in and to share updates relative to its ESG journey.

A challenge when aligning expectations between internal stakeholders and suppliers is to keep all parties on the same page. As responsibilities increase for external players, it becomes paramount to establish clear performance standards.

“Having one roadmap that is universally accessible makes set standards more tenable,” she says. “To accurately track progress in our industry year after year, it is helpful to have a certifying body that can confirm these specific standards are being met across the board. While there will always be difficulties calibrating expectations among internal stakeholders, investors, and suppliers, establishing a plan can help streamline integral conversations.”

Preparing for Future Challenges

More and more companies around the world are adopting sustainable practices and employing ESG measurements. However, challenges that currently exist, and those yet to come, support the notion that more effort is needed to preserve the environment on a global scale, due in large part to the steady pace of relocation programs with no signs of reduction.

“We believe that several things can be done to improve outcomes,” she says. “First, more legislation globally, nationally and locally will create mandatory requirements by organizations. Second, we need to see an increase in company requirements for ESG reporting. Lastly, we need to establish a universal method for collecting and reporting data since different organizations use different metrics, standards, and timelines.”

Despite its demonstrated success in aiding organizations in their sustainability journey, ESG remains a divisive topic. Heavily politicized, some organizations exercise restraint when it comes to widespread implementation.

“Some believe ESG to be a burden as opposed to an opportunity,” [redacted] says. “Instead of focusing on the extremes of whether it is a good or bad idea, I think we need to focus on the strategic value that ESG encompasses. We need to divert our attention to what really matters and the positive impact it has on a broader scale, not just in the mobility industry, but every industry.”

As sustainability and ESG continue to permeate strategic planning conversations, it remains clear that there is one shared end goal among organizations.

“There are so many ways as human beings that we divide ourselves into different social constructs—alliances by country or company or even community,” she says. “The one tangible thing we all have in common is that we currently have just one planet we can live on. Utilizing sustainability as a driver in both our professional and personal lives is necessary to get everyone on a united front to make critical change.”