4 ESG Benefits For Supply Chains

Today, investors are increasingly eager to align their portfolios with ESG-related companies, making it an exciting area of growth that also has positive effects on society and the environment. ESG benefits come from the implementation of a good framework developed around the elements of environment, social, and governance. In this article, we will review some of these benefits and highlight how they create value. This is part 2 of our article – “How To Develop An ESG Framework For Transport & Logistics“.

This article is written by Rudi Stalmans and featured in the 2023 Tank Container Supplement of Tank News International. The title of the article in the Magazine is “How To Develop An ESG Framework For Transport & Logistics”.

ESG Benefits: Create value through ESG

Developing and executing a good ESG strategy will result in increased trust, lower risk, lower cost, and more growth. Here are four ESG Benefits to consider when implementing your ESG framework.

Increased Trust – With more stakeholders becoming conscious about the environmental and social impact, companies that address ESG risks and opportunities can improve their reputation, build trust with stakeholders, and attract customers, employees, and investors who share their values. In the liquid bulk and chemical supply chain, service quality, traceability, and health and safety are extremely important to build trust. Partnering with carriers and logistics service providers such as trucking companies that use cleaner energy sources for their operations will support that trust.
Lower Risk – Using good safety and quality management systems and setting clear sustainability-related Key Performance Indicators (KPIs) to monitor progress will help to reduce risk. An ESG framework will support a company’s long-term success by taking steps to lower risks and become reactive in case of unplanned events. The liquid bulk and chemical sector needs resilient and sustainable supply chains to minimize risk. The transport sector should also focus on the selection of sub-contractors and perform regular audits to ensure compliance.
Lower Cost – The transport sector can focus on lower fuel consumption for container and depot operations and reduction of empty container loads, for example. Businesses can also use carbon offsetting programs to reduce their environmental impact and cost. Companies that are compliant with ESG regulations may also see lower taxes and have less risk of getting penalties.
More Growth – A study by Moore Global shows that around 83% of companies placing greater importance on ESG principles reported that their actions had improved customer retention. These actions thus result in more revenues and profits for these businesses. As for the transport sector, newly developed low-carbon footprint logistics services and business models will support growth.

Conclusion

Companies that improve in all areas of ESG will gain easier access to capital and trust from stakeholders. The impact of climate change has become evident during the recent summer months with record-hot weather across the globe, resulting in a greater understanding of the urgency of addressing this challenge. Sustainability is crucial for the world and your action is required.

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