The Automotive Industry Action Group (AIAG) held its longstanding Corporate Responsibility Summit April 28-29, focusing this year on “ESG: Managing Your Corporate Reputation”. The two-day event featured industry speakers from the public and private sectors to address corporate sustainability reporting and best practices. Day 1 focused on environmental management and integration strategies while Day 2 highlighted best practices and insights for social sustainability and responsible sourcing.
Staarsoft® Software’s Sandra Tavares, a regular attendee and multiyear presenter at the summit, once again joined the event, this year through virtual sessions. Tavares identified three areas of key takeaways. By taking a closer look at these issues, all organizations, not only those in the automotive industry, can benefit through better management of their sustainable actions.
With water being a critical resource and increasing demands becoming more difficult to meet, organizations would do well to evaluate their water management practices. Although water efficiency projects may be evaluated in terms of cost to the company, the true cost of water is frequently overlooked. Lara Kelly, an industrial water and wastewater specialist from ARCADIS U.S., Inc., presented to this year’s summit participants a strategy for implementing sensible and economical water efficiency projects — organizations should first calculate their water balance and identify the true cost of water to their operations before determining a Return on Investment (ROI) on potential projects, if looking to reduce water consumption and benefit from savings.
For a practical application of evaluating the true cost of water, automotive leaders from General Motors Company, Ford Motor Company, and Fiat Chrysler Automobiles presented the ways in which their companies are dealing with water management. By understanding water usage in all parts of production and operations and committing to a culture of sustainability, these companies are able to work towards water efficiency targets that meet one of the United Nations’ sustainable development goals — SDG #6 Ensure availability and sustainable management of water and sanitation for all.
The mineral supply chain is critical to automotive production but has the possibility of becoming entangled in unethical behavior. George Cajati, Foreign Affairs Officer from the U.S. Department of State, spoke about the importance of ethics in sourcing materials and the need to have confidence in suppliers. While mineral sourcing may not be applicable to all organizations, following guidelines to vet suppliers is critical in general to avoid inadvertently funding unethical behaviors.
One key way to do this is through the use of blockchain, the technology behind public transaction databases. Jennifer Blair of IBM spoke about the importance that blockchain can have in the advancement of ethical sourcing methods available to industries like the automotive industry. By using blockchain technology, companies can access transparent data on suppliers’ compliance records, making it easier to make ethical decisions.
Another way to assess suppliers was discussed by Traci Madden, Sustainability & Responsible Sourcing at FCA LLC and Rick Comrie, Sr. Manager, Global Sustainability & Chemical Compliance for Cooper-Standard Automotive in their presentation on measuring supplier sustainability. Collection of data to evaluate suppliers can range from simple self-assessments to onsite audits, with remote audits (for the resource challenged) a possibility. Using this data can help organizations to determine the risk associated with supplier activities.
ESG trends and reporting play a role in how investors make assessments. In a panel discussion on this topic with Bloomberg, CalSTRS, and UBS, and moderated by ERM, a representative from Bloomberg discussed the ways investors and corporate peers are leveraging the data for competitive analysis. CalSTRS identified organization-specific material metrics such as water efficiency and environment as being critical elements to the reporting process whereas UBS identified materiality mapping as a useful tool for reporting on sustainability. A key idea to remember however, is that even before meaningful reporting takes place, a Plan-Do-Check-Act (PDCA) approach must be applied to identify relevant stakeholders and their priorities so these can be managed effectively, efficiently, and successfully.
While sourcing responsibly can be an issue, organizations like the Responsible Minerals Initiative (RMI), which was also represented at the summit, can help organizations make smart decisions and improve their reporting. Since non-financial reporting is not regulated well, supply chain information can be difficult to obtain. RMI uses tools such as the Responsible Minerals Assurance Process and the Conflict Minerals Reporting Template to simplify responsible sourcing, provide useful information on supply chains, and make corporate reporting easier.
Managing Corporate Responsibility / Sustainability with Staarsoft® Software
Tavares Group Consulting Inc. (TGC), developer of Staarsoft® Software, has been a supporter of the efforts of AIAG over the years to bring awareness to corporate responsibility and sustainability goals. Sandra Tavares has presented the Staarsoft® Software approach to sustainability management at the summit from 2015 to 2018, speaking on relevant topics such as sustainability implementation, social sustainability, and integration of environment, health & safety with sustainability. It was at the 2017 AIAG summit that TGC unveiled its sustainability software, Staarsoft® Software (a digital version of its Sustainability Toolkit), which has since helped organizations plan, implement, manage, and report on their sustainability programs.
As organizations resume and adjust to a new normal, tools like Staarsoft® can help corporate leaders identify and prioritize stakeholder concerns while continuing their efforts to address sustainability throughout their operations to ensure resiliency and competitiveness — key messages throughout the AIAG CR Summit.
Contact us for more information on our sustainability approach, our consulting process, or for a demo of our Staarsoft® software.