The race to be a more sustainable society is on — and advanced manufacturing and mobility (AM&M) organizations will play an important role in the transformation. Repositioning environmental, social and governance (ESG) priorities from risk to opportunity is the first step to generate meaningful progress and create lasting growth for all stakeholders.
Why is ESG so important for AM&M organizations today?
The increasing reliance on ESG reporting represents one of the most significant changes in public company reporting since the formation of the SEC nearly 100 years ago. Stakeholders — from regulators and investors to employees and customers — are now defining long-term value in entirely new ways.
What does that look like?
- Regulators are moving to standardize the way companies report against ESG, decarbonization and sustainability overall.
- Shareholders are looking at sustainability through a more value-oriented lens, as important as evaluating financial performance.
- Employees are now factoring sustainability strategies into decisions about where they work.
All of these factors will impact the future of AM&M, as well as top- and bottom-line results for industry players. This is happening at a time when the pandemic has just upended the market itself. Over the last two years, pandemic-fuelled forces have driven tactical change across AM&M operations and accelerated the need for digitization and automation.
New challenges have required AM&M companies to overhaul supply chains from end to end. Companies have had to rethink recruitment and retention strategies to meet market demand. All the while, megatrends around ESG, and decarbonization in particular, have been continuously reshaping AM&M’s broader operating environment.
All this change makes it easy to see why some AM&M organizations might default towards viewing ESG as just one more risk in a long succession of threats. But that would be a mistake. Across AM&M, many organizations have already made more progress than leaders may realize.
Internally, organizations have achieved remarkable progress, improving operating efficiency and decarbonizing at the same time. Externally, AM&M has led the way on innovation, developing lighter-weight products that are a natural fit for a more environmentally conscious world. All this bodes well for the industry. The progress made means AM&M organizations are already well on their way to implementing ESG factors into their risk assessment and strategic decision-making going forward.