How EVs and the Internet of Things are accelerating ESG action

In addition to compelling safe driving, for example, EV companies might someday wish to steer owners to charge their vehicles back to the grid during peak demand, using cash rewards and other incentives to reboot its renewables strategies.¹ It has every reason to, given investors’ recent stampede into environmental, social and corporate governance (ESG) — which included pouring a record $120 billion into ESG-related stocks last year and awarding the leading EV company a trillion-dollar market cap, dwarfing its five next-largest rivals combined.²

This insatiable hunger for sustainable investments, coupled with impending regulation by the SEC,³ has created a convergence in which IoT is being harnessed to accelerate ESG-friendly initiatives — whether that’s EV competitors racing to electrify or rewiring more energy-efficient homes or decarbonizing the grid. And this, in turn, has elevated the importance of a corporate figure who’s rarely associated with sustainability: the CIO or CTO. Networking cars and heating-and-cooling systems at scale demands their leadership and expertise. 

IOT meets ESG

The IoT can, at times, be as amorphous as the cloud, referring to just about anything with a chip in it. But the IoT-meets-ESG stack might be described as having five distinct layers, starting with the thing itself — whether an EV or an HVAC — then the bandwidth necessary to connect these objects. That’s followed by edge computing to reduce latency and energy consumption, before rising to include the cloud-based services where AI and analytics are brought to bear on the data. Finally, there’s the interface—where users or the device in question are nudged in a more sustainable direction.

This vision has been a long time coming, made longer by one-off projects and proof-of-concepts that squandered nearly a trillion dollars in a phenomenon known as “pilot purgatory.” Most companies start from the bottom-up when they should be starting from the top-down, with a big focus on the business value.

For legacy automakers embarking on 10-figure electrification programs, making that case is simple: How can the IoT help steer consumers away from SUVs toward their new EVs? A key component of selling that switch is assuaging drivers’ range anxiety, or how far they can travel on a single charge. Although advertised ranges are fiercely contested for marketing purposes, they’re typically derived from the car’s basic battery chemistry (along with a healthy margin of error). But combining real-time charge levels with driving speeds, traffic conditions, and weather could yield range estimates with far greater precision—and thus wean customers off of internal combustion engines.