Technology to improve ESG strategies in the industry
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The acronym ESG (Environmental, Social and Governance) was used for the first time in 2005, in the report “Who Cares Wins”. The material was written by the UN Global Compact (United Nations) and has been conquering space in the media and industries in the last couple years.
The concept of ESG in the industry refers to efficient management practices based on environmental and social standards and good governance parameters. It seeks to find ways to balance these three pillars, which can be applied in multiple areas, in different ways. According to the Vanzolini Foundation, to implement ESG the industry must integrate it into the core business and culture of the organization.
In terms of the Environmental aspect, the actions are taken based on the promotion of sustainability. This is reflected in the way the industry makes use of natural resources and how its operations impact the environment. As an example, there’s:
- Definition of the waste destination, prioritizing recycling;
- The use of environmentally friendly materials in industrial products and processes;
- Develop reverse logistics systems;
- Carry out a conscious extraction of raw materials;
- Participate in programs that contribute to the preservation of the environment;
The social part evaluates the industry’s relationships with its employees, suppliers, and the community where it operates. It is necessary to think of actions that meet people’s needs. Here are some examples:
- Invest in education and training programs.
- Promote diversity and inclusion among employees.
- Work in partnership with NGOs.
- Assist financially in programs that contribute to the development of society.
Finally, the Governance aspect analyzes the company’s management, not restricted only to the financial area. Thus, it’s possible to:
- Develop strategies to combat disrespect.
- Application of transparent and collective work methods.
- Implementation of efficient management, which reduces waste and improves the industry’s productivity and routine.
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Brazil stands out in the implementation of ESG practices
As discussed, the incorporation of ESG practices in industry is essential to guarantee a sustainable future, and for this reason its application is growing in Brazil. According to the “ESG Panorama 2024” (2024) study, 71% of Brazilian industries have implemented or started the implementation of some of these ESG actions. Among them, 26% declare themselves to be “innovative” or mature in the face of these issues, while the others (about 45%) are in their initial stage.
Also, according to this same study, the main reasons for adopting ESG practices in industry are environmental and social commitments. In addition, the willing to improve the corporate image also plays an important role in this decision. This information only proves that sustainable actions are a trend and will be successful in the long run.
According to a survey by Deloitte (2021), Brazil is ahead in terms of the use of sustainable materials and raise awareness on the impact of climate change. Despite the highlight, that doesn’t mean the rest of the world isn’t concerned about environmental issues.
In Latin America, in general, there has been an increase in the inclusion of ESG practices in the last few years. According to the McKinsey & Company, this countries are most severely exposed to heat waves, humidity, droughts, and ecosystem degradation. This greater vulnerability to climate change intensifies efforts to change the current scenario.
Also, according to the same website, actions related to Equality, Diversity and Inclusion (D&I) were identified as the main focus of ESG strategies in Latin America. The list of good practices continues with carbon footprint reduction, workforce readiness and circular economy. Thus, to assist in the consolidation of this sustainable environment, government agencies have created tools and programs that ease in this process, as seen below.
ISO 50001: one of the paths to efficient energy management
The ISO 50001 is an international standard that provides a framework for organizations to manage and improve their energy performance. It can be implemented in industries of different maturity levels, which use various sources of energy, from electric to gas. Its guidelines were incorporated into the National Energy Efficiency Plan (PNEf), as a mechanism for saving consumption, and the National Energy Plan 2030.
In Brazil, it is represented by ABNT and its application in industries follows a structured process, which includes:
- Context analysis, to understand the needs and expectations of stakeholders, determine the scope and structure of the EMS (Energy Management System);
- Establish a commitment to leadership, define energetic policy, responsibilities and authorities;
- Set energetic goals and plan to achieve them;
- Manage the use and consumption of energy through systems, communication and documented information;
To achieve the defined goal, the standard focuses on the search for continuous improvement, and uses two basic tools for its implementation: the PDCA cycle of the quality area and the level of energetic consumption of the thermodynamics area. The figure below illustrates how this process works:
Copyright PDCA cycle according to DIN EN ISO 50001
Any organization, regardless of its energy management domain, can implement it to establish a baseline and improve it at an appropriate pace. This is done context-independent, which means there are no goals. It does not set absolute energy performance requirements beyond those set out in the industry’s energy policy and its obligation to comply with legal requirements. Thus, two organizations carrying out similar operations, but with different energy performances, can both comply with their requirements (ABNT NBR ISO 50001, 2011).
ESG: sustainable practice that brings positive results
According to Bureau Veritas (2020), a French company specializing in inspection tests, ISO 50001 certification leads to up to 30% better energy performance. In addition, the same institution also estimates that the standard will have a positive impact on 60% of the world’s total energy consumption. The benefits of this standard have encouraged the Brazilian Government to create several programs and initiatives aimed at energy efficiency and sustainability.
The Energy Efficiency Program (EEP) aims to promote the efficient use of electricity through the installation of technologies and different routines on a daily basis. Also, focusing on industry, there is the Brazilian Labeling Program (PBE) – which classifies products according to energy efficiency – and the Electricity Conservation Program (Procel).
Initiatives like these encourage the industry to produce and costumers to choose more efficient products that consume less energy. According to Sebrae (2023), Procel’s actions to label products that use electricity produced savings of 23 TWh (4.87% of electricity consumption in 2018).
In addition to the financial and environmental gains, the efficient use of this resource also has an impact on other areas. The American Council for an Energy-Efficient Economy (2022) shows that a 15% reduction in annual energy consumption would result in 2,190 lives saved. These data reinforce that the programs bring many results, positively impacting the entire environment.
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Data science as a key element for sustainable development
The implementation of these standards and programs reduces the emission of greenhouse gases, the energy cost, among other environmental impacts associated with energy management. ISO 50001 also helps with the issue of organizational transparency and facilitates communication in the management of energetic resources. It serves as a basis for evaluating and prioritizing the application of new effective technologies that allow integration with other systems.
To know if production is running within the goals and objectives set, the industry must install systems for monitoring and measuring indicators. This installation is considered as a prerequisite of the standard.
To this end, one of the options is the implementation of solutions that allow the collection and analysis of data. From this data, it is possible to better understand the patterns and assist in decision-making process regarding energy use and consumption. This type of digitalization also provides the opportunity to review the effectiveness of the current cycle, through the history data available, which enables the industry to achieve continuous improvement.
As previously mentioned, these technologies allow integration with other systems, and can also be used to monitor other types of raw materials, such as water. Intelligent monitoring of this resource in a beverage industry has resulted in its more efficient use, causing less waste.
Like ISO 50001, data culture can also be implemented in industries with different levels of maturity. This standard is just one of the examples of how ESG actions can be executed, as explained at the beginning of the text. Through digitalization, it is possible to discover and exploit various improvements that contribute to sustainable development and raise the industry to another level of productivity. Learn more about ST-One.
