The automotive industry has been challenged to address all elements of its ESG (Environmental, Social and Governance) responsibilities instead of focusing only on the environment.
Dee Hylton, Head of Claims Procurement, Aviva, fears that to many business leaders ESG means carbon footprint and taking care of the planet, and while she agrees this must be an absolute priority she has encouraged a little more attention be paid to the Social side of it.
Speaking at ARC360’s Gaining Ground Together event, which was held at The Manufacturing Technology Centre in Coventry last month, she said, “ESG covers lots of things. We talk about the E, but in terms of the S it’s important to get more women into the sector – not just from a gender perspective but from a diversity of thought perspective.”
She also called for the industry to do more to appeal to a wider demographic in terms of race and age. Facing an extreme skills shortage and with an ageing workforce, she believes the sector is limiting itself by not attracting talent from all backgrounds.
Dee continued, “As an industry, we also need to be a lot more diverse in terms of race and age. We need to focus more on inclusion. The insurance sector has realised it’s not done enough and what it has done, it has done too slow. I want those conversations to take place within the repair sector too. When we talk about ESG, we need to talk about all of it, not just Environment.”
Her comments come after research from the IMI Diversity Task Force found that 81% of the industry identifies as white British, compared to 56% in other industries, while male employees make up more than eight in 10 of the wider automotive workforce.
Supply chain
Dee’s call to action came during a panel discussion – A New World of Supply Chain Relationships – when she was joined on stage by Ulrike Lucas, Head of Practice – Allianz Procurement, Allianz Insurance.
Both agreed that tackling ESG, all aspects of it, relied on complete buy-in from the supply chain and that there were no short-cuts to success.
Ulrike said, “We’ve been talking about sustainability for a long time, but not enough has been done. Now it is becoming more urgent and I think we all realise that. But relationship-building and trust with our repair network is critical because we need to think long-term. Three- and five-year contracts are not the solution.”
Dee agreed: “It’s a long-term commitment to decarbonise the environment and we need to work together to achieve it. We recognised there are challenges so collaboration and communication are really important to help us understand what they are and work together to address them.”
However, while partnerships and a shared approach are essential, Dee said that reducing environmental impact was everyone’s responsibility and each organisation, no matter how small and how far down the supply chain, had to take ownership of their own actions.
She said, “Organisations shouldn’t need insurers to tell them that ESG is important. We are doing it because the planet depends on us getting it right. We’re all polluters and as individuals and organisations we need to think what steps we can take to reduce our own carbon emissions.”
Green parts
One area where the repair sector could and should be doing more is in the greater use of recycled/reclaimed parts. The UK is way behind other mature markets in their adoption, and Ulrike believes that only a lack of willingness is holding it back.
She said, “There are countries that are using a lot more green parts than we do in the UK. Why are we not doing it? There is no reason why we shouldn’t other than that we haven’t done it before. Maybe we’re putting barriers up that don’t exist. If we think it’s because of the customer, our research has found that the customer is actually a lot more accepting than we think.”
In fact, numerous studies have proven that many policyholders are now actively seeking sustainable solutions and would be prepared to pay a premium for them. Dee believes that in response the industry should change its attitude towards green parts and instead of being reluctant to talk to consumers about their usage should positively promote it.
She highlighted how their use is not suitable in every repair for safety reasons and also of the need to make sure their use doesn’t create more rework and cost, but emphasised how green parts are not always second best and there is an abundance of them out there.
Dee said, “The challenge to insurers is to push them more because no one blinks an eye when we buy a used car. It makes sense. My view is green parts also make sense. And if we do use green parts, let’s promote that to our customers and explain that we’re doing it for the right reasons – environmental and economic.”
Customer
Ultimately, the customer will drive the direction of the industry, but providing a helpful steer now and then is no bad thing.
Dee concluded, “The customer always has to be front and centre of our thinking so we can deliver on our promises. Returning them to the position they were in pre-accident is what we’re here for and it’s a shared goal.”
ARC360’s Gaining Ground Together 2022 event was sponsored by GT Motive and OSCA, and supported by ARC360 Corporate Partners: Solera Audatex; BASF; BMS; CAPS; Copart; EMACS; Entegral; Enterprise; Innovation Group; Mirka; Nationwide Vehicle Recovery Assistance; and S&G; along with Partners: Repairify; The Green Parts Specialists; Indasa; and Prasco UK; and Associate Partners: Gemini ARC; Trend Tracker; and Thatcham Research.
