CASE STUDY
Environment, Social and Governance (ESG) in the Transport sector
GOAL
Building an ESG framework to keep government contracts.
A removal transport services company in Sydney, reached out to us because their clients have started asking about their sustainability practices. One of these clients is a hospital and has already Environmental, Social, and Governance reporting in place, with goals to reduce environmental and social impacts across their entire supply chain.
To retain these contracts, the company asked us for support to help them understand which sustainability strategies are the best ones to meet government requirements, strengthen stakeholder relationships, and improve their chances for access to green loans.
If you’re looking to see your business take a bold leap, this is the perfect moment to start your environmental, social and governance roadmap.
What small and medium-sized businesses need to know
If you supply to large companies, or even to companies that supply to big corporations, you may be expected to follow certain ESG practices to meet their reporting requirements. As sustainability reporting becomes the norm, smaller businesses that act now will be better positioned to meet client and investor expectations and grow business.
Environmental Practices
Larger clients are now assessing “scope 3” carbon emissions, which include emissions from their suppliers. To stay competitive, suppliers need to manage their emissions and start environmental practices to reduce them.
Ethical Supply Chains
Government clients, like many large entities, want to avoid social issues in their supply chains, including impact areas like human rights, labour practices and modern slavery. Smaller suppliers may be required to share information about their practices to support their client’s compliance.
Climate risks & opportunities
Government, investors and banks increasingly expect businesses to assess their climate risks, which could impact future access to grants, tenders and loans.
Know who is your stakeholders
We began by conducting interviews to assess our client’s current ESG practices. This analysis focused on three key areas to identify gaps, ensure compliance with government expectations, and create a solid foundation for sustainable growth.
Selling to Government
When completing tenders, you may be asked to meet government economic, ethical, social, and environmental objectives.
Areas of focus
1. Environmental Actions
Emissions Reduction
Measure and disclose carbon emissions
Circular Economy
Manage initiatives for refuse reuse, reduce, and recycling.
Plan your route
Identifying ways to track and reduce environmental impacts and set goals.
Climate Risk Assessment Determining exposure to climate-related risks (physical and transitional risks) and strategies for mitigation.
2. Social Practices
Customer & Community Engagement
Building sustainability initiatives to connect with customers and communities.
Employee Training
Educating team members on sustainability practices.
Sustainable Procurement
Prioritising suppliers who align with ethical and sustainable practices.
Diversity & Inclusion
Promote participation of diverse individuals in the transport sector.
3. Governance
Transparency
Reporting annually ESG practices and targets to all stakeholders.
Data Use
Using data to measure and report on key performance indicators (KPIs) related to sustainability.
Board Oversight
Ensuring that sustainability goals are embedded in company strategy and culture.
ESG as a strategic advantage for SMEs
Why start now?
Mandatory Climate-Related Disclosures: Australia has approved climate-related disclosure requirements for large businesses starting in 2025.
Opportunities with the Olympic Games: Companies involved in Olympic projects will prioritise partners with sustainable and ethical practices.
Preferred Partnerships: Big companies will be looking for suppliers and partners that already have ESG actions and commitments in place.
Positioning and Attractiveness: communicate your ESG strategy to win new business, build your brand or attract new customers and employees.
Investor Interest: If your SME is seeking investment, showcasing a commitment to ESG can be a significant advantage.
Attracting Top Talent: By integrating ESG, SMEs can attract and retain employees who are motivated by purpose-driven work, enhancing employee satisfaction and loyalty.
Client Expansion Opportunities: Now is the ideal time for SMEs to open doors to new clients as this aligns with the increasing expectations of corporations focused on environmental and social impact.
Takeaways for Small Businesses
Client Expectations
Government and large clients are increasingly requiring transparency about sustainability practices, even for small and medium suppliers.
Financial Benefits
Having ESG practices in place can improve your chances of getting more clients, as big companies now expect their suppliers to be prepared to meet climate expectations.