Teresa Sanfeliu, Vice President of Internal Quality, H&S and Innovation at the Applus+ Group, participated in a talk on how ESG is managed in companies and the advantages gained.
She joined contributions from Carolina Castillo, Director of Partners, Microsoft Spain, Mariví Sánchez Jiménez, Director of Sustainability and Communication, the Calvo Group, and Antoni Mansilla, Director of Operations of the group and member of the Logista Management Committee.
Other major Spanish companies joined sessions to discuss ‘the cost of sustainable financing’, with representations from Iberdrola, Repsol, Endesa, Santander, BBVA and Telefónica.
The topic of how covid-19 has affected ESG was addressed by Naturgy, Engie, Enagás, Caixabank, AEDAS Homes and Paradores, while Ferrovial, Acerinox Group, Mapfre, PwC, Siemens Gamesa and Pharmamar analysed the importance of transparency and the social value of sustainability.
The event closed with some conclusions from the forum’s exchange:
- Companies act as a driving force for sustainability, setting an example and placing themselves in the spotlight of society. This is demanded from across stakeholder groups: regulators, investors, employees, consumers and funders.
- In the case of Applus+, ESG is highly integrated. The Group has established metrics and mechanisms to collect ESG information throughout the company, and then define action plans in different areas with an integrated vision. This is taken from a social point of view, because in a service company like Applus+, the employee is key, and also in the environmental field, due to the nature of our activities. These plans are embedded in the company's own management, and their effectiveness is monitored by the ESG Committee.
- ESG is changing the way we look at business. It is important to set two-tier targets: long-term, strategic, and short- and medium-term, more credible and reliable.
- In 2021, Applus+ set concrete ESG targets for the first time. In environmental actions, these targets are linked to emissions reductions, and in social actions, connected to diversity. In fact, our Board of Directors comprise 40% women, one year ahead of the date set by the CNMV. In the area of good governance, we have set ourselves the objective of complying with more than 90% of the CNMV's recommendations.
- Transparency and disclosure of non-financial reports are essential to maintain investor confidence. An annual report is not enough, and more frequent reporting is needed. Auditors will have to standardise their metrics, although there are certain aspects, such as social measures, that are difficult to quantify.
- For a good valuation from investors, all facets of ESG must be covered. Today, the most developed ESG aspect in all countries is the environmental focus, which has been attracting the largest volume of investment for years. It is also the most urgent, due to the climate crisis. The social aspect has also received a strong boost during the pandemic, starting with companies' own employees. A focus on governance is on the rise, as investors increasingly want to be more involved in companies. The role of the board of directors, which is still being shaped, will be key in this area.
- In the Applus+ Group’s TIC sector, there are basic issues, such as credibility and independence, which are linked to good governance and business ethics. The social aspect is also very important, and Applus+ is promoting a digital transformation through different initiatives: administrative robotisation in Human Resources; asynchronous interviews to make selection processes more agile; bots in internal communication to have direct channels with our workers 24 hours a day; equality and conciliation committees that cover 60% of our workforce; university programmes to increase the presence of women, because in the industrial sectors, women have little participation; shadowing initiatives with managers who tutor other women to progress within the company; and pulse satisfaction surveys to encourage employee commitment.
- In the future, investors will be looking for metrics that reveal the social impact of a business, and they will be convinced by explaining how a company generates value. At the same time, sustainability training is needed so that customers understand the value of ESG.
- The pandemic has accelerated some of the ESG aspects. Many of the services delivered by Applus+ were provided at the client's premises. Therefore, during the pandemic, we could not move our technicians, so digitalisation has allowed us to provide services remotely with the same confidence as we would on site. This avoids travel and also helps to reduce the Group’s carbon footprint.
- In the next five years, new business opportunities will be generated with an ESG mindset. Companies will have to increase their value proposition as younger generations join stakeholder groups, with very different value structures and increasing demands for ESG.
- Artificial intelligence and Big Data will be crucial in improving ESG, which will require closing the global technology gap and enhancing aspects such as cybersecurity and privacy.
- Sustainability will require the coordination of all efforts from social agents to create common synergies for a global objective: "Ten years from now, we will all have to be sustainable, or none of us will be. This is unstoppable.”, was the ESG Forum’s closing message.