First event of its type puts forward solid ESG practices and solutions.

Environmental and Social Governance (ESG), as well as Net Zero have been popular topics in the world of business and industry over the last few years. More and more organizations are looking at these concepts and making plans to embrace them as part of their strategy and operations. But how does an industry like the automotive service sector embrace these concepts and implement them successfully across multiple verticals?

To help find some answers, Solera and Simplicity Car Care recently hosted the Automotive Industry Sustainability Summit in Vaughan, Ontario, just north of Toronto.

Successful implementation

The aim of this conference was to bring thought leaders, influencers and executive teams from across the automotive spectrum together and look at ways in which sustainability practices can be successfully implemented in our sector, helping drive a future where business efficiency, reduced waste and minimal environmental impact will ensure a better quality of life for everyone.

Following an introduction by Simplicity Car Care CEO Paul Prochilo, who welcomed everyone to this historic and first of its kind event, the audience got to hear from Helle Bank Jorgenson.

Jorgenson, who originally hails from Denmark but now calls Canada home, is the Founder and CEO of Competent Boards and has been actively involved in Environmental and Social Governance policy and practices for many years. At the summit she provided a global outlook on how sustainability practices are being implemented and how different countries are exploring the concept of Net Zero emissions and looking at ways in trying to achieve these targets by the middle of the century.

Jorgenson encouraged attendees to look at some of the practices that have contributed to the saving of human lives, including the introduction of mandatory seat belt use, which was driven by the insurance industry. “Take a look around you,” she said and “thank a representative from the insurance industry.”

Taking action

Jorgenson stressed the importance of taking action now, instead of waiting, noting that while it can be difficult to see how the issues of sustainability and the climate are evolving, to quote the great Wayne Gretzky, she emphasized it’s important to know “where the puck is going,” rather than where it is right now.

Jorgenson also discussed the importance of collaboration between businesses and industry sectors in order to get things done, noting that the silo approach simply isn’t effective and businesses can no longer afford to utilize such practices, particularly when it comes to issues such as sustainability and environmental initiatives. Jorgenson also noted that increasingly, regulations are being drafted in developed countries that impose stricter penalties on wasteful actions. She talked about Bill Anderson—who famously said, in the future, what I’m doing right now could put me in jail.

Jorgenson stated it was important to understand that the practice of being wasteful and not embracing the concept of a circular economy is simply unsustainable long-term. “We [as a species and our planet] simply do not have the resources to continue doing that,” she said.

Following Jorgenson’s keynote, she served as moderator for a panel discussion that featured Alena Kharkavets, Vice President of Supply Chain Claims at Intact Insurance, Michelle Li, Vice President of Planning, Performance and Business Partnering at Aviva, Paul Prochilo, CEO at Simplicity Car Care and Paul Reichart, Senior Director of MSO and Insurance at LKQ.

Making the business case

Prochilo, whose organization has been actively pursuing a sustainability strategy for several years, noted that the business case aspect of Net Zero is something that really excites him. He noted that while the supply side of the industry, in which Simplicity Car Care Operates (collision repair) has some very strong and outstanding entrepreneurs, Prochilo also stated that today—within SCC’s network—there is this real sense of a guiding coalition among its franchisees and partners. He notes that initially, there was scepticism in creating a Net Zero strategy and that to execute it successfully requires understanding what the business case actually is, and the impact that results from pursuing it including the human, sustainability and economic benefits.

Li, whose organization has committed to Net Zero by 2040, notes that in the case of Intact, this sustainability push cuts across the entire organization and is a key pillar of the company’s entire strategy. “What we’ve really focused on is supplier engagement,” she said. “That activity is really, really important for us.”

Available data

Li noted and the other panellists concurred, that a major factor in determining how successful a key sustainability strategy is, comes down to the data that’s available. “You need to measure what you’re trying to achieve,” she said.

The panellists noted that today, it can still be challenging to find specific, relevant data related to sustainability practices, and pursuing and harnessing that information to gauge the extent of emissions reduction practices is key to making it work long term.

In the overall view of Net Zero targets and greenhouse gas emissions reductions, there are three essential categories—Scope 1, Scope 2 and Scope 3. Scope 1 are those emissions generated onsite by the organization’s own activities which it owns and controls. Scope 2 refers to indirect emissions generated by energy the organization purchases, while Scope 3 encompasses all those emissions an organization is responsible for but actually take place outside its own parameters and are controlled by parties up and down the entire supply chain.

Scope 3, as the panellists noted, currently represent the biggest challenge when it comes to accurately measuring GHG output and finding ways to reduce it, since there are so many moving parts involved and organizations themselves cannot directly control the level of emissions since it is outside their own sphere of influence and rests with each stakeholder that participates in the overall supply chain.

Mandatory reporting

Nevertheless, progress is being made and Reichart noted that in the case of LKQ, the company has not only released its first ever [and highly detailed] sustainability report, but as of 2023 had already seen a 12% reduction in GHG emissions and is moving forward to Scope 3 readiness with mandatory reporting on emissions reduction beginning in 2026.

In summarizing what taking steps now to reduce GHG and create a meaningful, long-term sustainability plan looks like, Paul Prochilo noted that while there is still a lot to understand and a lot of unknowns related to Net Zero, those organizations and individuals that actively commit today will not only challenge the status quo and their cohorts to do better, but also have an opportunity to leave a lasting legacy. “There will not be a day that would bring more happiness to me than knowing a competitor who looked [at our approach to sustainability] and not only found inspiration but also a better way to do it so that [collectively] we all reach Net Zero faster,” Prochilo stated.

Measuring and managing

The final session of the day came from Bill Brower, Solera’s Senior Vice President, Global Industry Relations and North American Claims Sales. Brower focused on how to measure and manage GHG emissions within the collision repair and claims industry.

A key takeaway from Brower’s presentation was that sustainability has become an increasingly important topic across a whole range of industries. Brower noted that growing consumer awareness, means that organizations that are not actively involved in pursuing real environmental and pollution reduction targets, face considerable scrutiny, since both consumers and investors are increasingly, not willing to support or invest in businesses that don’t have real Environmental and Social Governance (ESG) policies and strategies.

In the collision repair and insurance claims space, Brower said having a sustainability score is likely to be a key factor for businesses success in the future. He noted that for example, in the case of a collision centre, the higher the sustainability score, the more likely people will be willing to use or support that business. He noted that Solera has been working on a whole host of metrics that are designed to help the industry understand how much carbon is being generated from activities, including repair versus replacing parts during collision repairs and use that data to look at ways to effectively reduce GHG output.