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Top Automotive Suppliers’ ESG Reports Focus Mostly on Environment and Little on Governance, New Study Shows

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Top Automotive Suppliers’ ESG Reports Focus Mostly on Environment and Little on Governance, New Study Shows

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Review of ESG reports provides insight to help auto supplier communicators

Most top auto suppliers’ ESG reports focus mostly on the E (environmental) and neglect the G (governance), according to a recent study – “Automotive Suppliers and ESG” – conducted by automotive PR specialist firm Bianchi Public Relations.

Bianchi PR conducted the Automotive Suppliers and ESG study this summer to provide insights to help automotive supplier communicators assist their CFOs and investor relations executives in enhancing  their ESG reports.

Jim Bianchi, president, Bianchi PR shared some of the report’s key insights at today’s virtual Original Equipment Suppliers Association (OESA) Automotive Public Relations Council (APRC) event.

“In this current era of distrust, the more focus suppliers can put on transparency about their environmental, social and governance topics, the greater the benefit will be,” said Bianchi. “Yet, of the 200 specific topics covered in the supplier ESG reports we recently reviewed, approximately 1/3 related to the environment while only 3% related to corporate governance and compliance. So clearly, there is room for improvement in auto supplier ESG reporting.”

Bianchi PR conducted its study in May/June of 2021 by looking at the ESG reports for the top 25 North American auto OEM suppliers, based on the most recent Automotive News ranking.

The goal of the study was three-fold: to create a snapshot in time of auto supplier ESG reporting; to identify commonalities for the auto supplier sector in ESG reporting; and to identify the greatest  opportunities and areas for improvement.

“In this age of impact investing, your key publics – investors, customers, employees, recruits, partners, and others – want to know what your company is doing relative to its progress in sustainability and governance, as well as the environment,” said Bianchi. “But because there isn’t one common standard or format, it’s hard for investors to compare companies. Our colleagues in the Public Relations Global Network recently created the Global ESG Monitor to help investors and others assess the transparency of more than 140 of the world’s largest companies. That report sparked us, as a mobility-focused PR agency, to look at how the North American auto suppliers were handling their ESG reporting.”

During its review, the study uncovered some key insights:

  • There’s a big gap in coverage of the diversity, equality and inclusion efforts, with almost two-thirds of auto supplier ESG reports neglecting this topic. This is a key ESG reporting area that can help a supplier with social cause-motivated investors, automaker customers, employees and recruits;
  • The top North American auto supplier sector has not standardized on a single reporting standard, and many suppliers use multiple reporting standards, which makes it difficult for investors to compare companies; and
  • The top auto suppliers’ reports don’t share a common format or approach – running the gamut from sustainability reports to integrated reports with financial details and from corporate social responsibility (CSR) reports to combined reports.

The study also revealed several other insights, relating to the most and least covered topics, where ESG reports are found, goal- and metric-specific information, and report length.

SOURCE Bianchi Public Relations, Inc.

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