Disruption usually emerges from various events colliding and bringing forward something that changes the game. Sustainability used to strongly align to ethical principles but would not fit easily with a profit-oriented business. Also, technology would not be able to fulfil the promises given by the sustainability movement.
“TIP sees a unique momentum and the possibility for real disruption.”
Technology has finally picked up. The whole spectrum from data analysis that is allowing insights into non-financial performance to ever improving battery performance. Sustainability is turning into a highly profitable business.
Based on an analysis performed by global consulting company, Boston Consulting Group, top-quartile environmental performers show an additional 3.0 percentage points of total shareholder return. This rationale is apparent – more sustainable companies are trusted to deal better with a rapidly changing business environment and trust translates into enterprise value. The quest for alternative fuels in the transportation industry has only started and opens the door to a vast market. Regulations like the EU Taxonomy are finally defining what sustainable business conduct actually is.
In the future, sustainability won’t be a matter of storytelling anymore but a simple percentage of alignment to the technical standards of sustainability expressed by the EU Taxonomy.
TIP is committed to drive the industry towards sustainability and help customers achieve their environmental targets faster, easier and at a bigger scale.
“There is a difference between progress and movement.”
The foundation for making the green transition a success is to understand what the material subjects are. TIP has performed an extensive multi-stakeholder dialogue to determine the areas in which the organisation can make the biggest contribution to sustainability. It is focusing on carbon footprint, circular economy and corporate social responsibility because these are the matters where materiality has been identified. TIP is committed to its partners and suppliers.
“Data is one of the main tools.”
Once it is clear where the focus should be, it must be translated into tangible information and measurable data.
Gathering, analysing and reporting non-financial data tends to be a significant challenge for any organisation embarking on the sustainability journey. Data often sits in silos, is unstructured or missing. Understanding the data sources and how data is flowing through the organisation is a crucial element. As soon as data enters a dedicated ESG system the mandatory and voluntary reporting becomes manageable.
Voluntarily committing to one of the relevant ESG frameworks like GRI, TCFD, ISSB, etc. allows the best possible preparation for existing or upcoming non-financial reporting legislation like the NFRD, CSRD or the EU Taxonomy. This reduces regulatory risk, which translates into a positive contribution to the EBIT margin between 2-12 percentage points.
“ESG Strategy: for Generations to Come.”
In a next step, the focus needs to be shifted from getting a view to creating a vision. A sustainability strategy is supposed to be based on the materiality assessment and needs to line out tangible quality and quantity driven objectives.
TIP’s ESG Strategy ‘for Generations to Come’ aims at making TIP a carbon neutral organisation long before it will be legally required, reduce residual waste through improved waste management and refurbishment campaigns, improve gender balance in a historically male industry and launching new sustainable products like the electric light commercial vehicles and services like our telematics-based product TIP Insight.
“Building relationships through a shared vision”
Internal and external partners are of utmost importance to turn the sustainability strategy into reality. Partnerships along the supply chain are not only an enabler for change but are also a powerful relationship building instrument.
Therefore, TIP has created an Innovation committee with suppliers, customers and new innovative companies to bring to life the product developments and innovations of tomorrow. As one of the leading equipment services providers, TIP’s duty is to enable customers to achieve their sustainability, efficiency and safety targets faster and greater.
For instance, in 2021, TIP partnered with Unilever, Maxwell and Spark and Daily Logistics Group (DLG) to create a 100 per cent electric reefer engine pilot, the e-cooler. This nine-month pilot in the Netherlands will see diesel refrigeration systems in semi-trailers replaced by zero-emission battery-electric prototypes. This innovation keeps freight chilled at temperatures down to -25°C and will be tested to run entirely on renewable electricity. If successful, it could save 20-25 tonnes of carbon dioxide per reefer trailer annually, with air quality benefits for each vehicle equivalent to taking 70 passenger cars off the road.
“Working towards a more sustainable economy through green finance”
Ultimately, change comes with significant investments and growing a business goes along with financing needs. Utilising green financing options, looking into government subsidies and grants and having an entrepreneurial mindset in any sustainability initiative enable to make the green transition financially responsible.
On 29 July 2021, TIP has successfully amended and extended its existing Revolving Credit Facility (RCF) and additionally raised funding to strengthen the business. The existing Revolving Credit Facility (RCF) was increased from €1,150.5 million to €1,196.75 million.
TIP has added new KPIs to the facility on Environmental, Social and Governance (ESG) to contribute to sustainable development in coming years. The KPIs are focusing on carbon footprint reduction within our supply chain, improving our waste management processes and maintaining gender balance in pay across the organisation. TIP’s progress on these KPIs will manifest tangible margin benefits.
For TIP, it’s not only about the offers. It’s about the entire commitment, from personal involvement to a better waste management to exploring future innovations and providing emission-free solutions to change our industry. Each step is essential to turn the currently ongoing disruption into a triumph.
Based on TIP’s ESG claim ‘for Generations to Come – paving the road to sustainability’ the ambition is clear. Together with our partners, we will once again lead by example.
For further information, please contact:
VP Sales & Marketing
Environmental, Social and Governance (ESG) Director