News Article

ESG Investment for Higher Profitability

By Paloma Duran | Wed, 03/10/2021 - 18:43

You can watch the video of this panel here.

Investments in equipment and infrastructure may be seen as an additional expense at the beginning. However, they will turn into savings in the long run. This was one of the conclusions reached during the last panel of Mexico Energy Forum 2021 on Wednesday, Mar. 10, titled “Corporate ESG and Energy Efficiency: Best Practices in the C&I Sectors.” Experts agreed that ESG practices have become essential to companies’ business plans and it is no longer feasible to ignore these issues. The panel was moderated by Elizabeth Mosqueda, Senior Manager at Carbon Trust Mexico, and the conversation also included Mónica Samudio, Country Managing Director at Circutor; Enrique González Haas, Area President at Schneider Electric; Montserrat Batta García, Energy Manager at Continental and Verónica Ordóñez Montes, Innovation and Technology Manager at Soriana.

“ESG practices have paved the way to many opportunities; their implementation will not only bring us environmental but also economic and labour benefits,” said Samudio, who added that implementing responsible energy practices promotes business development, worker safety and much-needed energy investments in this day and age. “Energy efficiency also represents a social contribution: electrical accidents cause 25 percent of deaths at industrial sites worldwide,” she said.

At a recent interview with MBN, Circutor said that it expects to be recognized as the top company to help clients to comply with Mexico’s network code requirements. The company said it can help clients improve their production process and become more cost-effective. Furthermore, the company aims to be a pioneer when it comes to products that meet regulatory standards.

González said that the Mexican electricity system has a solid infrastructure. However, many resources are being wasted, usually by companies that do not know how to use their resources efficiently. He remarked that this problem can be solved, as today the sector has good technologies. “The ideal would be to design infrastructure from the beginning so that it can be energy efficient. However, companies do not always have this vision and choose cheaper options.” If companies incorporate technologies, they can identify and collect data that can be useful to reduce operating costs and improve their profitability. “This is a big bet for companies to make. However, we need a culture change so other companies know that a big investment can turn into long-term savings,” he said.

Schneider Electric has developed an integrated offer of technologies and solutions supporting the transition to a more electric, digital, decarbonized and decentralized energy system. Sustainability is at the core of the company’s business plan and this has been reinforced due to the new challenges brought by the COVID-19 pandemic. González explained that within the company’s five pillars, climate is the No. 1. In 2019, the company announced its commitment to carbon neutrality with three new actions: “accelerating its 2030 goal of carbon neutrality by demonstrating carbon neutrality in its extended ecosystem by 2025, achieving net-zero operational emissions by 2030 as part of validated SBT target and engaging with suppliers toward a net-zero supply chain by 2050.”

Ordóñez explained how the company has become a good example when incorporating ESG practices. “We have achieved energy efficiency by analyzing consumption, making a plan and managing it while monitoring energy use.” She agreed that the main challenges to incorporating these practices is that from the outside, they can be seen as an investment that might not generate short-term benefits, something that did not happen at Soriana.

Batta García concluded that to obtain effective results, the key to success is to have teams with specialized people. “You have to train the team to commit to ESG practices, as they will decide how to incorporate these practices into the company's business plan. We, as a company, have a responsibility to put the best of our talent at the helm,” she said.

Montserrat Batta García, Continental's Energy Manager, concluded that in order to have effective results, teams with specialized people are the key to success. The team must be trained to become committed to ESG practices, since they will decide how these practices are incorporated in the company’s business plan. “We, as a company, have a responsibility to put the best of our people in charge. "

At Continental, there is a group responsible for sustainability management, which promotes and monitors the implementation of sustainability strategies and their impact. The company is convinced that a sustainable and responsible business approach increases the company's ability to meet the needs of the future. Its approach includes market analyses, customer discussions and a stakeholder survey. Continental strives 100 percent of carbon neutrality in its entire value chain, emission-free mobility and industries and responsible sourcing and business alliances, reported the company.

Paloma Duran Paloma Duran Journalist and Industry Analyst