Considering Automotive School? Discover The Role Of ESG In The Automotive Industry

The world of businesses is changing right in front of our eyes. As issues around climate change and ethics shift, corporations across industries have been forced to restructure their objectives and leadership practices. The automotive industry is no exception. Not only do consumers prefer companies that prioritize ethics from an environmental and social standpoint but governments are now doling out significant financial penalties for those that fail to comply. For example, you may remember Volkswagen’s 2015 emissions scandal. 

This automaker, known as a household name in the automotive industry, intentionally programmed essential parts to cheat on emissions tests and a major crisis ensued. Executives resigned from the company and efforts to restore Volkswagen’s reputation as an honest, upstanding brand are ongoing. In many ways, the scandal served as a cautionary tale for other automotive companies and many are finding that a strong ESG strategy could have prevented an event like this from occurring. What’s ESG? Keep reading to find out and learn how it might affect your career in the automotive industry.

What Is ESG? 

ESG is an acronym that stands for environmental, social, and corporate governance. It refers to a set of standards that ensure that a company maintains good ethical practices from an environmental and social perspective. Major investors now use a variety of ESG measures to determine the companies they’ll support – and those they won’t. For this reason, companies are developing extensive ESG strategies with clear KPIs (key performance indicators). After automotive school, it’s very likely that your employer will be required to adhere to ESG standards and work toward a range of ESG KPIs. What does this mean for you?

automotive school grad charging an EV
After automotive school, you’ll see that ESG is becoming more important to the success of automakers.

How ESG Manifests In Canada’s Automotive Industry

Likely, one of the first automotive industry developments that came to mind at the mention of environmental regulations is the adoption of electric vehicles. Common KPIs around electric vehicles include zero nitrogen oxide and sulfur oxide emissions from engines. The deployment of renewable energy sources such as batteries and nitrogen have made a dramatic impact on the industry that is unlikely to go away. As a result, avenues for automotive technology training grads to work with hybrid and electric vehicles have opened up.

automotive school grad conducting car safety test
Car safety, sustainability, and the involvement of automakers in politics are ways you may see ESG play out after automotive school.

What about the social dimension of automotive ESG? Safety KPIs are arguably the most important metric that impacts drivers and workers in the automotive sector. To measure their progress in this area, automakers may be required to track the amount of money spent on safety features in vehicles and workplace safety measures. From a governance perspective, automakers are now encouraged to divest their donations to political parties as this is widely considered unethical.  

How  Students In Automotive School Benefit From An Understanding Of ESG 

As an automotive student, an understanding of ESG endows you with an awareness of corporate best practice in your industry. You should know if the companies you work for follow ethical standards as this may have a direct impact on how they’re likely to treat you as an employee. In addition, if you dream of owning a business in the automotive sector in the future, knowing the ethical standards you need to uphold in order to avoid financial penalties and do what’s right for your investors, employees, and the general public will help you to ensure success. 

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