As the world moves towards sustainability, ESG (Environmental, Social, and Governance) compliance becomes more and more important. The automobile industry is one of the most impacted when it comes to ESG compliance.
The Tech Panda spoke to Dr. Prabhakar Bhangare, Founder and CEO of Global PCCS, a compliance services company that provides IMDS services to global manufacturers to comply their products with specific environmental regulations.
Consultants like us, we will find out the best solution to reduce the greenhouse gases with alternative solutions. We do that by identifying, analyzing, and measuring all the data received from the entire supply chain and whatever data applicable directly from the manufacturer
Global PCCS has emerged as a leader in compliance and sustainability, serving more than 400 companies and training 1000+ individuals for global regulations. The startup, which has worldwide connections and can deliver 100% offshore and on-site services anywhere in the world, collaborates with countries like India, Germany, Tunisia, Turkey, the UK, the USA, Thailand, and Vietnam.
Europe started a regulation called End of Life Vehicle (ELV) in 2000, which became mandatory from 2002. During 2019 and 2020, big OEMs like BMW and Mercedes gradually accelerated the sharing of vehicle generated data with third parties, creating deals with both data aggregators and data marketplaces.
“They wanted to have one common database,” Dr. Bhangare explains.
They developed a system called IMDS, International Material Data System, which catered to the entire automobile industry.
“So that one system is helping the whole automobile industry. Whether it is component manufacturer or car manufacturer, they use the same database. This means they disclose their product ingredients in the database, such as chemicals used in their products, etc.,” he adds.
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Global PCCS is an authorized training and consulting partner for IMD system for seven countries. The IMD system is a global system that car manufacturers must abide by before they hit the roads.
“We are globally recognized by almost every car manufacturer and completed one million man hours last year,” he declares proudly.
To become ESG compliant isn’t an easy task. It’s a massive undertaking that involves gathering data from various sources, identifying and analyzing anomalies and patterns, and then concluding with definite numbers and solutions.
“This data will help us. Without this data, it is a big challenge for every company to comply with sustainability,” Dr. Bhangare explains. “Consultants like us, we will find out the best solution to reduce the greenhouse gases with alternative solutions. We do that by identifying, analyzing, and measuring all the data received from the entire supply chain and whatever data applicable directly from the manufacturer.”
While it’s a functioning system, it requires several man hours and is time consuming. An organization or brand has a lot to do to arrive at what to do to become sustainable. Dr. Bhangare explains how tough modern day compliance can be.
Dr. Bhangare says that one of the biggest challenges for car makers is indirect emissions, which is impossible to control. The Greenhouse Gas Protocol defines indirect emissions as those which are a consequence of an organization’s activities but are owned or controlled by another entity.
“The biggest challenge for OEMs and end producers is that 70% of the emission comes through the supply chain. So, they are directly emitting only 30%, but the rest 70% is coming from the supply chain. That is the biggest challenge. And they do not have a control on supply chain because it is indirect emission,” he says.
Regulations and mandatory requirements in the past were in place to an extent, but not as a sustainable approach. Today, regulations are more towards sustainability.
“Whatever they produce, including their manufacturing facility, they have to make sure they are environment friendly from cradle to grave. So, from the raw material or extraction from mining to production, producing new product, product usage by the end customer and after the usage of the end product, even the end of life of that product should be managed in a more efficient way,” says Dr. Bhangare.
Manufacturers today have Extended Producer Responsibility (EPR), which means the producer is not only responsible for producing but also for ensuring that their products are recycled and recovered so those material can be used for producing new products.
Labelling products to inform consumers is a recent trend and a part of ESG efforts of the producer to create awareness among consumers.
“Before the last ten years or so, I have only seen two products that mention labels like ‘injurious to health’, those are alcohol and smoking products,” says Dr. Bhangare.
Today, it’s common to pick up a product that claims to be 30% or 50% recycled, or a food item that claims to be wholly organic. But how can we be sure that the claim is valid?
“Traceability is missing, which is very important. Whenever a brands claims to be sustainable, there should be a platform to cross check,” he reiterates.
He says this is an area where emerging technology like AI can really help.
In today’s ESG relevant business environment, it’s not pliable to continue to maintain sustainability goals by keeping track of things manually. Technology is helping this sector in a massive way. Global PCCS recently partnered with Credibl ESG, an AI-powered ESG data management software and reporting platform to measure, manage and track data.
“Sustainability is not something you can do manually, you must have some kind of software. That is why we have explored a lot of tools and have recently collaborated with Credibl ESG to use the system for collecting the supply chain database and bring all that data as reportable for sustainability, Dr. Bhangare explains.
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“Also, once you are aware of the level of pollution you are creating from the data, you can prepare for the next ten years. How can I reduce? What are my challenges and what are my opportunities for saving? That data will help us give the right solution to the customer, saying these are the thing you can reduce this way, but these are the alternative solution,” he further adds.
A technology based process helps arrive at an accurate result, which in turn leads an organization to offer solutions for reduction of a car brand’s carbon footprint and greenhouse gases.
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