Speeding towards a sustainable future
Despite a growing awareness of sustainability and demand for eco-friendly practices, there remains a notable number of companies that perceive it as a mere 'checkbox' requirement rather than an integral component of sound business management.
However, perceptions are shifting, and business leaders across the entire C-Suite are prioritising sustainability with increased speed and urgency.
The shift is being driven by consumer demand and regulatory pressure
The green revolution is predominantly being driven by two factors: consumer demand and regulatory pressure.
The new International Sustainability Standards Board (ISSB) global baseline proposes Australian Sustainability Reporting Standards (ASRS) to mandate reporting from July this year, initially impacting large enterprises before eventually being required by all Australian businesses. Additionally, the Federal Government has announced strict emissions standards for new petrol and diesel-powered vehicles, planned for introduction from 2025 – as well as upgrades to the quality of petrol sold locally – intended to catch Australia up with Europe and other developed regions.
From a consumer perspective, drivers are calling for more sustainable motoring options. Helped by a higher level of social understanding around the environmental impact of internal-combustion-engine (ICE) vehicles, plenty of buyers are opting to make choices aligned with their environmental values and morals. The automotive and insurance industries have typically been slow to innovate, but the tech is available now, and drivers are calling for sustainable options.
Clearly, there's an opportunity to embrace sustainability to ensure compliance with current and future regulations, avoiding any penalties or legal issues, and for increased competitiveness.
Championing sustainability with used parts
Until now, focus on making vehicles more sustainable has been on electric vehicles but we need to look beyond this to make real progress.
In recent years, the fashion industry has undergone a huge shift, redefining the perception of 'used' clothing as 'pre-loved' and championing sustainability. This shift has not only benefited the environment but also resonated with eco-friendly consumers seeking quality without compromising on their values.
There's a lingering stigma about using quality used car parts, with consumers often associating "used" with inferior quality. But pre-owned car parts don't equate to poor quality and don't compromise safety. They are more sustainable and cost-effective and do the job just as effectively as new parts.
The same revolution must happen in the automotive industry. To do this, the perception of used-car parts needs to change.
The encouraging news for the automotive industry is the foundations for this revolution amongst the Gen Zs already exist. Solera's research shows that 80% of 17-24-year-olds are ready to embrace pre-loved automotive parts, as long as there is a guarantee attached to them, compared to 58% for all other age groups.
Data's role in sustainability
If a business has limited access to vehicle claims emissions data, data silo challenges, and a lack of necessary data analytics skills for informed decision-making, that business will struggle to move forward.
In fact, a Solera survey of decision makers in the Australian auto insurance industry revealed providers are facing significant data challenges, not only in meeting the sustainable demand but also managing new ESG regulations. Specifically, 51% express they need better tracking and management of emissions data and 30% lack the necessary analytics skills to make informed decisions regarding their claims data and sustainability.
This is where data is critical to bringing about substantial, long-lasting change. Because ultimately, reducing carbon emissions won't be possible if you don't understand them in the first place. Data is a powerful ally to the automotive industry looking to green their practices.
The future is sustainable, so it's imperative companies make moves towards sustainability, especially if they want to stay ahead of impending regulations and encourage the eco-conscious to buy their products.
