13. May 2021 Sustainability in the Logistic era

Based on what emerges from the IX Report on the social com­mit­ment of com­pa­nies in Italy, pro­mot­ed by Osser­va­to­rio Socialis, Ital­ian com­pa­nies have invest­ed in 2019 the fig­ure of 1.771 bil­lion in shares of Cor­po­rate Social Respon­si­bil­i­ty and Sus­tain­abil­i­ty, with an increase of 25% com­pared to 2017, and to invest was 92% of com­pa­nies with over 80 employ­ees.
These num­bers bear wit­ness to the increase in aware­ness of these issues, which, due to the sig­nif­i­cant cor­re­la­tion it main­tains with strate­gic choic­es, are increas­ing­ly on the tables of deci­sion mak­ers in the com­pa­ny.

We at Glas­ford Inter­na­tion­al Italy, in the light of the con­sult­ing exper­tise gained over the years along­side entre­pre­neurs, man­agers and heads of com­pa­nies, we are par­tic­u­lar­ly atten­tive in cul­ti­vat­ing reflec­tions and dis­cus­sion on issues that we con­sid­er deci­sive for the val­ue cre­ation for the busi­ness sys­tem. One of these is the sus­tain­abil­i­ty and we have decid­ed to talk about it from one of the more impor­tant points of obser­va­tion: the Logis­tics and the Trans­ports in which we oper­ate through man­dates of Exec­u­tive Search since more than twen­ty years in the sign of cross-fer­til­iza­tion and co-design.
Our Asso­ciate Part­ner Andrea Laman­na inter­viewed Daniele Testi, Pres­i­dent of SOS-Logis­ti­ca, and Gian­fran­co Coc­chi, HR Direc­tor of Stef Italia, with the aim to bet­ter inves­ti­gat­ing what it means for a com­pa­ny to under­take into account ESG issues and what impact and oppor­tu­ni­ties they gen­er­ate for their busi­ness and orga­ni­za­tion­al front.

AL: Ing. Testi, what does it mean for a com­pa­ny that oper­ates in logis­tics today to invest in terms of sus­tain­abil­i­ty? How many are the dec­li­na­tions of sus­tain­abil­i­ty?
DT: The theme of sus­tain­abil­i­ty for a long time has been addressed by logis­tics oper­a­tors as a pure­ly envi­ron­men­tal and eco­log­i­cal aspect. Improv­ing its envi­ron­men­tal per­for­mance meant invest­ing in new tech­nolo­gies (means and infra­struc­ture), with out­lays that are not com­pat­i­ble with the aver­age size of oper­a­tors and with the cost pres­sures to which the sec­tor has always been sub­ject­ed. Only recent­ly, and thanks to some ini­tia­tives such as those of the UN 2030 Agen­da, has begun to decline sus­tain­abil­i­ty on the dif­fer­ent axes includ­ing the issues of social respon­si­bil­i­ty and eco­nom­ic sus­tain­abil­i­ty. This, albeit slow­ly, is con­tribut­ing to a trans­for­ma­tion of the sys­tem and final­ly sus­tain­abil­i­ty is per­ceived as a lever to inno­vate and be more effi­cient, resilient and com­pet­i­tive. Briefly, we look not only at the costs to improve our envi­ron­men­tal per­for­mance but also at all the advan­tages that derive from it on the mar­ket in terms of cus­tomer loy­al­ty, dif­fer­en­ti­a­tion of the offer and risk mit­i­ga­tion. In this equa­tion, accord­ing to SOS-Logis­tics, the asso­ci­a­tion for sus­tain­able logis­tics, born in Italy in 2005, enter two fur­ther vari­ables:
1) poli­cies, which will increas­ing­ly reward vir­tu­ous prac­tices with regard to finan­cial sup­port and oper­a­tional and set­tle­ment rules;
2) con­sumers or ulti­mate ben­e­fi­cia­ries of logis­tics and trans­port ser­vices who will increas­ing­ly require guar­an­tees on the envi­ron­men­tal, eco­nom­ic and social impact of prod­ucts pur­chased through­out the life cycle or from pro­duc­tion to disposal/recycling.

AL: It seems to emerge clear­ly from its analy­sis that sus­tain­abil­i­ty increas­ing­ly meets the strate­gic objec­tives of the com­pa­ny that oper­ates in logis­tics, ori­ent choic­es, cre­ate oppor­tu­ni­ties… What impact does this have on the busi­ness mod­els of these com­pa­nies?
DT: Yes, I con­firm. Final­ly, these issues begin to per­me­ate the devel­op­ment of busi­ness mod­els, ori­ent­ing them towards a more cir­cu­lar and less lin­ear econ­o­my. In this new con­text the oper­a­tors of the logis­tics are called to devel­op new com­pe­tences and a cul­ture of base more sys­temic that is able to bring out the val­ue of the logis­tics and not only the costs and a more sys­temic basic cul­ture that is able to bring out the val­ue of logis­tics and not just costs. The tools are there and can derive from exter­nal ini­tia­tives such as all the reg­u­la­tions relat­ed to Qual­i­ty, Safe­ty and Envi­ron­ment or the cer­ti­fi­ca­tion of Ben­e­fit Com­pa­ny that is based on regen­er­a­tive busi­ness mod­els. Oth­er tools have been con­ceived through a ver­ti­cal indus­try expe­ri­ence, such as the sus­tain­abil­i­ty rat­ing devel­oped by SOS-Logis­ti­ca.
In sum­ma­ry, it can be said that the col­lab­o­ra­tion between the dif­fer­ent inter­locu­tors of the val­ue chain, the objec­ti­va­tion on the results and met­rics shared, togeth­er with the invest­ment on new skills, are the key tools behind the devel­op­ment of sus­tain­able logis­tics busi­ness.

AL: Mr. Coc­chi, with Mr. Testi we have under­tak­en the explo­ration of ESG issues start­ing from the strate­gic agen­da and the oppor­tu­ni­ties that this evo­lu­tion is deter­min­ing on the busi­ness front. In your view, what impact do these issues have on orga­ni­za­tions?
GC: The pan­dem­ic has accel­er­at­ed the need for inno­va­tion and the desire of the entire orga­ni­za­tion to par­tic­i­pate con­scious­ly in the cur­rent change, thus reduc­ing its resis­tance. Becom­ing a sus­tain­able com­pa­ny, espe­cial­ly in our sec­tor, implies first of all a dif­fer­ent cul­tur­al approach, a change of men­tal­i­ty and per­spec­tives that can be real­ized only if to sup­port all this there is a strong com­mit­ment, a strong com­mit­ment and strate­gic vision on the part of the Gen­er­al Man­age­ment, first and fore­most, and the Steer­ing Com­mit­tee, propos­ing new ideas and solu­tions, shar­ing a process that involves the entire orga­ni­za­tion and rela­tion­ships between peo­ple. This has allowed us to reduce the resis­tance to change and feed the flow of inno­va­tion with­in the com­pa­ny. This spec­i­fied, the orga­ni­za­tion­al impacts can have an echo in two dif­fer­ent direc­tions: in the def­i­n­i­tion of new pro­fes­sion­al­i­ty and in new modal­i­ties of work­ing and pro­ce­dures ori­ent­ed to the respect of the envi­ron­ment (paper­less, waste mate­r­i­al recov­ery, work­ing tools with low eco­log­i­cal impact, new real estate approach­es, …)

AL: Also Mr. Testi men­tioned the birth of new skills with­in this sec­tor and in rela­tion to emerg­ing issues. Which pro­fes­sion­al skills are most sig­nif­i­cant in your sec­tor?
GC: Con­trolled tem­per­a­ture food trans­port and logis­tics, a mar­ket that sees us as pro­tag­o­nists, is expe­ri­enc­ing a sig­nif­i­cant and last­ing change that we can also read in the impact that new tech­nolo­gies have in cre­at­ing val­ue through the pro­tec­tion of peo­ple and the envi­ron­ment. An exam­ple of this we read in the evo­lu­tion of the roles of the Ener­gy Man­ag­er and the Envi­ron­ment Man­ag­er who, in a mar­ket and in chang­ing pro­duc­tion con­texts, are con­crete wit­ness­es of this tran­si­tion through their man­date. It is no longer enough to “defend” the com­pa­ny from envi­ron­men­tal risks. They are required to opti­mize process­es, intro­duc­ing new tech­nolo­gies to reduce envi­ron­men­tal impact and ener­gy con­sump­tion. The Ener­gy Man­ag­er, first of all, is respon­si­ble for the Ener­gy bud­get that allows to under­stand the real ener­gy needs of the com­pa­ny and to pro­pose strate­gies to reduce costs and con­sump­tion of the com­pa­ny effec­tive­ly with projects rang­ing from the imple­men­ta­tion and expan­sion of the cap­il­lary mon­i­tor­ing sys­tem of ener­gy con­sump­tion, up to fea­si­bil­i­ty stud­ies for inter­ven­tions and new projects of Ener­gy Effi­cien­cy and sub­se­quent report­ing of sav­ings obtained, with a con­se­quent impact on the income state­ment of the com­pa­ny.

AL: Thank you Mr. Coc­chi. From the priv­i­leged point of view from which we observe the labour mar­ket, I can say that the pro­fes­sion­al fam­i­ly with­in which both the roles you men­tioned oper­ate is becom­ing increas­ing­ly vis­i­ble and sig­nif­i­cant: HSE Man­age­ment is increas­ing­ly a direct report­ing func­tion to the CEO and in some cas­es sits with­in the Man­age­ment Team to the extent that the analy­ses and fore­casts that arise from its obser­va­tion point become cru­cial for deter­mine busi­ness choic­es and, con­se­quent­ly, the orga­ni­za­tion­al ones. I would add, among the roles, the CSR Man­ag­er, a posi­tion, born in the Unit­ed States already in the ’50s but now increas­ing­ly sig­nif­i­cant with­in Euro­pean com­pa­nies and in our coun­try. This is demon­strat­ed by the fact that 35% of Ital­ian CSR Man­agers have a direct report line with the CEO and 44% have only one inter­me­di­ary towards the heads of the com­pa­ny and is a posi­tion that grows both in numer­i­cal terms and in terms of spe­cif­ic skills. If the first pro­fes­sion­al fam­i­ly orig­i­nates from a sol­id technical/engineering/environmental back­ground, the CSR role is a hybrid that draws a lot from the world of com­mu­ni­ca­tion and mar­ket­ing, insti­tu­tion­al rela­tions and orga­ni­za­tion.
The most inno­v­a­tive com­pa­nies, in this sense it seems they are work­ing for the con­sti­tu­tion of a new busi­ness func­tion, the ESG Man­age­ment that seems to rep­re­sent a right syn­the­sis between the two roles, a hybridiza­tion between hard and soft skills that must increas­ing­ly trav­el togeth­er to be able to guide strate­gic choic­es for the gen­er­a­tion of val­ue in the medium/long term.

To con­clude, we are con­vinced that the tran­si­tion we are expe­ri­enc­ing is an unprece­dent­ed oppor­tu­ni­ty. The world is see­ing a par­a­digm shift. Busi­ness­es and orga­ni­za­tions are increas­ing­ly aware of the need to launch a new devel­op­ment cycle that is much more eco­nom­i­cal­ly, social­ly and envi­ron­men­tal­ly sus­tain­able. The ESG prin­ci­ples go hand in hand with the already known Key finan­cial indi­ca­tors to mea­sure the effec­tive­ness of a com­pa­ny and of invest­ing in a com­pa­ny: the time of short-term oper­a­tions seems to be over, and com­pa­nies must have time to imple­ment indus­tri­al plans aimed at cre­at­ing val­ue by plac­ing human cap­i­tal at the cen­tre, mak­ing the most of peo­ple and skills.
Sus­tain­abil­i­ty is not the future, but the present to be built and pro­tect­ed for the future. A future that peo­ple, com­pa­nies, insti­tu­tions must com­mit to real­ize every day to con­tribute to the evo­lu­tion of the sys­tem.
At Glas­ford, we are also com­mit­ted to sup­port­ing the heads of the com­pa­ny as advi­sors in the field of Exec­u­tive Search and issues of orga­ni­za­tion and devel­op­ment, in line with the par­a­digm shift in place.