Environmental – Social – Governance: How RTLS promotes ESG factors

ESG Factors and RTLS | Favendo GmbH

Climate crisis, energy crisis, economic crisis. Companies of all sizes are increasingly dependent on adapting their work processes and corporate strategies to current developments on the global market in such a way that they remain economically viable and at the same time become fit for the future. Sustainability was, is and will remain a decisive factor, which also includes a well-thought-out digital transformation strategy.

Industry 4.0 has become a popular buzzword in this context, but processes often remain sluggish and fall by the wayside in the daily struggle for budgets and priorities. Real-time location services such as asset tracking, however, could go a long way toward optimizing processes for the benefit of all involved and thus making them more efficient.

ESG is receiving more and more attention by investors

After all, criteria for how companies are evaluated by potential investors, for example, are increasingly being applied where sustainability comes into play. In fact, in addition to conventional rating agencies that focus solely on a company’s financial status, there are now also sustainability rating agencies whose criteria reflect the dimensions of “Environmental – Social – Governance” (ESG for short).

Depending on the industry in which a company operates, environmental, social and governance factors are given different weightings. Whereas an automotive supplier tends to focus on the environment, a service provider is more likely to emphasize social aspects.

Above all, manufacturing companies of all kinds can benefit from an RTLS system tailored to their needs from an environmental perspective. In a first step, a successful RTLS implementation also includes a critical review of the current processes and, in case of doubt, their adaptation. In the long run, nothing makes less sense than setting up an asset tracking system that is detached from – or based on inconsistent – process chains.

In a second step, asset tracking makes production processes and machine utilization transparent. This transparency enables more efficient use of energy and raw materials – more important today than ever before – and, as a result, more environmentally compatible production. In this way, overproduction of semi-finished products or excess stocks of mobile tools and work equipment can also be avoided. Thanks to asset tracking, inventories can be precisely monitored and the location of the required tool, for example, can be called up in real time. Long search times or the need to keep additional material on hand are now a thing of the past. Freed-up time and financial resources can be used more sensibly elsewhere.

The “social” aspect, i.e., the evaluation of companies on the basis of social and societal aspects, comes into play with RTLS systems, especially in the area of occupational health and safety. Person tracking systems enormously increase the safety of lone workers in mining or opencast mining, for example, and can be lifesaving in the event of an accident. Larger evacuation scenarios also become easier to handle with a tracking system. Combined with sensors capable of identifying hazards in the environment (temperature, humidity, pressure, etc.) and triggering an alarm in case of doubt to remind workers to take a necessary break, health protection is also increased during ongoing operations.

Implementing an RTLS system therefore means not only advancing the necessary digital transformation, but also considering points on the increasingly important sustainability scale.