Previously I have written about the importance of the healthcare, resource transformation, food and beverage, consumption, extractives & minerals processing, renewables and alternative energy, and infrastructure sectors to the 17 Sustainable Development Goals (SDGs). The underlying data for that blog are based on a paper “The Relationship Between Investor Materiality and the Sustainable Development Goals: A Methodological Framework” that I wrote with Professors Gianni Betti and Costanza Consolandi of the University of Siena. A summary of our methodology is provided in my healthcare post. In brief, we mapped the 26 material environmental, social, and governance (ESG) issues (organized in terms of the categories environment, social capital, human capital, business model & innovation, and leadership & governance) in all 77 industries organized into 11 sectors, developed by the Sustainability Accounting Standards Board (SASB), to the 169 targets of the SDGs.  Mapping these issues to the SDGs’ targets enabled us to assess how each industry is creating or destroying value for society while focusing on those ESG issues that create value for shareholders. Based on this mapping we created an index that ranges from 0 to 100.

In this post I will analyze the importance of the transportation sector. It’s overall score is 18.1—compared to 36.0 for food and beverage, 32.6 for healthcare, 30.4 for extractives & mineral processing, 28.4 for resource transformation, 23.8 for renewables and alternative energy, 21.4 for infrastructure, and 20.1 for consumption—putting it the lowest end of the sectors I have written about so far. There is variation with this sector of eight industries. At the top end is automobiles (24.6), air freight and logistics (24.6, auto parts (23.2), and marine transportation (21.2). At the bottom end are road transportation (15.0), rail transportation (13.8), airlines (12.6), and car rental and leasing (9.6).

This sector has its highest impact on three SDGs, all at about the same level: #3 (Good Health and Well-Being-26.7 [nine of nine targets]), #7 (Affordable and Clean Energy-25.0 [three of three targets], and #12 (Responsible Production and Consumption-28.3 [four of eight targets]).  The low rating of this sector is reflected in the number of industries for which ESG issues are material. Three (GHG emissions fuel management, and employee health, safety, and well-being are relevant to five industries. GHG emissions and fuel management are material to the airlines, air freight and logistics, marine transportation, rail transportation, and road transportation industries. Employee health, safety, and well-being is for automobiles, air freight and logistics, marine transportation, rail transportation, and road transportation. Air quality is material for only four industries (air freight and logistics, marine transportation, rail transportation, and road transportation). Waste and hazardous materials management (automobiles, auto parts, and marine transportation) and lifecycle impact of products and services (automobiles, auto parts, and care rental and leasing) are material in three industries. Supply chain management, one of the most common material issues across the sectors analyzed so far, is only material for air freight and logistics. There are 11 SASB issue which aren’t material to a single industry.   The SDGs on which this sector has the least impact are #2 (Zero Hunger-6.9), #4 (Quality Education-6.3), #10 (Reduced Inequalities-9.1), and #16 (Peace, Justice and Strong Institutions-5.4).

There are seven SDGs for which the automobile industry (24.9) has its highest impact: #3 (Good Health and Well-Being-33.3 [eight of nine targets]), #5 (Gender Equality-27.8 [four of six targets]), #8 (Decent Work and Economic Growth-35.4 [eight of 10 targets], #11 (Sustainable Cities and Communities-26.3 [three of seven targets]), #12 (Responsible Production and Consumption-35.5 [four of eight targets]), #14 (Life Below Water-25.0 [three of seven targets]), and #15 (Life On Land-43.9 [six of nine targets]). The six material issues for this industry are waste and hazardous materials management; labor relations; employee health, safety, and well-being; lifecycle impact of products and services; product quality and safety; and materials sourcing). This industry has its least impact on #1 (No Poverty-9.9), #4 (Quality Education-0.0), #10 (Reduced Inequalities-9.1), and #16 (Peace, Justice, and Strong Institutions-8.7).

There are eight SDGs for which the auto parts industry (23,2) has its highest impact. It shares five of these in common with automobiles (#s 3, 11, 12, 14, and 15) at about the same level. Also ranked highly are #7 (Affordable and Clean Energy-34.9 [three of three targets]), #9 (Industry, Innovation, and Infrastructure-33.3 [four of five targets]), and #13 (Climate Action-33.3 [one of three targets]). It also has six material issues: energy management, waste and hazardous materials management, lifecycle impact of products and services, product quality and safety, competitive behavior, and materials sourcing. The reason Climate Action appears for this industry and not automobiles is because the ESG issue of energy management is relevant to Target 13.1 “Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.” This industry has the least impact on SDGs #4 (0.0), #5 (Gender Equality-5.6), #10 (9.1), and #16 (8.7).

image of the logistics, there are container truck, airplane for import export industry | GETTY

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