Why ESG is Crucial for Sustainable Growth in the Wires and Cables Sector
Author : Manisha S | Published On : 06 Nov 2023
Sustainable development of society and advancements in renewable energy in the wires and cables industry have revved up the transition to a greener world. The energy crisis in Europe, with fluctuating supply and high prices, has compelled leaders to invest in renewable energy generation and rigorous climate action. According to IEA, EU electricity demand dipped by 3% in 2022, alluding to an avoidance of 14 bcm of gas demand. In September 2022, Eurostat reported that consumer electricity prices in the EU were 35% higher compared to the preceding year. Bullish demand for high-quality cable solutions will encourage industry players to invest in ESG goals.
The promotion of diversity and inclusion has ushered women into leadership positions. Many sites traditionally dominated by men have witnessed a paradigm shift. For instance, NKT has set an audacious target of at least 30% women in senior leadership positions in 2025. In essence, women contributed 22% of the company’s senior management roles in 2022. These visible initiatives have amped up the confidence of stakeholders to bolster their sustainable business operations.
Key Companies in this theme
• Belden Inc.
• Fujikura Ltd.
• Furukawa Electric Co., Ltd.
• Leoni AG
• LS Cables & System Ltd.
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Environmental Perspective
Decarbonizing energy generation and enhancing energy efficiency have become pivotal to fostering an environmental profile. Concerted efforts to reduce emissions and foster clean energy could mark the beginning of a roadmap bolstering environmental performance. For instance, in FY 2021, the Fujikura Group performed activities to minimize CO2 emissions by 4% or more vis-à-vis FY 2018. In 2016, the Japanese company built the Fujikura Group Environment Long-term Vision 2050, acknowledging the Paris Agreement adoption and the goal to minimize CO2 emissions by 80% by 2050. It has also set the goal to achieve carbon-neutral plants by 2050. In pursuing increased RoI, environmental sustainability will remain paramount across the business vertical.
Social Perspective
Sustainable development has garnered headlines with the need for fair, inclusive and diverse work culture, irrespective of gender, disability, ethnicity, neurodiversity or orientation. Industry players are likely to prioritize work-life balance and gender equality to enhance well-being and boost mental health. LEONI is gearing up for women to account for 20% of senior management positions by 2030. It is contemplating reducing its global accident rate to 0.3 by 2023 and expanding local health protection projects by 2025. Leading players are poised to emphasize a safe and comfortable work environment full of diversity. Wires and cables manufacturers are expected to prioritize occupational health & safety, human rights, corporate mentorship programs and talent attraction.
Governance Perspective
A sound corporate governance structure with transparency and ethics & compliance has become fundamental to sustainable growth. Ethical behavior has become paramount for data ethics, cyber security and combating bribery and corruption. Predominantly, Belden has set an audacious goal of achieving an understanding of the Code of Conduct from 100% of global non-productive team members. In 2020, the company formalized ESG’s board oversight; its ESG Steering Committee is responsible for ESG procedures, practices and other aspects. The company has taken a giant stride in fostering board diversity. In 2023, the St. Louis-headquartered company appointed a new Vice President of Diversity, Equity and Inclusion to create and strengthen an environment of equity. Promoting a company culture that prioritizes employees, customers and other stakeholders with sustainability goals will stay ahead of the curve.
Wires and cables manufacturers and suppliers have created a forward-looking approach towards business ethics and environmental goals through a strong ESG roadmap. For instance, Hellenic Cables is committed to achieve net-zero GHG emissions by 2050. Besides, in 2021, it donated cables for infrastructure needs to institutions, including Municipality of Loutraki, Local Government of Evia and Municipality of Corinth, among others. These trends favor Grand View Research’s projection of the wires and cables market growing at a 4.4% CAGR between 2021 and 2028.
About Astra – ESG Solutions By Grand View Research
Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.
Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.
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