Automotive and ESG were the two most frequently heard terms during the regional innovation platform “Smart Mobility”, hosted by ZF Engineering’s headquarters in Pilsen last autumn. The event, part of the Pilsen Region Smart Accelerator III project, brought together representatives from research, manufacturing, educational, and public institutions. It was an opportunity for their presentation and mutual inspiration. Smart mobility is one of the five domains of specialization defined in the Regional Innovation Strategy of the Pilsen Region.
The automotive industry is currently undergoing major changes, and more are to come. The Drive2Transform project, which was presented by the consultant and project manager Filip Tikal from the Regional Development Agency of the Pilsen Region, is intended to support the transformation of this sector. “The project is now at the beginning. It has been developed on the basis of trends, such as the Green Deal, new technologies, and also global competition, and there are nine entities from eight countries, from Germany to the Czech Republic and Slovakia, working on it. The aim is not to map the situation in the countries as a whole, but only in certain regions, in the case of the Czech Republic, just in the Pilsen Region,” he said.
The target group of Drive2Transform are automotive companies, while focusing on the four key sectors of Electrification, Connectivity, Automation, and Economy. “Thanks to the companies that have decided to participate in the project, we can analyse their problems and concerns, and then set up a platform all across Central Europe. Of course, mapping the problems is not enough, we also count on an active component and the involvement of experts from the fields of education, research, and human resources. Ten companies from the automotive industry, and three entities from the business support sector from the Pilsen Region, have joined and responded to a 25-question questionnaire assessing the current state and the outlook, strengths, weaknesses, opportunities, and threats,” continued Filip Tikal, adding that the host, ZF Engineering, is also among those involved.
The threat to automotive firms in the Pilsen Region is specific, as they often produce parts and accessories that are not part of, for example, the engine or fuel system. Therefore, they are not, for example, threatened with a downturn due to electrification. “It has turned out that the companies are most concerned about the enormous increase in inputs, i.e. energy, material, and HR costs, coupled with the lack of qualified employees,” Filip Tikal added, noting that the firms also lack a transformation strategy.
Despite all that, the automotive industry remains a pillar of the domestic economy and, according to the data of the Automotive Industry Association, AutoSAP, it accounts for over 9% of the Czech GDP. In the Pilsen Region, there are 38 entities, with more than 50 employees, whose products are used in the automotive industry, most of whom also employ more than 100 people, which makes them relevant for the region, in terms of the labour market too.
A major challenge and a question to be answered for the automotive sector is the ESG (Environmental, Social, Governance) legislation. It assesses companies’ impact on the natural, social, and corporate environment, and currently applies only to large enterprises, which are subject to the Non-financial Reporting Directive (NFRD), and will have to report for the 2024 fiscal year. ESG reporting, which will show where companies stand, is therefore also being discussed as a current business phenomenon.
It was mentioned on several occasions during the meeting that the awareness of ESG should be greater. “There is a need to educate the public. When we meet with clients and discuss ESG with them, we often find that they are already doing many things, but they don’t know about it,” said Tomáš Lorenc from UniCredit Bank, who explained that bankers differentiate between the impact of ESG on large manufacturers, and on their suppliers. “Large manufacturers have sustainability and carbon footprint commitments, their goal is to ideally be at zero by 2050, and with sub-goals, for example to increase sales of zero-emission cars by 2030. But the pressure on large companies also affects their suppliers, for example, in tenders, where suppliers who are committed to ESG may have an advantage,” he said.
To encourage the involvement of businesses in environmental care, the Pilsen Region has created a new Healthy Landscape Partner project label this year, which was presented by Josef Sýkora from the Department of the Environment. “The brand is intended to connect local governments, public entities, and the private sector, from large companies to micro-enterprises which seek to promote a healthy landscape and positively influence it,” he said.
An example is the company IDEAL Automotive Bor, which took part in the expansion of a grazing area in the Janovský Wetland Nature Reserve near the D5 motorway near Nýřany. The grazing area for wild horses has also been extended by 4.6 ha, and will increase the biodiversity of mainly plant communities and invertebrates.
“Although businesses, with the exception of banking, are currently under no obligation to report on ESG, many do. We believe that our new label will gain significance over time, and will indicate that the companies involved are doing something for their environment. As part of ESG reporting, we would like to offer them materials that they can use, for example, in their annual reports. Automotive and a healthy landscape may seem mutually exclusive, but a symbiosis should be sought,” adds Josef Sýkora.
