‘Going Green’ Can Be a Profitability Opportunity for Collision Repairers

‘Going Green’ Can Be a Profitability Opportunity for Collision Repairers

Sustainability initiatives aren't just about keeping up with regulations. They can also boost a shop's bottom line.

The latest installment of AirPro Diagnostics' TechTalk 360 webinar series featured guest Gabriel Morley, AVP of DEKRA North America, and hosts Jordan Hendler and George Avery

The conversation delved into the impact of sustainability on daily auto body shop operations, environmentally-friendly initiatives and the shift towards a greener automotive world in general. From carbon neutrality to waste management, energy efficiency and the role of recycled parts, Morley explored various facets of sustainability and how they intersect with collision repair.

"How does sustainability affect shops day to day, and what initiatives can they take to be on the leading edge?" Hendler said. "This is an opportunity to get in front of something you won’t have to catch up on later."

"Sustainability is a bucket of profitability shops can look into," Morley said. "It's not as scary and regulatory as it may seem. This is about doing good business, and staying on top of efficiency."

Morley went over environmental, societal and governance (ESG) components of sustainability. 

Environmental Components

"We hear a lot about carbon neutrality," Morley said. "States are trying to get to carbon-zero, moving away from ICE vehicles."

However, few shop owners have analyzed their own carbon footprint, in terms of things like materials used and equipment efficiency. Morley recommended keeping a closer eye on the use and potential waste of consumables like sandpaper and tape, and either upgrading equipment to newer, more efficient technology or keeping up on routine maintenance of what the shop already has.

"It's better for your bottom line because you save money on utilities and also get better production," he said.

Simple steps like switching to LED light bulbs and considering solar panels can save money and reduce environmental impact, Morley said, but every business owner needs to evaluate which strategies make sense for their individual situation.

Morley also highlighted the potential environmental impact of incidents like EV thermal events. It can take 40,000 gallons of water to put out an EV battery fire, and anything on the shop floor, like oil, can be swept up into the runoff. He recommended keeping shop floors clean, as regulatory agencies like the EPA scrutinize such events, focusing on their environmental implications and future prevention measures.

The conversation shifted to recycled parts. Morley said he has spoken to insurer carriers for their perspective, and he expects to see a tendency to repair parts when possible rather than replacing them, as a green initiative. The integrity of recycled parts remains a topic of discussion. He noted the importance of supply chain transparency and material integrity.

"Yes it’s greener [to use a recycled part], but we also have to look at OEMs' position on repairs," Morley said. "There’s a strict chain of command so you know the integrity of that piece when it goes on a vehicle."

Despite these challenges, Morley sees opportunities for partnerships between OEMs and sophisticated recyclers.

On a global level, several countries, particularly in Europe, have much more stringent regulations in place than in the U.S. Those regulations can drive advancements, Morley said, noting Nordic countries moved to ban sales of new ICE vehicles years ago, something the U.S. is working toward. However, he said, when applied too quickly or forcefully, regulations can squelch innovation. For instance, alternative fuels, like synthetic gas, could be used to run ICE vehicles, rather than banning the engines altogether.

"We have to balance it out," Morley said. "It's easy to make advancements with regulations, but you also stifle innovation a little bit when you go too fast."

Societal Components

There is a lot of conversation throughout the industry about the technician shortage, Morley said, and how to engage younger people and different demographics .

Sustainability studies have shown that when a repair shop has a defined career path for new hires, it is likely to outperform its profitability objectives by 21%, Morley said. On the flip side, the average three-month vacancy can cost a shop $107,000 to $160,000.

The key is to not just find new employees, but keep them, by offering a workplace they enjoy, and help them develop in their careers.

"Are we prepared to facilitate a good workplace where they want to stay and grow?" Morley said. "I think it pays off."

Governance Components

Finally, governance is not just data privacy, Morley said, but whether or not "what you present on paper is the story you’re living."

"Make sure your actions follow the mission statements and policies you put in place," he said, noting those policies could be on anything from smoking to anti-harassment. "If you say you’re going to do something, make sure you’re doing it."

Conclusion: A Greener Road Ahead

In conclusion, Morley encouraged repair shops to embrace sustainability as an opportunity rather than a regulatory burden. He emphasized that sustainability aligns with good business practices, contributes to efficiency, and can even boost profitability. As the automotive industry continues to evolve, embracing sustainability will be essential to stay ahead of the curve.

He encouraged shop owners to seek guidance from a company like DEKRA, which does testing, inspection and certification for anyone involved in the automotive supply chain, including OEMs, parts suppliers and MSOs.

Abby Andrews

Editor
Abby Andrews is the editor and regular columnist of Autobody News.

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