Round organizational implementation of environmental and social responsibility
In today’s day and age, an organization’s company culture is a key element in determining its level of success. It is no wonder that several organizations, businesses, and companies like Westpac and Ikea have adopted consumption practices patterns and behaviors that incorporate environmental, social, and governance issues (Westpac Corporation, 2011).
If I were in an influential position within an organization or company I would take a systematic whole rounded approach to alter the consumption behavior patterns and practices of all stakeholders to ensure all value chains operate in an environmental and socially responsible manner.
Management Team: First off I would begin the process with the management team as they are in the position to influence overall company change and act as role models to those under them. Encouraging the management team to take initiative in matters concerning social and environmental responsibility means developing new systems or modifying existing practices and approaches to business operations. Management teams should be encouraged to promote positive competition so as to establish an overall social and environmentally responsible work environment. A few examples of steps that can be taken by management to allow for social and environmental responsibility in business practices and patterns is the incorporation of sustainability in the company’s values, processes, and long term strategy and the establishment of a diversity department or council to drive the company’s flexibility, diversity agenda, and strategy.
Employees: The second step I would take is educating employees on the company’s sustainability policy to ensure they understand what is required of them in terms of enabling the company to operate both socially and environmentally responsible. The development of performance criteria here would be beneficial if helping archive the company’s suitability goal.
Suppliers: Ensure that the company operates sustainably means that all the individuals involved in facilitating company operations should be involved. This means that we would have to develop and implement a sustainability code of conduct for suppliers, monitor, analyze and carry out a suitability audit and maintain sustainability reports to allow us to determine what process we have made and changes still need to be made. An example of ensuring sustainability with suppliers can be seen from companies that choose to only work with suppliers that operate both socially and environmentally responsible.
Consumers/customers: Companies such as Ikea have adopted sustainability policies and practices that allow them to demonstrate social and environmental responsibility from management down to their customers or consumers. In this regard as someone in a position of influence, I would advocate for the development of avenues where customers can be a solution, know-how, or information that will assist them in living a sustainable life at home. For example, if in the retail industry employees would be encouraged to offer customers information, tips, and benefits on recycling.
All in all, I would treat sustainability as more than simply a practice concerned with waste elimination to one that plays an expanded role in the company’s core business strategies.
Implementing a sustainability policy
If appointed CEO of a large corporation that requires the implementation of a sustainability policy I would go about implementing the following key initiatives in the manner listed below:
1. Resource efficiency: This would be the first step because resource efficiency is dealt with the reduction of waste. Adopting a do more with less strategy in this scenario would be the best option due to the budget constraints being faced by the corporation. The resource efficiency initiative will entail reducing the corporation’s expenditure by limiting waste and adopting energy-efficient processes. Some of the steps that will be undertaking in this process are the reduction of resource use(such as energy, water, raw materials, and more), the adoption of a move to front-of-pipe solutions to eliminate waste or return it to the production cycle as a resource (bio-mimicry), the development of a design or a redesign of buildings or the plant to dramatically reduce ‘footprint’ and allow for the creation of adaptable spaces, recycling or remanufacture and de-materializing which involves service provision rather than material production.
2. Establishing effective leadership and change management: this would be the second step as the corporation will need leadership and guidance by top management to successfully establish the sustainability policy. This would involve the forming of a department or council to oversee the development, implementation, review, and revision of the suitability policy. This council or department will be at the forefront of ensuring the corporation is on track with implementing sustainability and will deal with the development of a sustainability report to ensure Global Reporting Initiative compliance.
3. Stakeholder and staff engagement: This would be taken as the next step as it would be required to facilitate resource efficiency. The process of stakeholder and staff engagement involves working towards educating, training, and involving these individuals in the sustainability adoption process. The involvement of stakeholders may be in the form of getting the corporation’s shareholders to be more proactive when it comes to the development and implementation of suitability policies or in the form of involving outside stakeholders such as suppliers in the corporation’s quest to be both sustainable, and socially and environmentally responsible. This can be achieved by the formulation of policies requiring external suppliers to have sustainability codes of conduct.
4. Product life cycle: This would be the fourth step. It would involve the use of the product life cycle to identify where and when changes in the product life cycle may be needed to allow for sustainability. This will require innovation and setting up new systems and the development of new processes. The product life cycle process may even allow for the development of a new product through the implementation of innovative operational processes.
Implementing sustainability requires a fundamental change in mindset away from traditional mainstream business practices
Sustainability has become a new trend in the business world today. While the traditional mainstream practices focused on activities aimed solely at profit-generating for the company, the trend has since changed. This has been precipitated by consumers becoming more aware of environmental issues and thus wanting to purchase items that make them feel like they are doing their part. The second tier of influence comes from the governments who strongly champion the idea of sustainability and thus favor companies that are focused on sustainability and run environmentally focused activities.
To properly implement sustainability in organizations some several conditions and principles first have to be met by management. Some of these conditions are direct derivatives from the CHAPELFIRZ value system, namely fairness, integrity, responsibility, and accountability. Organizational leadership should also be prepared to instill systems that promote democracy, autonomy as well as interdependence. Some of the fundamental principles that should be implemented alongside these conditions include respect and maintenance of biodiversity, conservation of natural resources, environmental and economic integration policies, education, training, participation, and consciousness rising with regards to sustainable development.
Exciting business opportunities in sustainability
There are a lot of new exciting opportunities for businesses in the field of sustainability. A lot more organizations, corporate bodies, and businesses are paying much more attention to running their operations in a sustainable, socially responsible, and environmentally friendly manner. The adoption of such practices by most organizations worldwide has not only worked towards improving these organizations’ productivity through cost reduction but also benefited businessmen, women, and entrepreneurs in the sense that new jobs or business opportunities have been developed as well. Everywhere we turn today people are working towards a future governed by sustainable development and growth. All the focus on sustainability and social and environmental responsibility has led to the development of a consumer market that is interested in living green. What this means is that new business opportunities that may have not existed before or been probably not as trendy have become popular. The world is now looking towards businesses to provide innovatively sustainable and energy-efficient products. It is this market demand that has lead to the development of new exciting business opportunities in the area of sustainability.
Comparison of efficiency and strategic productivity phases in the Dunphy model
According to Dunphy, the achievement of sustainability is a process that organizations have to go through to meet their set sustainability goals. The Dunphy sustainability phase model begins with the process of rejection, followed by non-responsiveness then compliance, efficiency, strategic proactively, and lastly the sustaining corporation. Less formally an organization or company at the above-listed stages as Phase 1: the freeloaders and stealthy saboteurs, Phase 2: the “bunker wombats”, Phase 3: the reactive minimalist, Phase 4: the industrious stewards, Phase 5: the proactive strategists and Phase 6: the transformative futurists. The efficiency phase is all about more with less. A comparison of Dunphy’s efficiency phase and strategic pro-activity phase can be made by establishing the objectives and generally actions taken in each phase to identify the contrasting factors.
According to Dunphy the objective of the efficiency phase is to progressively eliminate waste and increase process and materials efficiencies. The key business opportunity here is increasing efficiencies by waste reduction and reorganization. The general actions taken here are the reduction of resource use (such as energy water, raw materials, and the like ), the development of a design or a redesign of buildings or the plant to dramatically reduce ‘footprint’ and allow for the creation of adaptable spaces, the adoption of a move to front-of-pipe solutions to eliminate waste or return it to the production cycle as a resource (bio-mimicry), recycling or remanufacture, dematerializing (which involves service provision rather than material production), redesigning products such that they are sustainable to produce and environmentally friendly and taking action to meet the international Global Reporting Initiative (GRI) guidelines (Dunphy, 2011, pp. 54-60).
The objective of the strategic pro-activity phase, however, is to pursue strategic opportunities in sustainability which quite different from working towards waste reduction as in the efficiency phase. The activities are undertaken to facilitate this include: an organization or company’s strong commitment to sustainability (by incorporating it in their values and long-term strategic plan) re-branding and building wider stakeholder support, adopting an early in on new product or service demand curve approach, creatively tearing down existing product designs, manufacturing models and re-invent the firm, leapfrog competition by early breakthroughs, increase employee and stakeholder engagement to source innovative ideas, shifting the prevailing business paradigm in environmental and social ideas being innovative with new models of stakeholder governance and concentrate on adding value and innovating.
All in all the main contrast between the two phases is the fact that one (the efficiency phase) deals with the reduction of waste by advocating for the promotion of doing more with less while the other (strategic pro-activity phase) moves a step further from simple waste reduction to the creation on innovative sustainability opportunities.
Role of accountants and managers in risk management and energy efficiency
Before managers and accountants can undertake any task in risk management and energy efficiency, they need to be aware of the practices and principles involved in both.
The primary role of the accountant is to give a comprehensive and accurate account of all financial data and to ensure that this data is disseminated to the relevant parties like all staff members or employees’ top managers and supervisors and external shareholders/stakeholders. Generally, this data is in form of financial reports and forecasts that detail the organization’s actual financial position.
With regards to risk management, the manager’s role is to implement organizational structures that make it possible for quick action to be taken in case of risk. Such an organizational structure could take the form of guidelines, training programs, and funding for employees who are likely to be involved in high-risk activity areas for example project implementation and other types of related information. Another key role of a manager in this capacity is developing and fostering a supportive risk management culture within the organization. This simply entails the creation of evaluation systems as well as reward risk competencies for the business. Along with the aforementioned duties, risk managers should also focus on continuous improvement. The fact remains that the business world is ever dynamic as such simply adopting a risk management culture is not enough. Risk management policies and procedures need to be improved upon ever so often.
Organizational benefits of implementing energy efficiency
Energy efficiency may be defined as the most cost-effective way of using energy during the manufacture of a good or service. By implementing energy efficiency policies the total consumption of the primary sources of energy is reduced and as such the margins of energy, waste is trimmed down. The greatest benefit of implementing energy efficiency policies is the alleviation of climate change. However aside from this ‘societal benefit’ organizations also benefit in several ways from instituting energy efficiency.
The prime gain is increased productivity and consequently increased economic output.
Global reporting initiative
The Global reporting initiative (GRI) also referred to as environmental social governance (ESG), corporate social responsibility (CRS), Ecological footprint reporting, and triple bottom line reporting are among the world’s most common standards for sustainability reporting. The GRI initiative is a type of value reporting system where corporate bodies, businesses, and organizations openly provide information on their environmental, economic, and social performance. The global reporting initiative tries to make sustainability reporting by all organizations, corporate bodies, and businesses a routine practice similar to financial reporting.
Relationship between Global Compact and Global Reporting Initiative
The global compact is a set of ten principles regarding the environment, labor, human rights, and anti-corruption that the United Nations requests organizations, corporate bodies, and businesses to embrace, enact and support within their sphere of influence. The global compact is a set of values about human rights, the environment, labor standards, and so on. The relationship between global reporting initiative (GRI) and global compact is that GRI is a reporting value that may be used to measure the level of an organization or business’s conformance to the Global Compact’s ten principles which revolve around sustaining social and environmental responsibility.
Benefits and limitations for corporations of the Global Reporting Initiative
The benefits for corporations of the Global reporting initiative are that these corporations enjoy transparency, accountability, and consistency. Other than this their commitment to sustainability development translates to improved overall system performance. Such corporations can identify their operation weakness which allows them to respectively address the issues. The limitations for corporations of the global reporting (GRI) are standardization and the adoption of cross cliff sectors. The cost is involved in resources needed for implementing corporate social responsibility goals may not always be available which presents as another limitation for Global Reporting Initiative corporations.
Six drivers of sustainability
Running an organization, corporate bodies, and businesses sustainably refer to doing the right thing. In my view, the following are the six most important drivers of corporate sustainability.
Brand strength: this is important because organizations, corporate bodies, and businesses that perform sustainably can create a strong corporate reputation that significantly affects the establishment’s financial position or valuation. According to the United Nations Global Compact, an organization or business’s reputation accounts for about 10% of its market value while 45% of a business’s reputation is based on its social performance.
Productivity and competitive advantage: this is important as it has been found from a survey conducted worldwide that most company behavior about sustainability is motivated by innovation.
Operational efficiency: Failing to address an organization’s sustainability concerns increases the organization’s risk of operational disruptions like employee strikes, boycotts, and larger regulatory scrutiny which all translate to major financial implications.
Improved shareholder value:
Financial efficiency: The importance of this is that adopting organizational practices that are more economic. An organization that operates sustainably is more economical than one which does not. Improved health, environmental and work safety practices result in a decreased number of accidents, lost workdays, and noncompliance fines.
Improved intellectual and human capital: The sixth driver of sustainability is human and intellectual capital. It is well known that a company’s social and environmental performance affects employee turnover. As such this becomes an important driver of sustainability since the more socially and environmentally responsible an organization or company is the more motivated employees which in turn translates to low turnover rates.
List of References
Dunphy, D., Griffiths, A., & Benn, S., 2007, Organizational change for corporate sustainability, Rutledge, London and New York
Westpac Corporation, 2011: Westpac ranked number one bank in the world for sustainability. [Online]. Web.