Corporate Sustainability: Implementing Changes to Meet Global Standards

Corporate Sustainability: Implementing Changes to Meet Global Standards
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More than Two Hundred Years of Living Beyond Sustainable Means

The call for environmental responsibility started even before the Era of Progressivism in the 1900s or the 1970s’ green movement. It can be traced back to the early 1600s to 1700s, during the Age of Reason, in which the views of theologians, philosophers and scientists could finally be heard without the fear of being accused of heresy or sacrilege.

Back then, there had been calls to respect and revere the Earth and its natural capabilities, not as a religious belief but as a practical way of life. Perceive, however, that during the olden days, believing was close to sanctifying and only the natives or pagans observed reverence for nature and its powers. But perhaps it was just an excuse to ignore the values that were being put forward.

The advent of industrialization came about during the 1800s and brought an air of economic prosperity. Community members were afforded with financial resources that gave them the means to pursue personal happiness and wealth. There were more reasons not to heed the “pagan beliefs” or the scientific explanations of the early intellectuals. The Earth’s natural resources were there for the taking and there was always a good use for all of them. Sooner than expected, Earth and its components reached their stages of depletion.

Through all those years, periods of prosperity were often short-lived and were usually marred by disparaging events. As resources became scarcer, manufacturing industries started formulating chemical compounds to come up with substitutes in order to meet the shortages of raw materials. As greed prevailed, chemically contrived materials presented opportunities for increased production, thus, the arrival of chemical wastes that defiled and contaminated air, land and water. There was total disregard for the environmental aggravations that were slowly altering the Earth’s normal conditions.

Chemical use had brought forth global warming, severe climate changes, harsh weather disturbances, polluted air, degraded soil, acidified bodies of water, impaired public health and spread of diseases as well as imbalance of natural ecology. It took several years of poor economic conditions and environmental disasters before the greater majority was convinced that the Earth was indeed facing a critical situation.

Finally, after more than two hundred years, it is now clear to almost every community from all across the globe that there is a need to change. It has become apparent that the next generations will have nothing else to inherit, not even natural resources. Their legacies will include social and environmental problems plus the diseases caused by contaminated air, water and soil.

There is now a general consensus for certain changes to take place, particularly among business organizations. Corporations are now required to assume social and environmental responsibilities by taking into consideration not only the financial gains but also the sustainable methods by which they run their business operations.

Yet many project management teams still cannot fathom the concept of corporate sustainability and the changes they have to consider in order to transform a company into a socially and environmentally responsible business organization.

The Dow Jones Sustainability Index: Top Ranking U.S. Companies

800px-Human welfare and ecological footprint, criteria for sustainability shown

First of all, it is important for business owners and project managers to comprehend that the matter of attaining sustainability does not necessarily mean engaging in business activities that are related to green products or services. There are certain criteria and benchmarks set forth by the Dow Jones Sustainability Index (DJSI).

The recent SAM Corporate Sustainability Assessment Review for 2010 had assessed 2,617 companies, and the results include four U.S. companies among the top ten DJIS –World, namely:

  • International Business Machines (IBM) - 2nd place
  • General Electric (GE)- 3rd place
  • Johnson and Johnson - 4th place
  • Coca-Cola - 8th place

All of these companies were initially assessed for their corporate sustainability initiatives. They were likewise compared against their peer-companies on a per-sector basis. Those that emerged at the top of each DJSI sector were subsequently evaluated for overall capabilities, which include financial performance and risks management. The purpose of this is to determine their rankings in the Dow Jones Sustainability - World.

As additional information, the results of the SAM Review for 2010 ranks the following U.S. companies as the top performers in terms of sustainable practices in their respective sectors under the “DJS United States 40 Index”:

  • UnitedHealth Group Inc. (UNH) – Health Care Sector
  • Caterpillar (CAT) – Industrial Goods and Services Sector
  • International Business Machines Corp. (IBM) – Technology Sector
  • Praxair, Inc. (PX) - Basic Materials Chemicals Sector
  • PepsiCo. Inc. (PEP) – Food and Beverage
  • Colgate-Palmolive Co. (CL) – Personal and Household Goods
  • Abbot Laboratories (ABT) – HealthCare
  • McDonald’s Corp. – Travel and Leisure
  • United Technologies Corporation (UTX) – Industrial Goods and Services
  • 3M Co. (MMM) – Industrial Goods and Services

Information about the DJSI criteria and benchmarks can be gleaned from the DJSI website. (See the link in the Reference section below).

Understanding the Criteria

Ssi 2010

Establish a clear definition of the core concept of a sustainable corporation, which should be understood by all the key stakeholders of the company. There are three aspects to consider if an organization is about to undertake changes in order to create values considered as sustainable:

  • Environmental Stewardship
  • Social Well-Being
  • Economic Success

For this purpose, study the values created by the top companies listed in the Dow Jones SI for the three aspects that meet the benchmark standards. At this point, we’ll take a closer look at the initiatives undertaken by the Coca-Cola Company as a soft drinks manufacturer, which obviously does not involve a “green” product.

450px-Coca Cola Zero 02

Ponder the following initiatives being undertaken:

(a) Measures have been taken to continuously improve packaging efficiency and have resulted in reduced costs of about seven percent for every liter of product sold. Eighty-five percent of its global deliveries are packed in 100 percent recyclable plastic PET bottles. Fifteen percent of their deliverables are transferred by bulk using refillable steel tanks or bag-in-box containers for concentrated beverages dispensed as fountain syrup.

(b) There is a zero-waste reduction program for all global operations by ensuring that empty bottles are recovered, recycled and reused under a well-managed recycling program.

(c) As a manufacturing company, it has adopted methodologies that resulted in reduced energy use and carbon emissions. The company has installed about 100,000 units of hydrofluorocarbon (HFC)-free coolers to fulfill its goal of phasing-out HFC in its cooling systems.

(d) The company’s fleets of more than 200,000 delivery vehicles across the globe are being outfitted to run at a lesser amount of diesel and electric power consumption or with the use of compressed natural gas.

(e) Continuous innovations are in place and are aimed at manufacturing low or no calorie beverages or those that come in smaller portions, offered as alternatives for those with weight or obesity issues.

(f) The company provides factual and meaningful labels for the benefit of consumers who need to monitor their calorie intakes.

(g) The Coca-Cola Company sponsors community activities that encourage physical exercise as a means to stay healthy and fit. It has entered into partnerships with medical communities as they develop plans that would encourage soft-drink consumers to engage in physical exercises to ensure a healthy, active lifestyle.

(h) As a manufacturer, it provides a clean and safe working environment for its employees and its workplace policy for this is based on the international principles of human rights, the International Labor Organization and the United Nations Global Compact.

(i) Coca-Cola buys only from suppliers that likewise operate through sustainable means.

(j) Plant-level water efficiency tool kits are in place in each of the company’s 900 bottling plants to monitor and track water efficiency practices being implemented. The company’s goal is to achieve a 20 percent reduction in water consumption by the year 2012.

(k) Coca-Cola Company maintains transparency in conducting its business operations by furnishing reports about its environmental, social and economic impact in accordance with the standards set by the Global Reporting Initiatives and the Annual Sustainability Reviews.

Planning for the Changes

Framework SSI2010

The task of transforming an organization into becoming a responsible corporate citizen seems like an all-encompassing endeavor. Nothing is too big if a carefully mapped out plan is at hand; hence, for planning purposes, consider the following set of guidelines:

1. Know the present financial, social or environmental values being created by the organization for each stakeholder, i.e. investors, employees, customers, suppliers, local, state and federal government and the community.

2. Determine the gap between the organization’s present operational systems in terms of value-creation and the real-world business models that meet the sustainability standards.

3. Study trends and emerging issues related to the organization’s products, activities and programs. Research other sources of value-undertakings.

4. Develop effective strategies for change management that aim to unify the leaders and employees toward the achievement of a shared goal that is clearly understood by all.

4. Set the sustainable goals and develop a business case that embodies the proposed plans and justifications. Present the values that will be added or created, as well as the detrimental factors to be eliminated.

5. Monitor the progress and validate the values created by the changes being implemented and immediately address issues that tend to lessen their sustainable qualities.

It took more than two hundred years for the concept of corporate sustainability through social and environmental responsibility to finally come of age – at least, the next generations will know this period as the “Sustainability Era”

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