Benchmark Progress Towards Sustainability - Vodafone and AT&T - Case Study Example

Benchmark progress towards sustainability of the Introduction Human being is exploiting the non-renewable resources of Earth at a non-sustainable pace that seems to be negatively impacting the Earth’s life, climate as well as the ecosystem (IPCC WGI Fourth Assessment Report, 2007). Related to this, global warming is another major cause of apprehension, which seems to be interconnected with the notion of sustainability in business. Since the beginning of 21st century, the challenges pertaining to global sustainability have been recognized by the industry experts and are a vital topic of discussion among the mass. Corporations, across the worlds, are therefore encouraged to address sustainability issues in an efficient manner and to integrate sustainable practices in their business operation (Rusinko, 2007). According to World Commission on Environment and Development (WCED) (1987), sustainable development or sustainability is a term that refers “meeting the needs of the present generation without compromising the ability of future generations to meet their own needs”. The definition emphasizes on the ethical principles that a company should put into practice for the purpose of achieving equity between the current and future generation and at the same time stresses on the long term aspect of sustainability. Therefore, sustainability is deemed to be the concept that triggers the inner sense of people, society as a whole and companies so as to promote, initiate and sustain practice that facilitates enhancement and protection of natural and human resources. Nandi (2011) suggested that owing to the fact that mobile towers consume high diesel, it results into environmental pollution. In addition, the radiation from mobile phones itself is also degrading the natural resources and is also responsible for various health issues. Despite, the health concerns and potential ‘degrading’ of environment, mobile phones and other telecommunication services have continued to remain an integral part of the lives of human beings. Hence, this study intends to evaluate the strategies and initiatives undertaken by the firms of this industry to minimize the environmental impact. The companies chosen to evaluate the same are Vodafone and AT&T, the two major players of the global telecommunication industry. Before getting into the analysis segment, brief overview of the chosen companies will be presented in order to ensure better understanding. Vodafone: A Brief Overview Vodafone Group PLC, commonly known as Vodafone is a UK based global telecommunications company. The company is currently headquartered at London, UK and is adjudged as the world third largest telecommunication company in terms of the total number of subscribers and the revenue generated in a calendar year (Vodafone, 2013a). As of June 2013, the company had a total subscriber of 453 million people (Vodafone, 2013a).The company operates in more than 21 countries of the world and has licensed partners in over 40 countries. It offers employment opportunities to nearly 91,272 people across the globe (Vodafone, 2013a). The company generated revenue of £44.445 billion and profit of £429 million in the financial year 2012-13 representing a stable financial situation (Vodafone, 2013a). In the context of sustainability issues, the company took several steps and initiated programs to safeguard the environment. The sustainability efforts of the firm will be discussed in details in the later sections of the study. AT&T: A Brief Overview AT&T Inc, commonly known as AT&T is a US based global telecommunications corporation currently headquartered at Whitacre Tower, Texas. The roots of AT&T can be traced to 1893, when the company was founded by Alexander Graham Bell. Randall Stephenson presently serves as the CEO to the company (ATT, 2014a). With presence in various parts of the world, the company offers employment opportunities to nearly 246,740 people (ATT, 2013). Likewise, any other company, AT&T is also active in promoting sustainability throughout their business channel. The sustainability efforts of the firm will be discussed in details in the later sections of the study. Discussion Due to the increasing awareness of sustainability in the society, industry and business houses are considering sustainability as an integral business challenge and are making efforts with their actions to protect the natural environment. Concerns pertaining to the need of businesses to behave ethically, beyond intentions of profit have been more prevalent nowadays. Hence, the discussion makes it evident that a company needs to be more careful while functioning in the market place. Apart from that, companies are also expected to make sure that their activities are neither degrading the environment nor causing pollution. This study seeks to investigate the sustainable strategies adopted by Vodafone and AT&T and evaluate the initiatives taken by them that reflect strong desires of safeguarding the environment.The discussion will be also related to Hart’s (1997) sustainability framework and a comparison study will be drawn. Sustainability Framework In the year 1997, Stuart L. Hart through his article ‘Beyond Greening’ emphasized on the fact that world has now reach a state where people need to become more aware of the environmental issues and at the same time business houses need to react and function responsibly. The author suggested that it is the duty of the business community to develop a sustainable economy that has the ability to safeguard and make optimum utilization of the resources. Furthermore, the author also suggested that business houses should immodestly transform into eco-friendly operation in order to save earth from disasters. Again, eco-friendly business will have a positive impact on the global environment, business itself and the customers. Green business has a direct impact in the revenue of the firm as customers nowadays have been more aware of eco friendly products and they usually prefer to products that are eco-friendly (Hart, 1997). The author pointed out that the major challenges related to sustainability differ from one country to the other and is more visible when segregated on the basis of survival economies, emerging economies and developed economies. (Source: Hart, 1997) The above diagram makes it evident that industrial emission is the major cause of apprehension in all the types of economies. However, the author states that emerging economies should not make the same mistakes repeatedly as this will seriously impede their growth process. Hence, companies belonging to any country remain actively engaged in the activities that foster usage of clean technology, pollution prevention, product stewardship and sustainability vision. The factors will be analyzed in the context of the chosen companies in the next section (Stacey, Griffin & Shaw, 2000; Wagner & Svensson, 2011; Vodafone, 2013; Svensson & Wagner, 2011). Comparison between Vodafone and AT&T Vodafone is company which is recognized as one of the responsible corporate citizens. The company has always been an active member promoting sustainability. The company considers sustainability as a journey rather than an objective. The company is continuously striving to integrate sustainability practices as an integral part of the business. The company advocates a comprehensive approach by promoting sustainability through every process, project and people. The company also promotes a culture where employees conduct business operation responsibly and strives to reduce carbon footprint (Vodafone, 2013). Likewise, any other multinational company, AT&T is also active in managing and promoting sustainability. The assessment of the annual report and sustainability report has shown that the company undertakes comprehensive approach to manage sustainability. For example, their efforts are visible in fields such as energy consumption and wastage, welfare of people and community, environment protection (through managing water resources initiative). Apart from that their initiatives also include eco friendly vehicles for business operation such as vehicles that run on alternative fuel. Pollution Prevention: - Both Vodafone and AT&T are trying hard to reduce environmental pollution and as a result of that various initiatives have been taken. For example, reduction of carbon footprint, recycling used products and proper disposal of wastage is an example of their act of pollution prevention. Reports have shown that AT&T has already completed more than 14,300 efficiency projects that saved around $151 million since the year 2010 (ATT, 2014). Product Stewardship: - The concept of product stewardship is more evident in Vodafone. The company has implemented system that ensures efficient product manufacturing. The company is also striving to reach 0% carbon emission through their new approach. However, in case of AT&T the same is lacking. Clean Technology: - Vodafone is way ahead in terms of the usage of clean technology compared to AT&T. Some of the global initiatives of the firm that reflects sustainability initiatives are green building initiative, promoting recycling, green networks and reduction of office waste by encouraging cloud computing (Svensson & Wagner, 2011). This initiative reflects their intentions to promote and safeguard earth. Sustainable Vision: - AT&T has the vision to create a future which promotes a sustainable future (ATT, 2014). In the similar way, Vodafone’s future vision is to reach zero emission level and promote highest level of sustainability. The vision of the firm i.e. ‘to transform societies by bringing innovative products and services to our 404 million customers – 68% of whom live in emerging markets” (Vodafone, 2013, p.5). Analysis The analysis of both the companies in terms of their sustainability efforts have shown that their investments, way of completing projects and publicizing the efforts are similar. However, the difference lies in their approach to manage sustainability. AT&T considers sustainability as a part of corporate social responsibility, whereas Vodafone give extra stress to sustainability issues. Almost similar results were identified when the companies were evaluated in the context of Hart (1997) sustainability framework. Vodafone has a well defined governance structure which is being headed by Group Executive Committee (ExCo) which is responsible for managing the sustainability performance of the company. In addition, the company has an established framework for the implementation of sustainability frameworks across the group. Dedicated team members work in different markets so as to align the business strategy with the organizational strategy. One of the most interesting facts about the company is that, it engages almost all the stakeholders group in the sustainability program thereby exhibiting their intentions to value stakeholders. This approach of the company has a direct impact on their profitability and overall position in the industry. Customers become more confident and become loyal. In the similar way, investors also like investing in a responsible firm. In the context of AT&T their approach to sustainability is somewhat different from Vodafone. Although, it does impact the company’s profitability and sales, but their approach does not satisfies each of the stakeholders group. Rather AT&T believes in undertaking activities that benefits the society only. Hence, an all-round approach is missing from their sustainability efforts. Vodafone is more close to sustainability zone. One of the visible initiatives of the company is ‘low carbon society’, where the company is seeking to reduce the carbon emission in the environment. The smart 2020 vision of the company proposes that Vodafone will cut global emission by 15% (Vodafone, 2013). Reducing the environmental impacts is clearly the main intention of the firm and as a result of that the ‘eco-efficiency’ business initiative has been taken. The company believes that such initiatives not only benefits the natural environment but also helps in reducing company’s cost thereby providing an opportunity to increase the profitability. The extensive management system of Vodafone that oversees carbon emission, waste and optimum utilization of resources has been an effective tool for the company that enabled them to manage suitability initiatives. Another initiative of the company is responsible supply chain where the company is coordinating with the suppliers to transform their operation that meets the global ethical, health, environment, social and safety standards. The company believes that such initiatives make an all-round development. The company even encourages the suppliers to promote sustainability to their associates as well. Vodafone has strengthened sustainability criteria which is one of the key factors for qualifying as a supplier. (Source: Vodafone, 2013) Hence, with such initiatives it is hoped that the company will continue to hold the leadership position in terms of sustainability management. AT&T has also taken numerous initiatives in preserving the environment. One of their key initiatives is the water footprint reduction. The company aims at reducing the 3.3 billion gallon water-footprint thereby ensuring adequate water preservation for the future generation. In addition, several energy saving initiatives of AT&T over the last couple of years has allowed them to save $151 million through energy savings. The company is also active in the field of research and development and through this initiative they are trying to create an alternate source of energy. As mentioned previously, AT&T considers sustainability to be a part of their CSR efforts, and hence stresses more on the CSR efforts. The company attempts to exhibit their efforts of sustainability through CSR activities. They believe that in order to preserve the environment an all round approach is required and as a result of that they try to generate awareness among the consumers through various methods. The company invests huge sums of money in educating the unprivileged segment of the society and believes that through education, awareness levels can be increased which will automatically benefit the society. (Source: AT&T, 2014) Initiatives of Vodafone (Source: Vodafone, 2013) (Source: AT&T, 2014) Hence, on the basis of the comparison between the two frameworks with the help of Hart (1997) sustainability framework as well as evaluating the general information pertaining to the sustainability efforts of the firm, it can be stated that Vodafone is more active. The best thing is that their initiatives are not meant for any single country; rather they give equal importance to every country, where they operate. It should also be noted that Vodafone spends significant amount of revenue in social development and sustainability causes. Hence, from the perspective of an investor, Vodafone will be a safe company to make investments. Owing to the fact that consumers have become more aware of the need of eco friendly products and their preference to such products is also a major reason to go with Vodafone (Wagner & Svensson, 2011). Conclusion & Recommendations There is an intrinsic paradox between corporate desire, achieving business sustainability and drive for increased market share, turnover and profitability. Inevitably increased consumption of products leads to rising consumption levels of natural resources. Hence, it is the duty of the business houses and the society as a whole to create a balance between the factors. The study tried to analyze the efforts of Vodafone and AT&T pertaining to the management of sustainability issues. It has been observed that both the companies make strong efforts but their approach differs greatly. The study also revealed that the efforts of Vodafone have more impact on the society and environment. Hence, from the perspective of an investor, it can be concluded Vodafone will be a safe company to make investments that shows that Vodafone is way ahead of AT&T. Yet, to further improve the future, following are the recommendations to the company: - 1. The company should create awareness in the minds of the consumers about the importance of sustainability so that consumers also act as a responsible citizen. In this context, the company can offer incentives to customers who return their used product for recycling, proper disposal etc. 2. The company is also recommended to reduce the carbon footprints and reduce emissions in the environment. References ATT. (2013). AT&T Inc. Financial Review 2013. ATT. 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