Corporate Social Responsibility Reporting, GRI and Sustainability - Report Example

Corporate Social Responsibility Reporting, GRI and Sustainability Table of Contents Introduction 3 Corporate Social Responsibility (CSR) and Sustainability 3 Sustainability Strategies 5 Types of Sustainable Strategies 5 Global Reporting Initiatives (GRI) 5 The Concept of Bottom of Pyramid (BOP) 7 Coca-Cola Company Corporate Sustainability Report 8 Analysis of the Stakeholders Groups 9 GRI Report of Coca Cola Company 9 Triple-Bottom-Line (TBL) Approach of Coca Cola Company 10 The KPMG Survey of Corporate Responsibility Reporting 2013 11 Conclusion 11 Reference List 12 Appendices 15 Appendix 1 15 Appendix 2 16 Introduction Corporate Social Responsibility (CSR) is referred to the business practice which involves taking part in those initiatives that provide benefit to the society (Businessnewsdaily, 2015). It is becoming main necessity for progressive organisations as they entrench sustainability into their business operations in order to generate shared value especially for society and business. Incorporating CSR practice into the business operation leads to the success of the company. The CSR policy functions as a self-governing mechanism where a company monitors and ascertains its active conformity with the global norms, ethical standards and various laws (Businessnewsdaily, 2015). By adopting the practice of corporate social responsibility, organisations attain a balance of social, environmental and economic imperatives, which is known as “Triple-Bottom-Line Approach” (Unido, 2015), and at the similar time addresses the hopes of stakeholders and shareholders. The Global Reporting Initiative (GRI) is referred to the multi-stakeholder method which asks for refining the set of universal, globally applicable sustainability/CSR reporting guidelines (Asyousow, 2015). This method has integrated the participation of various representatives from investment, business, accountancy, labour organisations, research, environmental and human rights from across the globe. Over 700 organisations have published sustainability or CSR reports corresponding to the GRI guidelines (Asyousow, 2015). The major purpose of this paper is to assess the CSR Report of Coca Cola against the GRI guidelines, with main focus on recognising the different stakeholder groups. It will also take into consideration the main priority issues of Coca Cola while addressing CSR and how the company reports on their particular concerns. Corporate Social Responsibility (CSR) and Sustainability CSR is referred to the management theory whereby organisations incorporate environmental and social practice in their operations as well as interactions with the stakeholders (Crowther and Aras, 2008). Sustainability is defined as meeting the requirements of present without having compromise on the capability of the future generations in order to meet their requirements. Now the companies are challenged by the stakeholders such as employees, customers, activists and investors to develop a plan for how they will actually maintain the economic prosperity at the same time as showing concern for their workforce and environment (Asyousow, 2015). Encouraging the uptake of sustainability practice among the companies requires strategies that fit properly to the respective capacities and needs of the companies and do not unfavourably affect the economic viability of the organisations. Over the past few decades, CSR has evolved as an effective practice adopted by businesses to remain ethical in their operations. Organisations have several reasons for remaining attentive towards CSR. It has been observed that corporate social responsibility offers various benefits to the companies which incorporate this practice in their operations. These benefits are reducing risk and cost, achieving competitive advantage, maintaining and developing reputational capital as well as attaining win-win results by means of value creation (Tonello, 2011). A new model has been emerged by combining the CSR and sustainability. The New CSR is known as “Corporate Sustainability and Responsibility” (Visser, 2010). Figure 1: The New CSR (Source: Visser, 2010) The New CSR suggests that the purpose of the companies is not just to become profitable and to serve their shareholders. It goes beyond to these goals and the main objectives of the business by applying the New CSR is to serve the community through safe and high quality services and products which will enhance the wellbeing of society without eroding their community and ecological systems (Visser, 2010). Sustainability Strategies Sustainability strategies assist the organisation to conduct its business functions in a manner that will embrace exploitation of those resources which will ensure long term orientation of the company. A sustainable company is one which makes profits for its stakeholders while looking after the environment as well as enhancing the lives of the people with whom it works (Baumgartner and Ebner, 2010). Types of Sustainable Strategies There are four types of sustainability strategies which include employment sustainability, corporate governance, systematic improvements and innovation. Corporate governance: It is referred to the directions that are employed by the companies to direct business operations and people. It includes social and environmental issues. Social issue demands the business to use capital on those items which enhance their environmental impact (Kotler and Lee, 2005). Employment sustainability: It is a type of internal sustainability strategy which involves compensating workforce and developing them above the market levels (Lindgreen and Swaen, 2010). Systematic improvements: It indicates the incremental progress which is used by the organisations for their sustainability strategies. Improvement is a long process; hence, company necessitates a sustainability plan which presents systematic improvement throughout future periods (Leonard and McAdam, 2003). Technology innovation: It permits the company to reduce waste and enhance its business operations (Ornat, 2013). Global Reporting Initiatives (GRI) GRI is the chief organisation in the field of sustainability. It promotes the utilisation of the sustainability reporting by the companies in order to become sustainable as well as to contribute towards sustainable growth (Global Reporting, 2015). With over thousands of correspondents or reporters in more than 90 nations, GRI offers the extensively used standards of the world on disclosure and sustainability reporting, thus enabling governments, citizens, civil society and businesses to make enhanced decisions (Global Reporting, 2015). The sustainability report of GRI presents the governance model as well as demonstrates the connection between its scheme and its commitment towards the sustainable economy. The GRI 3.1 Guidelines includes principles for describing the content of report and guaranteeing the reported information’s quality. It further consists of Standard Disclosures which are made of various disclosure items and Performance Indicators and also guidance on definite technical subjects in reporting (Global Reporting, 2011). Figure 2: GRI 3.1 Guidelines (Source: Global Reporting, 2011) The GRI Reporting Framework serves as a universally accepted framework especially for reporting on social, environmental and economic performance of organisation (Global Reporting, 2011). Figure 3: GRI Reporting Framework (Source: Global Reporting, 2011) The framework of GRI is generally a reporting structure/system which provides methods and metrics for reporting and measuring sustainability-related consequences and performance (Global Reporting, 2015). The Concept of Bottom of Pyramid (BOP) The “Bottom of Pyramid” comprises of 4 billion individuals living on below $2 for each day. Prahalad (2006) presents his novel view regarding answering the poverty’s problem as a solution towards social transformation and economic development, of which the parties occupied are: aid and development agencies, private enterprises, BOP entrepreneurs and consumers, as well as local governments and civil society corporations. Figure 4: Bottom of Pyramid Framework (Source: Prahalad, 2006) This framework offers an impulsion for more vigorous participation of private sector companies in structuring the marketing environment for the BOP consumers. Access to the BOP markets is generally not complicated. Unconventional approaches like Avon ladies and small sachet of shampoo approach by Hindustan Unilever works for the poor people (Prahalad, 2009). Most of the organisations want to do their business with the BOP people. They wish to offer their product at very low margins and prices and expect to generate profits and revenues by selling massive quantities of product to them (Kolk, Rivera-Santos and Rufin, 2012). This ‘low margin, low price, high volume” approach was in existence from very long time, which is based on the success of ‘Hindustan Unilever’. The company sells detergent of Wheel brand since long time to consumers of low income in India (Simanis, 2006). BOP approach is adopted by companies to help poor to get access to their products and also to increase their profits. Coca-Cola Company Corporate Sustainability Report The company work towards enhancing transparency in their sustainability reporting. The 2020 vision of Coca-Cola Company is to develop novel beverage products which will meet the evolving requirements of the customers, to generate social value and to make positive variation in the societies in which they operate (Coca-Cola, 2013). The value chain of the company explains that they rely on demand from the consumers as well as strong associations with retailers, distributors, communities and suppliers in order to expand their business operation sustainably (See Appendix 1) (Coca-Cola, 2013). The company is engaged in sustainable agriculture facility and also in the recycling of the products (See Appendix 1). Analysis of the Stakeholders Groups Effective engagement of stakeholder is the basis of Coca-Cola Company’s business and their initiatives towards the sustainable reporting. The four stakeholder groups of Coca-Cola Company are presented below: International Sport and Culture Association (ISCA): It is an international platform open towards the companies which are working in the area of sport. Through “The Coca-Cola Foundation” (Coca-Cola, 2013) the company supports the ambition of ISCA to encourage physical activity, to promote it on the political agendas across Europe, and to inspire over millions of Europeans to move in the direction of physical activity (Coca-Cola, 2013). EPODE: The Company supports the mission of EPODE to minimise the occurrence of the childhood obesity as well as the health risks associated with it. The company awarded approx $1.07 million in order to support the project of EPODE to address the obesity issue (Coca-Cola, 2013). Ceres: The Company has affianced with Ceres on various sustainability issues including sustainability reporting as well as goals to their water policies and also approach to social governance and environmental issues (Coca-Cola, 2013). IFBA: The Coca-Cola Company are also engaged with IFBA in order to meet their various needs. The company discuss their growth against the promises made by IFBA to the World Health Organisation (Coca-Cola, 2013). A properly applied CSR concept within the company brings various competitive advantages like increased revenues and profits, more access to the markets and capital, savings of operational costs, enhanced decision making and improved quality and productivity. It also results in well-organized human resources, improved customer loyalty, better risk management method and improved reputation and brand image (Coca-Cola, 2013). GRI Report of Coca Cola Company The GRI content index of the Coca-Cola Company presents that on the economic perspective, the company generates direct economic value including operating costs, revenues, employee compensation, retained earnings, donations as well as payments to governments and capital providers. They foster the economic empowerment of women entrepreneurs (Coca-Cola, 2013). On the environmental perspective, their initiatives on the reduction of energy consumption are achieved (Coca-Cola, 2013). The Company is making efforts to save energy by means of conservation as well as efficiency improvements. They are recycling and reusing the total amount of water and also recycling the other waste materials (Coca-Cola, 2013). On the social perspective, Coca-Cola Company is providing cover to the employees through collective bargaining contracts. They are providing compensation to their workforce as per their performance. The Company is providing efficient training facility to their workers and are also employing risk-control programs in order to assist the employees and their families regarding severe diseases (Coca-Cola, 2013). Triple-Bottom-Line (TBL) Approach of Coca Cola Company Triple Bottom Line is referred to an accounting structure that includes three elements of performance i.e. environmental, financial and social. The elements of triple bottom line are also known as: planet, profits and people (Farley and Smith, 2013; Slaper and Hall, 2011). On the environmental or planet stage, Coca-Cola Company is carrying out different initiatives which are environmental based such as reducing water consumption and energy, reducing waste, reduced packaging, recycling, carbon emissions and more (Willard, 2012). On the social or people level, Coca-Cola Company is focusing on enhancing dietary value by lessening salt, sugars, and additives from their product. On the financial level, the company is already experiencing growth in terms of its increased revenue due to their eco-friendly initiatives (Zu, 2008). This approach is used by Coca-Cola Company for measuring as well as reporting its business performance against environmental, social and economic performance. This approach assists the companies in meeting environmental and social standards without having to compromise on their competitiveness (Unido, 2015; Norman and MacDonald, 2004). It is an effort to align the organisations to the objective of sustainable development by offering them complete set of goals than just revenue alone. The TBL approach suggests that the company in order to be sustainable must become financially secure as well as minimise its adverse ecological impacts and should act in accordance with the societal expectations (Hubbard, 2009). The KPMG Survey of Corporate Responsibility Reporting 2013 The KPMG survey is based on comprehensive study of company reporting with special focus on the corporate responsibility performance. It has been observed that there is spectacular augmentation in the rates of CR reporting in Asia Pacific over the past two years (Kpmg, 2013). The Americas has surpassed Europe in terms of top CR reporting area, due to the augmentation in CR reporting practice in the Latin America. Since 2011, the highest progress in the CR reporting has been observed in India, Chile, Singapore, Australia, Taiwan and China (Kpmg, 2013). Among the top 250 companies of the world, the rate of CR reporting is almost constant at 93%. To name a few, the companies which have scored over 90% for the CR reporting are BMW, Ford Motor Company, Cisco System, Hewlett-Packard, etc (See Appendix 2). 78% of the reporting companies around the world refer to GRI guidelines or procedures in their corporate responsibility reports (Kpmg, 2013). Conclusion The paper has focused on the concept of CSR which states that it is becoming the main necessity for progressive organisations as they entrench sustainability into their business operations in order to generate shared value. Over the past few decades, CSR has evolved as an effective practice adopted by businesses to remain ethical in their operations. A sustainable company is one which makes profits for its stakeholders while looking after the environment as well as enhancing the lives of the people with whom it works. The sustainability report of GRI presents the governance model as well as demonstrates the connection between its scheme and its commitment towards the sustainable economy. BOP approach is adopted by companies to help poor to get access to their products and also to increase their profits. The Coca-Cola Company works towards enhancing transparency in their sustainability reporting. Their initiatives on the reduction of energy consumption are achieved. They are also providing cover to the employees through collective bargaining accords. The KPMG report shows that 78% of the companies refer to the GRI guidelines to remain ethical in their business operations. Reference List Asyousow, 2015. Corporate Social Responsibility. [online] Available at: < http://www.asyousow.org/about-us/theory-of-change/corporate-social-responsibility/> [Accessed 4 July 2015]. Baumgartner, R. J. and Ebner, D., 2010. 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[online] Available at: < http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html> [Accessed 4 July 2015]. Tonello, M., 2011. The Business Case for Corporate Social Responsibility. [online] Available at: < http://corpgov.law.harvard.edu/2011/06/26/the-business-case-for-corporate-social-responsibility/> [Accessed 4 July 2015]. Unido, 2015. What is CSR?. [online] Available at: < http://www.unido.org/en/what-we-do/trade/csr/what-is-csr.html> [Accessed 4 July 2015]. Visser, W., 2010. The evolution and revolution of corporate social responsibility. New Jersey: John Wiley & Sons. Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple bottom line. Canada: New Society Publishers. Zu, L., 2008. Corporate social responsibility, corporate restructuring and firm’s performance. Berlin: Springer Science & Business Media. Appendices Appendix 1 (Source: Coca-Cola, 2013) Appendix 2 (Source: Kpmg, 2013) Read More