Q1 CSR and Materiality
Outline the Principles of Reporting used by the Global Reporting Initiative and explain why these principles are necessary to guide companies in preparing their Sustainability reports.
The GRI (General Reporting Initiative) standards help companies understand the external impacts on the environment, economy, and society. This enhances transparency and increases accountability on their contribution to sustainable development ( Simmons et al., 2018 ). The principles of GRI reporting include comparability, accuracy, clarity, and reliability.
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These principles are necessary for guiding organizations in preparing their sustainable report because it helps them be transparent regarding the opportunities and risks the experience and when considering the impact on sustainability issues. It is not sufficient to make some claims about the organization's level of sustainability in the modern world. Companies need to give a credible and tangible demonstration of their sustainability levels by adhering to proper guidelines and standards for sustainability reporting. Following these principles as provided by GRI, the organization build and earn trust among the consumers and all its stakeholders, which, as a result, impacts the organization's bottom line. It is impossible to manage what you cannot measure, and as such, transparency is the ultimate currency that creates trust that builds businesses ( Sethi et al., 2017 ). Therefore, GRI's principle helps the business become transparent in its reporting and truthful to its stakeholders and customers alike. The principles of GRI Help the organization measurably give its sustainability actions.
b) Critically evaluate the contents of the extract given, ensuring your answer addresses:
i) Commentary on the stakeholders consulted, referring to academic theories on Stakeholder management.
Stakeholder theory is a perception of capitalism emphasizing the interconnected relations between an organization and its suppliers, customers, investors, workers, and community, among others, with interest in the organization. Stakeholder management theory demands that the business create value for all the stakeholder and not just one stakeholder ( Ramakrishnan, 2019 ). The act of balancing value creation for the stakeholders is healthy for the business's progress and success.
For Lindt, consumers are the first consulted. The consumers are given specific information requirements about the origin of raw materials, ingredients, and sustainability. Consumer feedback is taken to ensure their demands are met in regard to the provision of healthy end-product and products that meet their needs ( Nikolova & Arsić, 2017 ). The consumers directly talk to the company employees to leave their feedback and to get support.
Employees are Lindt's biggest assets. The most important issues regarding the workers include training and development, equal opportunity, and diversity. The company promotes a culture of feedback where honest and open dialog is allowed, and different communication channels are maintained. There is an annual talent management program that helps in assessing, identifying, and developing professional skills.
Farmers and suppliers are other critical stakeholders. They provide consistent, high-quality packaging, raw materials, logistics, transport, machinery maintenance, and many more. The employees are in regular touch and communication with supplier partners. The organization has in place a supplier development program to ensure they are at par with organization needs.
ii) An analysis of the materiality issues identified covering what you would expect for a company in this sector and evaluating how the company can then use the materiality list to inform a Sustainability Strategy.
The Lindt sustainability plan is based on a materiality process targeted at identifying and validating the most relevant issues to the stakeholders and brings the most significant impact on the environment, economy, and society. The materiality analysis results for Lindt indicates that the company places the most significant emphasis on human rights in the supply chain, rural development, product quality, and product safety, packaging material sustainability, Biodiversity, and emissions to the environment. These are targeted at the highest levels of meeting the stakeholders' needs and balancing between satisfying the societal, economic, and environmental needs.
Q2 Environmental Performance Data
The Greenhouse Gas Protocol has four steps. Explain the purpose of the first step, "Establish the Emissions Boundary"
Establishing Emissions Boundary is one of the most critical yet challenging steps in developing the GHG emission inventory. The boundaries are the extent and the coverage that is considered for the inventory process. They determine the things that are considered and the ones that are left out. The company boundaries define the facilities, operations, and sources included in the inventory, while the operational boundaries groups the emissions leading to either indirectly or directly from the company's facilities, operations, and sources.
Write an evaluation of the performance shown in the Emissions Data Extract
In regards to Biodiversity and ecosystems, Lindt had the plan to have 100% of its cocoa-free from deforestation by 2025. Regarding CO2 and climate, the company planned a 10% reduction of greenhouse gas emissions in the production process by 2020. The company also planned for a 10% reduction of municipal water used in the production process by 2020. Regarding Waste and recycling, Lindt planned for a 50% reduction of chocolate waste in the production process by 2025.
The older vehicles emit greater amounts of dangerous gas to the atmosphere. Emissions by the cars are determined by the nature of the engine, size of the engine, and the exhaust gas devices the car has been fitted with. Vehicle efficiency declines as its age grows, which implies that vehicles emit more gas as they age ( Varella et al., 2019 ). When the exhaust gas is not burnt fully to high temperatures, then the efficiency of emission control devices also declines since they are forced to filter too much dirt, they cannot handle
Vehicle fuel emissions have been fronted as the primary cause of global warming. Vehicle emissions are also negatively impacting human health. Governments across the globe have, in the past decade, been putting lots of effort into the bid to reduce the air pollution challenge.
Vehicle air pollution is a danger to both the city residents and the world at large. Reducing air pollution means making the earth a better place to live in. Reducing air pollution means better health for humans and protecting the environment for future generations ( Chen et al., 2019 ). A quick shift from the current gas emitting vehicles to electric vehicles will help do away with combustion engines' problems.
Lindt does not perform perfectly well in regards to emissions. It has higher levels of emissions at the moment, and this primarily comes from the older vehicles used for transportation.
Give ONE recommendation on which business processes the company should target for improvements
The business needs to improve on monitoring the levels of its inventory. The organization does not have an advanced inventory ERM system that automatically monitors and records the inventory levels at any given time, allowing the organization to balance between the demand and the desired inventory levels. Too much inventory denies the company significant capital, while too little inventory also may lead to product shortage and, as a result, dissatisfied customers. Implementing an ERM system in the supply chain would help solve this problem by ensuring the demand for goods is balanced with production and the supply of raw materials at all times.
References
Chen, S., Liu, Z., Chen, B., Zhu, F., Fath, B. D., Liang, S., ... & Yang, J. (2019). Dynamic
carbon emission linkages across boundaries. Earth's Future , 7 (2), 197-209.
Nikolova, V., & Arsić, S. (2017). The stakeholder approach in corporate social
responsibility. Engineering management , 3 (1), 24-35.
Ramakrishnan, D. (2019). Theories of Stakeholder Management. Available at SSRN
3535087 .
Sethi, S. P., Rovenpor, J. L., & Demir, M. (2017). Enhancing the quality of reporting in
Corporate Social Responsibility guidance documents: The roles of ISO 26000, Global Reporting Initiative and CSR ‐ Sustainability Monitor. Business and Society Review , 122 (2), 139-163.
Simmons Jr, J. M., Crittenden, V. L., & Schlegelmilch, B. B. (2018). The Global Reporting
Initiative: do application levels matter? Social Responsibility Journal .
Varella, R. A., Faria, M. V., Mendoza-Villafuerte, P., Baptista, P. C., Sousa, L., & Duarte, G.
O. (2019). Assessing the influence of boundary conditions, driving behavior and data analysis methods on real driving CO2 and NOx emissions. Science of the Total Environment , 658 , 879-894.
