...The Consequences of Mandatory Corporate Sustainability Reporting Ioannis Ioannou London Business School George Serafeim Harvard Business School Abstract We examine the effect of mandatory sustainability reporting on several measures of socially responsible management practices. Using data for 58 countries, we show that after the adoption of mandatory sustainability reporting laws and regulations, the social responsibility of business leaders increases. We also document that both sustainable development and employee training become a higher priority for companies, and that corporate governance improves. Furthermore, we find that companies implement more ethical practices, reduce bribery and corruption, and that managerial credibility increases. These effects are larger for countries with stronger law enforcement and more widespread assurance of sustainability reports. We conclude with thoughts about mandatory sustainability and integrated reporting. Keywords: sustainability reporting, mandatory reporting, corporate social responsibility, integrated reporting Assistant Professor of Strategic and International Management, London Business School, Regent’s Park, NW1 4SA, London, United Kingdom. Email: iioannou@london.edu, Ph: +44 20 7000 8748, Fx: +44 20 7000 7001. Assistant Professor of Business Administration, Harvard Business School, Soldiers’ Field Road, Morgan Hall 381, 02163 Boston, MA, USA. Email:gserafeim@hbs.edu, Ph: +1 617 495 6548, Fx: +1 617 496 7387 (contact...
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...3. Corporations practicing stakeholder management will be more sustainable. Discuss. Over the years, social and ethical concerns have brought attention to the community that caused much bitter conflict to the relationship between business and society. As people become better educated and more affluent, rising expectations naturally follow for major institutions and these developed a backdrop against which criticisms towards businesses have grown. Therefore, these created the need for them to assume greater societal responsibilities rather than mere ruthless pursuit of own profits. Many businesses today share the same viewpoint that making profit for profit’s sake no longer leads to sustainable performance, stakeholder management has become an increasingly important aspect of a business’ operation integrating traditional economic considerations with environmental and social concerns (Jones 2012). While doing well and doing good are no longer seen to be mutually exclusive, corporations practicing stakeholder management is highly debated to be sustainable to a large extent. With all the benefits that it brings, this approach however also has its fair share of limitations to be discussed later in this essay. Outlining the term ‘sustainability’ Sustainability is the capacity to endure. One of the best known general definitions about sustainable development was expressed as “meeting the needs of the present without compromising the ability of future generations to meet their...
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...The Transformation Continues QANTAS SUSTAINABILITY REVIEW 2013 This page has been intentionally left blank TABLE OF CONTENTS Page Introduction Governance − − − − Corporate Governance Business Resilience Group Security Group Risk and Audit 2 4 4 9 10 11 13 15 19 22 31 38 45 49 56 57 Stakeholder Engagement Financial Safety and Health Customer People Environment Procurement Community Measures Glossary The Group Strategy, supported by environment, procurement and community strategies, underpins the identification and reporting on material items. To support the Group’s core goal of delivering sustainable returns to shareholders, areas of focus are used to measure, monitor and report on the Group’s performance. Areas of focus and measures are reviewed and updated to ensure that they remain relevant. The Group Strategy drives sustainable outcomes Governance Corporate governance is core to ensuring the creation, protection and enhancement of shareholder value. Stakeholders We are committed to communicating effectively with our stakeholders. Financial Safety and Health To be recognised as the world’s leading airline group in air, ground and people safety and health. Customers Our Customers are the core of everything we do. The Group is continually striving towards providing exceptional customer experiences. Vision We strive to build a strong viable business capable of delivering sustainable returns...
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...and Spencer (M&S) is a leading UK retailer selling clothing, food, and housewares. In 2007, the company put sustainability at the heart of its business. In order to succeed, it would have to change the attitudes and the behavior of its shoppers. As a result, it launched Plan A which set out a five year plan involving 100 social and environmental commitments that were expected to shape the future of the company. Plan A would allow the company to resolve some of the big issues facing their business. They called it Plan A because there is “no B when it comes to conserving the earth’s finite resources” (Marks & Spencer Website). Brief Background on Company In 1884, Michael Marks started the company by selling an assortment of goods in an open-air stall in Leeds, UK. In the 1920’s, the company went public and expanded into general merchandise and ready-to-wear clothing. By the 1970’s, the company had become a British icon and a household name. However, from the 1980’s to 1993 came the troubled years. Despite the expansion of its operations in the 1980’s, the retailer had failed to keep current with its shopper’s preferences and this led to financial woes. From 1994 to 2006, it was back to the basics for the company. By 1996, it had rebounded to become the UK’s most profitable retailer. However, this recovery was short lived, and M&S experienced a significant slump in business in 1999 which continued into the early 2000’s with profits and sales declining significantly. “In 2004, Sir...
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...Name University Course Tutor Date Business Ethics Business Ethics Ethics can be defined as moral guidelines which govern good behavior. Therefore, business ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It is increasingly being applied in businesses to guide their operations. It captures different aspects norms and values that govern the behavior of a business. For instance, it has codes of practices that are increasingly becoming popular. These cover different areas such as corporate social responsibility, environmental policy and actions, rules for personal and corporate integrity, dealings with customers and the supply chain. Business ethics guide how businesses and people should behave in the world of business or commerce. Ethical Theories There are several ethical theories that explain how people and business entities should behave in the society so that their behavior may be considered to be morally good. Some of these theories are briefly explained below in relation to business behavior. Utilitarianism This theory holds that an act can be judged as morally good or bad, right or wrong when it produces amount of pleasure or lack of pain for the greatest number of people (Sadler 9). Business ethics operates under greatest happiness principle. This implies that businesses and their managers need to maximize positive outcomes for the largest number of people...
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...Contents Executive Summary 1 Introduction 2 Defining Sustainability 2 What Sustainability means to Woolworths 3 Corporate Stakeholders of Woolworths 3 Woolworths Drive for Change 5 Integrated Reporting 6 Why Integrated Reporting? 6 Woolworths Integrated Reporting 7 The Future of Integrated Reporting 7 Conclusion 8 Word Count: 1995 Executive Summary This report examines the new world of sustainability reporting, and the complex web of stakeholders. It focuses particularly on the demands for new kinds of transparency which serve the interests of the environment and society. In this report, Woolworths, one of our major competitors has been analyzed in order to understand how they have evolved the concept of sustainability and how they have applied it to their organizational level. As a result, Woolworths has placed our organization at a competitive disadvantage. The report finds Woolworths future prospects as a positive template in managing our organization. Their engagement on sustainability issues with their stakeholders, customers, suppliers, investors and employees through their Sustainability Strategy have placed them in the lead. This report provides an opportunity on sustainability and integrated reporting for our organization. Introduction Over the years there has been an increase in pressure and concern over the impact that organizations have had on the environment and the society. As a result, organizations are being challenged...
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...Strategic management, corporate responsibility and stakeholder management Integrating corporate responsibility principles and stakeholder approaches into mainstream strategy: a stakeholder-oriented and integrative strategic management framework Takis Katsoulakos and Yannis Katsoulacos Takis Katsoulakos is a Director at INLECOM Ltd, Burgess Hill, West Sussex, UK. Yannis Katsoulacos is a Professor at Athens University of Economics and Business, Athens, Greece. Abstract Purpose – The purpose of this article is to establish a strategic management framework that supports the integration of corporate social responsibility principles and stakeholder approaches into mainstream business strategy. Design/methodology/approach – A top-down and bottom-up approach was used to develop the proposed framework. The top-down approach focused on analyzing the main strategic management theories including social responsibility movements to identify complementary concepts and create a relevant topology. The bottom-up approach was based on empirical research on the views of business companies on corporate social responsibility, a review of best practices and case studies mainly in Greece. Findings – The paper describes a stakeholder-oriented integrative strategic management framework linking the main strategic management theories across value, responsiveness and responsibility dimensions. A mathematical model is presented describing the synergistic development of advantage-creating knowledge and...
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...** Explain the ethical issues a business needs to consider in its operational activities. BUSINESS ETHICS: - is the application of ethical values (the standards that are set by a business or individuals that control their behaviour) to business behaviour. - apply to: all aspects of business conduct, all levels of the organization, all activities that affects stakeholders and the organization as a whole. P1 ETHICAL ISSUES: 1. Corporate governance and corporate social responsibility Corporate governance – the people and procedures for taking the major decisions within a business. It is "the system by which companies are directed and controlled". Corporate social responsibility (CSR) – refers to the extent that a business considers what it does in relation to a wider world. It is the policy of the business towards all stakeholders that takes their interests into account. It is when a firm establishes its own policies regarding its standards of behaviour and its relationship with stakeholders. 2. Environmental ethical issues and sustainability Environmental ethical issues – are problems with the planet's systems (air, water, soil, etc.) that have developed as a result of human interference or mistreatment of the planet. Sustainability - is the capacity to endure. For humans, sustainability is the long-term maintenance of responsibility, which has environmental, economic, and social dimensions, and encompasses the concept of the responsible management of resource...
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...This report explores the relationship between system oriented theories, sustainability issues and disclosures made by Orica Limited in their 2013 Sustainability Report (“Orica 2013”). The review is based on the system oriented theories covering Stakeholder Theory, Legitimacy Theory and Institutional Theory. On the basis of this assessment, recommendations are made for future approaches to Orica’s Sustainability Reporting. The 2013 Sustainability Report by Orica provided benefit to stakeholders. Orica’s key sustainability challenges and opportunities focus on: refining the customer value proposition, developing people capability and competence, driving common systems and processes, developing performance metrics and targets, reviewing manufacturing reliability and integrity, extending the mining service offering and securing low cost and capital efficient supply (Orica 2013). These areas are constantly being enhanced and some current initiatives are the Seven Pillar training program to ensure all employees have an understanding of Orica’s vision, value and strategies, development of stakeholder plans at key sites to provide a consistent approach to management, implementing Environmental Management Plans (EMPs) to identify key environmental risks, controls and impacts, and Project Sustain which identifies initiatives under Orica’s Safety, Health, Environment and Community (SHEC) (Orica 2013). The disclosures made by Orica can be assessed using system oriented theories. Deegan...
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...over the world while maintaining their vertical control from their headquarters in Calgary; by analysing Agrium’s history, corporate structure, and three key business units. At the end of this case study we hope other Canadian organizations will adopt the Agrium model when they consider expanding operations globally. Keywords: Agrium, Agro-food, , clusters, global, mining, and vertical integration Table of Contents Introduction.................................................................................................................................................. 1 History .......................................................................................................................................................... 1 Corporate Division ...................................................................................................................................... 2 Governance ............................................................................................................................................. 2 Board of Directors .................................................................................................................................. 3 Chief Executive Officer .......................................................................................................................... 3 Code of Business Conduct and Ethics................................................................................................ 4...
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...collapsing ecosystems, freshwater shortages, nuclear accidents and failure to mitigate or adapt to climate change. Geopolitical Risks The geopolitical category covers the areas of politics, diplomacy, conflict, crime and global governance. These risks range from terrorism, disputes over resources and war to governance being undermined by corruption, organized crime and illicit trade. Societal Risks The societal category captures risks related to social stability – such as severe income disparities, food crises and dysfunctional cities – and public health, such as pandemics, antibiotic-resistant bacteria and the rising burden of chronic disease. Technological Risks The technological category covers major risks related to the growing centrality of information and communication technologies to individuals, businesses and governments. These include cyber attacks, infrastructure disruptions and data loss. Ten Global Risks of Highest Concern in 2014 1 Fiscal crises in key economies 2 Structurally high unemployment/underemployment 3 Water crises 4 Severe income disparity 5 Failure of climate change mitigation and adaptation 6 Greater incidence of extreme weather events (e.g. floods, storms, fires) 7 Global governance failure 8 Food crises 9 Failure of a major financial mechanism/institution 10 Profound political and social instability Risks are measured by impact and likelihood Risks...
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...CORPORATE SOCIAL RESPONSIBILTY SUSTAINABILITY ANALYSIS INTRODUCTION Larsen and Toubro is a USD 9.8 billion, technology, manufacturing, finance, engineering and construction conglomerate, with global operations. The company is headed by Mr. A.M Naik, CEO and M.D. During times when sustainability as the biggest challenge faced by mankind today, L and T has always pursued its long term strategic plans, remaining steadfast in its sustainability journey. 1.1 Sustainable Development United Nations in 1983 defined it as ‘Development that meets the needs of the present, without compromising the ability of the future generations to meet their own needs’. 1.2 Corporate sustainability Strategies and business practices adopted by the company to achieve corporate growth and profitability as well as to pursue societal goals, specifically those related to sustainable development-environment protection, social justice and economic development. In simple words, the well being of the society depends on the economy and the economy depends on the global ecosystem. 1.2 Corporate sustainability report L& T’s sustainability report is based on Global reporting initiative, i.e. GRI's Reporting Framework that is developed through a consensus-seeking, multi-stakeholder process. L and T reports are ‘ GRI Checked ‘ and graded as A+ reports, which is the highest grade for GRI reports. 1.3 L&T’s Take on Sustainability L & T views sustainability...
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...strategy tenable? The case provides a rich description of Enterprise Risk Management in action, and shows how Hydro One executives arrive at a shared understanding of the risk profile of the company. In the narrative a diverse group of managers (the chief executive, the chief financial officer, the head of the public relations and the chief regulatory officer) voice their views on the risks, collectively bringing a multiple stakeholder perspective to the risk profile. The case challenges students to define the problems and risks that the company faces, given its strategic objectives, its evolving risk profile, and the changing environment. The case also offers a discussion ground for defining the role of the chief risk officer, and the relationship between risk management, strategic planning and capital budgeting. Procomp Informatic: Stepping on Ethical Landmines in Asia The collapse of Procomp Informatics Ltd, a major Taiwanese chipmaker, has been regarded by Taiwan's market watchdogs as similar to the scandal of the U.S. energy giant Enron in 2001. In June 2004, Procomp defaulted on a bond payment and structured for bankruptcy, despite a huge cash balance recorded in its books. It was discovered that the company's executives and its overseas sales agents had colluded in overstating sales revenue, manipulating stock prices, illegally leveraging assets, and arranging bonds through paper companies. The incident left thousands of company...
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...Enriching Life Through Communication Huawei Investment & Holding Co., Ltd. Corporate Sustainability Report 2011 Report Profile Reporting Period: January 1 to December 31, 2011 Date of Most Recent Previous Report: June 2011 Reporting Cycle: Annual Defining Report Content Global Reporting Initiative (GRI) principles such as materiality, stakeholder inclusiveness, sustainability context, and completeness, were used in this report to analyze key sustainability-related issues in business operations and identify major stakeholders. Huawei Investment & Holding Co., Ltd. (hereinafter referred to as “the company” or “Huawei”) hired a third-party organization to survey stakeholders and collect information on stakeholder expectations and requirements. Huawei’s CSR Committee studied, assessed, and selected the key items and indicators disclosed in this report. The performance indicators and management approaches discussed in this report cover all entities that Huawei either has control of or a significant influence over in terms of financial and operational policies and measures. These same performance indicators and management approaches are also consistent with the scope of Huawei’s annual financial report. Report Assurance Method Core indicators and additional indicators from the GRI G3.0 Guidelines were applied to compile the report and the application level is B+. To ensure the reliability, fairness, and transparency of this report, Huawei engaged TÜV Rheinland to verify...
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...2.4- What is meant by business sustainability? To be a sustainable business, an entity should meet current needs without compromising the ability of future generations to meet future needs. The key drivers of sustainability are competition for resources, climate change, economic globalisation and connectivity and communication. 2.6- What are the three pillars of sustainability? The three pillars of sustainability are Social Economic and Environmental. 2.10-What are the four key responsibilities of business? Do you than an entity should consider discretionary responsibilities? Why? Corporate Social Responsibility, Shareholder Value, Stakeholder Theory, Stewardship Theory. Yes, I believe entities should consider discretionary responsibilities as I think it would benefit the company’s image within the community and it would also make for a happy place to work for its employees, as they would know they were working for a socially responsible entity. 2.17- Outline activities that accountants could take to help corporations discharge their social obligations? Transparency: The Company provides timely disclosure of information about its products and services and activities thus permitting stakeholders to make informed decisions. 2.22- List some of the reasons given to explain why business act in socially responsible manner. Competition for resources- natural resources are finite and must be preserved to ensure there will be enough for future generations Climate change- Due...
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