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In the late twentieth century, rapid development of information technology and products such as the PC, satellite and Internet became a driving force of globalization. The consequence of the development of globalization is reflected on weakening the influence and capacity of governmentâ€Ÿs governance, and on the increasing power of multinationals. While facing the challenges of natural resources depletion and the crisis of ecological imbalance, the expectations from the international communities to multinationals for taking social responsibilities and doing business ethically are growing rapidly. Sustainable development has been perceived widely as the biggest challenge to business in the 21st century. Walking the talk on corporate social responsibility (CSR) is regarded as one of the key towards corporate sustainability. A lot of global initiatives, principles and standards were launched and developed in response to the need for CSR in the last decade. The UN Principles for Responsible Investment (PRI), Dow Jones Sustainability Index and FTSE4Good are a few of the initiatives to be named based on the components with outstanding sustainability performance.
1.1 Defining Sustainability
Many specialists are working on developing and understanding the sustainability concept, but everyone has their own view point about what sustainability is. Disciplinary conceptions of the term, though useful, will by nature be incomplete because people will define sustainability with discipline-specific vocabulary (Allen et al. 1994). Sustainability "calls for broader disciplinary integration and subtler conceptualization than are offered by current efforts" (Allen et al. 1994). Creating a process for dialogue and the development of a shared vocabulary are critical to moving sustainability from semantic debate to application. Nonetheless, Sustainability is an ideal end-state. Like democracy, it is a lofty goal whose perfect realization eludes us. As the process of attempting to achieve sustainability will continually reveal new challenges and questions, a definitive definition is impossible.
According to research studies by University of Michigan (2002), corporate sustainability is a three dimensional approach rather than a single. Thus, it is significant for an industry or a firm to keep in mind the triple bottom line approach (refer fig: 1) and act accordingly so as to achieve sustainable development in oneâ€Ÿs industry.
Fig 1 -The three spheres of sustainability (adopted form University of Michigan sustainability assessment, 2002)
1.2 Defining Sustainability indicators
Sustainability indicators are information sets which are formally selected for a regular use to measure changes in key assets and issues relevant to the chosen industry. Indicators and composite indicators are increasingly recognized as a useful tool for assessing sustainable performance. "Indicators arise from values (we measure what we care about), and they create values (we care about what we measure)" (Meadows, 1998). Such indicators help in summarizing, condensing and conveying meaningful information from a complex and dynamic environment. The purpose of sustainability assessment is to provide decision-makers with an evaluation of global to local integrated nature-society systems in short and long term perspectives in order to assist them to determine what actions should or should not be taken in an attempt to make society sustainable, Kates et al (2001).
1.2.1 Features of effective indicators
Sustainability indicators are reckoned as "bellwether tests of sustainability and reflect something basic and fundamental to long term economic, social or environmental health of generations" (Sustainable Seattle, 1994). Indicators are derived from data. They measure the progress towards achieving specific goals or objectives either qualitatively or quantitatively. Therefore, they are used to monitor progress of past policies, and to provide information on strategies for future sustainable development. Indicators are as varied as the types of systems they monitor. However, effective indicators have the following features in common.
Sustainability indicators must integrate, in that they attempt to portray linkages among the economic, environmental and social dimensions. For instance, the cost of recycling products into both economic and environmental aspects.
Another important characteristic of effective indicator is that they must be forward looking. One simplest type of forward-looking is a trend indicator, which describes historical trends and provides information about future sustainability.
Effective indicators should be able to take into account the distribution of conditions (social, economic, environmental) within a population or across geographic regions. Sustainability indicators should alsobe able to distinguish between local and nonlocal sources of environmental degradation, and between local and nonlocal environmental effects.
4. Multi-stakeholder input
A final characteristic of sustainability indicators is the manner in which they are developed. The history of the social indicator movement suggests that the most influential, valid, and reliable indicators have been those that were developed with input from a board range of participants in the policy process. This can be accomplished by assigning significant responsibility for selecting sustainability indicators to a broad-based, multi-stakeholder group or by consulting in some other way with multiple stakeholders from the earliest stages of indicator development.
Fig 2 -International Stakeholders for ACER (Source: Acer CSR report, 2008)
1.3 Defining Monitoring Systems
The world business council for sustainable development (WBCSD, 1997), the Global reporting initiative (GRI, 2002) [see appendix-1] and development of standards (OECD, 2002) are the basis for sustainability reporting. Monitoring has emerged as one of the primary management responses to the sustainability challenge and it helps us understand the condition of systems and what we value as sustainable. Monitoring has focused on developing the tools necessary to gauge where we are relative to where we want to be. In other words, how well are we doing? Monitoring is the "repeated observation, through time, of selected objects and values in the ecosystem to determine the state of the system" (Clayoquot Sound Scientific Panel, 1995). In the context of sustainability, a monitoring program establishes a set of markers that help assess whether systems are being managed in a sustainable fashion.
1.3.1 Significance of Monitoring Systems
Ø Build a base of understanding about the system by revealing patterns and trends;
Ø Establish benchmarks of the current state of the system for comparison to desired future conditions;
Ø Detect change in the system and serve as an early warning of change;
Ø Evaluate the effectiveness of programs and measure progress towards goals;
Ø Identify changes in baseline conditions for key indicators that result from management actions, including restoration activities;
Ø Support planning and management decisions through the identification of key issues and trends;
Ø Communicate about the state of the environment; and
Ø Serve as an accountability mechanism for the public, managers, governments, and international communities.
2. Discussion - Acer & Sustainability
2.1 ACER - Company profile
Acer Incorporated is a leading Original Equipment Manufacturer (OEM) of notebooks, tablet, handheld, and desktop computers from Taiwan. Acer has streamlined its operations in recent years, spinning off all of its manufacturing operations, which the company considers to be of low value. Acer has implemented a new channel business model, shifting from being a manufacturer to a pure brand company that markets and distributes its products, while leaving the actual production process in the hands of contract manufacturers. Acerâ€Ÿs channel business model comprises a wide net of sales services. (Source: All reports associated to the research project on the ICT hardware sector can be found on SOMOâ€Ÿs website: www.somo.nl).
2.1.1 Defining Sustainability from ACER's perspective
Acer has dedicated herself in developing integrated sustainability and CSR strategies. Acer defines sustainability as "the ability to actively meet out corporate social responsibility (CSR) within the context of stable profit and sustainable growth, above all the dedication to seeing the world grow as a whole by pursuing global economic growth, environmental protection and social progress". An integrated strategy for Sustainable Acer, following the current mission statement and the consensus of top management on sustainability, will drive the motivation of embedding CSR in Acerâ€Ÿs mission. The journey toward sustainable development starts at a strong intention by the top management to explore business development in a healthy mode. This is the key for giving commitment, driving innovation, demonstrating business case and embedding sustainability and CSR in Acerâ€Ÿs culture.
2.1.2 Sustainability - An opportunity or threat?
Acer views sustainability challenges as an opportunity to grow as a global leader rather than a threat. As addressed by Acerâ€Ÿs chairman in the annual general meeting 2009, "Sustainability represents opportunities to us and our customers, not only because of the huge market but also the enhanced capacity of our customers for taking the challenges by using our advanced IT solutions. By providing advanced IT solutions, Acer will demonstrate the leadership in a much more proactive manner for breaking the barriers between people and technology. We believe that Acerâ€Ÿs easy-to-use, dependable and reliable products and services have enabled the world to get access to the opportunity for sustainable development. We dedicate ourselves to providing advanced products with higher environmental value".
2.1.3 Sustainable ACER - A Vision
Acer is focused to emerge as a leader in the global IT industry by adopting responsible management practices thereby securing a sustainable future for this life-giving planet through taking responsibility, innovation, increasing profitability and operating with an eye towards efficiency & sustainability hand in hand with the customers and business partners.
Fig 3 -Acer's Vision towards sustainability and the triple bottom line (Source: Acer CSR report, 2008)
2.2 Acer - Sustainability Dimensions
2.2.1 Economic Dimensions
Investorsâ€Ÿ focus is only on the returns from Acer and it needs to ensure that they do it with utmost corporate social responsibility and without much adverse impacts to the environment. Also, it should ensure that reliable and audited information is provided to the investors. The earnings per share (EPS) and the dividends paid per share are some of the factors that will help assess the long term economic sustainability of Acer. Acer could prohibit the use of harmful substances in its product range and can enforce strict safety standards for all products. Besides it can also promote greener products by developing technologies and processes that are environment benign. By developing organic and own-brand products, Acer could ensure value for money in all segments.
Ø Suppliers, Distributors, Retailers
Ø Priority to local suppliers &producers.
Ø Provide support for growth and long term success.
Ø Ensure compliance of suppliers, retailers &distributors with Acerâ€Ÿs regulations.
Ø Enforce sustainable practices to the suppliers, distributors and retailers.
Ø Increasing shareholdersâ€Ÿ value.
Ø Risk management and contingency plans.
Ø Encourage shareholder involvement in sustainable practices.
Ø Products / Process
Ø Development of eco friendly products &processes.
Ø High levels of safety standards and ease of use.
Ø Contribution towards GDP and local economic growth.
Ø Revenue to the local government in the form of taxes and on repatriation of profits back to the home country.
2.2.2 Social Dimensions
Acer guarantees appropriate social protection to all employees in the form of health and medical benefits. Acer also focuses on continual human capital development in the form of training programs thereby providing opportunities for its employees at all levels to develop their skill set. Realizing the grandness of employee diversity, Acer promotes equal employment opportunities for all by fighting discrimination and helping employees enjoy more dynamic careers. Acer can also develop well-being in the workplace by constantly communicating with employees which aids individual and collective performance. Conducting special "listen to staff" surveys and recognizing and respecting trade union rights are some other ways through which Acer could ensure social progress.
Acer also works to reinforce its control on social practices implemented by its suppliers like the ones relating to labor laws & working conditions. It ensures that the information flow from and to its suppliers is transparent and that there is no scope for fraud. Acer also carries out periodic audits of its suppliers to ensure their compliance with the charter of best social practices.
Acer aims to promote sustainability among local communities by creating jobs, dealing with local service providers and suppliers, campaigning against factors of exclusion, child protection and paying taxes. It also gets involved in community support projects and engages in a constructive dialogue with local authorities. This helps Acer establish its roots in the local community. Acer focuses on sustainable actions which relate to its specific know-how. Examples include logistics support and micro-financing for business start-ups with products likely to be sold in group stores.
Ø Ensure high level of occupational health and Safety standards.
Ø Manage workplace diversity and establish equal opportunities.
Ø Employee training and human capital development.
Ø Engage employees in sustainability practices.
Ø Ensure CSR throughout the value and supply chain.
Ø Enforce partners and stakeholders to follow sustainable practices.
Ø Minimize customer complaints.
Ø Meet or exceed customer expectations in terms of extended services.
Ø Create awareness among customers for greener products.
Ø Local Community
Ø Investment in social projects.
Ø Establish transparent systems for sustainability and keep the stakeholders communicated about the green practices.
Ø Establish and strengthen NGO-Retailer relationships.
Customers prefer a wide selection at affordable prices. By ensuring they have access to varied range of quality products, they can benefit the most. By anticipating its customer's needs, Acer could develop complementary product offerings to cater to their changing needs and lifestyles. Moreover, Acer could draw on its best practices to prohibit harmful and toxic chemicals from entering its product line. Furthermore, Acer could carry out customer satisfaction surveys to better understand and identify consumer expectations and also to ensure that complaints are dealt with minimum turn-around time.
2.2.3 Environmental Dimensions
Acer strives to preserve natural resources and encourage biodiversity whilst minimizing the impact of its operations on natural environments by opting for sustainable resources and helping suppliers to control their sourcing. Examples of such activities include, abandoning of toxic chemicals from its packaging section, introducing easy recyclable and reusable product designs and banning of chemicals that might emit CFCs onto the atmosphere thereby constituting ozone layer depletion. Another initiative includes introducing energy efficient star rated products with the global energy crisis & global warming in mind.
Ø Value chain management
Ø Waste management with recyclable product designs.
Ø Reduce chemical toxic contents.
Ø Energy efficient and star rated products.
Ø Supply chain management
Ø Abandon usage of toxic chemicals in packaging.
Ø Reduce harmful CFC emissions and related chemicals.
Acer recognizes the importance and need for optimization of transport and logistics given the huge volumes delivered to its stores. Acer is looking for alternative means of transport for deliveries to group warehouses in order to reduce mileage on road. Acer stores became the focus of logistics management with the introduction of flexible hours and deliveries based on realistic needs. This helped in saving time and fuel. Acer also carries out sustainable development audits of its consolidated warehouses and provides training to teams to help them integrate sustainable development criteria into their decision-making processes.
2.3 ACER - Sustainability Indicators
According to the GRI core indicator hierarchy structure and the FEEM sustainability index (ref. appendix: 1 & 2), the following are the core indicators for Sustainability for ACER in each of the three dimensions namely Economic, Social
and Environmental. It is strongly suggested that by maintaining a check on these indicators and monitoring them on a regular basis, Acer would be able to successfully turn their vision come true.
2.3.1 Economic Indicators
Economic dimensions comprise of information on financial performance such as profits, value creation and returns to shareholders. Taking it one step further, it could also be extended to deal with issues at the national and the global level. Indicators
Relevance of the indicator
Ø Consumer expenditure and GDP
Ø Star rated energy efficient product lines
Ø Waste reduction and recycling
Ø Distribution of revenues to Shareholders
Ø Investments (Capital, Employees, Community)
Ø Employment creation and crime rate
Ø Employee management &retention
Ø Increased purchasing power of people.
Ø Low power consumption and global warming issues.
Ø Lower pollution abatement expenditure.
Ø Higher earnings per share and &higher dividends.
Ø Enhanced reputation amidst stakeholders.
Ø High level of employment and hence low crime rate.
Ø Low hiring &training costs due to high retention.
2.3.2 Social Indicators
Acer upholds the concept that "embracing technology allows us to widen our horizons."Acer Foundation believes the key to working together toward an international alliance of wisdom requires a long period of cultivation, drawing on the strengths of all disciplines to develop scientific knowledge and train talented professionals. Thus, Acer Foundation's mission is threefold: research and develop technology and management; cultivate talents; and reward and promote service.
Relevance of the indicator
Ø R&D technology and management
Ø Health and Safety (internal and external)
Ø Enhanced global competitiveness.
Ø No adverse health impacts on employees or society.
ØEnhanced reputation amidst stakeholders.
ØStandardized organizational culture across the globe and better integration of operations globally.
ØSkilled labors development in the country outside Acer.
ØRecognition of talents through Public welfare activities.
2.3.3 Environmental Indicators
The pressing need to mitigate climate change has resulted in the international acceptance for deep cuts on the greenhouse gas emission. Energy and climate are the key issues to business in a carbon-constrained age. The Carbon Disclosure Project (CDP) has demonstrated the importance of climate risk and opportunity. At the same time, the supply chainâ€Ÿs GHG accounting has been initiated through the Supply Chain Leadership Collaboration (SCLC) of CDP. Acer believes that energy and climate issue will play a more important role in the global CSR performance rating. Furthermore, Acer is fully aware of the potential impact their products may have on the environment. Hence, their product design takes into consideration the ways to reduce environmental loading from the outset of production, in addition to user needs, functionality and added value.
Relevance of the indicator
Ø Resource &Energy saving
Ø Restricted chemical substances management
Ø Hazardous substance free (HSF) planning
Ø Waste management / Product recycling
Ø Easy Recycle and Disassemble designs
Ø Green Supply chain management
Relevance of the indicator
Ø Energy star rated low power consumption products.
Ø Conservation of stakeholderâ€Ÿs health / environment.
Ø Control on emission of CFCs and ozone depletion.
Ø Environmental damage prevention from wastes.
Ø Non hazardous chemicals and lower CFCs emission.
Ø Extending the awareness to other stakeholders.
In a world of limited natural resources, Acer places great importance on making the best use of all material resources. The foremost principles being to extend product life to optimize use of resources and to ensure all Acer products meet environmental regulatory requirements in addition to customer needs. Their Eco Product Requirement ensures all designs meet standards set for energy conservation, low toxicity, ease of recycling and green labeling. Among these standards, low toxicity criteria restrict the use of hazardous substances including batteries and packaging materials. Green labeling criteria ensure strict standards on material labeling, recycling labeling and packaging material labeling. The following figure shows an illustration of Acerâ€Ÿs compliance framework.
Fig 4 - Illustration of Acer's compliance framework (Source: Acer's CSR report 2008)
2.4 ACER - Sustainability Monitoring System
The following figure shows a sample monitoring system for Acerâ€Ÿs sustainability. This is a three stage process which starts with initiating and establishing meetings and communication with the partners in their value and supply chains, the shareholders and other internal and external stake holders involved in the organization. SAQs are self assessment questionnaires which needs to be filled by those who are taking part in the meetings and establish their visions to meet with regards to sustainability in the next year which might be further broken down to goals for each quarter.
The assessment and follow up procedures are just a means of control mechanisms to ensure that they are heading in the right direction as determined earlier. Controlling action is needed if the intended behavior is not in line with the original objectives. This would take us through the follow up and second assessment stage. This process is repeated till the desired results are achieved with regards to the triple bottom line approach - an ideal Economic, Social and Environmental sustainability.
Fig 5 - Sample Sustainability monitoring system for Acer (Source: Acer CSR report, 2008)
2.5 Limitations of Sustainability indicators
There are two important limitations to measuring an indicator, firstly the ambiguous nature of an indicator and its measurement technique. For instance, certain elements like child labour, adequate work conditions and policies against discrimination can be clearly measured by checking compliance with laws, regulations and policies. Some other elements might demand more qualitative and subjective measurement techniques due to reliance on perceptions and opinions from various factions.
The second limitation is the resistant to change attitude aspects of internal stakeholders. While audits are beneficial to the company, the compliance and adherence might be very low due to lack of proper support from the employees. They might be guarded and it may be met with a certain degree of skepticism or hostility. This might have an influence on the surveys / interviews when trying to gather more information and data for analysis. This would make the analysis of this area difficult and a comparison with its competitors even more unlikely
This planet will survive only if we work together for sustainable development. We must be ready for our competitiveness in tomorrowâ€Ÿs market which is to be shaped by sustainability issues. CSR is a business issue and the license to operate in the 21st century. As a leading global PC brand, accordingly, this is what Acerâ€Ÿs integrated CSR strategy is based on. Following Acerâ€Ÿs inaugural year of sustainable development in 2006, they have comprehensively and thoroughly reviewed their actions for sustainable development. By means of integrating and embedding CSR into their business operation and participating proactively in the global CSR initiatives, Acer has demonstrated its commitments and determination for CSR thereby making an attempt to contribute continuously to the global sustainable development.
"Sustainability is an ideal end-state. Like democracy, it is a lofty goal whose perfect realization eludes us as the process of attempting to achieve sustainability will continually reveal newer and tougher challenges and questions. Thus, any indicator framework, therefore, needs to be flexible and adaptable to those changing definitions. It needs to grow as our understanding grows, while continuing to serve its purpose as a simplifier and guide to complexity. It needs to maintain a trail of continuity from year to year and decade to decade. Most important, it needs to speak to people in ways understandable both to the rational mind and the intuition", (Atkinson A. (1998), The Compass of Sustainability: Framework for a comprehensive information system).
More effort is needed in standardizing on sector indicators and less on inventing new ones. On many environmental impacts, the data is not easily available and complex to calculate. The indicator criteria (say CO2 emissions) should be industry standard: the â€ždivisorâ€Ÿ will be sector-specific (per m2 of office, per ton of steel, per Mlitre of water). On some social (eg. staff) issues the KPIs are â€žsoftâ€Ÿ and arduous to measure; nevertheless vital to preserve. According to Charles Handy (1994), it is blindness to presume that which canâ€Ÿt be measured easily really isnâ€Ÿt important, so "persevere". It is strongly recommended that the following pointers be kept in mind while choosing the sustainability indicators or developing a sustainable monitoring system for an industry:
Ø Measure all the things which matter - KPIs will drive behaviour
Ø Donâ€Ÿt measure things which do not deliver
Ø Prioritise, where KPIs may drive in opposing directions - â€žtrade-offsâ€Ÿ
Ø Measure at the highest possible levels
Ø Sum different types and levels of KPIs separately
By paying close attention to these steps, it is obvious that Acer will walk the talk on CSR by means of a top-down process, and will be dedicated to being a global PC and IT player who embeds CSR as a key priority. Acer recognizes their influential power to engage suppliers to work together for improving the resource efficiency of IT products. With this, Acer will continuously create value and competitive advantage by timely integrating sustainability and CSR into business agenda, because of their ability to practically and eco-efficiently transform their unique understanding of business and sustainability into a comprehensive selection of innovative solutions.