The Causes Of Unsustainability In Modern Society Commerce Essay


Sustainability reporting has gained currency in modern organizations for a variety of reasons. The reasons range from enhancing customer value, improving operations, strengthening stakeholder relationships and enhancing credibility and trust among stakeholders. Besides, stakeholder expectations have been growing along with most firms' quest for protecting their reputation for social sustainability. According to KPMG, the push towards sustainability reporting has been as a result of the growing expectations of the ever widening stakeholder groups. KPMG also cites that firms are increasingly turning to sustainability reporting to attract the socially responsible investors, employees and customers.

In the same light, three major global problems have led to concerns about socially responsible enterprise. These are depletion of natural resources, waste accumulation and sustainability of business models. As a result, the government, businesses and civil society have become interested in maintaining the social sustainability of modern enterprise as a means of delivering sustained value. This has necessitated new thinking for an emerging new world free of pollution, destruction of ecosystems, depletion of natural resources and most importantly without climate change.

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The causes of unsustainability in modern society

White (25) point out that the reason for unsustainability in the modern era is the government corporations and private citizens. The governments make poor decisions motivated by populist agendas. Governments also make wrong financial solutions or worse still chose to remain dormant in the face of a deteriorating ecosystem. Corporations also take advantage of this and take no due care of the ecosystem. Greed and deception added to the drive for short term profitability leads to escalating damage to the ecosystem threatening the very basis of sustainability.

The above reasons have prompted responsible corporations towards sustainability reporting. Though much remains to be done as far as sustainable business practices are concerned, establishment of a reporting frame work is a step in the right direction. The thinking behind the establishment of this framework is that a different way of thinking is needed that would link problems to their root causes and create a Business Monitoring System that focuses of encouraging businesses focus on Holistic Sustainability.

Coca cola company sustainability report 2010/2011

Coca Cola Company is the world leading manufacturer of beverages. The company drafts its annual sustainability reports based on the provisions of the GRI's Sustainability Reporting Guidelines G3 reporting initiative for all its wholly owned subsidiaries around the globe (Coca Cola, 17). The company reports on all the key Performance Indicators that gauge economic, social and environmental performance.

According to Schaltegger and Roger (21), a company should follow six stages in reporting its sustainability initiatives. These are as outlined below as explained through the coca cola company sustainability report for the year 2010/2011;

Articulating vision and strategy

Schaltegger and Roger offer that companies must articulate their vision when drafting their sustainability reports. In so doing, they must set out how their sustainability priorities are integrated into their mission and business strategy. In so doing, companies must define what sustainability, corporate citizenship and social responsibility means to organizations. Their vision should identify the sustainability challenges and opportunities as they march into the future. They must explain how they will create value for stakeholders through their current performance and describe the sustainability issues that might arise and how they will be addressed.

As the biggest global beverage company, Coca Cola Company CEO recognizes that the company can only be as healthy as the people and communities are. The company is currently implementing its vision 2020. The company's vision is to be a responsible corporate citizen that makes a difference through helping build and support sustainable communities. It also aspires to realize long term shareholder returns while being mindful of its overall responsibilities.

In line with this vision, the company has set up a full fledged office to look into sustainability practices in its global operations. Appointed in May 2011, the Chief Sustainability officer will help the company make progress in creating sustainability initiatives both within the organizations as well as within the communities that the company operates (Coca Cola, 17).

The company has already started sustainability initiatives within the organization. The company has been improving water use for the last eight years consecutively and the company is already on course to achieving its 2020 goal of water neutrality-i.e. water that comes into the system goes out without waste or contamination. In addition, the company has reducing its carbon emissions as well as replacing all its plastic based bottles with those produced from materials from within the manufacturing plants.

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Description of governance and reporting systems

Schaltegger and Roger explain that it is very important for firms to disclose the role of the board and the executives in the drive to sustainability initiatives. the report must describe how the board functions and the exact connections with sustainability. The report must detail the day-today business operations and how the set management systems impact on the sustainability initiatives.

Coca cola company report on sustainability points out that the board is elected by shareholders to oversee the long term financial strength and success of the firm. The board is the highest decision-making organ of the company. The Board has one committee among seven that is dedicated to monitoring and advising management ton public issues and diversity review. This committee advises the board on sustainability issues affecting the organizations and any challenges and opportunities that the firm should take advantage of.

Consistency and materiality in reporting

Schaltegger and Roger offer that sustainability reports should be made consistently to enable users compare performance over different times. Schaltegger and Roger also explain that the information presented should be relevant to the users and should only include the issues that can materially affect sustainable performance. Companies therefore are supposed to design simple identification mechanisms to establish the material issues that should be included in the report.

In its preparation of reports, the company made a review of materiality limits to make sure that the information contained in the report would significantly affect its sustainable performance (Coca Cola, 87). The company also assesses its systems, internal controls, processes to ensure that the data used for preparation of the report is appropriate representation of the company's operations. This includes site visits to assess local operating environment vis-à-vis reported information for consistency purposes. However, the layout of the report is very complicated and includes narrations of firm strategy as opposed to performance against set parameters.

Selection of indicators and data collection

Schaltegger and Roger also explain that material issues for reporting (issues that have a bearing on sustainable performance) should be the ones to inform the selection of the indicators. Companies may also choose to customize indicators to suit their operations. They can also add other measures that are not mentioned in the GRI but that they feel they need to report on as a measure of sustainability. Qualitative and quantitative data collection techniques should be used to reveal as much information as possible.

Coca Cola sustainability report touches on 4 key performance areas including water stewardship, energy efficiency and climate protection, healthy communities and sustainable packaging (Coca Cola, 74). According to the report, these four areas have a marked significance on the business sustainability. To its credit, the company makes elaborate reporting criteria complete with comparative metrics for the last five years. The company has also customized come performance indicators that help illustrate their impact on sustainable performance.

Data analysis and explanations

GRI requires that the data so collected in step iv) be presented in report that details the progress of the firm for the past five years. This requires the company to link its findings to its strategic plan and vision for sustainability. The report should describe the progress made, the relevance of such progress on firm's sustainable performance, opinion of stakeholders concerning such performance, strategic responses and lessons learned as well as comparison with industry averages or benchmarks. Therefore, the report should weave through all the other performance measures for the firm and point to their sustainability over the operating period.

Coca Cola Company has a very comprehensive report on its sustainability initiatives. Though the report dwell so much on strategy and operational issues as opposed to pointing out the areas that need improvement, it reveals all the pertinent details regarding its sustainable performance. The 95 page report details all accounts of the company's challenges and opportunities in implementing sustainability initiatives.