Literature Review

We found an article from Ford, “Best practices in sustainability and more,” (Confino, 2014, ). This articles gives us so many example of companies that have adopted sustainable strategies to conform to regulations, but also to increase their revenues, and hands on impact on the world we are living in. In 2010, a study involved that more than 3,000 companies that was conducted by Boston Consulting Group and Word Economic Forum showed that companies with sustainable practices generate over-average profits. This study mentioned that its latest research shows that “companies with strong accountability systems- board oversight, clear policies on human rights and environmental management, and so on, in many cases also have strong work with suppliers as well as driving sustainability into product and services.” Many companies are now choosing to be more sustainable because doing the right thing is the way to go. Nike for example, has innovated in many ways. It has integrated sustainable design across its product portfolio and also created the Making app in 2013 which reveal the numbers of their sustainability reports. Another company such as Xylem, has adopted the executive compensation strategy. The global water technology provider has both a sustainable steering committee and an enterprise risk committee. It identifies senior executives who are held accountable for sustainability performance. Companies like PG&E has adapted the biodiversity sustainable strategy for example. The utility company’s environment policy explicitly references habitat and species protection, and the company publicly reports detailed findings on its efforts as well. Many company are getting pro-transparency.

            In PepsiCo, the food and beverages company [resents its sustainability strategy and goals during its annual shareholder meeting and identifies and discloses its impact on the climate change, water scarcity as well as public health issues as core sustainability challenges in its annual financial fillings. In the same optic, Coca Cola tries to address water stewardship issues as well. The drinks company has improved the efficiency of its water use by 20% and identified the need for a rigorous third-party evaluation of its water management approach. General Electric as well is adopting different ways to employee engagement. GE is using its human resources department to integrate sustainability into the company’s culture, ranging from hiring practices and training to employee wellbeing programs.

The first step in innovation would be to have a different approach on low-costs. Not only to focus on the cost, but on the efficiency of the organization as a whole as well. The choice of using a more expensive material can increase the unit price of the product, but it might drastically decrease the cost in the long run. The second step would be to start sustainability conversion with small changes then implement bigger ones into technology changes for example. An example of that could be for Coca Cola or PepsiCo to repair their leaking in the equipment in all their factories. By doing so, they can save a huge amount of money in the long run and save a huge amount in resources as well. In conclusion, a company’s efforts to achieve success as well as to implement sustainable strategies will boost their innovative actions in the right direction. In order to increase financial performance as well as innovation simultaneously, a company should identify the most important material or products issues and develop the appropriate sustainable strategy in order to fix that issue.

          Chapter 13 gave us an understanding of what the concept of supply chain management is. The textbook defines it as being the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. The way upstream and downstream works are by a flow of functions of finished goods and services from product design, procurement, facilities, management, production, logistics, marketing, finance, and until the distribution. In supply chain management, companies look to outsource, offshore, and global source their products to manufacture and produce at a lower cost. Companies who work closely with their suppliers have a better relationship and can overlook their facilities to prevent any human rights, environmental and social conditions in the future. Furthermore, social sustainability, these are the standards of making sure that workers are being treated fairly and are entitled to their rights. These standards adhere to getting paid a minimum wage and overtime, reasonable working hours, collective bargaining, health and safety in the workplace. Providing these standards to the workers, it can ensure an effective efficiency within production and manufacturing. Along with social, comes environmental codes which have to do with managing product stewardship. To comply with environmental codes, companies must reduce the impact of using harmful substances, finding a better solution to becoming energy efficient, and reducing emissions and waste. 

            chapter 6 titled Sustainability Reporting defines it is the documentation and disclose of how closely corporate operations conform to the goal of sustainable development. In this chapter, we can see how the development and the increase in publishing sustainability reports are happening, this information supports companies in developing reports and communicating externally their social, environmental and economic performance and impacts in order to satisfy the information needs of interested stakeholders groups. In order for companies to provide this information, there are two most knowing structures one is the GRI and the other one is IR. The GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues on environmental, economic and social dimensions of their operations. The GRI’s reporting focus areas are divided into two parts, the first one suggests what should be included in the report, they define the content of sustainability report. The second one prescribes ways to enable companies attain a standard quality for sustainability reporting. On the other hand, the IR knowing as the IIRC is a global coalition of regulators, investors, standard setters, the accounting professional and NGO’s, they all share a common perspective on the importance of communicating to the users of reports how value is created.