Global Corporate Sustainable Development Analysis - Case Study Example

Global Corporate Sustainable Development Analysis Table of Contents Introduction 3 DuPont: A Brief Overview 4 Issues 8 Stakeholders and their Impact on Sustainable Development 10 Benefits of Sustainable Development 11 Conclusion 11 Recommendations 12 Works Cited 13 Bibliography 15 Introduction The term sustainable development came into existence in the year 1980, when International Union for the conservation of Nature and Natural Resources put emphasis on world conservation strategy. The primary intention was to achieve sustainable development by means of conserving of the living resources. Nonetheless its focus was only restricted to ecological sustainability and did not considered sustainability in the form of economic and social issues (Baker 18). Sustainable development is defined as a development strategy for organizations that control all the natural resources, assets, human resources, and also financials in order to ensure long term operation and well being of the organization (Pearce, Barbier and Markandya 4). However the classical definition of sustainable development was given by Bruntland Commission in the year 1987. It defined sustainable development as ‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (Misra 236). In the context of the study E. I. du Pont de Nemours and Company and DuPont will be chosen on which the sustainability factor will be assessed. Apart from this the report will also emphasize on the issues of sustainable development. Furthermore the report will elaborate the challenges that are faced by the company in the context of sustainable development. Thereafter the report will conclude and will offer few suggestions that will be effective for the company in achieving sustainable development. The next half of the report will present a brief overview of DuPont along with its key financial figures, market shares, and insights about its products and competitors. DuPont: A Brief Overview DuPont was established in the year 1802 by Eleuthère Irénée du Pont. The company is presently it is headquartered at Wilmington, Delaware, U.S. Initially the company started its business as a gunpowder mill. It is basically a chemical manufacturing company. Based on the market capitalization the company is the third largest chemical company of the world. In the year 2009 DuPont was the third largest company in terms of total revenue. In terms of the most sustainable companies of the world the company according to global 100 lists of 2012, the company has been unable to find a place (Global 100). However DuPont was ranked at the 43rd Position by the fortune magazine in terms of ‘most admired companies of the world’. In addition to that according to 100 bets corporate citizens list, it is ranked at the 19th position (“DuPont Sustainability Recognition and Awards”). Some of the evident products of the company include Corian, Kevlar, Delrin, Nomex, Mylar, Tyvek, Neoprene, Teflon, Nafion, and Nylon resins (“Products & Services”). However the company also started to manufacture Freon (Chlorofluorocarbons) for the refrigerators. The company is arranged into 5 primary market segments. The major 5 segments are agriculture & nutrition, electronic & communication technology, performance coatings, performance materials and safety and protection units. Nevertheless in addition to the 5 segments it has also presence in the field of pharmaceuticals. DuPont has its presence all over the world. The manufacturing plant, processing, research & development, distribution centers, purchasing department and also the regional offices are present throughout the world. As of 2012 the company had a total human resource of around 70,000. The company is highly active in the field of sports. It is famous for sponsoring the Chevrolet Impala team of NASCAR. DuPont competes with a wide range of business units in the market place. The competitors of the company are from agricultural, biotechnology and chemical industries. The major competitors of the company are BASF SE, Dow chemical company and Monsanto Company. The market share of the company in terms of its biotechnology division is around 5 % in the US market. Figure 1 (Source: “Big 6 Biotech Corporations”) The financials of the last 5 years highlight that the net sales of the company in the year 2007 was $ 29,378 and suddenly dropped in the year 2009 to $ 26,109 (DuPont E I De Nemours & Co). However the sales picked up from 2010 onwards. The net income for the company also picked up similarly (DuPont E I De Nemours & Co). The key financials for the last 5 years are highlighted below. Table I Year 2007 2008 2009 2010 2011 Net Sales 29,378 30,529 26,109 31,505 37,961 Operating Expenses 26,910 29,445 25,144 29,022 34,437 Net Income 2,995 2,010 1,769 3,052 3,510 (Source: Author’s Creation) Based on the data of the last five years financials the trend for each of the elements are highlighted below. Figure 2 – Net Sales (Source: Author’s Creation) Figure 3 – Operating Expenses (Source: Author’s Creation) Figure 4 – Net Income (Source: Author’s Creation) Issues There are multiple issues with which the company has to deal. Some of the important issues in the context of sustainable development are as follows:- The biggest issue or challenge for the company in context with the sustainable development is the rising population. Studies reveal that by the year 2050, the global population will reach 9 billion. With this colossal growth it becomes more critical to feed the total population and also reduce the dependence on fossil fuels. The reduced dependency on fossil fuels will then keep the environment safe and facilitate sustainable development. Since the company is in the business of chemicals and has huge presence in the entire food chain, it affects DuPont to a large extent. The biggest challenge is to let global population consume nutritious food. However the company in this context is actively working with the farmers across the globe to ensure quality ingredients are available to consume. The company has taken a number of initiatives such as developing unique combination of seeds, development of products that gives protection to the crops and also high end use of technology. In order to combat this challenge the company also considers the ethical dimension. Therefore they developed and implemented only those solutions that are culturally acceptable (DuPont). The second challenge that the company is presently facing in terms of sustainability is the wastage of foods. Statistics show that around 30 % of the total production of foods gets wasted. It is also highly related towards the maintenance societal sustainability. Therefore if that 30% quantity can be preserved, it will help to feed a huge number of populations. In this context the company’s food packaging system can help to serve the purpose. Emission of footprint – With the course of time the emission of carbon footprint is hugely increasing. Carbon footprints are also known as green house gases. With the emission of these gases the environment is getting highly polluted. Apart from impacting the environment it also indirectly impacts the health of living organism. It also plays a major role in the issues such as global warming. In general green house gases get emitted by the operations of various industries. Also it gets emitted through land clearance, transport, fuel, manufactured goods and through various construction mechanisms. In this context the company has also taken various initiatives to counter the emission of carbon footprints. Also the issue is highly related with the company, as it is involved in a number of production activities. Moreover evidences also show that the level of carbon emission from the operations of DuPont is slightly on the higher side. Thus to curb it the company is spending huge amount of money in the process of research and development. With the reduction of footprints the company is aiming to reduce its affect in the areas such as consumption of water, air carcinogens, and energy consumptions (“DuPont Statement on Sustainable Development, Local Sustainability”). From the aforementioned issues the most important is the one related with the emission of carbon footprints. It is important because DuPont is directly related with the operations of the company. Also the impact of green houses gases are huge in the environment. Furthermore it brings an issue pertaining to ethics. The company for its own benefit cannot emit harmful substance in the environment. Therefore this issue of sustainable development must be highly prioritized and addressed as soon as possible. While on the other the issues related to the preservation of food and ensuring high quality food to the people is somewhat beyond the capabilities of the company. Though it is an important issue, but impossible for the company to transform it single handedly. Stakeholders and their Impact on Sustainable Development Organizations consist of a number of stakeholders and heavily depend on them for various functions (Phillips 3). Stakeholders are the individuals, group of individual or organizations who are directly or indirectly attached with the organization. They plays central role towards every activity of the organization weather internal or external. An organization has to deal with a large number of stakeholders. There are different groups of stakeholders. The various groups of stakeholders include suppliers, customers, employees, business partners and the owners of the business In this context a number of stakeholders group are related with the problems or issues discussed above. Employees – Employees are the one that carries out the operations of the company. Employees also execute the strategies of the organization pertaining to sustainability (“Make your business more sustainable”). Hence failing on it, may hamper the sustainability of the firm. Consumers – In most of the cases consumers prefer greener products. Also there are cases when they only prefer to buy products from a greener supplier. However consumers sometimes become the reason for hampering the sustainability. Due the high demands of products in the market and to meet that, organizations sometime manufacture products that require high emission of gases. Benefits of Sustainable Development Sustainable development provides the opportunity to preserve the environment of the earth. Nevertheless for an organization it also offers possibilities of economic growth. Therefore incorporating sustainable development in an organization ensures social benefits, economic growth and environmental benefits (“Benefits of Sustainable Development”). The companies also get huge financial benefits by practicing sustainable development. Some of the other benefits are highlighted below:- 1. Cost Savings: - Increased recycling and less usage of raw materials hugely reduces the cost of production (Dalal-Clayton and Bass 305). 2. Greater Readiness: - If there are sudden changes in the policies or rules and regulation pertaining to environment of a country, the firm practicing sustainable development will be highly benefitted as they will be least affected. 3. Reputation: - It offers a greater reputation to the company, thereby increases the market value of the company. Conclusion The report was about the assessment of how sustainable development is importunate for an organization. In order to accomplish it the report has made use of DuPont the US bio chemical giant to assess the impact. While in the course of study it has been identified that the company is facing multiple issues pertaining to its sustainable development. The most important issue identified was about the emission of green house gases. For this reason the company is facing huge legal as well as ethical issues. Nevertheless there are number of stakeholder groups associated with this issue. Now after conducting all the required researches it can be concluded that sustainable development for a company is extremely important for the purpose of avoiding any legal and ethical issues. Moreover it is also the way by which the company can play the part of preserving the natural environment. Recommendations Some of the recommendations to achieve further sustainable development, DuPont can use the following suggestions. The company should add initiate and implement sustainable development as the most essential component for the business (Cheigh, Kumar, Seyfang and Zhijun Tan 24). This will ensure practice of sustainability throughout the organization. The company should create awareness about sustainability and emphasize on value added products (Mohammed 116). Sustainable development must be integrated as a guiding entity for the company (Voigt 143). Works Cited Baker, Susan. Environment and Sustainable Development. London: Routledge, 2006. Print. “Benefits of Sustainable Development.” Epa. n.p., 2012. Web. 06 Sept. 2012. "Big 6 Biotech Corporations.” Sourcewatch. MediaWiki, 2012. Web. 06 Sept. 2012. Cheigh, Brian., Pankaj Kumar., Heather Seyfang and Jeanne Zhijun Tan. “Recommendations for Sustainable Development in Fields Corner.” 2004. MIT. Web. 06 Sept. 2012. Dalal-Clayton, D. B., and Stephen Bass. Sustainable Development Strategies: A Resource Book. London: OECD Publishing, 2002. Print. DuPont E I De Nemours & Co. “10K.” 2010. PDF File. DuPont E I De Nemours & Co. “10K.” 2012. PDF File. “DuPont Sustainability Recognition and Awards.” DuPont. DuPont, 2012. Web. 06 Sept. 2012. “DuPont Statement on Sustainable Development, Local Sustainability.” DuPont. DuPont, 2012. Web. 06 Sept. 2012. DuPont. “2011 Sustainability Progress Report.” 2011. Web. 06 Sept. 2012. Global 100. “2012 Global 100 List.” Global 100. Global 100, 2012. Web. 06 Sept. 2012. “Make your business more sustainable.” Businesslink. n.p., n.d., Web. 06 Sept. 2012. Misra, Surendra N. Indian Economy and Socio-Economic Transformation: Emerging Issues and Problems. New Delhi: Deep and Deep Publications, 2004. Print. Mohammed, Gina H. “Recommendations for Sustainable Development of Non-Timber Forest Products.” NCRS. Web. 06 Sept. 2012. Pearce, David W., Edward Barbier and Anil Markandya. Sustainable Development: Economics and Environment in the Third World. London: Earthscan, 1990. Print. Phillips, Robert. Stakeholder Theory and Organizational Ethics. California: Berrett-Koehler Publishers, 2003. Print. “Products & Services.” DuPont. DuPont, 2012. Web. 06 Sept. 2012. Voigt, Christina. Sustainable Development as a Principle of International Law: Resolving Conflicts between Climate Measures and WTO Law. Massachusetts: BRILL, 2009. Print. Bibliography Burger, Joanna. Stakeholders and Scientists: Achieving Implementable Solutions to Energy and Environmental Issues. New York: Springer, 2011. Print. Svendsen, Ann. The Stakeholder Strategy: Profiting from Collaborative Business Relationships. California: Berrett-Koehler Publishers, 1998. Print. Read More