Benchmark Progress towards Sustainability - Research Paper Example

Benchmark Progress towards Sustainability Contents Benchmark Progress towards Sustainability 1 Background 2 Research Objective 2 Research Questions 3 Literature Review 3 Research Methodology 5 Findings and analysis 6 Sustainability Measures of Siemens Ag 6 Sustainability Study of ABB Ltd 9 Recommendations 12 Conclusion 13 References 14 Background Sustainability, in general, implies protection of life on earth. Being a part of this global village called Earth, there are certain roles and responsibilities that every individual has towards the same. In the process of making advancements and attaining greater success, the planet is being plundered. Many of the rich natural resources are becoming endangered. Greenery and wildlife has become a lot lesser presently, compared to that a few centuries ago. In process of developing better industries, newer products and services and making higher profits, individuals overlook the amount of natural resources that are getting used up or damaged. Apart from this, pollution and deforestation have further aggravated this issue to a large extent. Under the light of such a scenario, the concept of sustainable development was formed. This concept essentially advocates conserving natural resources to the highest degree. Industries should develop their businesses in a manner that causes the least negative influence upon the environment. Hence, currently, companies stress a lot on how well they can continue producing without harming the environment in any manner. Sustainable development also focuses on welfare of the society. This involves generating employment, helping the society to reduce poverty and so on and so forth (Baker, 2006). Research Objective This research aims to find whether or not, in reality, companies follow sustainable systems in their production line. Therefore, two benchmark companies have been selected; Siemens Ag and ABB Ltd, who belong to the same industry of industrial automation and power technology (Hoovers, 2014). Accordingly, sustainability measures taken by each of the companies shall be studied and compared with the general norms relating to sustainability. Through this analysis, we can determine whether sustainability is a concept that is only talked about in books and meetings or does it really have a presence in the real business world. This research emphasizes on a reality check of whether companies are ethical when it comes to sustainability and their contribution towards making this world a better place to live in. This research shall be based on the sustainability framework of Hart (2011) and certain recommendations made by him shall be employed for effective discussion. Research Questions The main research questions that need to be discussed upon are: 1. How well are performances of Siemens Ag and ABB Ltd, as far as sustainability is concerned? 2. Is there any other company in the same industry that is performing better than them? 3. If there is, then what makes it better than Siemens Ag and ABB Ltd? The analysis of the above research questions shall be done by discussing various sustainable measures undertaken by both the companies. Literature Review This research is based on the recommendation and findings of Stuart L. Hart (2011). According to him, a sustainable company is one that delivers towards well-being of the society, the environment and the economy. Firms must develop strategies that not only help to achieve profit and productivity targets, but also those that adequately promote welfare of society as a whole. The real challenge, however, is to identify those strategies that effectively contribute towards societies as well as enterprises needs. In other words, it can be said that developing a win-win approach is the greater challenge here. Collaborating sustainability with increasing shareholder value becomes the main aspect to consider (Hart, 2011). Figure 1: Sustainability value Source: (Hart & Milstein, 2003) According to Hart, the Four Main strategies of sustainability that help to create value are: Clean Technology- Nowadays, technology is considered to be the devil behind prevalent environmental issues. Products are not able to reach their sustainability mark due to lack of technological support, which helps to render them more eco-friendly. A clean technology is what the world needs. This includes manufacturing or producing products that are bio-degradable or recyclable. Hence, this aspect involves innovation and development of new technology, which can suitably help to make better products, thereby creating least impact on the environment (Blewitt, 2012). Product stewardship- This refers to engaging stakeholders in managing the product lifecycle. This would make them more involved in dynamics of firms’ operations. They shall also understand what goes into the making of the products. When stakeholders are not involved in the process of production, they remain unaware about a lot of aspects. Their only focus is on the overall performance and results of the company. Companies many a times have to neglect the sustainability aspect because of peer pressure of the stakeholders. Once stakeholders get involved in functions of the companies, they can realize the effort that is invested in making of the end products. Therefore, they are able to appreciate the importance and need for sustainable development (Yagitcanlar, 2010). Sustainability Vision- Companies should help nations to curb problems of population, poverty and inequality. For this, they should develop more employment opportunities for people. Work opportunities automatically rise with the occurrence of industrial growth. So, developing new economic sectors is an effective way to increase employment and reduce poverty. Social service is also an aspect that firms must be encouraged at; for instance, developing schools and colleges for the underprivileged, donations to orphanages, constructing roads and bridges and so on. Many companies are presently seen to conduct these, thereby creating immense social awareness (Bebbington, 2007). Pollution Prevention- Minimizing wastes as much as possible is an essential factor to consider. Wastes should not be thrown or dumped into rivers and oceans as this is extremely detrimental to the water eco-system. Neither should they be dumped on open soil as this affects the soil’s fertility, induces pest infestation as well as damages purity of the air. Besides that, emissions from factories and vehicles cause the maximum amount of environmental degradation. Companies should develop vehicles that are more eco-friendly and devise an efficient way of reducing harmful emissions and factory wastes (Rainey, 2008). Research Methodology This research involves studying the sustainability practices of two companies; Siemens Ag and ABB ltd. This is basically a qualitative analysis based on secondary research. The information used in this report is gathered from books, company journals, online sources and articles. The analysis is done on the basis of Stuart L. Hart’s (2011) sustainability framework and the way in which the framework helps to generate value. The next part of the research consists of the sustainability development aspects and contributions of Siemens Ag and ABB Ltd. Findings and analysis Siemens and ABB have maintained high standards, as far as sustainable development is concerned. On the grounds of Stuart L. Hart framework (2011), that is discussed earlier, the sustainability measures taken by these two companies can be studied. Sustainability Measures of Siemens Ag Siemens is one of the leading companies operating in the automation industry and technology field. It is one of the most reliable industries in relation to industrial automation and has shown outstanding performance and growth over the years. The firm emphasizes hugely on research and development so as to manufacture world class equipments. In the context of sustainable development, the company has shown remarkable performance. Figure 2: Sustainability Report of Siemens Ag. Source: (Siemens, 2012) From the above data, it can be seen that Siemens Ag has contributed effectively towards economy, society and the environment. The company believes that people must not work only towards developing the present, but also the future. Our present actions might have a substantial influence on tomorrow’s generation. Hence, our activities should be carefully planned. The firm has taken initiatives to spread awareness regarding environment management. The company also conducts detailed analysis of its performance in this context and constantly searches for ways to improve the same. Walk the talk- The main focus of sustainability program of Siemens is to actively contribute towards benefit of the society. Through the ‘Walk the Talk’ initiative, the company invites people to visit their factories and workplaces for witnessing the way they function and contribute towards developing a better and more sustainable world. Therefore, people are encouraged to develop more awareness about protecting the environment. Developing wind energy- The company has installed offshore wind turbines that have played a pioneering role in energy management. The goal here was to promote the use of renewable energy, thereby helping to conserve oil and other sources of non-renewable energy (Rodgers, Jalal & Boyd, 2012). Siestorage- Siestorage is a renewable power storage system through the use of lithium-ion power battery. Not only does Siestorage help to compensate for voltage fluctuation, but it also does so by using a renewable source of energy (Siemens, 2012). Smart Products for a smart world- Siemens understands that the world is in need of better and more efficient products and technologies. The firm not only develops products that use state-of-the-art technology, but also aim to make them highly environment friendly. Many of their products are recyclable and are manufactured by using bio-degradable materials (Raggamby & Rubik, 2012). Innovation and Growth- The firm seems to be ever-expanding and has shown remarkable growth since the past few decades. The reason behind this is a strong investment in research. Through effective research, more and more products are developed. This leads to formation of more business opportunities, thereby increasing employment (Gendron, 2012). Carbon disclosure projects- The company publishes reports about its green house gas emissions annually. The report has shown a significant fall in the emission of harmful gases over the years. In order to achieve this, the company has carried out detailed analysis throughout its supply chain and has come up with suitable ways of reducing emissions as much as possible (Blackburne, 2012). Education and training- The company has taken adequate steps to train the employees and provide further education to them. This has been an important matter of consideration for the company. As a result, the company has established special institutes and training centers (Denig, 2010). Sustainability Study of ABB Ltd ABB is also one of the leading companies in the field of industry automation and power technology. The company is famous for its advanced electricity grids and has maintained a remarkable performance over the years. ABB strongly believes that sustainability comes in the form of designing and manufacturing products, which help to achieve organizational, social and environmental goals (The economic times, 2012). Governance and Stakeholder relations- This includes sustainability governance system followed by the company so as to facilitate a healthy relation with stakeholders. The company emphasizes on including stakeholders in their planning and decision making processes (Wbcsd, 2013). Community Help- Education and healthcare has been prime contributions of the company in this respect. The company was facing a shortage of skilled labor at one of its factory locations. As a solution, ABB decided to impart training and educational program to some of the young workers who did not have extensive formal education and little work experiences. After the training, they were suitable enough for employment. In healthcare, the company has concentrated on developing charitable institutions that work towards fund raising for cancer and HIV/AIDS victims. The employees of the organization are encouraged to volunteer for various awareness and health camps (Enterprise and Industry, 2013). Environmental responsibility- The company continues to avoid the use of hazardous substances in manufacturing processes. It is made sure that none of the company’s facilities are located anywhere near areas with rich biodiversity. Environmental penalties of the firm have fallen considerably in respect of oil spills, chemical spills, emissions to air and others (Mitchell Osak Online, 2010). Water Recycling- This initiative has been strongly upheld by the firm in order to reduce water consumption to a large extent. This has led to a huge amount of savings in water, which has also greatly helped to cut down costs (ABB Group, 2012). CEMARS - Through Certified Emissions Management and Reduction Scheme (CEMARS), the firm aims to demonstrate its commitment towards reducing emission of harmful gases as per the legally prescribed limit. The program also prescribes the customers to use energy efficient modes of transport (ABB Group, 2012). Figure 3: Sustainability report of ABB Ltd Source: (ABB Group, 2012) The above discussion eminently proves that Siemens and ABB have maintained high standards, when it comes to sustainable development. On the basis of Stuart L. Hart (2011) framework of sustainable development, a firm needs to concentrate on both environmental development as well as social well-being. Both these factors have been looked into by these firms. Their sustainable measures have helped to create a standard for other firms to follow. These are some of the reasons why both these companies are considered amongst the top sustainable firms of the world. Recommendations Although both Siemens and ABB have shown remarkable efforts towards sustainability; they still have lot to learn from General Electric Company that has been ranked the best firm, as far as sustainable development is concerned (Coster, 2010). It is important to know what sets GE apart from other firms in regards to sustainability (Mitchell, 2010). Eco-migration- GE not only practices environmental protection, but also conducts massive studies and research on ways to improve the present and future environmental conditions. They set standards regarding ways that firms can opt for to reduce the impact of their actions on the environment. For this, a separate business unit ‘Ecomigration’ was set up, which actively studied the present environmental conditions. This unit also innovates and develops new technology that can be used to better the climatic conditions. Internal Sustainability programs- GE encourages managers to measure the amount of energy savings that have been achieved. This boosts competition amongst employees in order to be able to achieve high scores in energy savings. They also train their employees to save energy through both major and little efforts. Influencing environmental policies- GE’s research and innovation measures aim to influence environmental standards itself. They make valuable recommendations and suggestions to other firms, environment control authorities and other organizations, both non-government and governmental. From the above discussion, it has been clear that Siemens and ABB can contribute more towards sustainability. The companies need to focus on developing innovative measures for sustainable growth. The measures followed by these firms are good, but they have been in practice for a long time. With evolution of business, companies need to come up with more advanced means of sustainable development (Land Learn NSW, n.d.). Conclusion The world is in need of sustainable industries and firms like, Siemens and ABB. Sustainable development should be a part of every firm’s objectives. Resource depletion and change in climatic conditions have been increasing alarmingly. Under such a situation, it is important for firms to contribute towards environmental protection. A collaborated effort of all industries is needed in this context. Not only is environment a matter of concern, but the growing population has also given rise to poverty and sickness. Although it is beyond the control of firms to help curb population, they still can significantly help by generating more employment opportunities, imparting education and training as well as creating awareness among people about various socially significant matters. Through these ways, companies can effectively contribute towards sustaining and maintaining a healthier and better world to live in (Environmental Affairs, 2014). References ABB Group. (2012). Sustainability performance 2012 Building on strong foundations. Retrieved from https://www02.abb.com/global/abbzh/abbzh258.nsf/0/2d86b807b5ff30f9c1257b27004e262a/$file/ABB+Group+Sustainability+Performance+2012.pdf. Baker, S. (2006). Sustainable development. London: Routledge. Bebbington, J. (2007). Accounting for sustainable development performance. Oxford: Butterworth-Heinemann. Blackburne, A. (2012). Siemens opens doors of £30m sustainable development hub. Retrieved from http://blueandgreentomorrow.com/2012/09/20/siemens-opens-doors-of-30m-sustainable-development-hub/. Blewitt, J. (2012). Understanding sustainable development. London: Routledge. Coster, H. (2010). Ranking the world’s most sustainable companies. 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