Corporate Social Responsibility Reporting, GRI and Sustainability - Essay Example

Corporate Social Responsibility Reporting, GRI and sustainability Introduction Increasing number of the businesses and organisations, especially those operating across the world have made a strategic focus not only on economic achievements, but also on social and environmental footprint. In academic world, this behaviour is associated with the term of Corporate Social Responsibility (CSR) and Sustainability. Coca-Cola is one of the global operators who has integrated the concepts and ideas of CSR to its corporate strategy and reported about its achievements through the Global Reporting Initiative (GRI) Report. The aim of this report is to provide a brief overview of the CSR and the GRI, and to evaluate critically the Coca-Cola Company Corporate Sustainability Report 2012-13 against the Global Reporting Initiative 3.1. Guidelines. A particular emphasis in evaluation will be made on the reporting of Coca-Cola’s practice of stockholder engagement. CSR defined As of today, there exist many different definitions and interpretations of definitions of CSR. Some academic researchers have counted more than 37 different definitions of this term (Caroll, 2015). While it is unreasonable to cite all these definitions, it is worth to explain that the Corporate Social Responsibility is based on the idea that organisations are responsible for their activities and performance not only in terms of economic/financial indicators but also in terms of social and environmental footprint (Lynch and Smith, 2005). Thus, CSR is based on the three key pillars (economic, social and environmental), building up a sustainability triangle. Graph 1. Three pillars of CSR Corporate Social Responsibility is recognised to be quite an old concept, however, its popularity has grown most notably in the post-World War II period, when society switched to the issues of civil rights, consumer’s, women’s and environmental movements (Caroll, 2015). In 1960’s there was spread a concept of Corporate Social Responsibility, which was replaced by Corporate Social Responsiveness by 1970s (Caroll, 2015). During the 1970s and 1980s, the concepts has evolutionised into Corporate Social Performance, which covered a broader range of issues, including business ethics, stakeholder management, corporate citizenship, and sustainability (Caroll, 2015). Visual illustration of CSR development over the 50 year period is presented in Graph 2. Graph 2. 50 Year Trajectory of Corporate Social Responsibility (Source: Caroll, 2015:5). The Global Reporting Initiative (GRI) Nowadays, practically all publicly traded companies and large organisations strive to do business in sustainable way and to be responsible corporate citizens. In order to do this, organisation tend to develop and publish CSR report based on the guidelines provided by globally recognized organisations, such as the GRI. The Global Reporting Initiative (GRI) is an international not-for-profit organisation, promoting the use of sustainability reporting by organisations, helping and navigating them in sustainable development and business practices (Globalreporting.org, n.d.). The mission of the GRI is to set a standard practice of sustainability reporting (Globalreporting.org, n.d.). The GRI framework serves as a generally accepted framework for organisations while preparing reports on their economic, social and environmental performance (GRI report 3.1.guidelines, 2011). This report is designed to be applicable by any type of organisation, despite their size, business entity, location, or sector in which it operates (GRI report 3.1. guidelines, 2011). The GRI framework provides organisations with an insight of what to report and how to report, based on Reporting Guidance, Reporting Principles, Standard Disclosures and Protocols. Standard Disclosures are comprised of three major elements that provide information valuable to most stakeholders: (1) strategy and profile of the organisation; (2) management approach; (3) performance indicators (GRI report 3.1. guidelines, 2011). GRI was established in Boston in 1997. In the early 1990s, Chief Executive Dr Allen White together with a former CERES (the Coalition for Environmentally Responsible Economies) of Executive Director Dr. Robert Massie have presented the first version of a framework for environmental reporting (Globalreporting.org, n.d.). In order to support the initiative of developing a framework for sustainable reporting, CERES established a ‘Global Reporting Initiative’ project department (Globalreporting.org, n.d.). Initially, the major stakeholders identified as target audience of reports were investors. However, by 1998 there was established a multi-stakeholder Steering Committee. This Committee has expanded the framework’s scope from solely environmental issues to social, governance and economic issues. Thus, GRI has presented the Reporting Guidelines within a Sustainability reporting Framework. There were several versions of the Guidelines. The first generation of Guidelines was launched in 2000, followed by a second one (G2) in 2002. In 2006, the GRI has introduced the third generation of Guidelines (G3). Soon after launch of G3, GRI has built formal partnerships with such organisations as the Organisation for Economic Co-operation and Development and the United Nations Global Compact (Globalreporting.org, n.d.). GRI expanded its strategy and Reporting Framework and added sector-specific guidance for organisations operating in different industries/sectors. In 2011, GRI presented an updated version of G3, G3.1, supplemented with the guidance for reporting on community, gender and human-rights related performance (Globalreporting.org, n.d.). In 2013, GRI released the fourth generation of Guidelines, G4. Coca-Cola GRI Report 2012-13 In 2013 Coca-Cola has published its GRI Report based on Guidelines 3.1. Below is provided more detailed analysis of this report. The company’s vision goals declared in the report indicate that employees, partners, investors, and society are the major stakeholders. Coca-Cola declares it wants to be a great place to work, stressing thus the priority of employees. Secondly, Coca-Cola listed its partners, and a goal of being the most preferred and trusted beverage partner. Thirdly, the company stated a goal of increased profit, which implies the interests of investors and shareholders. Also, there was mentioned a goal of being a global leader in working to achieve more sustainable packaging, water use, energy and climate protection (Coca-Cola GRI Report, 2012/2013). As this goal has a direct impact on the whole society and local communities, it is possible to state that the company aims to consider the interests of general public as well. Furthermore, the Chairman of the Board and CEO of the Coca-Cola Company identifies three major priorities: the global empowerment of women; the management of world water resources; and the well-being of the world’s growing population (Coca-Cola GRI Report, 2012/2013:9). The well-being program implies: offering of low or no calorie beverages in all markets, supporting physical activity programs in every country where the company operates; providing transparent information on calories and nutrition characteristics of its products, and responsible marketing, whereas no advertising is performed to children under 12 years old (Coca-Cola GRI Report, 2012/2013). For building stronger communities, the company declared the goals: to enable economic empowerment of 5 million women entrepreneurs across the Coca-Cola’s value chain by 2020, to ensure compliance with Human and Workplace Rights standards, and to donate to charity at least 1% of its operating income every year (Coca-Cola GRI Report, 2012/2013). For protecting the environment, the company focused on: replenishment of water resources; reduction of the carbon footprint of the drinks; sustainable sourcing of agricultural ingredients; and sustainable packaging (Coca-Cola GRI Report, 2012/2013). Stakeholder engagement analysis One of the requirements laid out in the GRI 3.1 is referred to an obligation of a reporting organisation to identify its stakeholders and provide explanation on how it has addressed the stakeholders’ interests and expectations (GRI report 3.1. guidelines, 2011). Coca-Cola has identified a number of different groups of stakeholders, including: employees, consumers, customers, investors, distributors, bottlers, shareowners, nonprofit partners and nongovernmental organisations (Coca-Cola GRI Report, 2012/2013). While Coca-Cola has identified its stakeholders as it is required according to the issue 4.14 of the GRI guideline 3.1., the company has not provided information of identification and selection of stakeholders with whom to engage. There was no identification given on the process for defining Coca-Cola’s stakeholder’s groups, and no information provided which would determine groups for engagement. According to the information presented in the report, the company continuously maintains communication with its stakeholders, learns their views and concerns, and uses this information as guide for further activities and improvements. In its report, Coca-Cola presents the whole section devoted to the Stakeholder Engagement. From the report there can be defined the following major stakeholders set in priority by a company: EU Platform for Action on Diet, Physical Activity and Health The company focused on the European region and engaged with the EU Platform through the Union of European Soft Drinks Associations (Coca-Cola GRI Report, 2012/2013). International Sport and Culture Association (ISCA) Coca-Cola has demonstrated support of physical activity and sport programs across the globe. According to the information published in the report, Coca-Cola Foundation awarded $15 million for support of nutrition and physical activity programs worldwide (Coca-Cola GRI Report, 2012/2013). Support to EPODE Coca-Cola has also reported about its support of the Ensemble Prevenons l’Obesite Des Enfants (EPODE) organisation aiming at prevention of obesity in Belgium and France. More specifically, the Coca-Cola foundation awarded $1.07 million to support one of the EPODE’s projects aimed at obesity prevention (Coca-Cola GRI Report, 2012/2013). International Food & Beverage Alliance (IFBA) In its report Coca-Cola company declared that is met with different stakeholders in order to discuss its progress against the five commitments of IFBA given to the World Health Organization (Coca-Cola GRI Report, 2012/2013). Ceres The Coca Cola Company reported that it has also engaged with Ceres, a national coalition of environmental organizations, investors and other public interest groups on many different issues. Water Stewardship and Replenish Report engagement The company reports that it also maintains stakeholder engagement across the company and seeks stakeholders’ feedback on its goals, water programs, and work performed throughout the year. In order to address the stakeholder’s concerns and answer questions, Coca- Cola provided feedback in its 2013 Water Stewardship and Replenish Report. Sustainable agriculture convening In February 2013, the Coca-Cola’s representatives met with globally renowned agriculture experts in order to review the company’s sustainable agriculture practices and policies. Human Rights Conference In order to engage with stakeholders on human rights, the company held the 6th human rights conference in May, 2013. This conference was attended by more than 150 leaders from government, businesses, and NGOs. As it is possible to judge, in the section devoted to stakeholder analysis, Coca-Cola refers to Non-profit organisations as the major stakeholder. There is no specific information on addressing the customer’s, distributors’, bottler’s, or employee’s concerns. The company fails to explain why it has prioritized NGO in its stakeholder engagement practice. While Coca-Cola identifies the key interactions and ways of engagement with its stakeholders, there is no information provided on the frequency of engagement by stakeholder group, and the way of engagement. According to the issue 4.16, the organisation is required to indicate “whether any of the engagement was undertaken specifically as part of the report preparation process” (Sustainability Reporting Guidelines, 2011: 24). Coca-Cola has not identified this aspect in its report. Another requirement laid in the GRI guideline is to indicate key topics and concerns that stakeholders have raised during stakeholder’s engagement. Coca-Cola has laid out these concerns in a table with indication of its feedback to the key issues and concerns (Coca-Cola GRI Report, 2012/2013). In addition to gaps in stakeholder’s engagement, Coca-Cola has some gaps in reporting. While the company reports its economic, environmental and social impacts against set goals, and informs about the progress it fails to disclose unfavorable topics. According to the Guideline 3.1., the report should not omit relevant information that would inform stakeholders or influence their decisions or assessments. During 2012, Coca-Cola was involved in a number of scandals, associated with the quality of its drinks. One of such scandals was referred to the drinks contaminated with chlorine that were produced at the bottling plant in China (Cleanbiz.asia, 2012). While this event has been widely spread through the news and might involve major stakeholders such as Chinese consumers and bottlers, Coca-Cola has not addressed this issue in its report. According to one of the surveys carried out at online news portal of People’s Daily, among 7506 respondents, more than 70% said that they will not drink Coca-Cola products anymore. The company has not addressed these concerns of customers as one of key stakeholder. Conclusion Increasing number of the businesses and organisations, especially those operating across the world have made a strategic focus not only on economic achievements, but also on social and environmental footprint. Coca-Coal is one of such organisations, which aims to meet the international standards on CSR reporting and strives to prepare reports in accordance with the Global Reporting Initiative. The analysis of the Coca-Cola’s GRI report 2012-2013 has shown that the company puts significant efforts focused on three major areas: the well-being of population and addressing of obesity problems; building of stronger communities by empowering women entrepreneurs across the globe and donating % of operating income to charities; environment protection with a major focus made on the reduction of the carbon footprint of the drinks, sustainable sourcing of agricultural ingredients, sustainable packaging and replenishment of water resources. The analysis published by Coca-Cola provides a comparative benchmark with the previous results and is supported with clear evidence on the progress made. It is possible to conclude that Coca-Cola identified clearly in its report is vision and strategy, set clear goals and objectives with clearly identified timeframe. Moreover, the company perfectly illustrates its progress on achieving set goals. The major concern is related to the stakeholder engagement section. One of the requirements laid out in the GRI 3.1 was referred to an obligation of a reporting organisation to identify its stakeholders and provide explanation on how it has addressed the stakeholders’ interests and expectations. Coca-Cola has identified a number of different groups of stakeholders, including: but has not provided information of identification and selection of stakeholders with whom to engage. There was no identification given on the process for defining Coca-Cola’s stakeholder’s groups, and no information provided which would determine groups for engagement. The section devoted to stakeholder analysis, Coca-Cola refers to Non-profit organisations as the major stakeholder. There is no specific information on addressing the customer’s, distributors’, bottler’s, or employee’s concerns. The company fails to explain why it has prioritized NGO in its stakeholder engagement practice. While Coca-Cola identified the key interactions and ways of engagement with its stakeholders, there was no information provided on the frequency of engagement by stakeholder group, and the way of engagement. In addition to gaps in stakeholder’s engagement, Coca-Cola has some gaps in reporting. During 2012, Coca-Cola was involved in a number of scandals, associated with the quality of its drinks. The fact the Coca-Cola has not reported and addresses this case in its report indicates that it failed to meet all the criteria of GRI. Moreover, the fact that some unfavourable facts were omitted in the report indicate that there could be some other issues which the company has hidden from its stakeholders. References: Caroll, A. (2015). Corporate Social Responsibility. Organizational Dynamics. Cleanbiz.asia, (2012). Coca-Cola China brand threatened as contamination scandal spreads. News on environment, business sustainability and cleantech in Asia. [Online]. Avaialble at: http://www.cleanbiz.asia/news/coca-cola-china-brand-threatened-contamination-scandal-spreads#.VQ_QO-E-7LU Globalreporting.org, (n.d.). What is GRI? [Online] Available at: https://www.globalreporting.org/information/about-gri/what-is-GRI/Pages/default.aspx Lynch, R. and Smith, J. (2005). Corporate Strategy. Pearson Education Sustainability Reporting Guidelines (2011). Version 3.1. [online] Available at: https://www.globalreporting.org/resourcelibrary/g3.1-guidelines-incl-technical-protocol.pdf Coca-Cola GRI Report (2012/2013). GRI Report [online] Available at: http://assets.coca-colacompany.com/44/d4/e4eb8b6f4682804bdf6ba2ca89b8/2012-2013-gri-report.pdf Read More