Nokia: Principles of Environmental and Social Sustainability - Case Study Example

SUSTAINABILITY AND GREEN CHAIN SUPPLY Name Institution Unit Title Unit Name Date of submission Instructor Table of Contents SUSTAINABILITY AND GREEN CHAIN SUPPLY 1 1.Introduction 3 Nokia. (2013). Each and every Nokia device is created with the environment in mind. Retrieved 15 from http://www.nokia.com/global/about-nokia/people-and-planet/sustainable-devices/ 15 Nokia (2011). Nokia Sustainability Report. Retrieved from http://www.nokia.com/global/about-nokia/people-and-planet/sustainable-devices/ 15 Patti, N. (2011). “Sustainability Processes and Practices In Business Management.” International 15 Journal of Business Insights and Transformation. Volume 3, Issue 3. 15 1. Introduction Currently, companies around the world are seeking to demonstrate their leadership abilities through applying principles of sustainability in their supply chains and logistics operations. Despite many challenges encountered in developing these principles, the companies have managed to encompass social and environmental principles into their operations, which include human rights, labor, environment, anticorruption, and lean environment (Nick, 2012). Sustainability refers to the process of balancing economic, environmental, and social issues as well as financial ones in order to ensure that the currently needs do not compromise the future ones. At Nokia, sustainability means maximizing on positive sides, causing effect of mobile technology on people and the world, all the while minimizing any possibilities of negative influence of its activities. Nokia integrates social and environmental sustainability in everything it does (Nokia, 2013). It achieves this through the mobile devices and other devices the company builds and the suppliers it chooses, as well as mobile solutions that offer training and education to the people about health and livelihood. In summary, Nokia strives to add value for the people, the world, and the company. Its major part in ensuring sustainability is transparent and open reporting of its progress. This paper covers key sustainability principles including social and environmental sustainability that are most relevant to Nokia’s business activities and operations of stakeholders. It discusses its enabling effects first followed by impacts of its operation. 2. Principles of Environmental and Social Sustainability Nokia as a company loves the future and its operational strategy is all about it. Nokia defines logistics as the transport of products from manufacturing site to Nokia offices, then from Nokia offices to the customers. Care logistics entail repair for damaged products, reuse, and recycling processes. Nokia estimates its logistics to be 16% of all energy consumed during the production of a device in its entire life cycle (Nokia, 2013). All the logistics operations are under a third-party operator; hence, greenhouse emissions are indirect effects for Nokia. Today, outsourcing business operations does not imply outsourcing responsibilities or accompanying risks, or imply that the responsibilities of a company are over once a product leaves the company. Nokia understands that it has a role throughout the lifecycle of its devices. As a result, supply chain sustainability management is very essential in enhancing and maintaining integrity of its devices, ensuring continuity of business activities, ad management of operational costs. Nokia uses this aspect in implementing the Global Compact Principles (John et al., 2011). The supply chain sustainability means the managing the environmental, social, and economic impacts as well as ensuring good practice of governance throughout the lifecycle of products or services. The main objective of the sustainability management is creation, protection, and maintenance of long-term environmental, social, and economic impacts of devices and values attached to the products. Supply chain sustainability ensures long-term viability of business operations and achievement of licensing for social operations of the business (Andrew, 2011). With its strategy, Nokia aims at sustainability for the people and environment. It is in a unique and strategic position to cause positive impact on environment and social change since over 1.3 billion people uses its products and devices all over the world. For Nokia, sustainability is not only an exercise of limiting damages but also offers an opportunity for making real change to people and the world at large. At Nokia, sustainability means maximizing on positive sides, causing effect of mobile technology on people and the world, all the while minimizing any possibilities of negative influence of its activities. Nokia integrates social and environmental sustainability in everything it does. It achieves this through the mobile devices and other devices the company builds and the suppliers it chooses, as well as mobile solutions that offer training and education to the people about health and livelihood (Nokia, 2013). In summary, Nokia strives to add value for the people, the world, and the company. Its major part in ensuring sustainability is transparent and open reporting of its progress. In implementing sustainability principles, Nokia uses a social strategy that entails empowering people. Nokia believes in investing in education, training, and health of the people. It believes that mobility powers play key roles in ensuring development of various areas. For instance, some kids in South Africa are enjoying the use of Nokia’s mathematics tools. In addition, farmers in rural areas of India use Nokia Life Tools to promote and enhance their business activities through access to latest information about market prices and weather forecasts. Similarly, communities in Amazon region use Nokia Data Gathering devices to help in combating the spread of diseases like dengue fever (Nokia, 2013). The above examples are just some of the many ways in which Nokia invests in the social lives of people especially in developing countries. By improving life including general well-being and improving health, Nokia has achieved continued use of its products (Zhu et al, 2008). Furthermore, Nokia recognizes the direct influence of its products operations on their work force. Consequently, the company ensures that it implements sustainable principles and ethical codes of conduct in all its production facilities in order to enhance health and well-being of all workers. On the side of environmental sustainability, Nokia goes to great strengths of minimizing negative impacts while maximizing the positive ones. Its aim is to be a global leader as far as reduction of negative environmental impact is concerned. It aims at offering products and devices as well as solutions that help people make sustainable choices (Watt & Koo, 2010). Nokia focuses on improving environmental performance of its supply chain through close collaboration with its suppliers. Nokia makes environmental issues to be the responsibility of everyone within the company and as a part of everything Nokia does. For instance, Nokia commits to reduce emissions of its production facilities and those of its suppliers, increase energy efficiencies, throughout its operations, increase use of green energy, save resources through simple strategies like reducing packaging, using sustainable and ethical materials for packaging. Additionally, Nokia utilizes life cycle thinking in creation of its products. It helps the company to focus continuously on improved environmental outcomes of its products and processes throughout all the phases of life cycle. This process begins from acquisition of raw materials to the end of life cycle of the product. For this reason, Nokia has been able to reduce significantly negative environmental impacts of its products (Nokia, 2013). Furthermore, Nokia goes further than that in ensuring environmental sustainability. It also uses its resources to assist organizations like WWF and IUCN to develop and implement their projects around the world. Nokia makes great sue of its international presence and mobile technology to encourage customers to green and sustainable lifestyles. Its environmental goals are not just driven by simple regulations but also go further beyond legal requirements. Furthermore, Nokia recognizes the direct influence of its products operations on their work force. Yet, the company ensures that it implements sustainable principles and ethical codes of conduct in all its production facilities in order to enhance health and well-being of all workers. The basic environmental sustainability principles descend from global principles and standards that Nokia integrates into its business operations. The company focuses its environmental efforts on four key areas, which include substance management, energy efficiency, recycling and promotion of environmental sustainability (Walker & McLain, 2008). As far as substance management is concerned, Nokia is the first mobile devices manufacturing company to provide full declaration of all its mobile products while working closely with its suppliers. Second, Nokia ensures that its devices and chargers use little energy as possible. The company also works to ensure reduced energy consumption in its operations. In addition, Nokia agrees with its suppliers about energy efficiency targets (Nokia, 2013). Concerning recycling, Nokia has around 6000 destinations in almost 100 countries that collect old used mobile devices. Its recycling program is an initiative to create awareness on recycling process and help return materials for reuse. For this reason, Nokia develops its mobile devices, services and applications that help people understand and make sustainable choices as well as consider environment in their daily lives and activities (Patti, 2011). Consequently, Nokia is a global leader in the reduction of negative environmental impact. On the other side, Nokia target climate change by minimizing greenhouse gas emissions. Even though operations at Nokia facilities are less intensive users of energy, the emissions of greenhouse gases occur at component manufacturing sites by its suppliers or in the use of its products. Nokia aims at showing leadership as far as reduction of these emissions is concerned. Nokia achieves the status by reducing its own consumption of energy and emission of greenhouse gases; it also takes responsibility in creating awareness and promoting sustainable practices in its supply chain and logistics operations (Lakshmi & Visalakshm, 2012). The climate strategy at the company focuses on energy consumption and emissions of greenhouse gases of its products and operations. The strategy also sets targets towards reduction of the emissions and energy consumption for most of its manufacturing operations in all areas whether contributing directly or indirectly to emissions. The first climate strategy was created in 2006 and revised in 2010. In 2012, Nokia started updating new strategies for long-term reduction of emissions in products, manufacturing facilities, and working activities as well as helping customers reduce their own emission of greenhouse gas emissions (Nokia, 2013). In a report that identifies the role of ICT as a major driver of sustainable future and reduction of greenhouse emissions, ICT sector indicates that it is able to help others decrease their emissions by seven times the amount of carbon used (Tseng, 2011). The company believes that with over 1.3 billion people using the mobile devices, the company is in a position to cause positive changes to environmental sustainability and change. That is why Nokia aims at using its mobile phones to reduce their greenhouse emissions many times in the life cycle of its products. The main activities towards sustainable logistics operations include developing services those instances of unnecessary travelling and commuting as well as promoting environmentally friendly transportation such as conducting navigation, virtual meetings, and remote working activities. Second, Nokia develops applications targeting sustainable enhancing sustainable lifestyle and services to replace physical devices. In addition, Nokia develops mobile devices that replace other unsafe products and uses energy saving solutions to help save energy. On the other hand, Nokia recognizes water as a vital and valuable resource. It has to ensure its availability to future generations. Water has great importance in the supply chain and is critical to the surrounding communities (Nick, 2012). Therefore, Nokia has always taken action to ensure that its operations does not cause burden to the environment. In addition, Nokia supports various water conservation projects in many areas experiencing lack of water. The company works hand in hand with experts on the best ways to utilize mobile phone technology to deal with issues such as water scarcity, creation of awareness, and improving water management. Finally, Nokia is committed to ensure efficient use of water in its supply chain and logistic operations. To achieve this, Nokia collaborates with its suppliers in increasing awareness, setting water efficiency targets, and supporting bets practices in water usage (Andrew, 2011). The table below shows environmental sustainability data from Nokia (Nokia Report, 2011). It shows that Nokia has progressively realized its sustainability target over the years. Environmental Data 2011 2010 2009 2008 Energy Consumption 1.143 1.190 1.223 1.228 Direct CO2 from facilities (tones) 17,000 20,400 20.100 23,000 Indirect CO2 form facilities (tones) 404,300 363,500 413,500 434,500 Water use (thousand m3) 2019 2197 2167 2293 Total wastes (tones) 58,500 69,100 58,930 55200 Total wastes utilization (%) 94 93 91 88 In ensuring social sustainability, Nokia utilizes United Nations Global Compact principles that provide a framework of ensuring responsible business operations concerning labor, human rights, and anti-corruption. Nokia is committed to its responsibility to respect human rights. The company takes steps to support and promote the realization of human rights and good working conditions. Nokia has always maintained international standards and regulations on human rights and hence avoids violation and abuse. The company strives to uphold international standards of labor, freedom, nondiscrimination, and collective bargaining. Today, workers may experience abuse of their rights, which include excessive working hours, unfair treatment, lack of freedom of movement, and other challenges (Tseng, 2011). To deal with this, Nokia ensures that its supply chain and logistic operations do not cause any infringement on the human rights by promoting freedom of movement, equal pay for equal work, right to rest and leisure, and humane treatment. Nokia also ensures safe and healthy working environment. Initially, Nokia began by addressing human rights by collaborating with its suppliers and partners to enhance a wide range of human rights including gender balance, access to equal education and training opportunities to all. Similarly, most supply chains face high risks of corruption including frauds in procurement offices and suppliers who engage in corruption practices (Patti, 2011). The cost corruption are adverse and include low quality of services that are often thwarted by costs related to management and resources incurred indirectly when dealing with legal liability issues and damaged company reputation. Nokia engages with its suppliers and the supply chain management through anti-corruption strategy that improve the quality of its products reduces corruption, enhance its reputation through honest business, and improve working environment by creating a more sustainable framework for the future (Nokia, 2011). 3. Implications As far as supply chain management and logistics operations are concerned, Nokia is the first mobile devices manufacturing company to provide full declaration of all its mobile products while working closely with its suppliers. Second, Nokia ensures that its devices and chargers use little energy as possible. The company also works to ensure reduced energy consumption in its operations. In addition, Nokia agrees with its suppliers about energy efficiency targets. Concerning recycling, Nokia has around 6000 destinations in almost 100 countries that collect old used mobile devices (Nokia, 2011). Its recycling program is an initiative to create awareness on recycling process and help return materials for reuse. For this reason, Nokia develops its mobile devices, services and applications that help people understand and make sustainable choices as well as consider environment in their daily lives and activities. Consequently, Nokia is a global leader in the reduction of negative environmental impact. Because of sustainability principles, Nokia has been able to reduce negative environmental impacts of its supply chain and logistics operations. The company managed to reduce the greenhouse gas emissions by up to 50% from 2000 to 2010 all the while introducing new features and applications that allow use of the devices in various ways (Nokia, 2013). Furthermore, Nokia has set specific targets for the following areas: products, manufacturing, and methods of working, logistics, and suppliers. The company continues with its efforts to realize an average no-load consumption of 0.07W in its chargers. The company realized 0.098W in 2012, which marked a reduction of 13% from 2011 (Nokia, 2013). Additionally, Nokia develops solutions that ensures the energy efficiency in all its mobile devices and continues research into new technologies that use renewable energy. In manufacturing plants and offices, Nokia plans to reduce greenhouse gas emissions by 30% by 2020, reduce CO2 emissions per working employee at Nokia offices by 28% at the end of 2015, and reduce energy consumption by 10% of every unit of production by 2015. Since 2004, Nokia has reduced the energy consumption of its chargers by over 73%. In 2011, greenhouse emissions of facilities at Nokia were lower than that of 2006 by 17%. The company met its 2011 target when it reduced emissions of CO2 from its office and suppliers by 15% (Nokia, 2013). Nokia has been a leader in the implementation of Human Rights standards and regulations throughout its supply chain and logistics operations. The company respects and protects the human rights of its workers, conducts its operations with diligence as far as responsibility towards protection of human rights is concerned, and assesses risks to human rights associated with its operations and devices. The risks and challenges of human rights vary at different stages of supply chain of Nokia. For example, it may include privacy and accessibility. Nokia focuses on the main human rights issues, which are health and safety as well as labor rights. Nokia has also addressed anti-corruption issues in its supply chain (Zhu & Saris, 2004). Nokia promotes diversity and inclusive workplace and provides rewarding career development opportunities to all employees. The company strives to create an inclusive environment that accommodates both men and women from different cultures, ethnic groups, skills, abilities, and perspectives. This has helped Nokia become a diverse and robust company. Analysis of total number of employees by gender shows that the company has 59% male workers and 41% females. In addition to this, Nokia had 15.2% of senior managers being women and 53.6% of management positions were held by people from different nations. These values have subsequently increased throughout the years (Nokia, 2011). 4. Conclusion The aim of this paper was to analyze key sustainability principles including social and environmental sustainability that are most relevant to Nokia’s business activities and operations of stakeholders. The paper has discussed the enabling effects first followed by impacts of its operation. It is clear that Nokia attempts to enhance and promote social and environmental sustainability in its supply chain and logistics operations. It employs a holistic approach towards ensuring positive impact of its activities on the environment, its workers, and surrounding communities. The company utilizes best practices to reduce emissions of greenhouse gases and energy consumption as well as availability of water to future generations (Nokia Report, 2011). In ensuring social sustainability, Nokia utilizes United Nations Global Compact principles that provide a framework of ensuring responsible business operations concerning labor, human rights, and anti-corruption. Because of sustainability principles, Nokia has been able to reduce negative environmental impacts of its supply chain and logistics operations. The main activities towards sustainable logistics operations include developing services those instances of unnecessary travelling and commuting as well as promoting environmentally friendly transportation such as conducting navigation, virtual meetings, and remote working activities. With this regard, Nokia has also realized its goals (Zhu et al., 2008). The company strives to create an inclusive environment that accommodates both men and women from different cultures, ethnic groups, skills, abilities, and perspectives. This has helped Nokia become a diverse and robust company. References Andrew Cameron. (2011). 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