What Value do CERES Add to the Current Business Environment - Assignment Example

Khalid Project Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Khalid Project Environmental reporting has not been a part of most organizations practices until after the recent calls for sustainability in the world. Previously, organizations focused on financial reporting; indicating their financial prospects and the value which shareholders were getting on their investments. However, there are many aspects which are affected by an organization’s operations apart from the economy. This can be seen from the oil spill which occurred after the Exxon Valdez ship wreck which led to a spill of 240,000 barrels of crude oil into the Pristine waters in Alaska. Going by the fact that the effects of the oil spill are being felt today, it is important that business organizations focus on a sustainable economy. This was the reason behind the formation of CERES, the Coalition for Environmentally Responsible Economies. CERES has played a major role in turning organizations towards environmental sustainability using the famous 10 CERES principles. Moreover, CERES has played a major role in environmental reporting by establishing reporting standards. CERES also played a major role in the formation of Global Reporting Initiative which provides reporting guidelines which are as of today, the de facto reporting guidelines in the world. The following paper will answer four questions which give an insight into environmental reporting. In your opinion, would CERES exist today if the Exxon Valdez wreck had not occurred? Why or why not? What value do CERES add to the current business environment? According to my opinion, I do not think that CERES would exist today if it was not for the Exxon Valdez Wreck in 1989, at least not in the formalized way in which CERES operates in. CERES was formed by a group of socially responsible investors, environmental groups and pension fund schemes (CERES 2013). The total number of groups which were involved in the formation of the nonprofit organization was fifteen. Ideally, CERES was formed 6 months after the oil spill which occurred after the Exxon Valdez Wreck in which 240, 000 barrels of crude oil spilled into pristine waters (CERES 2013). This was a major environmental disaster and the events which unfolded after the spill led to the formation of CERES. On taking a critical analysis on the turn of events after the oil spill, an explanation as to why CERES was formed can be gotten. It was formed in a bid to ensure that the world embraced more environmentally sustainable economies. The discussion of the effects of the oil spill below will illustrate this. The oil spill occurred near Valdez, which is the home sea port of the Exxon vessel which was carrying the crude oil (Ritchie, L & Gill, 2010). After the spill, the oil spread to about 2600 square miles to the Prince William Sound Pristine waters. It should be noted that pristine habitats are some of the most endangered marine habitats in the world. Therefore, an oil spill in such a habitat waters down the pristine conservation measures which have already been initiated. The oil also did spread to the Alaskan Gulf. In order to understand the effects of the Exxon Valdez oil spill, it is important to understand what exactly an oil spill leads to. First, an oil spill covers the water; hence no air is able to get in and out of the water. These cuts short the supply of air to the organisms living in the water, hence leading to their death (Ritchie, L & Gill, 2010). Secondly, oil pollutes the water, hence providing hostile conditions to the marine life (Walsh, 2009). More often than not, the marine life cannot withstand those conditions, hence leading to their demise. As a result of the oil spill, a lot of marine animals were either killed or injured, which led to an imbalance in the marine eco system of the region. One of the industries which were hard hit by the effects of the oil spill was the fishing industry. The region on which the oil spilled was a rich fishing ground, which contributed around $100,000,000 to the local fishermen (Dorsett, 2010). Moreover, the region was a source to about 50% of the salmon fish which was sold in the region. As a result of this, the economy of the region which relied heavily on fishing was affected adversely. The effects of the spill can be felt and seen up to date (Walsh, 2009). The effects of the oil spill on the economy and its effects on the environment (marine life) were some of the major reasons which led to the formation of CERES. If it were not for the Exxon Valdez oil spill, CERES would not have been formed. In addition to this the delayed and ineffective response of the Exxon Company, the government and the corporate world was another factor which led to the adverseness of the effects of the oil spill. Precisely, response actions took place three days after the oil spill. Over the three days, the wind had blown the waters away, leading to the 2600 square mile spread f the crude oil (Dorsett, 2010). As a result of this, the effects of the spill were felt on a larger geographical region. Therefore the oil spill was the major factor which led to the formation of CERES. In its goals and objectives, it sought to ensure that the corporate world upheld environmental sustainability by upholding the 10 CERES principles (CERES 2013). In so doing, it was expected that the world would move to towards being environmentally conscious. CERES has also transformed environmental reporting, thus providing guidance to corporate on how to integrate environmental sustainability measures in their operations. Looking at the 10 CERES principles in addition to the organization’s goals and objectives, it can be seen that they have a special connection to the Exxon Valdez oil spill, although they have also integrated various aspects of the environment. Therefore, if it were not for the effects of the Exxon Valdez oil spill, CERES would not have been established. What do the ten CERES principles have in common with the seven steps to the Federal Sentencing Guidelines for Organizations discussed in Chapter 4? How are they different? The 10 CERES principles were established with a view of ensuring that members of the organization upheld environmental sustainability in addition to creating awareness in the world about the environment. On the other hand, the Federal Sentencing Guidelines were established by the Federal government with a vision of ensuring that the violations on the federal law were prevented and detected in an organizational level. Looking at the 7 steps of Federal Sentencing Guidelines for Organizations for organizations and the 10 CERES principles, there are several similarities and differences which can be outlines. Identifying the similarities first, it can be seen that both of them uphold the prevention of bad occurrences, with the 7 steps of Federal Sentencing Guidelines for Organizations for organizations advocating for the prevention of law violations in an organizational level while the 10 CERES principles advocate for the prevention of environmental degradation. According to the 7 steps of Federal Sentencing Guidelines for Organizations for organizations, an organization is supposed to set up compliance standards which it has to communicate to its employees ad see to it that they are enforced. In addition to this, the guidelines specify that an organization must appoint high level personnel to oversee the implementation of the standards. This ensures that the organization complies with the federal law. Looking at the guidelines from an environmental conservationist’s perspective, it can be seen that an organization must set up standards which it has to comply with in order to adhere to the environmental act as it is provided in the federal law (Ethics Resource Centre, 2012). Similarly, the 10 CERES principles advocate for the prevention of environmental degradation ‘crimes’. In the 10 principles, CERES specifies that member organizations must protect the biosphere, use natural resources sustainably, reduce and manage waste effectively and conserve energy (Zairi, 2000). Above all, CERES points out those member organizations must reduce environmental risks to the lowest level possible (Zairi, 2000). Therefore, the advocacy for prevention is a major similarity between the 10 CERES principles and the 7 steps of Federal Sentencing Guidelines for Organizations for organizations. Another similarity between the two is that they advocate for a monitoring of an organizations performance via the use of audits and other control measures, after which a report must be written to, give the findings of the audit (Zairi, 2000). On this point, it can be seen that the two uphold the need for a continuous monitoring of an organizations comply with the federal law and the organizations environmental sustainability practices. Another similarity between the two is that each of them upholds the need to inform the public about the progress of an organization with respect to its adherence to the federal law and environmental sustainability. The 7 steps of Federal Sentencing Guidelines for Organizations for organizations point out that an efficient communication system must be put in place to ensure that the compliance standards are communicated to all the employees and he relevant stakeholders (Hemphill, 2006). On the other hand, the 10 CERES principles advocate for a routine reporting of an organizations performance via public reports. The major difference between the two is that the 7 steps of Federal Sentencing Guidelines for Organizations for organizations focuses on the federal law while the 10 CERES principles focuses on the environment only. Therefore, the 7 steps of Federal Sentencing Guidelines for Organizations for organizations will only have influence on the environment as per the provisions in the environmental act in the federal law. Visit CERES’s website (http://www.ceres.org) and compare and contrast the two formats for the CERES Report. Why did CERES create two formats? CERES is regarded to be the father of the modern environmental economical and social reporting. One of its recent product is the Global Reporting Initiative which as at now is the reporting format used by most companies in the world (GRI, 2013a). As per the 10 CERES principles, a member of the association must undertake environmental audits after which it is supposed to write a report giving detailed information about its environmental sustainability measures. However, the association did not focus much on developing a standardized reporting format until the year 2002 when it developed two types of reporting formats: the standard type and the short form type. The report formats were established by CERES in conjunction with environmental groups, investors and fortune 100 companies. The establishment of a standard in reporting was a major step towards ensuring that environmental reporting was done in a manner in which all aspects of environment and the organizations in the market were taken into consideration. The standard format of reporting is longer as compared to the short format. As per the provisions of CEES, the standard format must contain specific information as per the outlined table of contents (CERES 2013). The standard reporting format is used by large organization which has annual revenue of over $25,000,000. In addition to this, most of the organizations which use the standard report format are most manufacturing companies and other companies which use lot of natural resources. In addition to this, organizations using the standard reporting format produce a lot of waste, toxics and chemicals into the environment. An example of such a company is General Motors. On the other hand, the short reporting format is used by smaller organizations or organizations which do use a large amount of resources hence do not produce toxics and waste into the environment. An example of such a company is an insurance company like AIG. Just as in the standard format, organization using the short format must include specific information which is outlined by CERES. However, there is some information which organizations must include in either of the repots. It must be acknowledged that CERES do not dictate to an organization as to which reporting format it should use. As per the CERES guideline, an organization may use either of the two reporting formats. However, it must ensure that it includes all the information which is required in a specific format. A member organization may also deviate from the CERES reporting format and adopt its own only after getting authorization from the association. Concluding on this point, it is worth noting that the differences in the reporting format were arrived at due to the nature of business organizations. Ideally, no organization is similar to another but all of them can be widely grouped into two, organizations using large amounts of natural resources and organizations which don’t, organizations with a revenues exceeding $25,000,000 and organizations with a lower revenue. Therefore, it is logical that a standardized format be established for the two kings of organizations so as to take into account the several factors affecting their processes. Visit the Global Reporting Initiative website (http://www.globalreporting.org) and review the progress of the initial pilot program. What successes have been reported? What areas need additional improvement or refinement before the GRI is ready to be launched? The initial pilot program which is aimed at introducing GRI reporting standards in the market has been successful. The reporting guidelines which are being tested in the pilot program are the G3.1 reporting standards. In order to keep up with the changes in reporting Global Reporting Initiative, which is a body which was initially started by CERES, has been continuously changing the reporting formats so as to ensure that more areas of reporting such as human rights and social aspects are reported appropriately? Since its first guidelines release in 2000, Global Reporting Initiative has been developing guidelines which will enable corporate to produce reports which indicated how the organization’s practices are impacting on the environment. On this point, the GRI guidelines have been trying to incorporate other aspects which are influenced by organizations practices for instance gender, human rights and social responsibility. According to GRI (2003), G3.1 guidelines are the most recent reporting guidelines in the market. They are an improvement of the former G3.1 reporting guidelines. Over the time that GRI has been in existence, it has been adopted by many organizations around the world as the de facto reporting format. Precisely, about 1,800 organizations are using GRI reporting format. In addition to this, GRI reporting has been adopted by international bodies such as UNEP as the recommended reporting guidelines. This is a mark of the success of GRI. In addition to the G3.1 reporting guidelines, GRI has also launched a technical protocol which enables organizations to produce reports more efficiently as per the GRI guidelines. The technical protocol works by the principle of applying the report content principles (ISOS Group, 2013). One of the areas which need to be reviewed before GRI is launched is integrity. It is important that GRI finds a way of ensuring that the reports which are released by organization contain credible information. It is logical that organizations can use the reports to get themselves a good image in the market; thereby including things which are not really part of their deeds in the report. In order to ensure that this does not happen, GRI should establish a mechanism of reviewing the information contained in the corporate reports. \ References CERES, (2013). History and Impact, CERES, Retrieved on 11th January 2013 from < http://www.ceres.org/about-us/our-history> Dorsett, M., (2010). Exxon Valdez Oil Spill Continued Effects on the Alaskan Economy, Colonial Academic Alliance Undergraduate Research Journal, 1(7); 1-14 Ethics Resource Centre, (2012). The Federal Sentencing Guidelines For Organizations At Twenty Years, Ethics Resource Center United States of America, 1- 128 ISOS Group, 2013. GSI Reporting Initiative to Launch the G3.1 Guidelines. ISOS Group, Retrieved on 11th January 2013 from GRI, 2013a. What is GRI? GRI, Retrieved on 11th January 2013 from < https://www.globalreporting.org/information/about-gri/what-is-GRI/Pages/default.aspx> GRI, 2013b. G3.1 Guidelines. GRI, Retrieved on 11th January 2013 from Hemphill, T., (2006).Corporate internal investigations: balancing firm social reputation with board fiduciary responsibility, Corporate Governance, 6(5): 635 - 642 Ritchie, L & Gill, D., (2010). The long, long road from Exxon Valdez to Deepwater Horizon, Disaster Prevention and Management, 19 (5): 32-56 Walsh, B., (2009). Still Digging Up Exxon Valdez Oil, 20 Years Later, Times, Science & Design, Retrieved on 11th January 2013 from < http://www.time.com/time/health/article/0,8599,1902333,00.html > Zairi, M., (2000).Social responsibility and impact on society, The TQM Magazine, 12(3):172 - 178 Read More