Sustainable Development Study
Sustainable development refers to the type of human development that focuses on creating a healthy environment that does not compromise the ability of the future for immediate needs. This means that corporations must ensure that their activities and their efforts at expansion do not harm future generations or cause irreversible damage to the environment. This article studies the multinational corporation Heinz and their methodologies in implementing sustainable development.
Sustainable Development: The Aspects
There are different aspects of sustainable development, each one is as much important as the others are (Adams, 2009).
Environmental Development is the first aspect, where businesses have to ensure that they leave minimum damage to the physical environment; this includes leaving a relatively small carbon footprint, reducing pollution levels as much as possible, relying more on renewable energy, such as wind power and solar power, rather than limited energy, such as oil, fossil fuels and wood.
Economic Development is the second aspect, which has long been a topic of debate and controversy. Economic development is defined as the practices and activities that are associated with the process of production and manufacturing, and the use and management of resources, whether natural or unnatural. Experts debate whether or not there should be a differentiation between economic and environmental sustainability, as they both support each other. The third aspect is social sustainable development. Social sustainability refers to all matters that are associated with human rights, labor and worker rights, fair treatment and corporate governance. As with environmental and economic sustainability, social sustainability theory argues that the forthcoming generations should have either equal or more access to social resources than today’s generations do. As for current generations, they should have adequate access to social resources.
Legislative and Politics: In the present day, legally and politically, corporations have to abide by all three different aspects equally, environmental, social and economic, to fulfill true sustainable development and benefit society at large. Over the past number of years, experts and scholars have been advocating for culture to be the fourth aspect of sustainable development. In 2001, the European Union set a strategy for sustainable development for all European countries to abide by. In 2005, the strategy was amended to integrate specific environmental concerns that Europe was suffering from, as well as including social and economic development.
The public interest and fight for environmental awareness began in the late 1960’s, during the time when the “environmental movement” began in the West. The damage sustained by international corporations and their abuse of environmental factors began to surface, prompting many to call for legal action to be taken against companies whose activities were hazardous to the environment. Companies that manufactured synthetic, non biodegradable products and material were under public scrutiny for their environmental violations, factories were under criticism for their air pollutant toxic waste, as well as oil companies for their oil spills. This wave of environmental concern caused corporations to begin being held accountable for their actions, both within society and in legal cases (Pedler & Boydell, 1996). As the “green movement” continues to flourish in 2013, companies are becoming increasingly pressured to engage in sustainable development. At the same time, union labors were starting to become formed, and public interest in labor and worker rights and social corporate responsibility have increased drastically.
Importance of Sustainable Development
Because of the disastrous effects of factories and corporations on the environment, environmental experts believe that if we continue using our current methodology with regards to production and development, the world will run out of natural resources necessary to sustain life, leading to the destruction of planet Earth. Moreover, there are ecological problems occurring as well that damage the environment. Because of such fast and fierce development by corporations, tropical rain forests lose over 137 species on a daily basis because of forest depletion (Marco, 2011). This will have disastrous effects on the environment for the coming generations. Today, we are witnessing some effects of these actions, such as global warming and climate change and an imbalance of the ecological system. According to recent studies, over 80% of the entire world’s resources are only used by 20% of the world’s people. Meaning, for instance, an average person living in the United States, one of the most developed countries in the world, is using more natural resources and energy on a daily basis equal to those used by a collective of 300 East African citizens, one of the least developed areas of the world (Adams, 2009). This means that not only are the world’s resources becoming depleted, but they are also unequally distributed. This is why social development is necessary.
Forms of Sustainable Development
For a corporation, engaging in sustainable development is necessary for a number of reasons and is essential for the financial success of the country. First of all, it has great marketing value. The public would have a generally more positive view of the company for its dedicated effort to benefit the global society, making the company more valuable and increasing its revenue (Hall & Lennox, 2010). A recent study by Cone revealed that 86% US consumers would choose a more sustainable and environmentally and socially aware brand over a brand that does not have a solid sustainable development strategy, assuming the price and quality of both products are the same.
Another study showed that 75% of consumers would be willing to boycott the use of a brand if its company was associated with causing severe environmental damage or had negative social responsibility (Marco, 2011). This shows that sustainable development and responsibility has a huge impact on consumer behavior and perception of a brand. Additionally, many countries are now making new laws, requiring corporations to adhere to environmental standards. Any violations could result in federal lawsuits, costing the company millions of dollars and resulting in public scandals, which the company might never recover from, financially or otherwise (Hopwood & O'Brien, 2005).
The resource-based sustainability approach is the view that a corporation’s internal environment, with regards to its resources and capabilities, are the most important aspects when determining a strategic sustainable action. The view asserts that external factors should be neglected, while the focus should remain on the company’s internal resources and potential. Resources are all materials that are used in the entire production process, starting from financial capital, machines and equipment and workers’ skills. It is only through capitalizing on the company’s resources that a competitive advantage can be built. The capabilities of a company are the capacity of the resources in which activities could be performed (Rodriguez, Garcia & Lopez, 2007).
Activity-based sustainability is a method of financial decision-making. Activity based costing helps assess risks and factors taken into consideration to decide upon financial strategic sustainability programs. This is done through analyzing all activities that are associated with the products and the production process and evaluating their costs, while simultaneously calculating the cost of alternative options to see which plan would be more cost effective (Pedler & Boydell, 1996).
Stakeholders are any individuals that directly affect and are directly affected by the performance of the company. Stakeholders are regular employees, managers, owners, investors, suppliers or even trade unions. They have an interest in the corporation’s results and have an influence over the company. Stakeholder sustainability refers to the relationship between a stakeholder and the company. For instance, it is in the best interests of a business to create a strong value to being a stakeholder, so they are motivated to enhance their performances and have a satisfying and rewarding experience doing their job. This can be done through maximizing employee satisfaction as well as customer satisfaction. Also, it is important to have a good community corporate culture and a sense of unity amongst all employees. This will help create shareholder value and increase the overall value of the company (Elliot, 2012).
Company Profile: Heinz
Heinz is a United States based, Multinational Corporation that creates food products, markets and sells them in over 50 countries across the world, where it has the number one, or number two, shares of the entire industry in the country. It was founded in Pennsylvania, United States, in 1869 by Henry John Heinz. Heinz is most recognized for its legendary bottled ketchup, which Heinz sells 650 million bottles of them per year. In 2012, Heinz’s revenue was a total of $11.6 billion US dollars. The company is widely known and respected, it employees over 32,000 people across the world ("Heinz: About our," 2013). Heinz’s mission statement includes their company acting responsibly towards corporate citizens, and to practice safe and environmentally friendly practices in all its aspects of production, from growing, to packaging, to distributing and selling. They also attest their interest in giving back to the local and global communities ("Heinz sustainability," 2013).
Lessons to be learned
Heinz is a sustainable corporation, with dedicated effort into creating a sustainable environment and engaging in social corporate responsibility. However, there are many ways Heinz could improve its strategies and increase its sustainability to further improve its public image and boost sales. Heinz has already placed a lot of emphasis on sustainable development in its products in terms of packaging and agriculture ("Heinz sustainability," 2013). This research recommends giving priority to the corporation’s sustainability as an office business.
- Reduce Papers: Reducing the usage of papers within the company and encouraging employees to stick to e-mailing and online memos will make the company more environmentally friendly. Additionally, it will save the company a lot of costs on papers and stationaries, including pens, highlighters and markers. In instances when paper usage is necessary, photocopying can be done on both sides of the page to save paper.
- Encourage Commuting: Instead of having Heinz employees drive, encourage them to carpool and give carpoolers better parking spots to further encourage them. Additionally, the company could encourage its employees to opt for public transportation, such as underground metros or buses. The management could set a strong example by doing the same. Also, the company could have bike racks for cyclists to leave their bicycles and not worry about having them stolen.
- Reduce Travelling: Instead of flying employees to attend business meetings or conferences in different cities or countries, Heinz could begin teleconferencing online. This will reduce Heinz’s carbon footprint and reduce gas emissions and fuel usage. Also, it will benefit the company as it will decrease costs and lessen the financial strain on the company. However, if there are necessary trips that must be taken, the company should track the miles and set a maximum number of miles per year that should not be exceeded. With company shipments, track petroleum and mitigation effects (Rodriguez, Garcia & Lopez, 2007).
- Detox the Corporation: Many corporations, without knowing, carry toxic substances in their offices. Items such as batteries, copy toners are toxic and environmentally harmful. Heinz should ensure that all supplies in offices are environmentally friendly and naturally disposed of. Heinz could also begin recycling its trash.
- Get the full staff involved: Encourage employees to ‘go green’ themselves. Create financial rewards or motivational incentive for employees to become more environmentally friendly in the office. This will be great for public relations and company image.
- Philanthropy: Heinz could begin corresponding with social and cultural NGOs, and sponsoring their cultural events, holding fundraisers and awareness campaigns.
- Encourage a good work environment: Management must foster a good work environment and community feel. Positive reinforcement, management support and economic incentives are necessary. All employees, regardless of their position, are entitled to prospects for promotion, annual wage raises, and financial compensation for after-hours work, paid vacation, medical insurance and contract benefits (Hall & Lennox, 2010).
- Employee Safety: Employee safety is one of the most important aspects of sustainable development. Factories and production units should be free of hazardous wastes and toxins. If they such materials are unavoidable during production, employees and workers must be well-equipped to face these dangers, wearing protective goggles, appropriate outfits, or plastic gloves. In the offices, sanitation is necessary (Hopwood & O'Brien, 2005).
- Equal Employee Rights: Heinz must make sure all employees are treated equally and fairly and that they all have access to better opportunities. Human Resource must be dedicated to eliminating any discrimination against groups or individuals, including discrimination against race, ethnicity, religion, gender, sexual orientation, disabilities or otherwise. Heinz should make sure those policies apply to all Heinz’s’ offices around the world, not just the Western offices.
All these changes, no matter how small, could have a huge impact of Heinz’s image and corporate abilities. Heinz should release annual press statements about its corporate changes and their effects on the environment, as well as celebrate its sustainable accomplishments in the media. This will help Heinz gain a competitive edge and beat its competitors, locally and internationally. The pursuit of sustainability is a long-term plan. There are no immediate results and there is no immediate method of tracking down the rewards of the company’s efforts. However, the positive effects will become evident over time (Hall & Lennox, 2010).
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