Sustainability Asset Management (SAM)

Sustainability Asset focus (surface-to-air missile)IntroductionThe concept of Sustainability soon is been paid more and more attention. The idea of Triple Bottom line of yields (TBL) which Economic, Social and surroundings or Profit, People and Planet (PPP) be come to not only from societies or non-government system (NGO) provided besides from completely stakeholders shargonowners, investors, employees, customers, etc.. As in that location are many studies on unified sustainability, collective accessible profession which many of them shown prescribed turn outcome or positive relation between integrated sustainability and corporates exertions or outcomes in either in m bingletary or non-monetary endpoint or both (Groot Churet, 2009 Peters Mullen, 2009 Samy, Odemilin, Bampton, 2010).Monitoring organisation has been developed to furbish up issue line more sustainable by livelihood corporation to measure, indicate, monitor and address their operation o r sustainability activities and execution of instrument for their action breakment overtime. A characteristic of monitoring system should be accurate, sense of balance in performance write up, comparable, easy to understand and match to firms activities plan (GRI, 2010) which to a fault mean monitoring system should able to assess sustainability performance compliancy to the legislation, norm, code, and threadbare with reckonability, be able to continuous developed jibe to the expectations, be able to interpret and understand the positive and negative impact to the firms, comparison over companies, over time that thunder mug support organization to make decision for organization strategy, implementation plan, outcome and continuous advance (GRI, 2010). peerless of the most good-known monitoring systems is world-wide Reporting endeavour (GRI) which pull up stakes explore further period in this delineate.This embrace will briefly introduce the history and the dev elopment of sustainability accountancy and describe following by the overview concept of surface-to-air missile Sustainability Asset oversight, Dow Jones Sustainability Indexes (DJSI) and ball-shaped Reporting opening (GRI) as monitoring systems. Then review and analyze a selected familiarity, snuggle as a leader multinational food for thought Producer order in which their trance and mission are concerning not only on scotch but also purlieu and social as their hope to be a part to shape the world for more sustainable ( near, 2010). what is more its relevant sustainability dimensions will be identified and described on the marches implemented in its operation, including the power measurable and results account to the publics, its limitation, challenges and how will it consumption those indicators for go with performance improvement.Literature review history and development iodine of the literatures of sustainability accounting and reporting development reviewed f rom Burritt and Schaltegger (2010) which take in to classify paths and the future of sustainability accounting and reporting assessment call downed that there are two primary(prenominal) development tracks. The first one is a viewpoint of a critical possible action which seen sustainability accounting development as a ca procedure and extraction from corporate sustainability problems which may not reach the purpose of firms sustainability information disclosure and can be seen as a fashionable which may fade out after some(a)time. go another path looks sustainability reporting as a tool for foc utilize to support and make varied decisions and actions agree to those information.In the critical path sustainability accounting development, the Bruntland Report, World Commission on purlieu and Development (WCED), was published in 1987 and seemed to pull attention from the public for the orbicular pauperism of sustainable development but beca manipulation insufficient understa nding of sustainability this corporate sustainability report was not hale defined and been abandoned (Burritt Schaltegger, 2010). Even the sustainability accounting process and reports was not clear though some companies still utilise sustainability reports caused by the pressure from both internal stakeholder managers and external stakeholder publics, media, societies to gained competitive reinforcement as reputation, merchandise opportunities and to perceived from others perception on sustainability (Bebbington et al. as cited in Burritt Schaltegger, 2010). other sustainability accounting development, managerial path, by comparing the financial accounting, the worry reports were designed to represent the need of firms managers for decision making, planning and controlling sequence financial statements e.g. balance sheet, financial performance reports were designed for external stakeholders in which the first sustainability reports tried to linked with these accounting reports by integrating stintingal, social and environment aspect to support counselling decision and other stakeholder decision.Burritt and Schaltegger (2010) proposed troika approaches for sustainability accounting which are inside-out, outside-in and twin-track. For the first approach inside-out, it is an approach for a family to define its military control strategy, implementation plan and make decision from sustainability performance measurement and reporting that trying to contribute to social and environment unneurotic with economic to strengthen their market position, gain competitive advantage from earnest reputation or measure out added to customers and even in monetary term from new technologies concerning with triple bottom line or innovated process that minify waste, cipher saving, emission reduction which decrease operational expenses and increase sugar for the firm.Secondly, the approach of outside-in is an approach from external organization such as gl obal Reporting Initiative (GRI) that supply guidepost for a bon ton for sustainability reporting and can be used as a driven forces for management consideration of how can the firm contribute to sustainable development and meet expectation from stakeholders. In which GRI is one of the best(p) well-known sustainability reporting guideline (Brown et al. as cited in Burritt Schaltegger, 2010).Also, the way to measure, indicate, monitoring and reporting had taken into account as the study on the market reaction to the first-time release of corporate sustainability reports (Guidry Patten, 2010) in which they examined from US firms report according to Global Reporting Initiative (GRI) found that even there were no significant market reactions from the corporates sustainability released declaration but the it is positive significant to the quality of the reports in which the more market reaction to the juicyest quality report than lower quality report. Those evidences could implica te that populate (investors in this study) are more concern in the detail or quality of the sustainability not only to give way or simply mention corporate social responsibility in the annual report (Erusalimsky et al. cited in Guidry Patten, 2010).Monitoring System surface-to-air missile Dow Jones Sustainability Indexes and Global Report Initiative atomic number 53 guinea pig of monitoring system that has been develop as the important of corporate sustainability and increased interested from organizations stakeholders consist of societies, media, customers, employees, NGO, investors etc. reviewed earlier, an asset management go with in Switzerland, surface-to-air missile Sustainable Asset Management, specializing in corporate sustainability investments has founded in 1995 and turn to be one of the worlds leading investment groups, looking for and account the leading companies base on sustainability criteria using one of the largest sustainability corporation database by coop erated with Dow Jones Sustainability Index (DJSI) in analyze companies all over the world in y premature basis (surface-to-air missile, 2009). In 2009, from 2,500 largest companies according to Dow Jones Wilshire Global index had been examine and only 15% 367 companies in 57 different sectors were qualified which classified ad in three different level SAM Gold break scored more than 75%, Silver Class scored 70-75% and Bronze Class scored 65-70%. The slews were measured across all three thoughts economic, social and environment.As mentioned the SAM collaboration with DJSI. DJSI is one of the biggest and longest da plank that has been launch in 1999 provided character point for corporate sustainability assessment by measuring and indexed base on economic, environment and social criteria of the firms. The assessment processes are conducted annually by SAM using different weightinged criteria in general and specific-industrial to assess companies according to firms opportunities and risk from their sustainability trends. The assessment are the response from the companies based on SAM questionnaire including companies document and from others third-party. This assessment report then will assure by Deloitte defining rules. The dimension, criteria and weight unit are shown as diagram to a lower place character Dow Jones Sustainability Indexes, 2010 other example of monitoring system is GRI Global Reporting Initiative which has developed in 1997 from the idea to disclosure sustainability information frame cultivate by CRES, non-profit organization in Boston, the pioneer of environmental reporting frame sprain since early 1990s. The first GRI version of sustainability report guidelines, G1 guideline, had released in 2000 following by the G2 guideline in 2002 and the recent version of GRI, G3 Guideline launched in 2006 (GRI, 2010). The GRI Guideline aim support an organization to what it has to report and how to report. The overview concept can be explained b y the figure witnesser Global Reporting Initiative G3 Frame do work and decision maker Summary (GRI, 2010).In how to report, the GRIs Principle Guidance and Protocols are provided to witness that the report is focused to both internal and external stakeholders value. In the normal and focussing part the processes are first, to define the report content relating to core component, stakeholder comprehensiveness, sustainability perspective and completeness. Secondly, make sure the report quality by concerning with accuracy, balance, comparable, easy to understand, by the way and reliable of the report. Third, set the report boundary by determine the organization unit, function or process to be include in the report. some other part on what to report Standard Disclosure, Sector Supplements and National Annexes are provided and using three different measurements which are Profile to express strategical approach and governance, Second, Management Approach to explain the sustainabil ity goals and management used and Third, capital punishment indicators which accountable on economic, environment and social performance.Company DescriptionNestl was launch in 1867, Switzerland by Henri Nestl (Koese, 2008). The meaning of Nestl is little nest (Nestl, n.d.). The first intersection of Nestl was FarineLactee Nestl for children who mother cannot feed them with the breast. The current product line including chocolates, soups, instant coffee, cornflakes, fixed foods, seasoning and mineral wet as well as they grow their products to pet foods, pharmaceutical, and cosmetics (Sefcik, n.d.). Nestl accomplished with the innovative and business acquisitions to become the world largest nutriment Company in term of sales which has factories in 83 countries globally.The vision of Nestl is known as the leading in Nutrition, Health, and Happiness association (Nestl, 2010 Mali, Ali, Rana, Ilyas Khan, n.d.). concord to Nestl (2010) stated that Our missionof Good solid food, G ood Lifeis to provide consumers with the best tasting, most nutritious qualitys in a wide range of food and drinking categories and eating occasions, from morning to night. With it vision and mission, Nestl focuses on 5 areas namely the consumers, human rights and ride operations, human resources, supplier and customers, and environment (The Nestl Corporate backing Principles, 2010) using 10 doctrines on its business operations consist ofConsumersNutrition, health, and health is the first principle that gild postulate to increase the quality of consumers day-by-day life by adding more tastier and healthier to their products.Quality assurance and product safety provides the safe and high quality to consumers.Consumer communication, the partnership provide liable to consumers to reach consumers need such as infant foods.Human rights and outwear operationsHuman rights in our business activities is the fourth principle which punctuate providing and supporting good real situa tion of human right and labour performances via business activities.Human resourcesFifth principle is leadership and personal responsibility by respecting and reputing to all faculty as well as cause and providing opportunities to develop themselves in management and leadership.Safety and health at work is the sixth principle of business operations that concern with obviating the hazard, harm, and unsoundness from work.Suppliers and customersThe seventh principle is suppliers and customers relations by expressing the reliability and equality to contractors and clients.agribusiness and rural development, the guild provides the advancement in the production, community, and financial to farmers and rural nation as well as prepare environmentally friendly in term of sustainability. environsNinth is environmental sustainability. The phoner takes the sustainability in environmentally friendly into action through business activities as well as product life motor regular recurrence by using the resources efficiently.The last principle is water supply callable to the company attain the sustainable of water as well as development in water systems by managing as the confining resources.Sustainability dimensions most relevant to NestlNestl is responsible for creating the corporate achievement in long term in term of creating shared value. (Nestl, 2009) The company follows the highest tired of business activities and environmental sustainability which concerns in various areas of sustainability such as socio-cultural, economic, and environmental. mention to the companys objective is known as the leader in Nutrition, Health, and Wellness it relates with the sustainable in triple bottom lines such as financial, social, and environment issues (Nestl Oceania, 2009).Nestl believes their business activities in term of sustainability can compose environmentally friendly for future. (Nestl, 2009) Regarding to sustainable development to Nestl, it can define as the elaborateness that reach the need in the present by using the fully ability to play individuals need of next generation. Description CSVConversely, the company makes business profit in long term by going beyond cooperation and sustainable to create value for investors and society. In addition, Nestl emphasizes on the global environmental issues such as nutrition, water, and rural development as well as these issues can create strong business strategy and competitive advantage to increase the shareholder value and attain the socials requirement (Nestl, 2009). The dimensions relevant to draw close are categorize asSocio-cultural dimensionsFirst of all, nutrition is one of the relevance of Nestls sustainability due to the company focuses on helping people and society healthy (Nestl, 2009). The company creates the nutrition aim to improve health and provide more choice to consumers as well as adding up quality of life. In addition, the company also focuses on the lowest impact with e nvironmental problems. Moreover, the company needs to provide association and understanding in the consumers. The company tries to develop and improve their products with high quality of foods to support low-income consumer as well as prosecute with World Health Organizations regulation. Furthermore, Nestl renovates products by providing the nutrition labelling and descriptions on the packaging as well as develop nutritional knowledge and readying in infant formula marketing employees (Nestl, 2009).Nestl has several aspects that make corporate sustainability. For instance, the inquiry and development is one of factor that concern for the social sustainability. The RD needs to have well planning to drive the company achievement in the consumers needs. The company also provides diversify of products to improve branded active benefits for health benefits to customers. However, there are some problems that Nestl faces such as the increasing rate of fleshiness in the developing count ries (Nestl, 2009).Second, rural development is one of aspects that Nestl concerns due to the company works directly with the farmers. Most of them live in the rural areas and work as agriculturists. Nestl creates sustainable by supporting them to have better standard of living, increasing in productivity, and protecting the environment. The company also has the high quality of raw material to support the consumers and make more profit because they scale down the intermediaries. Nestl supports social sustainability by providing the knowledge, loans, rural employment, and training as well as technical assistance to rural people. The company also manages the relationship with suppliers to relieve the distribution costs and obtain high quality of raw materials. Moreover, the company can create shared value via supplier development by providing training and knowledge as well as reach high standard of the company (Nestl, 2009).Last are human resources that focus on the sustainability a nd stability in work life as well as the employees satisfaction. Nestl aims to invest for professional training and development in quality of staff as well as provide the job opportunities and environmental in the workplace. The company also needs to create the respect and parity at all level within the company (Nestl, 2009).Health and safety is one of the important factors that can create the sustainability in organization such as the zero accident during work. Employees need to work in the secure and soothing place which can create more productivity. The relationship within employee is accenting on the human rights, culture and equity which can connect to the sustainable in corporation. Moreover, Nestl concerns in the gender balance in term of multicultural diversity within the company. Training and learning are necessary to create business success by staffs need to understand their job and use effectively skills as well as the company provides the management training and leaders hip development to their employees. In addition, Nestl creates in employee engagement and workplace health to build corporate sustainable (Nestl, 2009).Environmental dimensionsNestl concerns in water and environmental sustainability which improve production process and environmental performance as well as they produce goods with lowest environmental effect. The company launches the environmental sustainability programs to load use in water and natural resources as well as develop the packaging to maintain environmentally friendly. Moreover, company promotes more sustainable in supply drawstring management in water. Nestl is continuing to improve the environmental performance such as water resources and reduce the heftiness consumption as well as renovate energy sources (Nestl, 2009). Nestl has environmental management to improve the sustainable development in order to business activities. The company is also responsible for engaging stakeholders performance and capture leadershi p role. The company also creates the environmental sustainability in product life cycle by focusing on the environmental impacts such as production process, conveyances, and consumption. Water is the natural resources that an essential for Nestl due to the company uses water for factory farm. (Nestl, 2009) indeed the company manages the water resource as main factors of creating shared value.Another factor is climate change, Nestl concerns for the glasshouse suck emanation by improve energy, and converting to cleaner fuels as well as renewal of energy. Moreover, transport and distribution, the company works on the environmental impact to reduce the environmental issues. The company also reduces the waste and recovery of by-products and increases the reprocess of by-products as well. In addition, Nestl emphasizes on the packaging due to it is necessary for food safety by providing the nutritional information to consumers. Hence, the company focuses on the innovative of packaging that makes from natural resources such as plastics as well as motivates consumers to reuse plastic store (Nestl, 2009).Economical dimensionsNestl provides the economic sustainability through the principles and policies which concerns in management approach. (Nestl, 2009) Nestl also indicates the economic sustainability into risk and opportunities in climate change. Nestl create sustainability in core strategy in term of rural development due to the company provides knowledge training to communities as well as develop the rural areas. Moreover, the company provides long term micro financial loans to farmer as well as employment. Nestl has project to invest and develop in term of agriculture activities such as growing and improving coffee quality and sustainability. Nestl also shares the Creating shared Value and supply chain in order to consumers, suppliers and distributors, industry, employees, government, and shareholders which share-out as consumer surplus, suppliers of raw mat erials and packaging, price and cost of company productivity, job and taxation of staff, taxes, and enhance in share-holder value.Analysis of come on indicatorsFrom Nestle company perspective, they believed that Creating Shared Value for societies that go beyond regulations, business principle, code of conduct conformism and sustainability to protect the future concerning with all stakeholders can create long-run value for their shareholder and company value in the term of economic, innovation, social and environment too. They are support UN Global compact and committed business principle base on sustainability and had developed conceptual framework measured the impacts on all stakeholders which depict as the figure to a lower place.Apart from the stakeholders impact matrix mentioned, they also looked in to materiality issues and analyze on their value chain which concerning from stakeholders and identified key performance index, focused area and prioritize according to degree from low to high of the impact and the interest of society that helped the company to utilize resources allocation, clearly goals setting and proper action plan in each focused areas.Source Nestle Creating Shared Value, published on www.nestle.com, 2010Analyzing to the Nestle monitoring system, their recent indicators are measured and reported in the form of United Nation Global Compact Principles which are Economic, Nutrition, Water, Environment Sustainability, Rural development, Suppliers, People and in addition with external assessment from SAM using Dow Jones Sustainability Indexes (DJSI) and Bureau Veritas assurance for Global Reporting Initiative (GRI).This report will describe and evaluate indicators from the dimensions of Socio-Cultural, economic and environment by using DJSI and GRI for analysis.Overall, results of performance indicator by SAM, Nestle been classified in to SAM Gold Class and ranked second leader in Food Producers Sector according to SAM methodology and ass essment as shown in figure below.Source SAM Sustainability Yearbook 2010The performance indicators measured were weighting across Economic 34%, Environment 29% and Social mark 37% which can been seen that it got highest score in Social Dimension and some highest in Environment Dimension that match with the firm focused areas on Nutrition, Rural development Our people as Social and Water Environment Sustainability as Environment Dimension as shown in table below.Source SAM Company Benchmarking Scorecard, Corporate Sustainability estimation, 2010Looking into another indicator, GRI, Nestle GRI report shown its application level on B+ which mean they met criteria requirement in level B shown below and the report assured by external auditor Bureau Veritas. The reasons Nestle not met level A are because the reports did not respond to core G3 version and Sector Supplement Indicator Nestle are categorized in Food Producers Sector.Source GRI industriousness Levels version 3.0, 2010The detail indicator analysis according to different dimension will explain in the following section.Economic DimensionDSJI Sustainability discernment in economic dimensionIn DJSI Economic Dimension, it evaluated in 6 criteria indicators using the Sustainability Assessment questionnaire responded from the company, Nestle, consist ofCorporate GovernanceRisk Crisis ManagementCode of Conduct / Compliance / Corruption BriberyInnovation ManagementHealth NutritionStrategy for Emerging MarketsThe DJSI report of Nestle Company evaluated by SAM can be seen as table belowIt can be seen that Nestle Score are more than mediocre in every area that evaluated by the answers responded from the questionnaire. For example In corporate governance, it reported Checks Balance of the Board structure using two-tier system with supervisory get on from non-executive and independent directors of total 14 persons compared to 13 from management carte du jour from executive management and the role of CEO i s split from Chairman. It reported dress corporate government statement. There are 3 women in board for gender diversity. Board owned the company stock to align with long-term interest of shareholders.Another example in Risk Crisis Management including water and climate which Nestle got the best score shown that it assigned specific management staff Head of Group Risk Management, to response and report in this area, it using risk analysis tool such as HACCP, good luck Tree Analysis (FTA), etc. and correlated analysis all this risks to business and financial risk including sensitivity and stress test such as change in carbon pricing, water quality. It has contingency plans using Nestle Environmental Management System (EMS) including ISO14001.More detail questionnaire answers can be seen from SAM Research Corporate Sustainability Assessment Questionnaire, DJSI Sustainability Assessment 2010, NESTLE SA/AG.Global Reporting Initiative (GRI) for Economic dimension measuring in 3 perfo rmance areas asEconomic performance, 4 indicators EC1, EC2, EC3 and EC4Market presence, 3 indicators EC5, EC6 and EC7 confirmative economic impacts, 2 indicators EC8 and EC9For example Nestle reported EC1 Direct economic value generated and distributed as below figuresIt reviewed that the group achieved organic growth of 4.1% but because of Swiss franc currency weakness, it reported sale down to 107.6 Billion CHF. While the EBIT margin is increased to 14.6% and also dividend per share are increased 14.3%. The gainfulness is increased because of the cost saving target from Nestle Continuous probity (NEC) program. Also it increases its RD investment by 1.9% of sale for long-term brand build and investment.Another example of EC2 Risks and opportunities due to climate changeIt can be seen that Nestle has improve energy efficiency and renewable energy expansion use over year such as it reduced greenhouse gas emissions by 3.1% from 2008.Environmental DimensionDSJI Sustainability Asses sment in environmental dimensionThe score are measured in 8 different sub dimensions and Nestls score are shown in below tableNestls all scores are above the average and some of them get the best score. Those score achieved by the company performance, for example in Environmental Policy / Management System, Nestle has adopted environmental polity which committed to environment since publish global policy on environment in 1991 where preserving natural resources and reduced wasted are in its operations which include the reduction use of water per kilo of food and beverage produced, signed UN Global Compact, improved environment through SAI-platform (Sustainable Agriculture Initiative), participated carbon Disclosure Project (CDP), shared knowledge through Greening the cut Chain (CGS) program which help suppliers to develop their EMS (DJSI, 2010). Nestle EMS verify by ISO14001.Another indicator in Operational Eco-Efficiency, reported that the EP- Direct nursery Gas Emissions in 200 9 was 3976158 Metric ton CO2 equivalent compared to 4104488 in 2008, also Indirect Greenhouse Gas Emissions, zip fastener purchased, Water consumption, be adrift generation were reduced from the previous year. superfluous example of Packaging indicator, Nestle policy is integrated with environmental aspects which applied to holistic life cycle farm to consumer to reduced weight and volume of materials, Packing reduction, recyclable packaging, use recycled materials, biodegradable packaging, recovered energy from used packages in which all detail reported can be seen from Nestle publications, eco-design and by invested in RD Sustainability Council to ensure that sustainability is taking in to account in all development products.Global Reporting Initiative (GRI) in Environment Dimension are measured in 9 different areas as solid 2 indicators EN1 and EN2Energy 5 indicators EN3 to EN7Waster 3 indicators EN8, EN9, EN10Biodiversity 5 indicators EN11, EN12, EN13, EN14 and EN15Emissi ons, effluents and waste 10 indicators EN16 to EN25Products and serve 2 indicators EN26 and EN27Compliance 1 indicator EN28Transport 1 indicator EN29Overall 1 indicator EN30At Nestle, for example in Material EN1 Materials used by weight or volume, it shown that it reduced 58,995 tons of materials weight from 21.43 million tons in 2008 to 21.18 million tons in 2009 as table belowNext example of Energy EN3 Direct energy consumption by primary energy source. It can be seen that Nestle had reduced energy consumption and move toward renewable energy sources.Additional example of Water EN8 Total water withdrawal by source in which Nestle aim to be the most efficiency water user and they can reduced 143 million cubic meters in 2009.Another example of Emissions, effluents and waste EN16 Total direct and indirect greenhouse gas emissions by weight reported reduced in 2009 compared to 2008.Further example of Products and Services EN26 Initiative to mitigate environmental impacts of products and services, and extend of impact mitigation. Nestle conducted Life Cycle Assessments to determine the impact to environment from its product such as coffee products and used those information for RD and share among communities for further improvement as shown in figure belowSocial DimensionDSJI Sustainability Assessment in social dimensionSAM was assessed in 7 main area indicators which Nestle assessment score are shown as below tableFor example in Labor Practice Indicators, Nestle reported that it has a strict policy of non-discrimination base on gender, ethnic, nationality, religion and performance characteristic which from the Labor KPI as Non-Discrimination / Diversity shown 33% of women in the manpower and 27% in management position and the diversity distribute among 33.9% in Europe, 38% in America 28.1% in Asia, Oceania and Africa. Also for the safety in the workplace it used international standard of OHSAS 18001 as safety work indicators in which only 0.23 in