6 - Regulatory and Social Processes Flashcards
What must companies do to operate in their communities?
Companies must continually earn the right to operate in the communities and countries in which they produce and sell.
What are the main regulatory standards companies need to comply with?
National and local regulations on the environment, employee health and safety, and hiring and employment practices.
Why do companies aim to exceed minimal regulatory standards?
To develop a reputation as an employer of choice in every community in which they operate.
Who emphasized the importance of integrating social and environmental accounting into accountability reports?
Marc Epstein and Bill Birchard.
What does Nova Chemicals aim for in its community initiatives?
Outstanding performance concerning safety, health, and environmental standards.
What enhances a company’s commitment to the community, according to Nova Chemicals?
Corporate sponsorships and donations.
What is the relationship between regulatory performance and shareholder value?
Failure to perform adequately on regulatory and social processes puts at risk the company’s ability to operate, grow, and deliver future value to shareholders.
How can an excellent reputation in regulatory and social dimensions affect a company?
It assists in attracting and retaining high-quality employees.
What changes did BellSouth implement to improve its HR practices?
Added benefits for domestic partners and included a diversity measure on HR department scorecards.
What are the dimensions along which companies manage and report their regulatory and social performance?
- Environment
- Safety and health
- Employment practices
- Community investment
What are the components of environmental performance reports?
- Energy and resource consumption
- Water emissions
- Air emissions
- Solid waste production and disposal
- Product performance
- Aggregate environmental measures
How do companies typically measure energy consumption?
Total energy consumed or normalized by units of output, sales revenue, or cost of goods sold.
Why is clean water considered a scarce resource for companies?
Due to the demands made on clean water supplies and the total wastewater released.
What types of air emissions do companies commonly report?
- Toxic gases
- Air carcinogens
- Carbon dioxide (CO2)
- Nitrous oxide (NO)
- Sulfur dioxide (SO2)
What is the purpose of product performance reporting?
To address the environmental impact of products even after they have been sold.
What are some design considerations for environmentally friendly products?
- Identify design changes that reduce environmental impact
- Eliminate hazardous or toxic materials
- Use molded-in colors instead of paint
- Design for easy disassembly and recyclability
What does the ISO 14000 family of standards focus on?
Environmental management, including monitoring the quality of air, water, and soil.
What is an example of a measurement for hazardous waste reported by companies?
The amount of hazardous waste sent off-site for disposal.
True or False: Companies aim for compliance with regulations only to avoid shutdowns.
False.
Fill in the blank: Companies with outstanding reputations enhance their images with _______.
[customers and socially conscious investors]
What does Coca-Cola’s stewardship initiatives focus on?
Forming alliances to seek solutions to environmental challenges.
What is the main goal of Novartis’s annual Sector Reviews?
Continuous improvement in health, safety, and environmental performance.
What type of waste did IBM report reducing despite increases in production?
Hazardous waste generation.
What is the ISO 14000 family of standards?
A set of standards developed for environmental management, including over 350 specific standards for monitoring air, water, and soil quality
Established in 1996 to make development, manufacturing, and supply of products and services more efficient, safer, and cleaner.
What is the purpose of the Business in the Environment (BiE) Index?
To compare the extent of corporate environmental engagement among participating companies
Established in the UK to assess and manage environmental performances.
What was Diageo’s BiE Index score in 2000?
73.9%
Improved from 63.8% in 1999.
In which area did Diageo pledge to improve its performance?
Environmental processes related to suppliers, environmental management systems, transport, and biodiversity
To address weaknesses identified in their previous reports.
What was BT’s overall score in the BiE Index of Corporate Environmental Engagement (2000)?
96 percent
This score was significantly higher than the industry average of 47 percent.
What does the Business Charter for Sustainable Development articulate?
Sixteen principles for environmental management
Urges businesses to adopt and express public support for these principles.
What are the five ways companies can leverage environmental capabilities according to Forest Reinhardt?
- Reduce cost
- Differentiate products
- Manage competitors
- Redefine markets
- Manage risk
What is a potential benefit of improved environmental performance mentioned in the text?
Cost reduction
Similar to the ‘quality is free’ concept in total quality management.
What is a necessary condition for successful environmental product differentiation?
Customers are willing to pay more for an environmentally friendly product
Other conditions include credible communication of benefits and protection from competitors.
What strategy do chemical companies use to manage competition regarding environmental standards?
Develop voluntary environmental and safety standards through industry associations
This helps avoid punitive regulations and maintains competitive parity.
What is one way companies can redefine markets to lower costs and increase customer willingness to pay?
Require customers to return used equipment when purchasing new equipment
Allows for recycling and reduces disposal costs.
What can environmental incidents lead to for companies?
Heavy cleanup costs, litigation, consumer boycotts, and loss of reputation
What common measure is used for employee safety and health performance?
Number of OSHA recordable cases per 100 employees
Triggered by regulatory requirements.
What does Siemens state about diversity?
It is an invaluable source of talent, creativity, and experience
Diversity contributes to corporate success.
What target did Siemens establish for new trainees in South Africa?
70 percent must be from previously disadvantaged communities
What is Coca-Cola’s core value regarding community?
To contribute time, expertise, and resources to help develop sustainable communities
Emphasizes partnership with local leaders.
What is the purpose of Bristol-Myers Squibb’s ‘Secure the Future’ initiative?
To partner with African nations to manage HIV/AIDS and improve community education and patient support
Represents a $115 million commitment.
What should the Balanced Scorecard represent according to the text?
Measures whose improvement will drive the company’s strategy forward and enhance shareholder value
What is the main focus of the Bristol-Myers Squibb Foundation?
Management of HIV/AIDS in women and children, community education, and patient support
The foundation also supports women’s health, healthcare infrastructure, and science education and research.
What does Novartis’ Foundation for Sustainable Development aim to improve?
Quality of life for people living in poverty through health, social development, and emergency aid projects
Their Community Partnership Day encourages employee participation in social activities.
What is IBM’s top philanthropic priority?
Education
IBM’s Reinventing Education program focuses on innovative technology solutions for disadvantaged children.
What is the purpose of IBM’s KidSmart Early Learning program?
To provide computer access to millions of children from low-income families
IBM donates Young Explorer computers to preschools.
What initiative did Nokia establish in April 2000?
Make a Connection program
It helps young people connect with peers and communities, improving educational opportunities and life skills.
What is a significant limitation in corporate reporting on community investments?
Companies report only inputs without measuring outcomes
This contrasts with detailed reporting on environmental, health, and safety investments.
How much has Nokia committed to the Make a Connection program?
More than U.S.$11 million
The program has made a difference for nearly 20,000 young people.
What do Michael Porter and Mark Kramer suggest about corporate philanthropy?
It should improve the competitive context in which companies operate
Companies can align charitable efforts with their business strategies.
List the four elements of competitive context that companies can influence through philanthropy.
- Input factor conditions
- Demand conditions
- Rules for competition and rivalry
- Related and supporting industries
What should companies demand from their community investment programs?
Output and outcome data
This aligns the quality of reporting with environmental and safety programs.
What benefits can arise from strategic collaborations between companies and nonprofits?
- Strategy enrichment
- Human resource management
- Culture building
- Business generation
What is an example of a successful strategic collaboration?
The partnership between Timberland and City Year
This relationship evolved from philanthropic support to an integrated joint venture.
What does the partnership between Georgia-Pacific and The Nature Conservancy illustrate?
A shift from confrontation to collaboration
They jointly manage forested wetlands for biodiversity and commercial development.
What is the outcome of implementing a performance-based model for community investments?
More effective and efficient nonprofit organizations
Successful organizations attract more stable funding.
What should companies assess regarding their community investments?
The regulatory and social process objectives with the biggest impact
This includes employee attraction, customer value, and financial performance.
What does the case study of Amanco illustrate?
Using the Balanced Scorecard to implement a triple-bottom line strategy
The strategy aims to create economic, social, and environmental value.
What is Amanco known for?
Amanco is a leading company in Latin America in the production and marketing of plastic pipes and fittings for fluid transportation.
What is Amanco’s mission?
To profitably produce and sell complete, innovative, world-class solutions for the transportation and control of fluids.
What is the corporate vision of Amanco?
To be recognized as a leading industrial group in Latin America, operating in a framework of ethics, eco-efficiency, and social responsibility.
In which regions is Amanco present?
Amanco is present in Mexico, Central America, Panama, and the Andean and Mercosur regions.
When did Amanco introduce its sustainability scorecard?
Amanco introduced a sustainability scorecard in 2000.
What framework did Amanco align its sustainability scorecard with in 2002?
The Balanced Scorecard framework.
What are the three commitments at the top of Amanco’s strategy map?
- Create economic value sustainably in the long run
- Generate value through a system of corporate social responsibility
- Generate value through environmental management
What financial objective does Amanco have?
Sustainable profitable growth with targets of 10 percent annual sales increases and return on net assets of 24 percent.
What are the four brand attributes of Amanco?
- Integrity
- Innovation
- Solutions
- Reliability
What does the process and technology dimension emphasize for Amanco?
Effective product creation processes to produce environmentally friendly, innovative products.
What approach does Amanco use for product development?
A cradle-to-grave approach that includes raw materials, production processes, use of finished goods, packaging, and final disposal.
What does Amanco measure in its environmental and social dimension?
- Health and safety performance by lost-time injury frequency
- Per-unit energy and water consumption
- Raw materials waste and scrap
True or False: Amanco’s eco-efficiency is expected to reduce costs and attract more customers.
True.
What is Amanco’s social impacts objective?
To implement at least one community development project in collaboration with a nongovernmental organization (NGO) in each local community.
What does the human resources dimension measure at Amanco?
- Job satisfaction
- Job turnover
- Skills and competencies of employees
What has Amanco implemented to manage and learn from its strategy?
Quarterly meetings and a strategy management committee.
Who stated that the Balanced Scorecard is a powerful tool for aligning people to strategy?
Roberto Salas, Amanco’s CEO.
Fill in the blank: Amanco’s sustainability scorecard was revised to better align with the _______.
[Balanced Scorecard framework]
What is the primary goal of Amanco’s strategy map?
To show the triple bottom-line results and the strategy it is following to achieve those results.
