Business Ethics and Sustainability Concepts, Research Paper Example
Words: 3962Research Paper
The foundation of this report is based on a business’s business ethics and sustainability concepts. It is important to define the meaning and substance of the business acumen. A business sustainability report is business report card that provides information concerning the businesses environmental, economic and social performances (Bradford, Earp & Williams, 2014). The sustainability reporting is more than just a collection of general or financial data but it’s a method to measure an organizations commitment to sustainability development. The link between sustainability reports and the organizations successful activities have been established as the leading factor in analyzing the business framework for business ethics and commitment (Symons & Lamberton, 2014).
ColgCoca-Cola and PepsiCo are two of the most successful and competitive beverage companies in the United States. Both companies have leverage their respective markets with strong ethical, moral and business excellence( Golan,2000).In addition, they are good examples of business that has sustain long term performance and reputation of running their operations with efficiency. The comparison between two companies in the same industry can provide an easily identifiable similarities and differences business ethics and respective sustainability concepts (Research and Markets, 2012). The sustainability is important because it describes how the company’s infrastructure and how well both entities are meeting long term sustainability goals (Lin, Chang & Chunchia, 2014).
The sustainability of a business involves business issues such as business ethics, business performance, sustainability activities, and quality of training, advantages and disadvantages. The comparison of GRI reports will provide a clear picture on the activities of the beverage giants including how they plan to accomplish sustainability goals and activities (The Coca Cola Company, 2012). The best approach in comparison of business ethics and sustainability concepts can easily compare the global systems, environmental and distribution because PepsiCo and Coca-Cola have the same sustainability goals (Biedenweg, Monroe & Oxarart, 2013).
The synopsis of ingredients, distribution, customers and recycling activities provide an excellent foundation to compare the operational efficiencies of both businesses (Richardson, 2013). However for this report, the Global Reporting Initiative Reports (GRI) will be utilized because it provides a roadmap of the businesses long-term strategies, awareness of current business problems as relating to business ethics and sustainability (Barkemeyer, Pruess & Lee, 2015).
Global Reporting Initiative Report (GRI)
The purpose of the sustainability reports is to provide a benchmark for measuring, reporting and monitoring the organizations impact of society and the economy. One of the key indicators that must be used in evaluating the quality of the invaluable sustainability reports are the Global Reporting Initiative Report (GRI). The GRI PepsiCo report is broken down into the organizational detail overview, human sustainability, talent sustainability and environmental sustainability (PepsiCo, 2015). In comparison to the Coca Cola GRI report, the PepsiCo report was completed with more real time and up to date issues. In report by Searcy and Buslovich (2014), indicated that the best way to compare sustainability reports is determining which report is utilizing real-time data. In our society today, the environment has become a major issue with the public holding corporations accountable for corporate responsibility, and social involvement (Gilbert, Ulrich & Rasche, 2007).
Coca Cola and PepsiCo are both very well-known brands with similar beverage goals that make it an interesting comparison. Coca Cola has operations in over 200 countries in the world while PepsiCo is the world leader in beverages, snacks, and foods. In the GRI reports they explain how each organization has grown economically and their contributions to human and environmental sustainability activities (Bozer, 2015). The GRI reports provide the companies documented practices concerning social and environment sustainability and how they are accountable for social contributions. Thus, the evaluations of the two companies’ sustainable reports can provide an intimate look inside of each operations and their business ethics polices globally. The GRI report for 2015 for both companies have very detailed information that helps provide an explanation and reporting of their sustainability activities and how well they are achieving set goals for the next year(Willis,2003).
The criteria for comparison of the GRI report will based on several factors that are consistent with the industry such as the social human rights efforts, social responsibility, environmental, ethics and integrity and human/labor practices. This format for GRI is one the best benchmarks to determine the success of the sustainability plan (Isaksson, Raine & Steimle, 2009).
This is fair assessment because the beverage industry has benchmarks based on this criteria’s. The analysis based on these areas PepsiCo has a more robust and clear initiatives explaining very specific goals while Coca Cola is has it merits but PepsiCo is more reader friendly and detailed. Coca Cola is known for its environmental contributions to keep the earth from being polluted by Coca Cola operations or use of energy. In the 2015, Coca Cola GRI reports indicates they have set energy consumption guidelines to ensure they abide by the countries energy regulations. In addition, they have added greenhouse emissions, climate initiatives and water protection laws within Coca Cola operations. However, the 2013 GRI report completed by PepsiCo committed an entire section with detailed explanation on how they plan to address water, climate and greenhouse issues.
The Coca Cola environmental sustainability section was presented with illustrations how they develop business polices for each area of importance. The language was clear with the understanding of the different audiences along with chronological listing of the environmental issues they believe to be the most important. In contrast, the PepsiCo environmental sustainability report was robust covering a wide range of environmental issues such as environmental compliance, waste management, water and access to clean water and evaluation of suppliers to ensure they are complying with environmental safety issues. These criteria help complete a snapshot of their performance not just in the United States but their performance from other countries as well.
The Coca Cola GRI has a better balance of issues because they concentrated on products worldwide. They have a comprehensive report because it address complex issues address across 200 countries with strict guideless for is business partners the bottling companies. The value chain section of the Coca Cola clearly shows their dedication to five critical areas which are agriculture and ingredient sourcing, Coca Cola areas of emphasis, bottling and partner’s distribution, customers and consumers recycling and recovery (Coca Cola. (2013). In our society, we have many businesses that are supporting the world-wide initiatives to save the planet with improved ways innovate ways of saving our agriculture ecosystem. The Coca Cola GRI agriculture section has a balance of active healthy living, human rights, product safety and water stewardship. Coca Cola is balancing the environmental, human and planet initiatives which shows their belief in social corporate responsibility (Cedillo et.al, 2012). The second areas of concentration is the Coca Cola areas of emphasis which are human rights, environmental safety and the earth water supply safety. The business goals include making sure that all their products are made, distributed and produced without putting additional burden on the already fragile ecosystems. The third area of emphasis is people and the rights of human beings all over the world. The sustainability report for Coca Cola clearly has the human rights as one of the priorities that cannot be undermined or taking lighting.
The third area of concentration is the safety of the water because each country has a different water reserves, water regulations and shortages. In contrast, PepsiCo has a great balance of organizational goals, however, Coca Cola has a balance plan that includes consideration for all the countries they occupy.
The comparison of the same industry’s such as Coca Cola and PepsiCo will have very similar areas of concentration such as shipping, packaging, environmental, water, human rights and their collection actions for sustainable activities. The human rights issue is one the most important issues for companies that conduct business abroad because they must be aware of the countries human rights climate (Emeseh, Engobo, Songi, 2014). In fairness, the beverage industry has similar goals and sustainability reports, however, there are some other areas within the reports that can be compared. The area of human rights have different approaches that both have merit with the GRI reports. The Coca Cola report emphasis on the workplace because they have over 200 Coca Cola plants in the world. The have shown that they care about equality and the health of their employees. The workplace has achieved remarkable accomplishments such as increasing the female leadership to 25% and 36% of the entire management is female (The Coca Cola Company, 2015).
In contrast, the workplace concentration for PepsiCo is health and safety in the workplace such as incident free working plants and decreasing in employee injuries. PepsiCo has initiatives concerning equality in the workplace but the GRI report has an in-depth talent sustainability section to ensure they key quality employees. PepsiCo stands behind their commitment to global safety not just in the United States. In 2013, PepsiCo implemented a plant model that consists of 32 officers sharing safety measures with the private sector to build uniformity for the entire industry. In addition, in PepsiCo divisions of New Zealand and Australia they recorded over 8000 safety conversations concerning how to complete a plant safety walkthrough (Fisher & Bonn, 2011). It is clear that both PepsiCo and Coca Cola believe in employee safety, however, PepsiCo has a better track record and documented safety trends and results. The areas that are easy to compare is the environmental contributions because both PepsiCo and Coca Cola spend millions in the environment ensuring they are a part of the green movement and saving the earth. Both GRI reports invest several of detailed plans concerning how they play to do their part. However, the edge has to be given to Coca Cola because they have a more detailed plan with successes on how they are improving the environment ecosystems.
The ability to determine which beverage company was accurate with predictions, statistics or overall delivery was difficult. The statistical figures are completed by each company’s financial department which made it hard to dispute, therefore we compared which GRI report provided a timeline when they would complete these goals which is a characteristic of accuracy. The GRI reports can take certain liberties because it’s difficult to determine when the action or goals was completed and when other projects were just started this year. Coca Cola has an in depth fact sheet that covers all their current and future corporate responsibility and sustainability activities. The level of accuracy shows their level of organization investment to ensure these goals are met. This section includes the name of the sustainability activity, the description of the activity, the specific target goals and the date these goals have been accomplished or will be accomplished in the future. In addition, Coca Cola provides some very important numbers that describe the overall success of the Coca Cola integrated within the GRI reports such as 170 million people have been served across eight territories in Western Europe, 17 manufacturing plants and facilities in Western Europe with 40 beverage brands on the market today(Coca Cola,2015). This information is critical to the GRI report because it provides information with accuracy so the reader understands the entire report. The accuracy of both reports are commendable because they provide facts, figures, updates, changes and future innovations.
GRI Report Differences
Coca Cola provides a detailed accomplishment in the GRI report about the different countries that they operate globally. The information is so detailed that the layman person can understand the report by country. In addition, Coca Cola has a tool that you can chose detailed reports based on sustainability factors for each country. The reports are robust, accurate with clear research concerning the findings and results of the reports. The Coca Cola delivery appears to provide more accuracy with numbers, statistics, global deliveries and more information about the different bottling companies they partner with during the year. Overall, the reporting differences is the delivery because Coca Cola is more in the model of a storyboard versus the PepsiCo GRI report reads more like a financial report.
PepsiCo has the ability to complete their GRI reports in the same year 2015, which shows they are planning ahead and they provide dates and times they would be completed with each phase. In addition, PepsiCo indicated they were planning the timelessness and accuracy of the report seven year ago. PepsiCo leadership wanted a model in place that would track the success of previous GRI reports with future reports to determine which processes were successful and which process or projects needed to be improved.
The PepsiCo GRI report explained that the CEO believed that sometimes the changes and improvements are made after the mistakes have been made and the improvements are not seen until a few years later. It was apparent that PepsiCo was trying to make changes and improvements in real-time with weekly, monthly and yearly comparisons to capture data in the same quarter or year. The CEO understood the importance making the right changes when they happen (Barrett, Haug & Gaskins, 2013). In several countries that have been complaints about the water shortages polices that have not been observed by local businesses. Coca Cola has been one the leaders with innovative water solutions based on the water restrictions in any country. Coca Cola wants timely reports concerning the water crisis in another country that allows them to make timely changes to lessen the negative impact to other countries. Coca Cola is adept at transforming the way they adopt local countries water restrictions to ensure they are economically and environmental in compliance while welcoming input for global governments (Karnai, 2015).
In one report in the PepsiCo GRI report indicated that the implemented innovations that were measured from 2012 and 2013. This lead to an increase in 9% increase in productive and successful changes in each region globally. This is a clear indication that PepsiCo wants timely reports that allows the company to take quick action to make the appropriate changes that affect the environment. In contrast, Coca Cola made some timely changes with the environment and business decisions, however, PepsiCo planned their changes over seven years ago. That type of planning coincide with the validity and credibility of the GRI report, which gives the edge in timeliness to the PepsiCo organization.
The Coca Cola presentation of the 2015 Sustainability report should be a model for all other industries. The leadership created this GRI report with the perception that not everyone would understand the terminology, sustainability explanations and the organizations complex goals. The initial introduction called “The about Coca Cola “was explained as if the reader was not familiar with the business ethics of contributions of Coca Cola. The opening was an educational journey for the reader in layman’s terms and very easy to understand. The introduction was clear, precise and informative providing a graphic explanation that contributed to explaining the sustainability reports for Coca Cola in 2015.
GRI Future Projects
The PepsiCo GRI report provide excellent information about their commitment and activities concerning the completion of the sustainability activities, however, the Coca Cola GRI report include their goals from present through 2020. The list the future projects that have priority such as women’s economic empowerment, sustainable management of water resources and sustainable system for agriculture. This section included an individual goals that affect society such as offering no calorie options in 191 markets. This is a clear indication with clarity that Coca Cola in concerned with the health of its consumers. In addition, they have 330 health living programs in 112 global markets (Coca Cola, 2015). The second section that clearly shows the commitment of Coca Cola is Women’s economic empowerment support for 5 million women globally. PepsiCo GRI report did an excellent job of explaining how they contribute to the agriculture industry in the world. However, Coca Cola GRI report provided a World section that listed the agriculture contributions by Coca Cola in 2014 and 2015. Coca Cola hit their sustainability target for agriculture by developing a new seven Step Engagement Program which outlines the different ways Coca Cola complies with the companies “Sustainability Agriculture Guiding Principles. The program is another innovative and futuristic program that will help developing countries with their underdeveloped areas that need improve agriculture ideas.
Coca Cola has a clear picture on how they plan to proceed into the future with innovative changes that will improve the agriculture markets. They make an emphasis in the GRI report concerning how the future must be included importance of helping developing countries while spreading the social responsibility from country to country.
In our society, we are living in the nutrition age which demands more no calorie products, reduced fat and no calorie beverages. This is not just the addition of a diet product to show their ability to deliver products that are healthy. Coca Cola has taken pride with a dedicate section in the GRI report concerning how they intend to continue meeting the nutritional needs of consumers. PepsiCo GRI report was informative providing their contribution to human sustainability such as reducing the amount of saturated fat per servings and by 15% by 2020. They will reduce average amount of sugar in their products based on a consumers demand for less sugar in their products. In addition, they plan to remove a large percentage of sodium per product all by the year 2020(PepsiCo, 2015).
In this case, PepsiCo would receive a score of a 5 on a scale of ten because they plan to make changes in the future, in the next 5 years. Their actions are commendable but Coca Cola has more credibility and reliability because they provide their nutritional changes in that have already been accomplished in 2013 and 2014. Coca Cola has already made a commitment in 2013 towards children under 12 years old promising not to advertise or market their products to younger ages. The commitment to children has already been achieved and they are continuing this trend across the globe.
Coca Cola is one of the leaders in healthy products for children in the beverage industry, in comparison to PepsiCo (Coca Cola, 2015). Here are some additional achievements that make the Coca Cola GRI report more reliable such as in 2014 they have released over 400 new products that are reduced or low calorie in 191 markets. In addition, in 77 countries Coca Cola they have reduced, low or no calorie products in 20% of their entire global market. In addition, Coca Cola has a track record of nutrition that dates back to six years ago. They launched more than 180 low- and no-calorie drinks in 2009 that increased their no calorie beverage portfolio to over 800 beverage products (Environment, 2015).
Advantages and Disadvantages
The use of standardize approach to the GRI report has it merits such as the ability to have true comparisons because the variables are the same. The model covers the same areas without the Coca Cola or PepsiCo watering down certain sections or leaving them out completely. The standardized formats ensure all areas of accountability are covered. The disadvantages is the corporations do not have the freedom to share the most important factors they feel can improve their own sustainability reports. The organizations may have innovative models that can help the entire market.
Recommendations on Improvements
The recommended changes would be the Coca Cola labeling share more information about what diet ingredients are included in each drink. It has been in the media concerning Coca Cola not divulging all the harmful ingredients in the diet drinks. Both Coca Cola and PepsiCo should have dedicated a section to how they are addressing the use of sugar, caffeine and aspartame (Ladas, et al., 2013). The aspartame has documented studies over the last 20 years on the kidney damage these diet products have caused with consumers. In addition, diet drinks have been contributed to poor health of drinkers including kidney damage and diabetes (Taylor, 2011).
This was poor judgement on the part of both companies not to address their sustainability plans because it appears they just ignored the problem. In addition, advocates against the diet drinks have been documenting how many big beverages company have known for years the damage the diet drinks have caused to the population. This responsibility and accountability will not go away, they need to address the diet drink ingredients.
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