Global Reporting Initiative – a Comparative Study Between Two Companies In Food Sector

=== Global Reporting Initiative – a comparative study between two companies in food sector ===

Global Reporting Initiative – a comparative study between two companies in food sector

Introduction

Sustainability reporting is a process that assists organizations in setting goals, measuring performance and managing change towards a sustainable global economy – one that combines long term profitability with social responsibility and environmental care.

Sustainability reporting – mainly through but not limited to a sustainability report – is the key platform for communicating the organization’s economic, environmental, social and governance performance, reflecting positive and negative impacts. The Aspects that the organization deems to be material, in response to its stakeholders’ expectations and interests, drive sustainability reporting. Stakeholders can include those who are invested in in the organization as well as those who have other relationships with the organization. Integrated reporting is an emerging and evolving trend in corporate reporting, which in general aims primarily to offer an organization’s providers of financial capital with an integrated representation of the key factors that are material to its present and future value creation.

Integrated reporters build on sustainability reporting foundations and disclosures in preparing their integrated report. Through the integrated report, an organization provides a concise communication about how its strategy, governance, performance and prospects lead to the creation of value over time. Therefore, the integrated report is not intended to be an extract of the traditional annual report nor a combination of the annual financial statements and the sustainability report. However, the integrated report interacts with other reports and communications by making reference to additional detailed information that is provided separately. Although the objectives of sustainability reporting and integrated reporting may be different, sustainability reporting is an intrinsic element of integrated reporting. Sustainability reporting considers the relevance of sustainability to an organization and also addresses sustainability priorities and key topics, focusing on the impact of sustainability trends, risks and opportunities on the long term prospects and financial performance of the organization. Sustainability reporting is fundamental to an organization’s integrated thinking and reporting process in providing input into the organization’s identification of its material issues, its strategic objectives, and the assessment of its ability to achieve those objectives and create value over time.

CHAPTER 2. CORPORATE SOCIAL RESPONSIBILITY

Definitions

Corporate social responsibility (CSR) is a broad term that can encompass almost any responsibility that company holds towards society and people. This may include simply making a profit and following laws, regulations and customs of the country. CSR in extended view would include aspects such as environmental conduct, the working conditions at foreign affiliates and subcontractors, and protection of human rights (Segerlund, 2010). It is a business commitment to work in the betterment of people and society by publishing voluntary reports of activities done for the betterment of people and society. (Kotler & Lee, 2005) World Business Council for Sustainable Development (WBCSD) defines corporate social responsibility as “Corporate Social Responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their fami-lies as well as of the community and society at large.”

CSR is concerned with corporate attitudes and behavior towards its responsibility beyond its immediate profit gains and other benefits pursued by the business, CSR refers to those activities that are not only done for fulfilling legal obligation and requirement. CSR is more about activities that any business undertakes for mitigating the negative impacts of the business on the society and people it is related to. That means business should not just do what is legally, economically and morally right and avoid what is legally, economically and morally wrong, but also hold social and moral obligations to help build a better society. (Pollard, 2010). Corporate Social Responsibility is expressed in many different terms by different companies and authors. Corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, corporate responsibility, global citizenship, and corporate social marketing are the some of the terms used in expressing the concept of corporate social responsibility. (Kotler et al.,2012)

History and current outlook of CSR

The history of CSR can be traced before many hundred years ago but it is mostly the product of twentieth century, especially from the early 1950s up to the present time. (Carroll, 2008) Business practices of 1900s that could be termed socially responsible took different forms like philanthropic donations to charity, service to the community, enhancing employee welfare and promoting religious conduct. During 1950s the ideology of CSR was primarily based on an assumption of the obligation of business to the society. This obligation arose because some people specially scholars saw business as an integral part of society and the management people as an administrator whose duty was to maintain balance among the competing demands of employees, customers, suppliers, communities and shareholders. (Banerjee, 2009) The publication of the book (The Social Responsibilities of Businessman, 1953) by Howard R. Bowen, who is often regarded as a father of CSR best marks the modern period of literature on the subject. He set forth an initial definition of the social responsibilities of businessmen as follows:

It (SR) refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.

In the past 20 years the concept of CSR has been received in a serious manner not only by the companies but also by the consumers as well. Companies now are expected to operate in more responsible manner taking consideration into many issues as diverse as climate change, pollution, employee relation, human rights, bribery and corruption and many other matters that are directly or indirectly related to the society and people living there. Companies have responded these issues according to their level of operation and their capacity. They have set up board and committee to take care of CSR issues, among the many methods establishing management systems, conducting environmental and social audits, creating board committees and appointing senior managers are some of the key strategies of the companies regarding CSR. Companies have spent great amount of money and resources for mitigating their impacts on environment and other aspects. (Sullivan, 2011)

The number of CSR disclosure has increased by significant number in many countries. Companies must now be more careful about these issues due to increased awareness among the consumer. People are now more concerned about the activities of the companies relating to environment and other stakeholders such as suppliers of raw materials and other resources, customers, employees, local community, society and the government. Though there is no universal legal obligation for CSR, mandatory reporting has developed mainly on the environmental side of the issue and many countries have regulations concerning the companies’ environmental impacts on society. (Janggu et al., 2007)

Benefits of CSR for company

There are many reasons for companies being socially responsible and acting for the betterment of environment and society. Companies develop and implement CSR policy primarily taking consideration that CSR will pay off in the future. There are several ways in which CSR can affect profitability. CSR as a concept has caught attention from not only business sectors but also from other parties like NGOs (Non-Government Organization) and government as well. CSR has become a part of many activities carried out by companies. The direct or indirect of impact of CSR is visible in many departments and sections of the companies. CSR has become part of marketing campaigns, purchasing, and an important factor for hiring and retaining talented people in the company. It is also the regarded as a source of innovation and entrepreneurial development tool in the company. It is often taken as profit driver and even as an export product. (Moratis and Timo Cochius, 2011)

CSR is a way for companies to benefit themselves while also benefiting society. The benefit of the CSR also depends upon the type of company and its CSR activity. Following are the main benefits that company can get by successfully implementing CSR strategy:

1.) Innovation and Cost Saving: For environmental reasons many companies now focus on designing products that consumes less energy and resources. Doing so companies can innovate new things for the market which ultimately benefits the company. Not only in new products but such strategy of is applied in the entire process of manufacturing and other business activities like marketing, logistics etc. By implementing environmental friendly measures in such activities company can reduce the cost of ener-gy and other direct indirect and costs. (James Epstein-Reeves, 2012)

2.) Human Resource: Due to the growing awareness of the importance of CSR many people consider CSR of the company as an important factor for selecting their work-place. It is not only crucial to recruit talented employees but also for maintaining the engagement of the existing workforce. Research conducted by Cone Millennial Cause Group found that 80% of 1800 respondents aged 13-25 olds wanted to work for a company that values social responsibility. (Meister, 2012) Good working conditions and behavior by top level management are also the part of CSR.

3.) Brand Differentiation: CSR can also be used as a medium of brand differentiation. The successful implementation of CSR helps to strengthen the relationships to potential customers, employees and investors. (Inc, 2010)

COPORATE SOCIAL RESPONSIBILITY REPORTING

CSR reporting introduction

CSR reporting is the medium through which companies can report their CSR activities to interested parties. Since many stakeholders and organizations operating worldwide demand transparency and accountability from companies, implementing and communicating CSR activities is an important task for many companies. Although there are guidelines for reporting CSR there is no single universal frameworks to report CSR so, companies sometimes find it difficult to report their CSR activities. (Ellerup and Thomsen , 2007)

CSR reporting gives an account of an organization’s progress toward sustainable development for both internal and external stakeholders. CSR reports give useful information for external users and stakeholders on company’s social, environmental and economic impacts and the activities that is being undertaken to minimize the effects on environment and society. Looking at the CSR re-ports stakeholders can find about the CSR performance of the company in particular time and the impacts of their activities on the targeted sector. CSR reports are equally important for internal users as well. With the help of CSR reports people working in diffe-ent departments of company can understand how the company is performing in CSR and where they are heading towards. (White, 2009)

Existing reporting guidelines and standards

The purpose of CSR report is to provide information to internal and external stakeholders by measuring, disclosing and showing how the company is accountable towards the aim of sustainable development. CSR reporting can be applied to cover reporting on environmental, social and economic impacts of the company. (Simpson & Taylor, 2013) The trend towards making the operations of companies sustainable is increasing. Companies nowadays can not only look profitability as their main aim but they also need to think about the social justice and environment as well. CSR reporting is the document where companies show their activities that make their operation more sustainable. CSR reporting helps in understanding and managing the effects of the sustainability developments on the organizations’ core activities. Internally agreed disclosure and metrics makes the reports accessible and comparable. (Global Reporting Initiative, 2013) There is no a single universal guideline or disclosure for-mat based upon which companies can report their activities. There are many guidelines for-mulated by different Organizations such as United Nations (UN), Global Reporting Initiative (GRI), and International Standard Organization (ISO).

Current issues and trends of CSR reporting

With the increase in interest of consumers and other stakeholders in CSR the trend of CSR reporting is also increasing. Since there is no one global standard on reporting CSR companies follow different guidelines proposed by different organizations. KPMG Survey of Corporate Responsibility Reporting provides a very useful insight into the recent trends in CSR reporting. KPMG started publishing such report from 1993 and the latest report was published in 2013. This KPMG report covers 4,100 companies across 41 countries, 100 big companies from each country. The report suggests that there have been growth in the number of companies reporting their CSR activities all around the world and the trend is growing especially in the Asia Pacific. According to the KPMG more than 51% of world’s biggest companies report their CSR report in their annual report. Similarly the report suggests that GRI is the most used guideline when it comes to reporting CSR. More than 78% of the surveyed companies use GRI as a guideline for disclosing their CSR activities. In several countries GRI is linked to local regulatory reporting requirements. The overall quality of the reported data is also increased in the recent year. The quality of data which was measured based on different parameters shows European companies as a top quality reporter of CSR. (KPMG, 2013)

Sustainability

Gallo and Christensen (2011) describe sustainability as corporate agendas which integrate a mix of financial and extra-financial goals, and these goals include social responsibility, environmental protection, poverty alleviation and stakeholder commitment. Furthermore, Gallo and Christensen (2011) write that to strive for full “sustainability”, organizations must address financial, social, and environmental impacts of their actions. However, the authors explain that to date, most work in this field has effectively focused on corporate social responsibility or environmental management instead of on sustainability composed of these elements. Thus, studies of sustainability as a broader concept that capture the integrative and interdependent nature of the financial, social, and environmental dimensions of the sustainability definition are rare, and usually the studies focus on single industries or on a single dimension within the sustainability concept (Gallo & Christensen, 2011).

Economic aspect

In the World Summit on Sustainable Development held in Johannesburg in 2002 it has been emphasized that because of the connections of most of the economies worldwide, an “integrated approach” towards economic sustainability was needed in order to enable a “responsible long-term growth” which would include all nations and communities (Moldan et al., 2011). Furthermore, the economic aspects have been even more under close control since the global economic and financial crisis, as countries facing the recession have to take actions domestically to handle the crisis (Asmussen, 2009). Therefore, Moldan et al. (2011) imply that economic growth is both an important and universally accepted objective for the society. Growth is so important that it has been considered, at a world scale, the most essential goal for societies for the last five decades, (Moldan et al., 2011).

The global economic and financial crisis could be used as an opportunity for improving the approach between sustainable development and economic growth. The crisis has brought into focus the economic pillar, and as economic growth has an effect on social, economical and environmental issues (Alam & Kabir, 2013), the economic aspect has become an important part for companies, as well as for the society as a whole, to put focus on when handling sustainability matters.

Social aspect

The social field has originally been defined as a pillar because the growing needs of people (“jobs, food, education, energy, health care, water and sanitation”) have to be satisfied in a way that ensures that everyone can contribute in the creation of their own future meanwhile “the rich fabric of cultural and social diversity, and the rights of workers are respected” (Moldan et al., 2011). Several definitions of social sustainability have been brought up to the surface during the years but despite all of the different definitions, it is still not totally clear what the most important elements of social sustainability are. One reason could be the difference between countries, in terms of economic, social and cultural aspects, which makes a uniform definition of social sustainability difficult to achieve .

Environmental aspect

The initial idea when the environmental pillar was recognized as such was that human beings have to take care of the natural resources they have at their disposal and so “reduce resource consumption, stop pollution and conserve natural habitats”, so that the future generations can live decently (Moldan et al., 2011). If we go back in the genesis of this pillar, originally the term “environmental responsible development” was used by the World Bank in 1992. Later, “environmentally sustainable development” was introduced (Serageldin & Streeter, 1993) before the term was finally transformed in “environmental sustainability” (Goodland, 1995). According to Goodland, protecting the sources of raw materials for human needs and welfare was a major part of environmental sustainability (Moldan et al., 2011). An important addition to the environmental sustainability concept was made by the OECD Environmental Strategy for the First Decade of the 21st Century (Moldan et al., 2011,). It defines four criteria for environmental sustainability: regeneration (resources which are renewable shall be used in en efficient way and not exceed their natural regeneration rates), substitutability (non-renewable resources shall be substituted with renewable resources or other forms of capital when they have been efficiently used to a certain limit), assimilation (releases of pollution or similar substances shall not exceed their given capacity) and avoiding irreversibility (Moldan et al., 2011,). The authors explain that these criteria engender five objectives for improving the outcome of environmental, within sustainable development:

Efficient management of natural resources which will maintain the ecosystems integrity,

De-coupling different environmental pressures from economic growth,

Improving decision-making information by measuring progress through indicators,

Social and environmental interface by enhancing the quality of life,

and improving governance and co-operation.

The importance of sustainability

We have just mentioned the principal objectives companies can try to reach in order to be more respectful of the environment – which is one of the three pillars of sustainability we described-; however, the motivations which push companies to consider sustainability as one of their main objectives have not been developed yet.

Sustainability reporting

We have noticed that an increasing number of companies has made of sustainability a goal to achieve, has implemented actions to go this direction and is measuring its progress to reach its goal. Therefore, a large amount of information concerning sustainability gravitates around companies. Information as regards sustainability inside an organization is mentioned in sustainability reports (GRI, 2013).

The evolution of sustainability reports

Sustainability reporting has evolved swiftly from an ambitious concept to a widely adopted practice, and to date, as a result of the increasing popularity of sustainability reporting around the world, several thousands of corporate environmental, social or sustainability reports have been published on voluntary basis (GRI, 2013). Since the publication of the first environmental report in 1989, the number of companies which disclose about their sustainability actions has not stopped

Indeed, from 1992 to 2001, the number of reports issued by companies with sustainability information has grown, at a world scale, from 26 in 1992 to 5819 in 2011 according to CorporateRegister.com.

The aims of sustainability reporting

Sustainability reporting, which is a voluntary activity for companies, has two general purposes; firstly, to assess a company’s economic, social and environmental aspects; and secondly, to communicate the efforts and progress of a company’s sustainability actions to their stakeholders.

Inside each business sector companies need to create an increasing economic value while using the environment and natural resources sustainably, and at the same time cooperate to the society’s social aims to be able to contribute to sustainable development. Companies do not have to report according to a standardized sustainability reporting framework; and so that the increasing number of published reports is partly a decision companies are making.

We notice that these motivations at the source of sustainability reporting have been mentioned earlier among those pushing companies to act sustainable. This may be explained by the fact that the companies first evaluate the reasons they have to consider sustainability, then act sustainable, and finally report on what they are doing

Table 2. Companies’ motivations for reporting or non-reporting (Kolk, 2004)

In addition to all these reasons pro-sustainability-reporting, Lozano (2013, p. 58) explains that sustainability reporting has been recognized as an important part and driver of a company’s sustainability contribution; which legitimizes even more the need for companies to report when they establish their sustainability process. In order to master this process, it is essential that companies control, assess and measure their different operations. Therefore, sustainability reports can be used for measuring sustainability performance over time, showing how the company is influenced by, and influences, various expectations of sustainable development, and benchmarking against other companies on the market.

In order to report on their sustainability performances, companies need to have evaluated their performances with indicators. According to GRI (2013), indicators represent an important part of the sustainability reports. In the second section of this chapter we identified the need of indicators for measuring sustainability, the advantages of indicators, the process to select indicators, and the potential difficulties in doing so. We aim to define the indicators or frameworks we will use to do our empirical observations. Therefore, we will gather information on indicators to make our selection.

Indicators

When reporting on sustainability, companies generally produce reports including many different units (GRI, 2013). According to Krajnc & Glavic (2005,), although it is important to assess sustainability with several indicators, it may be difficult to make business decisions and comparisons among companies based on a large number of performance measurements. To help decision makers in this respect, it may be useful to use composite sustainable development index, linking many sustainability issues and so reducing the number of decision-making criteria that need to be considered. However, a complex problem still consist of the aggregation of different indicators into a properly constructed index, which would enable quick and efficient assessment of sustainability of company as well as benchmarking of companies within a particular sector.

The Global Reporting Initiative

The Global Reporting Initiative (GRI) is a network-based, non-profit organization headquartered in Amsterdam, Netherlands. They have a network of around 30,000 people who contributes to the work , many of them are sustainability experts, and in addition to the GRI headquarter; they also have regional offices in USA, Brazil, Australia, China and India. GRI promotes economic, environmental and social sustainability and provides companies from all around the world with a comprehensive reporting framework, which has become widely used. Thousands of organizations, from all sectors and of all sizes, use the framework to communicate and understand their own sustainability performance (GRI, 2013). The GRI Sustainability Reporting Framework assists both companies and organizations in measuring and reporting on their performance in the sustainability area, and by reporting with accountability and transparently, the companies and organizations can gain trust from stakeholders. GRI’s vision is “A sustainable global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently”, and their mission is “To make sustainability reporting standard practice by providing guidance and support to organizations” (GRI, 2013).

History

GRI was established in Boston in 1997, and its roots are from the non-profit organizations the Coalition for Environmentally Responsible Economies (CERES) and the Tellus Institute. In the early 1990s, CERES founded a ‘Global Reporting Initiative’ project to develop a framework for environmental reporting. The aim of this project was to form an accountability mechanism to make sure that companies followed the CERES Principles of responsible environmental behavior (GRI, 2013).

In 1998, the GRI guidance was developed. The aim was to broaden the framework’s range of “just” including the environmental aspect, and therefore social, economic and governance issues were adopted. The guidance became the Sustainability Reporting Framework, with the Reporting Guidelines as a major part of it (GRI, 2013).

The first version of the Guidelines was created in the year 2000, and on the following year, GRI was separated from CERES as an independent institution. In 2002, the second generation of Guidelines, or G2 as it were called, was disclosed to the world. The United Nations Environment Program (UNEP) embraced GRI and UN member states were invited to host it with Amsterdam as the host country. Later that year, GRI became an independent organization with headquarter in Amsterdam (GRI, 2013).

In 2006, the current generation of Guidelines, G3, was launched and the usage of GRI’s Guidelines received a boost. GRI expanded its strategy and build alliances with, for

For example, the United Nations Global Compact. Regional offices were established in different parts of the world and sector-specific guidance was produced. The services for GRI’s users also expanded to include training, software certifications, and others. In 2011, an updated version of the G3 Guidelines was released, called G3.1 Guidelines, which includes human rights-related performance, community and gender reporting (GRI, 2013).

Figure 1: Growth of sustainability reporting, 2000–2011

Source: Data from GRI Sustainability Database

Figure 2: Reporting frameworks organizations use to organize their reports

Reporting

Companies, which report according to G3 or G3.1 Guidelines, receive an Application Level; A, B or C. This level reflects the degree of transparency against the Guidelines reporting and the amount of contents that has been addressed in the report .Hence, a reporting company or organization can decide themselves on which, and how many, issues and indicators to report on. The levels do not give a statement of the sustainability performance of the reporting company or organization, nor how the quality of the report is (GRI, 2013). To receive a C, the report needs a minimum of ten performance indicators; a B needs a minimum of 20; and to get an A needs a respond to each core and Sector Supplement indicator or at least an explanation why it is not reported. For C and B (and obviously A which needs all core indicators), at least one from each of economic, environment, human rights, labor, society and product responsibility needs to be reported on (GRI, 2013). If a company or organization gets their sustainability reporting externally assured, they receive a plus (+) to their level.

Performance indicators

In our thesis, we aim to have an overview of the use of the GRI as a guideline to report on sustainability inside the group of the “large” Swedish companies which belong to the industrial sector; to determine the importance of the size of a company as regards the quantity of GRI indicators disclosed inside the group of “large-size” Swedish companies performing in the industrial sector; and to analyze the disclosure of the GRI indicators by “large” Swedish companies belonging to the industrial sector. We have chosen to examine companies GRI reports, because of the global use of the GRI Guidelines and the numerous sustainability indicators that are presented in the GRI reports.

The GRI’s G3 sustainable Performance Indicators is divided into three categories: Economic, Environmental and Social. The Social category is broken down into subcategories: Labor, Human Rights, Society and Product Responsibility. Table 4 shows the hierarchical structure of the different categories.

The Environmental category consists of 30 indicators, divided into different aspects. These aspects are structured to reflect on an organizations inputs, outputs and impact modes on the environment (GRI, 2013). The aspects are Material, Energy, Water, Biodiversity, Emissions/Influence/and Waste, Products and Services, Compliance, Transport, and Overall.

The Social category is divided into subcategories. The first one, Labor, consists of 14 indicators, divided into the aspects of Employment, Labor/Management Relations, Occupational Health and Safety, Training and Education, and Diversity and Equal Opportunity. The Labor indicators are broadly based on the notion of decent work. The second subcategory, Human Rights, discloses on the impact and activities an organization has on political and human rights. This category consist of nine indicators, divided into the aspects of Investment and Procurement Practices, Non-discrimination, Freedom of Association and Collective Bargaining, Child Labor, Forced and Compulsory Labor, Security Practices, and Indigenous Rights. The third subcategory, Society, focuses on the impact that an organization have on the community it operates in and how the interaction with other social institutions proceed. There are eight indicators in the Society category, which are divided into Community, Corruption, Public Policy, Anti-Competitive Behavior, and Compliance aspects. The last subcategory, Product Responsibility, consists of nine indicators divided into Customer Health and Safety, Product and Service Labeling, Marketing Communications, Customer Privacy, and Compliance. These indicators address the effects services management and products have on the customer and users of the products (GRI, 2013).

GRI Sustainability Reporting Guidelines

The GRI Sustainability Reporting Guidelines (the Guidelines) offer Reporting Principles, Standard Disclosures and an Implementation Manual for the preparation of sustainability reports by organizations, regardless of their size, sector or location. The Guidelines also offer an international reference for all those interested in the disclosure of governance approach and of the environmental, social and economicI performance and impactsII of organizations. The Guidelines are useful in the preparation of any type of document which requires such disclosure. The Guidelines are developed through a global multi-stakeholder process involving representatives from business, labor, civil society, and financial markets, as well as auditors and experts in various fields; and in close dialogue with regulators and governmental agencies in several countries. The Guidelines are developed in alignment with internationally recognized reporting related documents, which are referenced throughout the Guidelines.

Principles for defining report quality

This group of Principles guides choices on ensuring the quality of information in the sustainability report, including its proper presentation. Decisions related to the process of preparing information in a report should be consistent with these Principles. All of these Principles are fundamental to achieving transparency. The quality of the information is important to enable stakeholders to make sound and reasonable assessments of performance, and take appropriate actions. Balance Principle: The report should reflect positive and negative aspects of the organization’s performance to enable a reasoned assessment of overall performance. The overall presentation of the report’s content should provide an unbiased picture of the organization’s performance. The report should avoid selections, omissions, or presentation formats that are reasonably likely to unduly or inappropriately influence a decision or judgement by the report reader.

Comparability Principle: The organization should select, compile and report information consistently. The reported information should be presented in a manner that enables stakeholders to analyze changes in the organization’s performance over time, and that could support analysis relative to other organizations. Comparability is necessary for evaluating performance. Stakeholders using the report should be able to compare information reported on economic, environmental and social performance against the organization’s past performance, its objectives, and, to the degree possible, against the performance of other organizations.

Accuracy Principle: The reported information should be sufficiently accurate and detailed for stakeholders to assess the organization’s performance. Responses to economic, environmental and social Indicators can be expressed in many different ways, ranging from qualitative responses to detailed quantitative measurements. The characteristics that determine accuracy vary according to the nature of the information and the user of the information.

Timeliness Principle: The organization should report on a regular schedule so that information is available in time for stakeholders to make informed decisions. The usefulness of information is closely tied to whether the timing of its disclosure to stakeholders enables them to effectively integrate it into their decision-making. The timing of release refers both to the regularity of reporting as well as its proximity to the actual events described in the report.

Clarity Principle: The organization should make information available in a manner that is understandable and accessible to stakeholders using the report. Information should be presented in a manner that is comprehensible to stakeholders who have a reasonable understanding of the organization and its activities.

Reliability Principle: The organization should gather, record, compile, analyze and disclose information and processes used in the preparation of a report in a way that they can be subject to examination and that establishes the quality and materiality of the information. Stakeholders should have confidence that a report can be checked to establish the veracity of its contents and the extent to which it has appropriately applied Reporting Principles.

Whilst the GRI Guidelines seek to enhance comparability between reports through encouraging the use of common indicators, it can also incorporate flexibility so that organisations can take steps to reflect the context in which they operate. The GRI Guidelines can also be used with a more informal approach consistent with organisation’s capacity. The organisation may choose to cover only some of the content in working towards improving their reporting. With this in mind, organisations are also asked to clearly indicate how they have used the GRI Guidelines and in particular, the core indicators. With time and practice, organisations are encouraged to move gradually towards more comprehensive reporting built on the content of the GRI framework.

The reporting framework is made up of a series of ‘General Standard Disclosures’ and ‘Specific Standard Disclosures’:

General Standard Disclosures include:

Strategy and Analysis

Organisational Profile

Identified Material Aspects and Boundaries

Stakeholder Engagement

Report Profile, Governance

Ethics and Integrity

The main features of the G4 Guidelines include:

All content that any report writer needs to know to assist in producing a sustainability report that is focused on material aspects of the business

Guidance on how to choose the report focus.

Detailed guidance on how to select material aspects and boundaries

Flexibility to combine with local and regional reporting requirements and frameworks.

Up-to-date harmonization and reference to key internationally accepted reporting documents.

Overview tables, summaries and Quick Links to specific Guidelines components.

Complete Glossary, reference lists, and visual guidance.

Potential benefits

•The GRI Guidelines provide a holistic framework that addresses broad performance – social, environmental and economic – as to how an organisation is reporting to stakeholders.

•They guide an organisation’s approach to ‘proving’ its impact.

•GRI is used widely internationally as a generally accepted reporting framework and, as such, provides a method for increased comparability.

•Organisations can use GRI reporting to help measure and benchmark performance, both against their own targets and externally. Management can use the GRI indicators to encourage employees to understand and contribute to progressively better performance.

•The Guidelines are flexible and can be used in different sectors and geographical contexts.

•The Guidelines support and integrate other tools such asSocial Accounting and the AA1000 Series

Potential limitations

•Adhering to the Guidelines can be labour intensive and full reporting may represent a challenge for smaller organisations.

•Their history of use in the third sector is limited and some of the language and approaches are more familiar and appropriate for multinational corporations.

•They provide guidance, but not accreditation, a mark or external evaluation unless combined with other tools, such as an assurance standard.

•Their main focus is ‘sustainability’, e.g. reporting external impact but not necessarily focusing on positive outcomes or impacts.

The benefits of sustainability reporting go beyond relating fi rm fi nancial risk and opportunity to performance along ESG dimensions and establishing license to operate. Sustainability disclosure can serve as a differentiator in competitive industries and foster investor confi dence, trust and employee loyalty. Analysts often consider a company’s sustainability disclosures in their assessment of management quality and efficiency, and reporting may provide firms better access to capital.2 In a review of more than 7,000 sustainability reports from around the globe, researchers found that sustainability disclosures are being used to help analysts determine firm values and that sustainability disclosures may reduce forecast inaccuracy by roughly 10%.(Dhaliwal et al., 2012)

The GRI Guidelines are intended to be applicable to organisations of all sizes and types operating in any sector. However, they were developed primarily with the needs of larger businesses in mind. According to GRI, the reporting framework being used by more than 1500 organisations, ‘including many of the world’s leading brands’.

To adhere to the GRI Guidelines, an organisation will need to collect information and performance across the whole organisation and therefore it requires the leadership and commitment of management and senior staff members.

Skills and experience with developing reports and impact assessment or data collection would be helpful, as would experience of other social research methods.

Significant time will be required to compile, analyse and write up information and implement action. Some flexibility exists depending on whether the organisation uses all or part of the Guidelines.

CHOICE OF COMPANIES

As the aim of this study was to conduct a detailed comparison of GRI and SR within the same industry, it was deemed necessary to identify two companies that do not only operate within the same industry but also have fairly similar characteristics. Out of the identified companies in US and Europe, only one from each region had recent SD reports available: Nestle in Europe and SoDelicious DairyFree in the US. These were subsequently chosen for this study. Despite core differences of ownership structure and size, the choice of these companies seemed appropriate given their similar histories; company values; and their use of comparable communication strategies. Nestle is a  Nutrition, Health and Wellness Worldwide Company, while SoDelicious DairyFree is a small yet prominent player in the US market. These companies offer a product selection of comparable drinks; breakfast products; and desserts, and both display a zealous sustainability focus in their operations. Yet, they are faced with stakeholders from diverse cultural backgrounds and are subject to dissimilar legislations. A comparative analysis of their SR practices will deepen the understanding of reporting within the chosen (and so far unexplored) industry, and will contribute to cross-regional SR research within the food industry as a whole while opening up for more detailed and comprehensive studies.

BACKGROUND FOR THE STUDY

This chapter describes the plant-based product industry and the growing popularity of these products in light of the environmental problems of the dairy industry. Here is also provided a presentation of the case companies; a short discussion on the differing socio-political and economic environment of the two regions chosen; as well as an introduction to two of the available global standards on SR. The aim of this section is to provide the setting for the analysis in the following chapters

PRESENTATION OF CASE COMPANIES

SoDelicious Dairy Free is the main brand of natural food company Turtle Mountain, and consists of a range of plant-based non-dairy products, while the subsidiary brand Purely Decadent brand consists of plant-based frozen desserts only. The company exhibit a high environmental and social concern, and is a member of the Sustainable Food Trade Association as well as The Sustainability Consortium. Based in Oregon, So Delicious Dairy Free brand was started out Mark Brawerman, also a founder and President/CEO. Turtle Mountain LLC developed a line of non-dairy and natural frozen desserts, beverages, creamers and cultured products.

Nestlé was founded in 1866 by Henri Nestlé and is today theworld's biggest food and beverage company. Sales at the end of 2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestléemploy around 250,000 people from more than 70 countries and have factories or operations in almost every country in the world.

Today, Nestlé markets a great number of products, all with one thing in common: thehigh quality for which Nestlé has become renowned throughout the worldThe Company's strategy is guided by several fundamental principles. Nestlé's existing products grow through innovation and renovation while maintaining a balance ingeographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company's priority is to bring the best and most relevant productsto people, wherever they are, whatever their needs, throughout their lives.Taste of Nestlé in each of the countries where Nestlé sell products. Nestlé is based on the principle of decentralization, which means each country is responsible for the efficient running of its business – including the recruitment of its staff.he world.( https://www.scribd.com/doc/21544545/Introduction-Nestle-Was-Founded-in-1866-by-Henri-Nestle-And

Table 1 below provides an overview of the case companies

As can be seen in table 1, apart from operational regions, the companies differ

considerably in size. Their product lines are comparable, however, Nestle has a notable greater focus on milk-based products, where as SoDelicious produce a number of coconut-based varieties.

The latest version of the guidelines, the G4 standards, was presented in late 2013. For the purpose of this study however, the preceding G3 standards have been used as a baseline, as those were the standards recommended at time of creation of the case reports analysed. Table below provides a simplified overview of the FPSS (GRI, 2014). The table outlines the main reporting areas as categories, and the specific issues to report on as subcategories.

OVERVIEW OF GRI G3 GUIDELINES

CHAPTER 3. ASSESSMENT TOOLS AND METHOD

To analyze these reports we used the template shown below, which is based on prior literature, adapted for the retail field.

Suppliers: What engagements are required of suppliers? Do controls exist regarding the engagements of suppliers?

Community: Are there social initiatives on the part of the company? Is there collaboration with independent organizations?

Consumers: What are the types of products? Are there general and social purpose initiatives (against obesity, energy saving?) Is there collaboration with independent organizations?

Employees/Coworkers: Are there policies concerning diversity and gender questions? Are there policies concerning careers? Is there encouragement to participate in social initiatives? Is there collaboration with independent organizations?

Environment: Are there statements about efficient use of resources? Are there statements about energy efficient buildings? Is there an analysis of actions to reduce supply chain carbon emissions? Are there policies about sustainable sourcing of products and services? Are there policies about sustainable transportation for consumers? Is there collaboration with independent organizations?

As outlined in last chapter, a method of content analysis specifically developed for SR assessment has been utilized for this study.

First of all, we have to ask if these reports are available on company’s websites and if they are easy to access.

The answer is Yes for both companies, for Nestle the annual raport fot US has 40 pages and for SoDelicious 32.

These reports are presented in different forms, Nestle has many chapters and informations and SoDelicious is more focused on a few objectives.

For example Nestle present in his annual report, in 2014:

Nutrition, Health and Wellness

Nestlé Nutrition Knowledge Leadership

Nestlé Nutrition Research

Continuing Education for Health Professionals

Nutrition, Health and Wellness Policies

Promoting Positive Behaviors for Healthier Lives

Environmental Sustainability

Water Efficiency and Water Stewardship

Production and Responsible Packaging

Climate Change

Responsible Sourcing

Zero Waste to Landfill

Food Loss and Waste

Advocating for EPA’s Clean Power Plan

Social Impact: Creating Shared Value in Our Communities

Our People

Supplier Diversity

Volunteer Efforts and Outreach

Employee and Charitable Giving

Pet Welfare

Looking Ahead

Stakeholder Engagement and Materiality Aspects Defined

Partnerships and Alliances

Our Commitments

Nutrition

Environmental Impact

Our People, Human Rights and Compliance

Responsible Sourcing

Water

GRI Content Index

Business Principles and Governance

On the other hand SoDelicious presents in his Sustainability Report, in 2014:

Who We Are

Culture

Planet

Energy Conservation

Water Conservation

Greenhouse Gas Emissions

Waste Profile

Carrageenan Removal Commitment

Organic Farming

Code of Conduct

Green Office Program

Alternative Commuting

Lighting Upgrade Program

Recycling Drive

Our Giving

Creating shared values

No business can long survive in a failed society, and no society can long survive without a strong economy.

At the same time, businesses depend on healthy and educated employees, a stable and transparent government and access to sustainable natural resources. These social and environmental dynamics form the context in which businesses derive their financial success and competitive advantage. This interdependence between business and society is the logical starting place to construct a framework for corporate responsibility.

Businesses create social and environmental impacts – both positive and negative – through the daily operations of their value chain. In addition, they have the opportunity to use their resources outside the ordinary course of business through social investments that strengthen the context in which they operate. These two dimensions, value chain impacts and contextual investments, are the fundamental tools of corporate responsibility.

❛❛ ‘Creating Shared Value’ is a very different approach to CSR, because it is not focused on meeting a set of standard external criteria, or on philanthropy. The idea of winners and losers doesn’t fit this model of CSR ❜❜ Mark Kramer, Senior fellow.

Every step in the value chain also has the potential for harmful consequences. Without sustainable growing practices, farms can deplete natural resources, and farmers can be marginalised. Operations can cause pollution, and consumer products can create health risks such as obesity.

On the other hand SoDeliciou’s values chain refers to transparency, Environment Stewardship and Social Responsibility.

They talk about farmers farmers and suppliers love by treating them with fairness, integrity and respect. They are part of their team.

To keep our environment clean, they source from organic farmers whenever possible, reduce their shipping carbon footprint through efficiency and cut backon waste wherever they can.

Both companies refers to sustainable growing practices, to their customers. Nestle is more focused on this, because witk GRI implemented, it can show step by step what can offer, what can change, talks about suppliesrs, customers and a lot of consequences that can be avoided.

SoDelicious, without GRI is more like in a wide sector, but talks also about farmers, Commitments, Organic, Packaging.

In next table is presented how 3 values are listed is company’s reports or not.

Most main categories are used to group together a number of subcategories, and disclosure phrases were always coded according to existing subcategories. Further, during categorization, phrases of disclosure were simultaneously divided into five levels, according to the original method (Beck et al., 2011). Table 4 provides a description of each level as well as examples of disclosure phrases at each level from both case companies.

POLLUTION

The pollution category consists of 11 subcategories in total, related to Air emissions; Water usage; Waste (and recycling); Land; and Products. Recycling refers both to the extent of recycling as well as the use of recycled products. Product refers to disclosure on products; ingredients; and packaging.

Both companies devote a great part of their reports to pollution related disclosure. SoDelicious report is filled with disclosure related to the POLL category, and they are somewhat more focussed on this part than are Alpro. In terms of GHG, the Co2 emissions of plant-based beverages are compared to those of dairy; the 2012-2013 total emissions are depicted, as are total reductions of the same. Water usage for the past three years is outlined; water efficiency is stated in actual numbers; attempts at water restorations are mentioned, as is a certification for water conservation. Also, a failed attempt at installing new water management system is disclosed- this is the only negative disclosure provided. In terms of waste, the report contains numbers on total weight of reduced waste, as well as a total waste profile for 2012-2013 (divided into landfill and recyclables).

In regards to recycling, significant efforts seem to have been made to recycle and compost more overall, and to use recycled products in the offices. Little is mentioned on land use other than a hint that they have reduced their land use by operating with organic coconut farmers as suppliers. Information on their products include the refusal to use any kind of GMO produce; that many products are certified organic; and that they are making an effort at innovating organic products. Also, the amount of product packaging that can be recycled is disclosed. Generally, SoDelicious claim to use “…ingredients that are kind to the earth”.

Nestlé joins other leaders in acknowledging the risks of carbon pollution from power plants as well as the economic benefits associated with improving energy efficiency and upgrading to renewable energy. Nestlé Waters North America is also a founding member of the Business Renewables Center (BRC), a collaborative organization helping corporations find ways to reach clean energy and climate targets by advancing a shift to renewable energy profiles.

In December 2014, Nestlé joined a coalition of 223 companies to support the Environmental Protection Agency’s Clean Power Plan. The nonprofit sustainability advocacy organization Ceres assembled the coalition. In a joint letter to the EPA, we expressed our concern about the immediate and long-term implications of climate change and our strong support for the principles behind the Carbon Pollution Standard for existing power plants. Nestlé focuses on efficiency and incorporating renewable energy, just as the Clean Power Plan does. Supporting policies that reduce carbon pollution aligns with our mission to create long-term value for our consumers, society and shareholders.

ORGANIC

Any mention related to organic produce fall into this category. SoDelicious report has much more frequent organic related disclosure, mainly that a majority of products are Certified Organic or made with Certified Organic Ingredients; that they use organic coconut farmers as suppliers; and have an organic focus in their product innovation. Further, they disclose in numbers the amount or organic ingredients purchased in the past two years.

The Lean Cuisine brand of Nestle is now offering meal options that are gluten-free as well as varieties that are made with organic ingredients and contain no genetically modified ingredients (GMOs).

Results and discutions

GLOBAL REPORTING INITIATIVE

Nestle report has a GRI reference table, with disclosure guidelines as recommended by the GRI. A majority of indicators are from the Environmental Performance category, mainly energy; water; emissions; and waste related.

The SoDelicious report contains no mention of GRI guidelines. However, a number of disclosures match those indicated in the GRI G3, including some food sector specific categories. Particularly, annual purchase volume of organic ingredients is disclosed in accordance to their own sourcing policy. The majority of other disclosures which match those recommended in the GRI guidelines are related to the environmental performance category and includes disclosures on materials; water usage; biodiversity protection; total emissions; waste situation and reduction; products and services; and transportation. Further, there is a mention of community involvement and support, as well as the provision of healthy food.

Next Table provides an overview of GRI performance categories referred to by the case companies: denote inclusion of related disclosure by the company, followed by the coding number of the specific disclosure indicator referred to. Both case companies have most disclosure related to the Environmental category, also a few on Labour practice and Decent Work as well as Society categories.

Indicators

Indicators allow companies to provide comparable information on their economic, environmental and social impacts and performance. Much of this is in the form of quantitative data. Organizations are only required to provide Indicators on Aspects that they and their stakeholders have identified as material to the business. G4 contains Indicators for a wide range of sustainability issues. For example, these include water usage, health and safety, human rights or an organization’s impact on local communities.

The Guidelines recognize that, in exceptional cases, it may not be possible for an organization to disclose certain information. In those cases, the report can clearly identify the required information that has been omitted and indicate which explanation applies, from a list provided in the Guidelines.

SoDelicious has partial application of the gri guidelines. This alternative may be useful for this firm, where is required to report certain Indicators under a regulatory framework, or for first-time reporting organizations that need a longer transition period before it can claim to be ‘in accordance’ with the Guidelines.

According to the G4 Guidelines, the statements in sustainability reports are expected to present the overall vision and strategy for the short, medium, and long terms, particularly regarding the management of the significant economic, environmental, and social impact that the organization causes and contributes to. It is equally important to communicate the impacts that can be linked to its activities as a result of relationships with others such as suppliers, people, or organizations in local communities. Statements from the company’s senior decision makers addressing stakeholders were studied to understand the relevance of sustainability to the company and its strategy to improve sustainability.

Reducing negative impacts

Sustainability reporting is an enabler for both organisations to be more accountable and for stakeholders to be more informed about organizations that affect them. Without the right knowledge about impacts as well as an action plan to reduce negative impacts and increase positive impacts, organizations will be ill-equipped to make fundamental changes. In addition, stakeholders will lack the confidence to engage with organizations to ensure that their expectations are met. Apart from implementation and optimization of business measures, companies can reduce their negative impacts by investing in initiatives or programs involving core business operations and/or communities impacted by these operations. Nestle describes some of initiatives or programs executed to create a positive environmental footprint.

Environmental Sustainability

“Environmental sustainability means protecting our future in a world where water is increasingly scarce, natural resources are constrained, biodiversity is declining and climate change may exacerbate these challenges. Our goal at Nestlé is to make our products not only tastier and more nutritious, but also more environmentally sustainable along our entire value chain. We are strongly committed to environmental sustainability across all of our operations and living up to our external stakeholders’ and employees’ expectations that we are working to ensure that our practices are responsible and sustainable for the long term. We understand that environmental sustainability along our value chain is important to many of our consumers and that our continued progress in this area gives them another reason to trust our company.” (Nestle Anual Report, 2014)

Nestlé uses a number of key performance indicators to measure our environmental footprint. Nestlé’s facilities in the United States aim to produce our food, bottled water and pet food products while improving our water and energy use efficiency.

Production and Responsible Packaging

Smart packaging design helps reduce food waste, guarantee the quality of their products and communicate with consumers. They are working to improve the environmental performance of our packaging by optimizing packaging design and materials. They take a holistic approach, assessing the impacts of raw materials and processes across a product’s life cycle, and making the best choice for a particular product, whether it’s baby food, frozen pizza or pet food. They package designers figure out how to deliver performance and functionality while optimizing weight and volume. They also continue our efforts to develop solutions that promote recovery and recycling and the use of materials from renewable sources, where there’s an environmental benefit and it’s appropriate. Improving the resource efficiency and environmental performance of their packaging is an ongoing priority across all of Nestlé’s operations in the United States and around the globe. Their work in packaging now will help them to deliver on 2020 commitment to develop the next generation of our recyclable water bottles, with a lighter environmental footprint, made from post consumer recycled or renewable materials.

Packaging highlights for SoDelicious

Commitment to Sustainable Packaging. Every year they go to considerable effort to choose the right packaging for their new products. In an ideal world, the right packaging would be sourced from readily renewable materials, would keep their product fresh for as long as possible and would be easily recycled or composted. This goal is what we keep in mind when choosing packaging. Renewable materials from wood pulp (and a tiny proportion from plant-based polymers) made up 69% of our primary packaging last year, none of which came from genetically modified sources. With such a large percentage of their packaging made from wood fiber, they knew this could be a great place to make a big, positive impact. This is why they decided that by the end of 2016 they were going to set a sourcing goal for wood fiber-based materials from responsibly managed forests certified through the Forest Stewardship Council or Sustainable Forestry Initiative.

Waste profile

Zero Waste to Landfill Nestlé’s overall ambition is to work toward zero waste for disposal, where no factory waste goes to landfill or is incinerated without energy recovered, and to maximize the value of remaining by-products. As of 2014, 12 of Nestlé’s facilities in the United States achieved zero waste to landfill status, and we’re continuing to make improvements. Beginning in May 2015, all 23 factories for Nestlé USA reached landfill-free status. By the end of 2015, 30% of all our factories in the U.S. will achieve landfill-free status. This important milestone supports Nestlé’s commitment to environmentally sustainable business practices to protect future generations and helps Nestlé meet its 2015 global commitment of 10% of facilities achieving zero waste to landfill status ahead of schedule. They encourage employees to look for different ways to reduce, recycle or recover energy when disposing of manufacturing by-products. Additionally, they work with reputable waste vendors to support us in our efforts to dispose, recycle and compost in line with Nestlé’s environmental sustainability guidelines and standards. All of this work ladders up to our U.S.-wide goal to achieve zero waste to landfill status in all factories by 2020.

The trouble with the growing sales SoDelicious sees for their products each year is that we then need to deal with the increase in packaging scrap that comes from the manufacturing process. They are lucky to operate their own factory in Springfield, Oregon that produces many of their products, giving them the opportunity to make changes and decisions that reduce their waste generation. The majority of our waste — over 60% in 2014 — was bound for recycling instead of the landfill, which means we are increasingly finding ways to reclaim and recycle their manufacturing scrap. Recyclable or not, though, they regularly examine ways to reduce their total waste through efficiencies and communication with their suppliers.

Waste Efficiency for SoDelicious

Total Waste Profile & Percent Diverted for SoDelicious

Greenhouse Gas Emissions

Nestle greenhouse emissions

We can see in Figure that Nestle improved greenhouse emissions from 2012 to 2014, to less that 1%.

In 2014, SoDelicious saw a slight increase in Natural gas and direct mobile source emissions. This was mainly because of their increased production, which necessitated more equipment washes that require natural gas to heat the wash water. The increase in production also meant more shipments to their warehouse and therefore a greater use of diesel fuel.

Emissions Efficiency for SoDelicious

Water Conservation

As we can see in the figure , Nestle works to achieve water efficiency and sustainability, water conservations, reducing water per metric ton of product.

Making food and beverages means that SoDelicious have to consume water, but it’s our most precious resource, so they go to great lengths to use the least amount possible and waste none. Even though their considerable growth in production increased their water usage, they were able to achieve the same water efficiency rate as they reached in 2013.

Water use efficiency for SoDelicious

SoDelicious report doesn’t has an GRI Content Index, because it has no implemented system. Nestle on the other hand can provide in his Annual Report a GRI Content Index, from which can see hoe sustainability can be provided, big data and important indicators with their presentation.

For example, G4-12 Describe the organization's supply chain, discuss supplier code of conduct, both companies describes this aspect.

“The standards of the Code set forth expectations for the Supplier with whom Nestlé does business, including their parent, subsidiary or affiliate entities, as well as all others with whom they do business including all employees (including permanent, temporary, contract agency and migrant workers), upstream suppliers and other third-parties. It is the Supplier’s responsibility to disseminate, educate and exercise diligence in verifying compliance of this Code to its employees, agents and sub tier suppliers, including farmers when relevant.” (Nestle Supplier-Code, 2013)

“The Sustainable Food Trade Association’s industry Code of Conduct does for farmers and suppliers what USDA Organic does for the planet — sets high standards for good and ethical treatment of workers. In order to make sure those producing our ingredients are cared for at work, we decided to adopt this policy as our own. We’re asking our top-priority suppliers to sign the Code of Conduct by the end of 2015. By the end of 2016, we expect the rest of our suppliers to be on board as well. It’s one more step towards making sure So Delicious Dairy Free products are as good for the lives they touch as for the taste buds they satisfy.” (SoDelicious Code, 2014)

Example of indicators from Nestle Annual Report 2104:

G4-19 List all the material. Aspects identified in the process for defining report content We provide performance metrics for these issues in this report, aligning with the Global Reporting Initiative (GRI) G4 Reporting Guidelines covering material.

“Our goal is to continue to foster a transparent process to engage our stakeholders in discussing relevant environmental, social and community topics identified as unique to the United States. As we continue to grow and develop as a business, it is vital that we keep open lines of communication with our stakeholders, working continuously toward our stated commitments. We remain committed to all key topic areas for Nestlé and will continue to report and deliver against our stated objectives now and in the years to come.”

Very important aspects of Business principles and governance are discussed in the Annual Report of Nestle, but SoDelicious doesn’t have these kind of informations.

For Consumers:

1. Nutrition, Health and Wellness. They aim to enhance the quality of consumers’ lives by offering tastier, healthier food and drinks and encouraging a healthy lifestyle.

2. Quality assurance and product safety. They want to ensure that, everywhere in the world, the Nestlé name represents the highest levels of product safety and quality.

3. Consumer communication. They are committed to responsible, reliable communication that informs consumers and promotes healthier diets. They respect consumer privacy.

Human rights and labor practices

They fully support the United Nations Guiding Principles on Business and Human Rights, and aim to set an example of good human rights and labor practices throughout our business activities.

People

Leadership and personal responsibility. While fostering a culture of respect and dignity, they provide their people with equal opportunities for development, protect their privacy and do not tolerate any form of harassment or discrimination against them. At the same time, expect their employees to be responsible, motivated and respect our values.

Safety and health at work. They are committed to preventing work-related accidents, injuries and illnesses, and to protecting employees, contractors and others

Supplier and customer relations. They require our suppliers, agents, subcontractors and their employees to demonstrate honesty, integrity and fairness, and to adhere to our non-negotiable standards.

Suppliers and customers

Agriculture and rural development. They aim to help rural communities become more environmentally sustainable by contributing to improvements in agricultural production and the social and economic status of farmers.

Environmental sustainability. They are committed to environmentally sustainable business practices and strive to use natural resources efficiently, achieve zero waste and use sustainably managed renewable resources.

The environment. Water The world faces a growing water challenge, and they are committed to using water sustainably and improving our water management.

Advantages for using GRI Index

Gathering information and constructing a report can help both firms to develop new means of data collection and to think in new ways about long-held practices. The data gathered in the reporting process may help firms:

• Innovate processes

• Reduce waste

• Gain insight into possible growth areas

Reporting can offer both firms insight into potential changes in process and business.

Risk management. Reporting may be better able to predict and manage risks emanating from sustainability-related dimensions of business.

Engaging in sustainability reporting may allow firms to:

• Anticipate and prepare for issues in communities of operation

• Increase agility in process improvement

• Anticipate and prepare for future materials scarcity

Reputation and consumer trust

Reporting may prove to be a powerful tool for corporations that need to build or restore trust.

Employee loyalty and recruitment

Reporting has a powerful impact on stakeholders outside a company, and it can also have a profound effect on the happiness and productivity of the firm’s employees.

Social benefits

Many firms that produce sustainability reports have found that doing well and doing good are not mutually exclusive propositions. By releasing their reports, they engage with stakeholders outside the company, integrate with local and global communities, and participate in inclusive discourse that can lead to investments that benefi t the company and its operating environment.

In an especially competitive or saturated market, disclosing information on a firm’s sustainability commitments leads to positive differentiation of the company and better firm performance. A study of corporate social responsibility in highly competitive markets concluded that companies engaging in sustainability initiatives can simultaneously increase firm success, reduce negative social influence and benefit society at large.(Fernandez-Kranz and Santalo, 2010)