Exploring Sustainability in Theory and Practice: a Case Study Approach.
Exploring Sustainability in Theory and Practice: a Case Study Approach.
Favour E Markson and E. E Markson
Abstract
The concept of sustainability is the burning issue in today’s business environment, and in the bid to maintain a green planet and a clean air in our society, organisations in different part of the globe have decided to reduce their carbon emission and ‘go green’. This report will discuss in detail showing a critical assessment of the development as well as the process of sustainability. The report will also make analysis of energy companies and compare their various best practice in terms of their sustainability. The application of sustainability, benefits and challenges as well as recommendation will be considered in this report.
Sustainability in energy companies has over the past years been seen as a key consideration in many academic literatures. As a result of the increasing apprehensions in the high impact of industrial pollution in the world generally, this report seeks to focus on evaluating the development as well as the value regarding sustainability in business environment. It also attempts to evaluate critically the process of practicing sustainability among various organisation using the relevant theories. This report also highlights benefits, challenges and make adequate recommendations for energy companies.
The concept of Sustainability viewed by several authors, fundamentally implies operating in such a manner that might be continuously sustained, this implies, to produce “something” without destroying (Silver et al. 2012) or depleting the resources.
However, to channel sustainability in its right course, different concepts were developed. One of these is the development of the Brundtland Commission Report of 1987 which asserts that Sustainability is “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Supporting this assertion, Thomas (2015) reveals that, sustainability is about the activities of human and the ability to meet their wants and needs without reducing the resources available; hence, this brings about thoughts on the way individuals and companies should carry out their social and economic lives not taking advantage on the ecological resources that are available for the development of human.
Furthermore, the United Nations Environment Programme (UNEP) was introduction in 1972, with the focus of taking care of the environment and enabling people as well as nations to enhance quality livelihood without (UN Environment Programme, 2020) compromising the future of generations ahead. However, Murphy (2016) criticised UNEP that it is encountering deficit in the area of governance and is also faulted in its responsibility to enhance compliance to good environmental procedures at the global domain. Several researchers stressed that in 1992, the United Nations adopted Agenda 21, with the purpose of identifying, resolving problems and challenges associated with sustainable development at national, regional and local government (Kveton et al., 2014) level. In addition, Agenda 21 it consists of a variety of programmes with focus on environmental protection, economic and social development, encouraging involvement from nongovernmental institutions and communities. Additionally, the Global Reporting Initiative (GRI) was introduced as a guide to aid organisations in sustainability report (GRI 2020). According to Elkington (2012), the concept of sustainability is built on three key dimensions or pillars known as the “Triple-Bottom Line” which constitute: Environment, Economic and Equity (Social).
Environment
According to Robertson (2014) Environmental sustainability implies, the ability to constantly ensure that the ecosystem is preserved as well as restored as life on earth relies solely on the ecosystems to make clean water and air, make provision for food, facilitate plant pollination and recycling of waste.
Research shows that economic sustainability suggests equal distribution as well as allocation of (Frontstream 2013) resources effectively; the idea of economic sustainability is to advance the efficient use of resources in a way that is responsible with long term gain. In addition, economic (Meadows et al. 2004) growth that utilises all the resources, and pollutes the water, soil, as well as deplete the services of the ecosystem will ultimately result in decline in life quality.
According to Robertson (2014), equity is liberty from unfit conditions of living and equal access to basics of livelihood such as water, education, food, healthcare and employment for everyone. Edwards (2005) also argued that equity is making opportunities available for everyone, to flourish as they desire, not only for the few privileged ones. Below is the diagram illustrating the three pillars of sustainability.
Figure 1, The Three Pillars of Sustainability (Circular Ecology 2020)
According to Haanaes (2016), sustainability has become of great essence across the entire business industry; generating lasting value by considering the way businesses function in the social, economic, and ecological environment. Below are some organisations that have valued and integrated sustainability in their business proactively.
Duke Energy being one of the leading companies in energy values sustainability a great deal in its business strategy. Duke Energy factors two of the UN Sustainable development goals which are goal seven – Affordable and clean energy and goal thirteen – climate factor (Duke Energy Report 2019). Duke energy impacts the environment by being more energy efficient (Ovo energy, 2020); generating more clean and reliable electricity through investments in solar, wind and natural gas projects. Duke Energy is focused on cutting down and attaining net zero emission of carbon, a greenhouse gas contributing to earth warning (Robertson, 2014) by 2050.
Coca-Cola values sustainability by incorporating sustainability into the organisation strategy through good governance, with the support of leadership (Robertson 2014). Coca-Cola appears to adopt a more proactive approach in recycling and reuse of plastics, according to Dixon (2020), recycling is a procedure of gathering materials already used and taking them through a process for reuse; reusing and reducing plastics according to research helps to protect the environment and oceans from pollution. However, Pivnenko et al., (2015) argued that recycling of plastics could be contaminated with impurities. Nevertheless, Coca-Cola in achieving a cleaner environment is committed to the use of “100% recycled PET (rPET) bottles” as its carbon footprint is moderate, thereby doing away with the use of about “3,500 tons virgin plastics” and reducing carbon footprint by 25% (Coca-Cola Sustainability report, 2019).
Chevron an oil and gas company, has tremendous value for sustainability as it prioritises and integrates ESG (Environment, Social and Governance) throughout (Kiehne 2019) the business. Chevron is focused on reducing its carbon emission by 40% by investing in world class technology project that capture and store carbon. Research shows that carbon capture and sequestration is a technology that removes greenhouse gas emission (carbon dioxide) produced from making use of (Wolfson 2008) fossil fuels generated in industrial processes, stopping it from getting back into the atmosphere. However, carbon capture and storage has been criticised because of the risks of carbon dioxide leakage into the earth surface, thereby causing harm to the ecosystem (Chen 2010). Chevron renewable energy innovation on solar project would accelerate a quick transition to cleaner energy with the generation of 80% solar energy (Chevron SR 2019).
Application of Sustainability within Energy Companies (Best Practices)
Several energy companies have engaged in the reduction of carbon to improve their environment and achieve clean air in their society. As a result, company such as Duke Energy and others inculcate best practice as part of their sustainability, this report critically evaluates these practices among various energy companies and others.
Carbon Reduction/Renewable Energy
Duke Energy in their process of sustainability exercise best practice by introducing carbon reduction in their practice in order the achieve clean air in the environment. Duke Energy successfully reduced 39% of its 93million tons of carbon emission with the focus of achieving a net zero emission of carbon by 2050 (Duke Energy 2019, p 26). In order to generate energy with zero emission of carbon, Duke Energy engages on renewable energy (Solar and Wind) which serve as their key best practice as stated by Ritchie & Roser (2017), this completely substitute carbon energy practice (initial practice) and improve clean environment. However, Alsharif et al. (2018) argued that solar energy has its limitation of being cost intensive and unpredictable as it is vulnerable to weather situations but can be overcome through effective planning. Nevertheless, renewable energy is the future for cleaner energy as it is environmentally friendly (ENGIE 2020) and sustainable.
On the other hand, NRG Energy has its sustainable structure that shows its level of best practice, NRG Energy has similar best practice with Duke Energy, however, the reduction of their carbon emission (NRG, 2019), is over 40 million metric tons which is less than that of Duke Energy (equal to 9 million cars taken off the road). Furthermore, NRG has broadened its renewable energy portfolio by partnering with organisations to install rooftop solar panels for customers, however, the risk is that it depends on whether (Aris, 2020) and used a lot of space and this aspect has not been adequately addressed by NRG Energy unlike Duke Energy that has factored this risk into the long term plan. Differently, PPL appears to reduce more carbon compared to Duke Energy and NRG Energy and focuses in making its environment safer and cleaner. Literature shows that it has reduced its carbon emission to the tune of 80% which is about 200,000 metric tons of carbon emissions” (PPL, 2019), showing that it has greatly invested in renewable energy (solar energy) compared to Duke Energy and NRG with a better plan to mitigate risk (Aris, 2020).
Recycling and Waste Management.
Secondly, another best practice of these three energy companies is in water recycling and waste management. Water recycling as stated by Climate Adapt (2020), is considered as a process where water is saved for reuse. Here Duke Energy demonstrates higher water recycle as its best practice compared to NRG and PPL, as it returns back to source over 98% of water through its cooling systems which can be reused for other purposes. On the other hand, NRG recycles non portable water for its operations, while PPL and NGR successfully recycled 89% and 69% respectively of water lower than Duke Energy. Furthermore, NRG and PPL are highly committed to waste management. NRG recycled 680,000 tons of carbon combustion residuals a little higher than PPL. However, Duke Energy is very low in waste management compared to NGR and PPL, it only recycled 80% of its solid waste (Climate Adapt, 2020). More so, such best practice is also demonstrated by a manufacturing company like Coca-Cola which is focused on recycling and reuse of their packaging. Although this reduces environmental pollution, however, it is very costly and capital intensive to build a recycle plant (Brandon 2015). Ragossnig (2014) also, maintained that most of the products made from recycling have quality issue and do not last.
Research shows that a workforce that is diverse and inclusive drives growth in the economy, fosters more innovation and creativity; where the voice of the employees (Kerby and Burns 2012) is heard and respected. However, MacDonald (2019) argued that employees in a diverse organisation may decide to quit, if they experience unfair treatment working with co-workers from diverse cultural background. Nevertheless, Duke Energy, is committed to growing a diverse workforce with a goal of increasing the number of minorities and females in the workforce by 60%. On the other hand, PPL and NRG also embed diversity and inclusion in its operations as best practice by ensuring that there are no disparities regarding gender, however not as detailed as Duke Energy (PPL, 2019).
Benefits in Implementing Sustainable Practices.
Research illustrates that there are benefits when organisations consciously implement sustainable practices. Below are some identified benefits:
Brand reputation and competitive advantage
Literature reveals that several businesses brand reputation have been alleviated and has outperformed other competitors due to the implementation of sustainable practices and positively creating awareness on their brand, hence emphasising on resolving environmental as well as social challenges resonates (Kohleriter and Crawley 2020) for clients. In line with this view, Ramukumba and Ferreira (2017) maintained that sustainable practices in business can improve a company’s reputation as it maintains positive public relation with the community. Based on this, companies such as Duke Energy, PPL and NRG have greatly benefited in this aspect via their consistency in sustaining their best practice.
Reduce Cost and Increase Production
Research reveals that the implementation of sustainable practices in organisations, has relative increase in operational efficiency, more so, with conservation and more valuable use of resources, there will be decrease in cost and operations streamlined (Verne 2020). Hitchcock and Willard (2009) suggest that cost reduction is the most cited sustainable business benefit practice as most organisations now opt for cost efficient operational measures like using materials that are recycled and “installing water saving devices”. NRG has reduced the cost of water by recycling and reusing their waste water, this also goes to coca cola company and PPL (Climate Adapt, 2020).
Enhance Financial/Investment Opportunity
According to literature, financial/Investment experts have taken recognition of organisations who have incorporated sustainability plans (Verne 2020) with respect to reduction of impact on the environment and being energy efficient as a key criterion for elevation. In addition, Rogers (2016) stressed that investors would not want to partner with an organisation that is associated with environmental disaster. Duke Energy has increased in finances by installing new solar system to its customers (Alsharif et al., 2018).
Increase Recruitment and Retention of Employee.
Research demonstrates that employees are more attracted and interested to remain and work with organisations who implement sustainable practice (doing things the right way) in their business; take a proactive approach to social (Rogers 2016) and environmental programs. Furthermore, Kohleriter and Crawley (2020) maintain that great talents among younger generation will accept job offers from organisations that respect the environment.
Challenges in Implementing Sustainable Practices
The energy companies through their best practice have achieve certain level of benefit, however, they still have some challenges, these includes the following.
Loss of Corporate Image/Reputation
Research demonstrates that equity that is built around an organisation’s reputation can be lost in the bid to implement sustainable practice, as most reputation is created around credibility, transparency, trust and quality (Hopkins 2004). In addition, Schmitz (2012) stressed that organisations that give a false impression about their products being environmentally friendly can suffer loss of corporate image for lack of integrity, for instance Ryanair lost its reputation due to bad practices considered as “best practice” (Igniyte, 2018).
Literature maintains that implementing sustainable practices (going green) in organisation is capital intensive; organisations such Duke Energy would require (Joseph 2019) financial support so as to execute their social responsibility like the installation of solar panels is considered energy efficient but expensive. Hopkins (2004) also maintained that organisations ability to access finance is a challenge as the marketplace aimed at “socially responsible investment” (SRI) is on the increase; bringing about support for corporate social responsibility (CSR)
CSR Vital for Employee Retention
According to Danciu (2013), Employees are currently more interested in organisations that implement and manufacture products that are environmentally friendly and relate in a socially responsible way; this poses a challenge to most organisations as they may likely loss employees and customers. Furthermore, Hopkins (2004) pointed out that embedding CSR (Corporate social responsibility) is key for attracting quality employees and retention.
Strategy that is too tactical and inadequately developed could create lack of understanding by the team members and can not be viewed as vital or easy to implement or develop, PPL has been faced with the issue of not meeting its target in 2019 because of difficult sustainability practice (PPL, 2019).
Duke Energy is one of the leading energy companies that have embedded sustainability in its corporate strategy; taken a proactive management approach in addressing the issues with greenhouse gases (Carbon emissions) which has become detrimental to the environment as global warming is on the increase. Duke Energy targets to build a smarter and cleaner future for energy and has proactively used smart grid and invested in advanced renewable energy technology projects (Solar and Wind energy) which has the capacity to generate sufficient energy to the municipalities so as to transform customer experience. Duke Energy is also committed to recycling water through the cooling system technology and returns a reasonable percentage of water back to the source. This aligns with the Brundtland report that emphasizes on meeting the needs of the present, without compromising the future generation needs. In addition, also endeavored to recycle its solid waste product, though could not reach its set target.
Furthermore, Duke Energy embraces and shows great commitment in the area of a diversity and inclusion; has increased the number of female and minority workforce, embedded diversity and inclusion across all departments and strengthens inclusion culture in the organization. Duke Energy also extends its sustainable practice to the educational sector, in addition, to enhance “going green” Duke Energy issues 100 percent renewable energy certificates (RECs) this strategy enables organizations to legally claim and buy the rights of ownership to renewable energy use and generation. More so, Duke Energy, values transparency and aligns with Global Reporting Initiative (GRI) standards which is the recognized framework for organizations to present their sustainability report.
Duke Energy in aligning with United Nations Environment Programme (UNEP) standard has proactively taken steps in implementing sustainable practices in the organization. However, there are areas which Duke Energy needs to improve on.
- Duke Energy should consider reducing more of its carbon footprint by investing in other sources of renewable energy, like biomass energy which can be sourced from organic materials to support its energy generation from geothermal, solar and wind as these are unpredictable and vulnerable to weather conditions.
- Duke Energy is committed to diversity and inclusion, but should endeavor register their presence more in communities by partnering with non-profit organizations to improve the quality of life in the rural areas.
- The organization should consider investing more in advanced technology to further expand on wind and solar projects, even though there are issues surrounding it, they are energy efficient and environmentally friendly; thereby cutting down on carbon emission.
- Duke Energy should endeavor to invest more on the smart technology that will be able to reroute power back to customers in the event of power outages due to severe weather.
- There should carry out an in-depth risk analysis to evaluate if their structural facilities are situated in areas prone to extreme weather.
- Duke Energy should endeavor to improve on solid waste management as this could be disastrous to health and the environment.
Reference
Alsharif, M.H., Kim, J. and Kim, J.H., 2018. Opportunities and challenges of solar and wind energy in South Korea: A review. Sustainability [Online]. 10(6), 2-1
Aris Vourvoulias (2020) Pros and Cons of Solar Energy. Available at: https://www.greenmatch.co.uk/blog/2014/08/5-advantages-and-5-disadvantages-of-solar-energy. Accessed on 10/10/20
Brandon, M., 2015. 14 Important Advantages and Disadvantages of Recycling. Available from: https://greengarageblog.org/14-important-advantages-and-disadvantages-of-recycling [Accessed on 28 September 2020].
Brundtland, G. 1987. Report of the World Commission on Environment and Development: Our Common Future. United Nations General Assembly Document A/42/427 [online]. Available from: https://sustainabledevelopment.un.org/content/documents/5987our-common-future.pdf [Accessed on 31August, 2020]
Chen, W. 2010. Carbon Capture and Sequestration. [Online] Available at: http://large.stanford.edu/courses/2010/ph240/chenw2/. [Accessed on 22 September 2020].
Chevron 2019 Sustainability Report. [Online] Available from: https://www.chevron.com/-/media/shared-media/documents/2019-corporate-sustainability-report.pdf. [Accessed on 18 September 2020]
Circular Ecology, 2020. Sustainability and Sustainable Development – What is sustainability and What is Sustainable Development? Available at: https://circularecology.com/sustainability-and-sustainable-development.html. Accessed on 8th September.
Coca-Cola 2020 Sustainability Report. [Online] Available from: https://www.coca-colacompany.com/content/dam/journey/us/en/reports/coca-cola-business-and-sustainability-report-2019.p df. [Accessed on 28 September 2020].
Danciu, V., 2013. The sustainable company: new challenges and strategies for more sustainability. Theoretical and Applied Economics, 20(9), p 7-26.
Dixon, N., 2018. The Importance of Recycling and Reusing of Plastics. Available at: http://www.pupilvoicewales.org.uk/the-importance-of-recycling-and-reusing-plastics/ . Accessed on 21 September, 2020
Duke Energy 2019 Sustainability Report. [Online] Available from: https://sustainabilityreport.duke-energy.com/downloads/2019-Duke-Energy-Sustainability-Report-Complete.pdf. [Accessed from 25 September 2020].
Edwards, A.R., 2010. Thriving beyond sustainability: Pathways to a resilient society. New Society Publishers.
Elkington, J., 2012. The triple bottom line for 21st century business. The Earthscan reader in business and sustainable development, pp.20-43.
ENGIE, 2020. Renewable Energy for Better Future. [Online] Available at: https://www.engie.com.au/home/about-engie/our-values/renewable-energy-future/. [Accessed on 25 September 2020].
Frontstream, 2013. The Three Pillar of Sustainability. Available from: https://www.frontstream.com/blog/the-three-pillars-of-sustainability. Accessed on 9 September 2020.
GRI, 2020. How to Use the GRI Standards. [Online] Available from: https://www.globalreporting.org/. [Accessed on 30 September 2020]
Haanaes, K., 2016. Why All Businesses Should Embrace. [Online] Available at: Sustainability.https://www.imd.org/research-knowledge/articles/why-all-businesses-should-embrace-sustainability/. [Accessed on 11 September, 2020].
Hill, R., 2018. Reflective Practice Using Gibbs Reflective Cycle. [Online] Available from: https://www.robhills.com.au/2018/07/31/reflective-practice/. [Accessed on 30 September 2020]
Hitchcock, D. and Willard, M. 2009. The business guide to sustainability – Practical strategies and tools for organizations. 2nd Edition, London: Earthscan
Hopkins, M., 2004. Corporate social responsibility: an issues paper [Online] Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=908181. [Accessed on 30 September 2020]
Igniyte, L. 6 Shocking Reputation Disasters That Rocked Big Names And Brands In 20182018. [Online] Available from: https://www.igniyte.co.uk/blog/6-shocking-reputation-disasters-rocked-big-names-brands-2018-igniyte. [Accessed on 12 October 2020]
Joseph, C., 2019. Disadvantages of Going Green for a Corporation. [Online] Available from: https://smallbusiness.chron.com/disadvantages-going-green-corporation-3318.html. [Accessed on 30 September 2020]
Kansas, 2017. How Solar Energy is Collected and Distributed. Available from: https://kcc.ks.gov/images/PDFs/education/PEP_FactSheet_2017_SolarEnergy.pdf. [Accessed 24 September 2020].
Kerby, S. and Burns, C., 2012. The Ten Top Economic Facts of Diversity in the Workplace.[Online] Available from:https://www.americanprogress.org/issues/economy/news/2012/07/12/11900/the-top-10-economic-facts-of-diversity-in-the-workplace/. [Accessed on 28 September 2020]
Kiehne, 2019. Environmental, social and corporate governance (ESG) -also an innovation driver? Available from:https://www.researchgate.net/publication/334398123_Environmental_social_and_corporate_governance_ESG_-also_an_innovation_driver . [Accessed on 22 September 2020].
Kohleriter, K. and Crawley, M. N., 2020.9 Unexpected Benefits of Integrating Sustainability Into Your Company’s Core Strategy [Online ]Available from: