Sustainable Value Report

As indicated by the ESG ratings, Elder’s Ltd has a weak management due to poor ESG programs, practices, and policies. For instance, one of the poor ESG practices contributing to its weak management is their substandard reporting of ESG reports. To improve on their reporting, the organization needs to include ESG reports in the board of director’s annual report or in the company’s annual report but in an integrated manner. Integrated reports (IR) refer to reports that are developed according to integrated reporting standard that represent the company’s performance both financial and ESG aspects. Eccles and Krzus (2010) indicate that it includes eight key components that are;

The predominant goal of IR is to elucidate to financial capital providers how a company can grow its value over time. It benefits all stakeholders including employees, local communities, business partners, customers, policymakers, supplier, and regulators. Moreover, through IR an organization develops greater clarity on business issues and performance since the report provide greater insights into factors driving business performance. It also improves employee engagement, corporate reputation, and stakeholder relationships. In recapitulation, the IR model will help the organization create value by enabling its stakeholders to make informed assessment of the organization and its initiatives.

Concomitantly, due to its poor reporting practices, Elders Ltd need to have a clear section in its report where they identify different stakeholder groups, as well as the issues and concerns for each group. Possibly have this on an easy-to-read table. Stakeholder analysis refers to the process of identifying the all people involved and affected by the organizations interests, grouping them according to involvement, interest and impact levels and lastly determining the best communication strategy throughout the implementation process. It enables the management to enlist the help of key organizational players, which increases their chances to earn their support. Consequently, it will ensure everyone involved has a comprehensive understanding of the organization objectives and their contribution results can influence success. Additionally, stakeholder analysis helps to address and resolve conflicts and issues early enough, for instance the organization will be able to identify an executive that can derail the organization’s objective since he/she does not see the value of the initiative. As erstwhile indicated, stakeholder analysis begins with identifying and determining the key stakeholders then grouping and prioritizing these stakeholders. A quintessential way of prioritizing stakeholders being the Power-Interest Grid that groups stakeholder according to their power and interest (Thompson, 2011).

Despite Elder’s Ltd clearly identifying its stakeholders and setting out their engagement approach, they fail to prioritize them and identifying the issues and concerns of each group.

Looking at the SASB Materiality Map, Elders failed to cover most elements of Social Capital including data security, product quality, and safety and selling practices. In order to improve their ratings, the organization needs to focus on Social Capital since it is a key aspect the report investors will want to look at. Social Capital denotes a shared set of values that allows employees and employers to effectively work together to achieve the organization’s purpose. In a time when data breach is becoming rampant, the organization needs to invest in data security to protect their critical assets. Elder’s Ltd should look into big data solutions such as Cloud data security, date encryption, Payment Security such as point-to-point encryption and tokenization, Mobile App Security, Web Brower Security, Email Security among others (Ziora, 2015). On the other hand, a quality product creates customer loyalty; revs recommendation from the customers; results in fewer customer complaints and returns that taint a company’s image and overly produces a higher return on Investment (ROI). Emphatically, Elder’s Ltd. can improve the quality of their products by defining quality standards from customer perspectives, improving traceability, organizing quality circles, and investing in training. The need for improving product quality stems from the risk of being ousted by competitors.

Lastly, to improve ESG scores, they need a stronger focus on Environment factors including emissions, resource use, and innovation in their report. Typically, the core set of environmental metrics include C02 Emissions, the total C02 and its equivalent emissions in tonnes; the Total Waste production in tonnes, non-hazardous plus hazardous waste; the Total Energy Use, both direct and indirect energy consumption; and the Total Water Withdrawals in cubic meters. According to Baral (“n.d”) some of the relevant gases that the company should look at include hydro fluorocarbons, perfluorinated compound (PFCS), sulfur hexafluoride (SF6), nitrogen trifluoride (NF3), Nitrous Oxide (N20) and Methane (CH4). Despite Elder’s Ltd developing recyclable containers for packaging and transportation that would have been disposed to landfills, they also need to improve the systems and processes to reduce paper waste within its branches. The need to protect our environment is to reduce destruction of eco-systems caused by a myriad of anthropogenic activities. In general parlance, environmental degradation is detrimental since it threatens the long-term health of humans, animals and plant.

References

Baral, B. Climate change and global warming: an ultimate havoc and a great threat to our existing biodiversity.

Eccles, R. G., & Krzus, M. P. (2010). One report: Integrated reporting for a sustainable strategy. John Wiley & Sons.

Thompson, R. (2011). Stakeholder analysis. Mind Tools.

Ziora, A. C. L. (2015). The role of big data solutions in the management of organizations. Review of selected practical examples. Procedia Computer Science, 65, 1006-1012.