Corporate Social Responsibility Managing Sustainability Risks

Question: Discuss about the Corporate Social Responsibility for Managing Sustainability Risks. Answer: Introduction CSR or Corporate Social Responsibility refers to the self regulation of the corporations, which is integrated in its business model. The CSR policies act as a self regulatory mechanism for the businesses to monitor its activities so as to ensure the compliance of the law, in the spirit as well as the letter. In the given segments, a discussion has been made regarding the CSR of PricewaterhouseCoopers (also known as PwC) in Australia, in the area of ecological sustainability. On the basis of this discussion, the sustainability plan of PwC has been analyzed. Lastly, a study has been carried to examine the possible advantages and difficulties in the integration of this sustainability plan with the strategies of PwC. CSR Factors and PwC PwC is one of the big four organizations in the world and are providing professional services across the globe. As a result, it has to fulfill the responsibilities in a prudent manner. The global strategy of PwC commits to doing to right thing by acting in a responsible way, regarding the matters which are vital to the business of the firm as well as to the society. The firm also aims to be a catalyst for changes by use of the available skill set, the people and the relationships to work in a way which creates a lasting impact and promotes change among the other companies. Economic Factors For the growth of any nation, the growth of its economy is a necessity. By helping entrepreneurs, PwC is able to contribute towards the growth of Australia, as well as those countries in which it operates. The people of PwC have used their knowledge to help the social entrepreneurs in maximizing their value by improving their business skills. Such social enterprises have the social and environmental purpose at its heart, while doing a business of delivering goods and services. The more the number of such entrepreneurs, the better are the chances of sustainable growth. Besides the CSR activities, PwC generates a variety of benefits to the society by the services which they provide to its clients. Such services are based on ethics and transparency in the context of business and contribute to the economic development. Some of the examples in this regard include the work done in disaster recovery, international development, fraud prevention, human rights and the management of international aid funds. Ethical Factors PwC has been supporting the education, not only in Australia, but in countries like US, Japan and Egypt. By supporting education, PwC has taken steps on the ethical grounds to promote sustainability, as education provides the basis for ethics in any person. The reputation of PwC is relied on the fact that the firm upholds the highest standards of professionalism and ethics in serving its clients as well as in the dealings of the firm. In this regard, a Code of Conduct has been chalked out which includes the values of teamwork, leadership and excellence. These behavioral values of professionalism, respect for each other, good citizenship, integrity, and ethical decision making have also been implanted in the business of the firm (PwC, 2016). PwC has a very strong CSR philosophy. This results not only in profitability but also creates opportunities for infusing the integrity and ethics into a business. And it is this infusion of ethics and integrity, which makes PwC, stands out in the crowd and builds its brand as well its core business (Timber, 2010). Discretionary Factors In Australia, there has been constant struggle to overcome the generations of disadvantages to the indigenous communities. Such people in Australia are often excluded with regards to sharing of the economic wealth of the country. In this regard, PwC, along with a group of indigenous consultants from the country, have created PwCs Indigenous Consulting (PIC). PIC is a member firm in the global network of PwC. The focus of this firm is to attain cultural integrity in the projects, programmes and policies made across the nation for indigenous people. The founding principles of PIC include majority ownership, delivery and management, of and by, the indigenous people (PwC, 2014). PwC has also been working with the UN to reduce the risks of disaster. Despite the high warnings, the businesses indulge in high hazard areas which have a negated impact on the environment and results in disasters. PwC has created an initiative with the UN known as the RISE initiative to bring the stakeholders together by forming a single alliance for taking the necessary leadership in the management of risks of disasters (PwC, 2016). Analysis of the Sustainability Plan of PwC Sustainability has been increasingly being integrated in the various levels of strategic planning in the organizations. The management has to balance the regulations and protect the brand, as well as, has to ensure the stability of supply chains. It also has to seek the opportunities to enhance the performance and use the sustainability agenda for the strategic advantage. By development and integration of a sustainability vision in the long term strategic plans, a lasting value is created which also builds trust of the public. PwC not only creates its own sustainability strategies but also the sustainability strategies for the other organizations (PwC, 2016). For Example, PwC had created a sustainability strategy for Luxenbourg based on the challenges of this company which resulted in benefits for Luxenbourg (PwC, 2016). PwC is constantly working on creating such value for the business and communities which respects the environment and also understand and reduces the impact of its activities around the world. The firm creates the value for its clients by its sustainability and climate change practices. The sustainability practices of PwC provides guidance in the areas such as biodiversity; certified emissions reductions; sustainable financing; transfer pricing and footprint; carry structuring and management structure; clean development mechanism; carbon technology funds; carbon offset schemes and carbon trading; CDM; and investment funds related to sustainability (PwC, 2016). The sustainable practices of the firm have increased its revenues even during the difficult years of the firm which boosted its consultancy business, as well as created a number of new jobs. The firms sustainability staff in the Europe has hired the top airlines to act as EU emissions trading scheme (ETS) which verifies as well as audits as per the new laws, which require the aircraft operators to independently submit the verified emissions. PwC also audits the UKs companies which have publically assured their CSR data. PwC has also secured various contracts relating to the ethical supply chain sourcing, carbon related assurance and verification, forestry financing and policy support to the various forums. PwC has been highly concentrating on creating sustainability as the guiding principle, both externally as well as internally. This replicates the certainty of the management that climate change and sustainability are the crucial policy and business agenda of the coming time (Environment Analyst, 2010). PwC has its operations around the globe, and hence, they have created a global Corporate Responsibility Statement. PwC considers itself as the part of the solution to the business challenges by doing the correct things and by being the catalyst for change. The focus of PwC is on doing business responsibly with diversity, inclusion, societal participation and ecological protection. Australian Centre for Corporate Social Responsibility (ACCSR) has recognized PwC Australia in its top 100 list of CSR organizations. This ranking is calculated on the basis of the CSR management capabilities of any organization and proves that inventive CSR actives help the organizations in accessing new markets (PwC, 2014). PwC considers CSR as one of the influential ways of building society and solving problems. This has been done by the firm by setting clear and unambiguous CSR standards. Though they still have not been able to achieve its goals, but its CSR activities have been focused on achieving the set goals. PwC works on reducing its own impact on the environment and advises the climate vulnerable countries in this regard (PwC, 2016). In a recent interview of the Chairman of PwC, Dennis Nally, taken by Petra Justenhoven, the CSR performance of the company was discussed. In this interview, Dennis mentioned the environment as its biggest challenges as the regulations across the world in this mater are very diverse. The chairman also mentioned that the aspiration of the company is to become more technology enabled. PwC considers itself unique because of its special focus on its talent. PwC has also been involved in promoting diversity by taking part in UN initiatives like HeForShe. With this, the issue of gender diversity is addressed in a unique manner (PwC, 2015, 2-5). As per the global annual review, 2015, PwC had harnessed the power of its network to scale responsible business. As per the statistics provided, its largest 21 firms were partially able to align to the global CR strategy in financial year (FY) 2014; and for the FY 2015, it was able to completely align to its CR strategy. PwC was able to assess itself against the leadership ladders in both 2014 and 2015 FY and was also able to develop clear progression plans for both the financial years. For the FY 2014, it was partially able to meet its set targets for improving performance in the matters related to CR in the Global People Survey. But for the FY 2015, it was able to fully meet the set targets (PwC, 2015, 16). PwC has been constantly working on minimizing its environmental impact. Being a professional service, it has a lower environmental footprint and yet, PwC works towards a good environmental stewardship. The PwC firms are working on developing more environment efficient business practices by managing the impact on environment through understanding and mitigating its greatest impacts on environment such as carbon measurement and reporting (PwC, 2016). In this regard, the PwC UK-led global alliance delivered the UK Department for International Development-funded Climate Development Knowledge Network (CDKN). Through CDKN, the PwCs UK climate change and sustainability experts have supported negotiators of the least developed nations to represent their interests in the global climate discussions (CDKN, 2016). The PwC firms are engaged in volunteering activities for the betterment of the environment and to promote the awareness of issues relating to the environment. For instance, over 1000 people from PwC Canada took part in the environmental events in the FY 2015 and this included many of its clients. PwCs largest 21 firms were partially able to implement the local environmental policies and environmental management approaches for the FY 2014 and 2015 (PwC, 2015, 21). Figure 1 shows the community engagement of the PwC. And Figure 2 illustrates the positive social impact of PwCs community activities. The figures of GHG (Greenhouse Gases) emissions otherwise known as CO2e for the FY 2015 showed the direct emissions at 7%, indirect emissions at 29% and air travel at 64%. The Gross GHG emissions for the FY 2015 were 619,521 tCO2e and the Net GHG emissions for the same period were 416,573 tCO2e. The importance of CR is clearly reflected by PwCs commitments (PwC, 2015, 21). And even though PwC has not been able to achieve its goals in FY 2015, it is working on achieving its set goals in this regard. Integration of Sustainability Portfolio In Companys Strategy On the basis of above analysis of PwCs sustainability profile, certain advantages and difficulties have emerged in the integration of this profile into the strategy of the company. A professional service provider does not affect the environment, as it is not involved in production and manufacturing activities which results in pollution. This is PwCs biggest advantage in integration of the sustainability profile, which focuses on environment. Further, by taking steps towards the betterment of environment, PwC earns customers loyalty and ends up in creation of brand name. As mentioned above, this proves fruitful for the company. But in this advantage lies the difficulties. As PwC does not have enough areas to safeguard the environment, it creates higher goals, which are not easily achievable, as was seen in the FY 2014 as well as FY 2015. Further, companies in the present time have to face the regulatory changes, the costs of insurances and claims, bureaucracy, health of its employees, dependence on third parties, consumer pressure and variation in leaderships and behaviours (PwC, 2016). These provide both the advantages and difficulties to PwC. For instance, a favourable change in the regulatory policy in Australia helps the firm, but a negated change, on the other hand, creates a huge challenge for the firm. Like any other organization, PwC also faces some concerns when it comes to the risks associated with sustainability. Even though the firm currently has a strong environmental policy, it faces issues like climate changes, natural disasters, water security, and loss of biodiversity (Case, 2012). These issues can emerge at any time and provide difficulties in the proper implementation of PwCs sustainability profile. Further, the goals of environmental protection remain unattained, which showcases the company in negated light. And as a result, the integration of sustainability portfolio in the PwCs strategies proves difficult. As PwC operates globally, integrating the environmental and sustainability policies across its entire firm creates a huge problem. Each nation has its set of norms regarding environment and so, each of the PwC firm has to formulate different policies and at the time, these policies have to match up with the global policy of PwC. This becomes cumbersome for PwC and is often regarded as the reason why PwC fails to achieve its environmental standards. PwC was the first professional services firm which became carbon neutral in 2008. PwC has continued its commitment by implementing the NCOS (National Carbon Offset Standard) carbon neutral program. By implementing such policies, not only it earns better customers, but also creates a positive impact on the government. By integrating such sustainability profiles in its policies, PwC creates a remarkable advantage for itself. Having such high standards for sustainability, PwC performs surpassingly well in the main assurance activities of GHG inventories, sustainability reporting and risk analysis. This improves the credibility of sustainability reporting as well as provides the stakeholders a greater confidence. With the increase in the weight of sustainability risks, the assurance of being a leading brand also rises. As per a study of 2013, the growth in the carbon regulation and the increase in the realization regarding sustainability being a source of advantage drove the investors to invest in the sustainable firms and this provided a huge advantage for PwC, as it is constantly engaged in sustainable activities (Walker, 2011). So, the sustainability development goals have turned into a reporting advantage for PwC. Conclusion From the above analysis, it can be concluded that PwC has gained more advantages than difficulties by following proper standards of sustainability. Not only PwC has been successful in creating a brand name, but has also been able to attract and retain more customers, clients and employees. It has integrated its aims, strategies, and objectives in its work towards the betterment of the environment along with the various other CSR activities. Lastly, it can be right deducted that the present sustainability plan of PwC is impactful and is bearing more and more fruits for PwC. References Case, P. (2012) Managing Sustainability risks and opportunities in the financial services sector. [Online] PwC. Available from: https://www.pwc.com/jg/en/publications/ned-sustainability-presentation-may-2012.pdf [Accessed on 17/09/16] CDKN. (2016) About. [Online] CDKN. Available from: https://cdkn.org/about/?loclang=en_gb [Accessed on 17/09/16] Environment Analyst. 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