Frank Birkin and David
Frank Birkin and David Woodward
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lifecycle a ss es sm en t s for d evelop m en t p u r p os es, few a r e u sin g t h e t ech n iq u e t o con -st r u ct a n a ccou n t . T h e Da n ish E n gin eer in g Com p a n y Da n fos s r efer s r e p ea t ed ly in q u a li-t a li-t ive li-t er m s li-t o li-t h e u se of life-cycle a ss es s-m en t s w it h in t h ose p a ges of it s a n n u a l r e p or t d ed ica t ed t o p r od u ct a n d p r ocess d evelop -m en t a n d w h ile q u a n t it a t ive p er for -m a n ce im p r ovem en t in for m a t ion is a ls o given , t h e
t wo a r e n ot lin k ed . T h e la r ge Sw ed ish for est r y com p a n y MoDo is wor k in g t o in t e-gr a t e it s in d u st r ia l a ct iv it ies w it h t h e su s-t a in a ble u se of Sw ed ish for ess-t r y r esou r ces a n d t h e com p a n y d isp lay s a n effect ive life cycle for for est s a n d for est r y p r od u ct s in t h eir 1993 en v ir on m en t a l r e p or t . As t h e MoDo p r esid en t h a s w r it t en in t h e for ewor d t o t h a t r e p or t : “Su st a in a b ilit y in ever y a sp ect a n d a Figure 2
Frank Birkin and David Woodward
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cyclic a p p r oa ch for m t h e ver y fou n d a t ion for t h e fu t u r e d evelop m en t of ou r com p a n y ”.
Stakeholders
St a k eh old er r e p or t in g is a ch ieved t h r ou gh m a n y d iffer en t com m u n ica t ion ch a n n els a n d t h es e ch a n n els ca n va r y a ccor d in g t o st a k e-h old er n eed s a n d t e-h e n a t u r e of a n y p a r t icu la r p iece of in for m a t ion . Wh ile t h e a ct u a l con -t en -t of -t h e s-t a k eh old er r e p or -t s m ay va r y con sid er a bly, it is of som e u s e t o cla s s ify cor -p or a t e s t a k eh old er s a n d t h eir in for m a t ion n eed s w it h in a fr a m ewor k for r e p or t in g p u r -p oses.
Ta ble I p r ov id es on e su ch cla s s ifi ca t ion , b a sed on id ea s in it ia lly p r om u lga t ed in T h e Cor p ora te R ep or t (ACCA, 1975), a n d u p d a t ed
by Woodw a r d (1993), a n d w h ich h a s b een u sed s u cces sfu lly t o a n a ly se em p ir ica lly t h e ext en t of st a k eh old er in for m a t ion p r ov is ion by bu si-n ess esi-n t er p r ises. It sh ou ld b e si-n ot ed t h a t t h e s t a k eh old er id en t ifi ed a s “t h e n a t u r a l en v ir on m en t ” st a n d s a p a ir t fir om t h e ot h eir in t eir -es t gr ou p s sh ow n , in t h a t p er se it h a s lim it ed a b ilit y t o d em on st r a t e t h e t h r ee elem en t s in h er en t in b ein g a st a k eh old er of in t er est , cla im (Ca r r oll, 1993) a n d a b ilit y t o in fl u en ce t h e m a t t er u n d er con sid er a t ion (F r eem a n , 1984). E lem en t s of t h e en v ir on m en t ca n n ot t h em s elves give exp r ession t o t h eir feelin gs a b ou t a sp ect s of en v ir on m en t a l con cer n , a n d r ely on p r essu r e gr ou p s t o d o t h is on t h eir b eh a lf for b et t er or for wor se. It m ay t h u s b e b et t er t o en v isa ge t h e n a t u r a l en v ir on m en t a s
Table I
A model of c orporate stakeholder information needs
Information needed to assist in
Stakeholder determining/ assessing/ evaluating Information source
Owners: existing and potential Share trading dec isions Corporate report
shareholders (including holders of Comparisons with earlier Value added statements
options and warrants) and their years/ other c ompanies Forec asts
advisers Managerial performanc e
future performanc e
Lenders: existing and potential Sec urity of investment Corporate report
suppliers of short- and long-term Value of c ollateral Cash-flow statements
funds Cash generating ability Independent valuations
Human resources: existing potential Sec urity and prospec ts Employee/ employment
and past employees and their Information for c ollec tive bargaining reports at loc al (site) level
representatives Position, progress and prospec ts Corporate report
Business contacts Long-term viability Produc t literature
customers, suppliers, Ability to meet obligations Trade press releases
competitors and those Produc t information Corporate report
interested in business Ec onomic c omparisons
amalgamations
Governmental/ regulatory Ec onomic indic ators (balanc e of Central Statistic al
All aspects of national and payments; output; employment; etc .) Offic e returns
local government and Tax data Spec ial reports
quasi-government Corporate report
General public: taxpayers (central Role of the enterprise in the Media
and local), community interest c ommunity and how all its ac tions Surveys/ reports/
and pressure groups, interest affec t soc iety at large investigations
groups and representative Corporate report
bodies
Natural environment: in reality, The total effec t of the enterprise Environmental reports
groups of concerned individuals on the natural environment Life-c yc le analyses
claiming to represent environmental Sustainability surveys
interests Environmental impac t
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A com p r om is e is t o a gr ee on t h e b r oa d fr a m e-wor k a n d m et h od ology for t h e a ccou n t . T h is a gr eem en t sh ou ld b e n a r r ow en ou gh t o en a ble m ea n in gfu l com m u n ica t ion a b ou t t h e a ccou n t s t o b e m a d e b et w een op er a t or s a n d u ser s in , s ay, Lon d on a n d Rio d e J a n eir o bu t b r oa d en ou gh t o p er m it t h e evolv in g loca l a n d r e gion a l va r ia t ion s of d iffer en t sit es t o b e con sid er ed . A b en ch m a r k a p p r oa ch s eem s m os t s u it a ble for t h is p u r p ose. Ta ble II gives a n exa m p le of a b en ch m a r k a ccou n t for cor -p or a t e s u s t a in a ble d evelo-p m en t . Det a iled p r oced u r es a n d ca t e gor iza t ion s cou ld b e in cor p or a t ed w it h in t h e a ccou n t by u s e of en v ir on m en t a l m a n a gem en t s y s t em s t a n -d a r -d s s u ch a s ISO 14001; fu r t h er wor k cou l-d est a blis h a s t a n d a r d ized fr a m ewor k for s t a k eh old er r e p or t in g; t eh e a s sess m en t of ecos y s -t em ca r r y in g ca p a ci-t y is -t ech n ica lly fea sible. H ow ever, t h e p r e p a r a t ion of s u ch a n a ccou n t is n ow h er e n ea r a s d ifficu lt a s cr ea t in g t h e cu lt u r a l va lu es in w h ich s u ch a n a ccou n t h a s m ea n in g.
References
ACCA 1975), T h e Cor p ora te R ep or t, Accou n t in g St a n d a r d s St eer in g Com m it t ee, Lon d on .
Bir k in , F.K. a n d J ør gen s en , H .B. (1994), “Cor p r a t e en v ir on m en t a l r e p or t s a s w ea lt h a p p r o-p r ia t ion st a t em en t s”, E n v ir on m en ta l M a n a ge-m en t a n d H ea lth , Vol. 5 N o. 3, p p. 23-7.
Br ow n , L. et a l. (1994), V ita l S ign s 1994, N or t on , N ew Yor k , N Y.
Ca r r oll, A.B. (1993), B u sin ess a n d S ociety: E th ics a n d S ta k eh old er M a n a gem en t, Sou t h -West er n P u blish in g Co. Cin cin n a t i, OH .
F r eem a n , R. (1984), S tra tegic M a n a gem en t: A S ta k eh old er A p p r oa ch , Ma r sh a ll, Bos t on , MA. J ør gen sen , H .B. (1993), “T h e ‘gr een a ccou n t ’ of
t h e Da n ish St eel Wor k s Lt d ”, S ocia l a n d E n v i-r on m en ta l A ccou n tin g, Vol. 13, p p. 2-6.
N a ess, A. (1990), E colog y, Com m u n ity a n d L ifestyle, Ca m b r id ge Un iver s it y P r ess, Ca m b r id ge. Sm it h , D. (E d .) (1993), B u sin ess a n d th e E n v ir on
-m en t, P a u l Ch a p -m a n , Lon d on .
St a cey, R.D. (1993), T h e Ch a os F r on tier: Crea tiv e S tra tegies for Con tr ol in B u sin ess, Bu t t er -wor t h -H ein em a n n , Oxfor d .
Wh ea t ly, M .J . (1994), L ea d ersh ip a n d th e N ew S cien ce, Ber r et -Koeh ler, Sa n F r a n cis co, CA. Woodw a r d , D.G. (1993), “A st a k eh old er a p p r oa ch
t o cor p or a t e socia l r e p or t in g a n a ly sis”, S h effield Un iv ersity M a n a gem en t S ch ool Dis-cu ssion Pa p ers, N o. 93, p. 39.
Table II
Benc hmarks for a sustainable development c orporate ac c ount
Life cycle Ecobalance Stakeholder Carrying capacity
assessment accounts analysis assessment
+ Verific ation by No waste 90% stakeholder 100% renewable
c ompetent body Third party support resourc es verific ation High transparenc y Diverse biotic
Demand management environment Produc t redesign Proc ess redesign Stakeholder dialogues Industrial ec ology
Analysis of stake- Habitat restoration holder needs High use of
renewables
Sustainable Material sourc ing Material effic ienc y Regular stakeholder Toleranc e of
development and disposal Environmental reports c ompetitor spec ies
performanc e EMAS c redentials Dematerialized indic ators growth
Customer use Reuse Environmental reports CO2/ O2stabilized analysis Rec yc le Press releases No ozone damage
Harvest rates monitored Linear proc esses No waste rec ords Minimum stakeholder No rec ognition of
c ommunic ations ec osystem limits
