This mix the ecological sustainability and socially accounting Corporate

This work focuses on the analysis Henkel’s Sustainability Report 2016. First of all, is necessary to highlight the phrase “Our long-term goal reflects the global challenges of sustainable development: We will have to significantly improve our efficiency in order to reconcile people’s desire to live well with the resource limits of the planet, and to allow us to build on our economic success” (Henkel, 2016, p.12). This quote from Henkel serves as their premise of the whole report because it reflects the main objectives of the report. The paper divides into three main parts categorised as the analysis of the report, the implications for practices of the report, and conclusions. The first one, the analysis of the report, exposes the strengths and weaknesses by using the various theories and relevant readings as well as addressing specific examples or ideas of the report. The second, the implications for practices of the report, discusses the various repercussions of the report in the societal, organisational, and individual levels. Finally, giving a general conclusion that gives a broad view of the report.Strengths and Weaknesses of the ReportAfter reading and looking critically at the report is possible to say the majority of Henkel’s actions seem to mix the ecological sustainability and socially accounting Corporate Social Responsibility (CSR) intervention approaches (Khun & Deetz 2008) in order to maintain Henkel’s reputation or as they declare in the report “improper conduct undermines fair competition and damages our trustworthiness and reputation” (2016, p. 25). Additionally, with the previous, also attempting to stop and break ground (with implementation practices) in the commonly mention contradiction between social and business concerns (Khun & Deetz, 2008) confirmed in the strategy section of the report by saying they welcome “at regular intervals, sustainability analysts and specialist institutions that evaluate how companies balance the relationship between economic, environmental and social aspects” and consistent participation in discussions such as the forum ‘The Future of CSR – Trends in the European Union and Latin America’.Even if not expressed explicitly, the report highlights some notions of what Schlosberg says the original ecological modernisation discourse which”… emphasises more efficient production, less waste, lower costs from anticipating and preventing pollution rather than cleaning up later, profits to be made in selling green goods and technologies – and all with the cooperation and little or no economic or political upheaval” (2008, p.256). Thus, seen in the introduction of the Henkel Production System (HPS) that improves efficiency along the value chain, through the Henkel’s innovation process assures every product should make a contribution to sustainability and simply as said in the report “As early as the product development phase we can assess what environmental impacts occur, to what extent, and in which phase of a product’s life”(2016, p.56).They are aware 68% of the emissions are done when consuming and 3% of emissions come from disposal of the Henkel’s business unit products (Henkel, 2016, p.128) therefore realising that most of the effects, ecologically speaking, happen out of the company’s control and within the consumers actions. Consequently, counteracting this as they mention “we will make more use of communication with our customers and consumers to demonstrate how our brands and technologies contribute to sustainability, where consumers can play a part, and how we can help them use resources more efficiently and reduce costs” by taking actions such as having transparency  on the products ingredients and elements (even opening a telephonic service for questions); aiming to influence in both, the practices as entities and practices as performances, or the deep of the ‘iceberg of consumption’ (Jaeger-Erben & Offenberger, 2014) through social programmes and initiatives that spread awareness and show the right consumption practices; and aiming to create a cradle-to-cradle by moving to either biodegradable or reusable materials (whenever not possible explaining that decision) and assuring the recyclable materials are accepted on the different countries in order to achieve closing loop concept (Stahel, 2016) and therefore reducing landfill waste by having a life cycle thinking approach (Gregson et al, 2015).The report generally suggests Henkel has moved from doing business as usual to something similar to what Dyllick & Muff (2016) call ‘true business sustainability’. They want to demonstrate their commitment as sustainability leaders to the extent of modifying their organisational structure as seen in Figure 1 to give priority to sustainability in the decision-making process. Likewise, reinforcing their commitment with a compliance centered in communication combined with training and having zero tolerance for violations throughout the company .Figure 1. Henkel’s organisation structure.Furthermore, as Funtowicz explain “the scientific mind-set fosters expectations of regularity, simplicity and certainty in the phenomena and in our interventions” (2001, p.1) however the environment phenomena and the solutions for the current environmental issues are complex hence multiple perspectives to answer a single problem. Henkel’s open dialog culture implies they are aware of this complexity and that their actions may not be perfect and therefore open to suggestions.The evidence in the report consists primarily of the data from their business operations in the indicators section, and examples of the diverse programs or initiatives aligned to the common sustainability concerns (i.e. emission reduction and SDGs). Consequently, they expose several awards in the ranking section of the report and therefore cover the third approach of the CSR interventions (Khun & Deetz, 2008) ‘CSR awards’. In addition, Henkel is constantly  participating in sustainability forums and having an open dialog with experts, finance- and sustainability- oriented agencies, and the GRI. In other words, the entire report is based on frameworks that are leading the sustainable development discourse while at same time has been improved through time by a frequent challenge to their current operation methods and have been awarded for that reason. Thus, enables Henkel to address multiple issues of the sustainability and sustainable development discourse in the report and to show how they are attempting to correct certain issues in their practices as a business or explain, without the need of hiding information, the reason they have not change specific processes or components (e.g. surfactants).Overall, the report has every section and information coherently structured and properly argued, discussed, defended or explained  with considerable transparency and therefore, demonstrating Henkel’s commitment as sustainability leader. Thus, might be explained to the reports’ aligned framework with Global Reporting Initiative (as the guideline of how they report the business information), and the United Nations Sustainable Development Goals (SDGs) shaping their priorities to reflect the 17 goals in addition to the fact that they have been doing the sustainability reports for 26 years.The main concern raised from the report is if the term ‘sustainability’, that is used shamelessly throughout the report, is delimited properly because it is a decisive guideline in the implementation of solutions. Thus, supported by the their strategy called “Factor 3” that aims to increase 3 times their value; being completely focused on decreasing CO2 emissions and therefore their carbon footprint within the Paris Agreement; and even showing signs of what Farley & Smith (2014) call ‘weak sustainability’ when saying “we aim to ensure that the palm materials we use do not contribute to deforestation of primary or secondary forests with significant ecological value” to defend the use of Palm Oil, however, they cannot know judge what ecosystem are valuable now or if they will be necessary in the future. For instance, this concern grows as Henkel seems to support the idea of sustainable development with possible endless growth (i.e. their strategy towards sustainable development) without compromising the environment ecosystems in the long-term.Retaking the previously argument of Henkel being something similar to ‘true business sustainability’ but now taking into account what Dyllick & Muff (2016) named ‘the big disconnect’ or in the case of Farley & Smith (2014) ‘the implementation gap’ is possible to say most activities from the report demonstrate Henkel has made progress in applying the focus of the sustainable development macro-level discourse to their micro-level as a sustainable business. However, Business Sustainability (BTS) fails to recognise the interlinkages of the systems. To elaborate on the latter idea Henkel looks at the systems (economic,social and environmental) in the same way as the pillar theory criticised by Farley & Smith (2014) when either using the concentric or nested concept from Adams (2006) or Stead’s ‘Coevolutionary Economy’ (2009) are more appropriate since the social and economic systems are dependent on the existence of the environment.Along the report, the idea of becoming ‘climate positive’ is repeatedly addressed but the definition is never delimited, besides the emission reduction, which raise the question does this concept is based merely on substitution with technology to decrease the CO2? is evident they acknowledge the environment’s limits and the idea of protecting the environment while keeping consumption, both ideas, in the Brundtland Report perspective consequently reinforcing the idea of the misunderstanding of the systems. On one hand, the previous more specifically shown with the CSR ecological sustainability approach (Khun & Deetz, 2008) as it aims to mitigate the environmental impacts illustrated in the report with saying they know most of their products need to be used with energy and their aim is the reduction of the emissions, and in addition to the approach, not completely going ‘green’ as Ecological Modernisation suggest (Schlosberg, 2008) because as other angle of the sustainable development argues maintaining consumption results in less long-term stock. On the other hand this could be explained or clarified if the Henkel idea of closing loops in a circular economy is similar to Stahl’s, who says “circular economy preserves physical stock”.Generally, the report could benefit from changing their focus on energy reduction and eco-efficiency typical of the BTS discourse (Dyllick & Muff, 2016) to a decrease of total environmental damage that consider a broader delimitation with concepts such as pollution, and resilience alterations (Farley & Smith, 2014) even if it is harder to collect data and would require more complex systems to measure.Implication for Practices of the ReportNormally the implications of a policy would involve either the author’s assumptions or the necessary steps to take what the document proposes from theory to practice, however, Henkel sustainability report differs from those policies due to the fact that most of what the report displays are the results of Henkel’s operations methods and practices. Therefore this part of the paper is centered in the repercussions at the societal, organisational and individual levels. Considering the report is based on results after implementation is necessary to delimit each of the levels before discussing them: the organisational level, considers Henkel as the whole and considers from the employees to the stakeholders; the societal level which refers to all the society impacts; and the individual level, limiting to the people the programmes reach and particularly consumers of the different business units of Henkel.First, the organisational level which looks at Henkel as a business and hence the one with more impacts of the three. Looking at the impacts in the organisation at a macro level with the change in the organisational structure changed to an almost complete priority to sustainability in the decision-making process (seen in Figure 1 in the Strengths and Weaknesses part); working with groups and industrial associations such as the World Business Council for Sustainable Development (WBCSD), the International Association for Soaps, Detergents and Maintenance Products (A.I.S.E.), and the Consumer Goods Forum (CGF); having regular audits, that include their partners and suppliers, to maintain standards and sustainability priorities whereas also having zero tolerance at any fault; developing a complex  sourcing selection process; and considering sustainability in the products development process and early fabric construction stages. Thus level, also impacting to all the people in the organization from employees to stakeholders with constant all personnel assessment and feedback combined with economic compensations and various benefits as rewards,  training for employees as sustainability ambassadors and volunteers, and open dialog with employees and representatives to achieve constructive dialog in the Henkel processes. Secondly, the societal level that considers all the initiatives and programmes that create shared value as the report mentions and dividing these impacts in what Henkel calls ‘our four pillars’: corporate volunteering, social partnership, brand engagement and emergency aid. Corporate volunteering with employees participating in the special olympics 2016 and helping in orphanages in Uganda; social partnerships like the house-building project conducted jointly with the charity organisation Habitat for Humanity in Romania or the program for integrating refugees at the Du?sseldorf vocational training center; brand engagement projects for instance two schools construction and educational project in Brazil along with Plan International, the ‘Million Chances’ initiative with the Schwarzkopf brand that helps girls have a better future and the ‘NaturKinder’ initiative with Rossmann (drugstore chain business) that aims children develop environmental awareness; and emergency aid with the Fritz Henkel Stiftung foundation by providing quick and pragmatic aid worldwide and different cash and in specie donations.Finally, the individual level with the impacted people from the social programmes and the consumers of the Henkel’s business units products. First, mentioning the goal for 2020 in the ambassadors initiative is to reach individuals or consumers such as 200,000 schoolchildren. Then, the “your move towards sustainability” initiative that creates awareness and persuades to change consumption behavior of individuals in their consumption practices and Henkel’s target of reaching 300 million consumers through targeted information on recycling. Ending with their strategy to reach more individuals with their sustainable products by modifying prices and product sizes to meet national and local needs in all the countries they operate in.ConclusionIn conclusion, the report suggest Henkel has a deep understanding of several issues and concepts of the sustainability and sustainable development discourse and therefore displays considerable transparency and coherency when arguing, discussing, defending or explaining each of the points in the different sections. However, they could benefit from targeting a decrease of total environmental damage (that consider ideas such as pollution and resilience alterations) instead of  limiting symply to energy reduction (i.e. decreasing their carbon footprint) and eco-efficiency even if it present a new difficulty level. In addition to this, the report is different to other documents in the sense that Henkel exposes results from programmes implemented in their organisation which reflects in the implications for the societal, organisational and individual levels.