Enhancing Governance Transformation - Part 5
In the last article, we made commentaries on two organisations case studies which were involving Rothy’s and Bank of America projects whose purposes were financing sustainable development businesses that were susceptible to the risk of liquidation due to financial constraints. The commentaries were based on how the King IV Report’s six capitals demonstrated their exchange of impacts among organisations in the context of sustainable development integrated thinking.
In this article, we will be examining three case studies of the three organizations which are: Etsy and AstraZeneca still in the context of sustainable development illustrating symbiotic relationships of corporate citizenship of organizations in any nation ( Sustainable development compatible organizations) with all stakeholders through integrated thinking. It should be a reminder that a corporate citizen organization as articulated in the King IV Report Principle 3 in its ordinary course of business should put in its plans’ expenses for its contribution to sustainable development projects which are either compulsory or/ and discretionary expenditure. Compulsory expenditure is any legal funds that are provided to meet the future legal financial obligations that the organization is required to pay after a certain period or in the event of closure for the purposes of rehabilitation of their former area of operation. For example, a mining company at the closure of its operations is required to rehabilitate its area of operation. In other words, it is required to leave a place in an acceptable state before its final departure from the area. There can be the former mining area physical rehabilitation or/ and former social rehabilitation of the former mine employees and their dependents. A good example is the SPEDU funds that were available for Selebi Phikwe’s economic development projects.
Based on that, during its operations, the mining company accrues certain sums of money on a regular basis and opens a financial reserve account for that purpose. Usually, during the time of closure, the company will clear some holes and harness water coming from the underground of the mine to an unharmful direction from residential and industrial areas. The same financial reserve will also meet economic rehabilitation in the area like establishing projects that will remedy the unemployment status which is the void rendered by the mine closure. Certainly, the discretionary financial assistance provided to the stakeholders in the vicinity of the mine is the usual corporate social responsibility initiative that is common to several organizations. It is a benevolent gesture of good corporate citizenship of the company that should also be managed with care. It would be terribly embarrassing to see a company masquerading to a freedom square to boldly donate to the needy while the same company’s employees have not received their salaries on the fifth day of the subsequent month without their prior month’s pays. Etsy is the first major online shopping destination in the United States of America ( USA).
The organization’s aim is to offset 100 percent of carbon emissions from shipping caused by their daily engagement with art and creations in trade by shipping their merchandise. Being socially responsible, the company found the need to clear its back after its beneficial trade. To facilitate the reduction of environmental destabilization by packaged shipment, Etsy partnered with an energy company called 3Degrees to fund verified emission reduction projects.
The purpose of the partnership was also to protect forests and sponsoring wind and solar farms and developing greener methods for auto part production. ( Available in: online. hbs. edu/ blog/ post/ sustainabilityinitiatives Accessed: 24 August 2021). Etsy funding was purposeful as demonstrated by the company by counteracting at least the amount of carbon emissions its company created or creates.
AstraZeneca is a pharmaceutical company whose core business is on health services. The company took the initiative to fund projects that improve Kenyan health. Through that initiative, the company was aiming at its aid to appreciate how the environment made sense for the organization. In other words, the company felt the real impact that it would make when participating in that initiative.
To advance that initiative further, the company partnered with Kenyan company Biogas International and the University of Cambridge’s Institute for Sustainability to install biogas stoves in rural communities in Kenya. The purpose of installing those types of stoves was to replace the firewood and charcoal fire stoves which were emitting harmful carbon dioxide polluting the environment and causing Kenyans who stood on fire cooking ( women and girls) to experience respiratory detrimental substances. The installation of stoves illustrated the truth of the vision of the company that the health of other people comes first. In addition, the company gathered data about the detrimental impact of carbon dioxide on the respiratory system for future pharmaceutical work referencing.
The two companies’ initiatives were based on discretionary expenditure and that is why it brought the owners with the spirit of gratification.
In the next article, we will discuss the last case study sustainability projects. We take this opportunity once again to thank our readers who continuously give us positive feedback.