Sample Essay on Gorilla Health Bars’ Business Sustainability Report

Executive Summary

This report presents an analysis of GHB business in relation to its sustainability condition. The report found out that the company was experiencing sustainability issues including high-energy bills, poor building materials for their premises, poor supply chain arrangements, and high water consumption levels. The implication of this report is that for improved profitability, the company should review and amend their sustainability approach. Therefore, various recommendations have been presented to help in countering the sustainability challenges for a better and more profitable business. To reduce energy bills, it is recommended that the company installs new cooling and heating appliances while also improving their energy use efficiency. Similarly, GHB should minimize water consumption through strategies like reusing and recycling water as well as installing water meters. The company should also renovate and change the building materials into more efficient materials such as the corrugated PVC roofing. Lastly, the company should alternate suppliers of raw materials to reduce supply costs.

Contents

Introduction. 3

Background. 3

Background/Literature Survey. 4

Defining the Problem.. 4

Overall Report Purpose. 4

Overview of Report Structure. 5

Findings and Discussions. 5

Corporate Social Responsibility. 5

Increasing Business Sustainability. 6

Reducing High Water Consumption. 6

Reducing High Energy Bills. 6

Sustainable Building Material 7

Conclusion. 7

Recommendations. 8

Change the building material 8

Reducing energy bills. 8

Reducing water consumption. 9

Alternate raw material suppliers. 9

References. 10

Introduction

Background Information

Gorilla Health Bars (GHB) is a business that mainly targets health-conscious customers in Victoria. The company’s CEO Janet Jones, therefore, ensures that the company delivers this commitment by producing health-oriented snacks using nuts, cereals and fruits. The CEO sources her supplies from various areas of Australia including Darwin for dried tropical fruit and South Australia for grains.

Additionally, the CEO runs the business within an old factory warehouse where her office is also located. Currently, the CEO has intentions to enhance the company’s focus on sustainability in order to raise the corporate reputation for better financial performance. Moreover, environmental sustainability is very crucial in today’s business, especially considering the rising environmental-consciousness among modern customers. Environmental sustainability involves making the right and responsible decisions, which will work towards minimizing the negative effects of a business on the environment. A sustainable organization has minimal consumption of resources, fully employs materials sourced from renewable resources or post-consumer recycled materials and the energy resources are similarly non-polluting and completely renewable(Wright 2002).

This report will aim to establish how GHB can become more sustainable in their business. Furthermore, the company’s CEO needs to develop their CSR strategy in a manner that will help conserve energy, minimize resource utilization levels such as water, and reduce operational costs. However, the CEO should be strategic considering that the company has financial limitations. Inclusive in this report will be the evaluation of the problem GHB is experiencing, assessing the company’s CSR strategy plus the various recommendations to enhance their sustainability level.

Background/Literature Survey

Defining the Problem

GHB operates their business within an old two-storey factory warehouse, which is made using corrugated iron. For this reason, the company has been facing problems during the summer season since the factory environment becomes very hot while very cold during winter seasons. As a result, the company has been incurring huge electricity bills to facilitate the heating and cooling of the premises in such seasons. Similarly, GHB’s business consumes huge amounts of water to facilitate the production of their health-based products. The rising water rates for the last two years have made this process of producing health bars very expensive for the company. Hence, the CEO is now focused towards minimizing the water consumption levels.  GHB also has a highly costly supply chain, since the CEO sources supplies for their raw materials from far regions including Darwin and South Australia for tropical fruit and grains respectively. Consequently, this has made the transportation costs in their business very high thereby shaking their financial stability.

Overall Report Purpose

According to Rangam et al (2012, p. 1), every CSR strategy should be centered on creating a ‘shared value’. As such, CSR should create value for a company’s shareholders as well as society thereby manifesting in a win-win proposition. GHB does not seem to have a defined CSR strategy and that is why the CEO is considering enhancing the company’s sustainability focus. The company’s CSR approach is vague thereby failing to address the main CSR issues facing the business. In order to improve and change this situation, the company should construct CSR programs reflecting the company’s values while at the same time addressing their humanitarian, social, and environmental challenges such huge energy costs, large water consumption and an expensive supply chain (Cramer & Porter 2011; Craig 2003).

Overview of Report Structure

Many corporate initiatives on CSR incorporate the wide scope of funding activities in communities, grants for NGOs, in addition to environmental sustainability programs that aim to minimize resource and energy use plus ample efforts in rebuilding an entire value chain of a business. In line with such CSR aspects, the GHB’s CSR approach fails in such respects. The company’s CSR strategy is ineffective in that it fails to address the issue of resource and energy utilization. This is because the company incurs huge electricity bills (energy) to cool or heat the factory premises while also using huge amounts of water (resource) to manufacture their products. Similarly, the company’s value chain is wanting, considering that the transportation costs have been extreme due to poor supply chain arrangements in sourcing raw materials like grains and dried tropical fruits from Darwin and South Australia respectively.

GHB should adjust their CSR approach to counter such limitations, including seeking ways of reducing their energy and water consumption while also reviewing their supply chain activities in a manner that will reduce the costs. Consequently, reduced costs will imply increased profits that can fund the rebuilding and renovation of their factory.

Findings and Discussions

Corporate Social Responsibility

CSR relates to the ethical organizational behavior towards society. In this case, a company’s management behaves responsibly in their relationships with the other stakeholders that hold a legitimate interest within a business. Further, CSR includes the continuous commitment of a business towards behaving ethically while also contributing to the economic development while enhancing the employees and their families’ quality of life as well as addressing the welfare of the society and local communities.

Increasing Business Sustainability

Kopnina and Blewitt (2014, p. 199) stated that sustainability cannot be met merely through tinkering the present economic system’s margins. Boosting sustainability demands for major changes within the corporate and political leaders’ perceptions, while also addressing social and environmental issues.

Indeed, the changing business environment globally requires an understanding of the inconsistencies of sustainability plus the necessary choices between conservation and growth. Therefore, the role played by political and corporate decision makers is crucial in providing rulings and solutions regarding sustainability challenges.

Strategic

Reducing High Water Consumption

The GHB case has demonstrated that the company’s production process consumes huge amounts of water to make health bars. The large consumption of this resource has been challenging the company financially considering the rising water rates over the years and there is need to manage the consumption levels for better sustainability.

However, businesses can minimize their water consumption by around 60% through utilizing it more efficiently. Similarly, the consumption levels can be reduced through reusing and recycling water while also capturing rainwater. For efficiency, improvements on water consumption include installing water meters at business is essential. The state should similarly stress on long-term policies that will motivate people to adjust their businesses to change their way of operation (Saving Water 2014).

Reducing High Energy Bills

Understanding the cooling and heating process is essential in minimizing high-energy bills in businesses like GHB. Businesses that aspire to reduce their energy bills should start by assessing the systems they have installed for cooling and heating because this determines the level of energy consumed (Zadek 2004). Since some premises need cooling and heating at some seasons, winter and summer respectively highly efficient and well designed premises will minimize the need for extra cooling and heating appliances.

By targeting how best to cool or warm premises, businesses can make their premises cheaper to operate while remaining comfortable across the year. Besides the choice of the cooling and heating system solutions, a business should similarly consider how they operate and maintain their system to reduce energy bills (Your energy savings 2011).

Sustainable Building Material

John et al (2005, p.319) observed that most of the conventional, modern architecture lacks sustainability in the long term. However, sustainability can be attained in this respect through using building materials and energy more efficiently. In this case, designers should develop delightful buildings, which are also functional productive as well as regenerative by design. The designers can do this through understanding natural processes plus how they interrelate with human needs interactions.

Biomimetics science should be applied in providing ideas pertinent to graded materials functionality, adaptive response integrated intelligence and architecture plus other functionality. The design solutions should exploit such principles.

Conclusion

The above analysis has demonstrated that businesses can promote their sustainability through establishing effective CSR strategies. GHB has been wanting in this respect because they lack clear CSR programs or CSR strategy. This failure has led to the company incurring huge operational and production costs due to using ineffective building materials, having high-energy bills, huge water consumption, and having a costly supply chain. For improved profitability, the company should review and amend their sustainability approach.

Recommendations

Change the building material

One major issue facing GHB involves the materials that have been used in building the factory. The use of corrugated iron has made the business premises to be extremely hot during summer and extremely cold during winter. For this reason, the company has been forced to install cooling and heating systems, thereby extremely raising their energy bills.

Considering that the building has not been renovated for a long time, the company’s CEO should consider renovation and change the corrugated iron to more sustainable materials. The selected materials should be graded based on efficiency, functionality and adaptive response. For instance, GHB can replace the corrugated iron with corrugated PVC roofing, which is effective for commercial and industrial buildings. This alternative material is advantageous in that it is less costly, heat absorbent and durable.

Reducing energy bills

GHB should similarly consider ways of minimizing their energy bills. Such initiatives will help reduce their operational costs thereby boosting their profitability levels. The company’s energy costs are high because of the cooling and heating process during winter and summer seasons respectively. However, the business can reduce such costs by first assessing their present systems for heating and cooling to determine the amount of energy consumed and efficiency of their systems. The company can install new and more efficient systems if the existing ones are not efficient. Similarly, since the heating and cooling processes are seasonal, the company should consider renovating and redesigning their factory premises to make it energy efficient, thereby minimizing the need for such appliances. The business should also consider other options targeting how best to cool or warm their premises to make cheaper to operate while also remaining comfortable across the year. Effective operation and maintenance of the systems is also a recommendable option for reducing energy bills.

Reducing water consumption

The GHB case has indicated that the company’s products consume huge amounts of water to be manufactured. Such factors have been making the company’s costs of operation/production to immensely shoot up. Nonetheless, the company can minimize their water consumption levels through considering more efficient ways of water consumption. Similarly, the business should consider water reusing and recycling strategies. In addition, the business can save water by installing water meters at their business premises.

Alternate raw material suppliers

GHB has poor supply chain arrangements that make the company’s sourcing process very expensive. However, the business can curb this challenge by considering other suppliers that can deliver the same raw materials but are located nearer the business to cut down on transportation costs. Similarly, alternative suppliers should be considered if they on the basis of offering more favorable raw material costs that will help counter other related costs. Indeed, the company should seek and maintain high flexibility in supply by proactively identifying potential material and supply alternatives. When choosing alternative suppliers, the company should consider those that demonstrate sustainable business practices including respecting the environment.

 References

Craig, S 2003, “Corporate social responsibility: whether or how?”, California Management Review, vol.45, no.1,pp.53-56.

Cramer, M & Porter, M 2011, “Creating share value”, Harvard Business Review, vol.89, no.1, pp.66-89.

John, G, Clements-Croome, D, & Jeronimidis, G 2005, “Sustainable building solutions: a review of lessons from the natural world”, Building and Environment vol.40, no.3, pp.319-328.

Kopnina, H & Blewitt, J 2014, Sustainable business key issues, NY: Routlege Publishers. (p193)

Moir, L 2001, “What do we mean by corporate social responsibility?”, Corporate Governance: The International Journal of Business in Society, vol.1, no.2, pp.16-22.

Rangam, K, Chase, L, & Karim, S 2012, “Why every company needs a CSR strategy and how to build it”, Harvard Business School Journal, vol.12, no.8, pp.1-30.

Saving Water in California.2014. The New York Times. Viewed on May 18, 2015 from http://www.nytimes.com/2014/07/10/opinion/saving-water-in-california.html

Wright, T 2002, “Definitions and frameworks for environmental sustainability in higher education”, International Journal of Sustainability in Higher Education, vol. 3, no.3, pp.203-220.

Your energy savings, 2011, viewed on May 18, 2015 from http://www.energyrating.gov.au/for-consumers/your-energy-savings/

Zadek, S 2004,” The path to corporate responsibility”, Harvard Business Review, vol1, no.1, pp.1-12.