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Tuesday, December 7, 2021

Companies operating at sea must adhere to the principles of conservation and sustainable development, not wait to be forced.

Compared to all other institutions in the world, corporate enterprises have the most significant impact on the environment. According to the Carbon Majors Report published by the Carbon Disclosure Project in 2017, 100 companies account for 71% of global emissions.

Given the contribution of corporations to climate change – and other environmental issues – leaders need to understand both the implications and solutions to global environmental challenges. As a researcher of corporate strategy and innovation, I was curious about the level of understanding of sustainability and innovative problem solving among executives in companies operating offshore, including oil and gas, shipping and logistics, mining, cruise lines, and agriculture.

The United Nations Sustainable Development Goals are a model of sustainable organizational practice. Corporations need to be aware of these areas and make productive efforts to achieve sustainable development. For companies operating at sea, the conservation of the marine environment and the sustainable use of the oceans, seas and marine resources must be a top priority.

Increased maritime traffic is expected to exacerbate friction, such as collisions or the introduction of invasive species, between ships and ocean inhabitants. Global forecasts for transport and logistics suggest that by 2050, maritime traffic could increase by 1,209 percent. Saving life in the ocean requires targeted measurement and management in the form of robust environmental, social and corporate governance (ESG) reporting by companies operating at sea. …

However, ESG reporting is still in its infancy and indicators of marine impact are qualitative rather than quantitative. My recent research shows that the practice of environmental, social and corporate governance reporting by companies operating at sea is not a top priority and jeopardizes the health of the marine environment.

CSR and ESG growth

Most CEOs today adhere to stakeholder theory, which holds that the purpose of a firm is to create value beyond its shareholders.

Since the 1960s, stakeholder theory has been the dominant viewpoint among enterprises. Corporate social responsibility (CSR) is the commitment of a firm to fulfill its social and environmental obligations in order to achieve its economic goals. CSR not only benefits society, but also enhances the competitiveness and business efficiency of the participating enterprises.

According to a 2006 study by leading strategy researchers Michael Porter and Mark Kramer, corporate social responsibility “has become an inevitable priority for business leaders in every country.”

Read more: Sustainability ratings do not always define sustainable companies

Over the past 20 years, businesses have also focused on assessing their environmental and social responsibility efforts. Contrary to the ideals and goals that CSR defines qualitatively, environmental, social and corporate governance (ESG) reporting quantifies the impact and progress of companies in CSR.

My research examines the current practice of ESG reporting among companies operating at sea. Based on 14 interviews with large multinational companies operating at sea and studying their ESG reports, I found:

  1. Inconsistency of reporting measures.

  2. Superficial organizational knowledge and reporting.

  3. Industry change will only occur as a result of consumer protection or regulation.

Lack of consistency

Saving life under water is one of the UN Sustainable Development Goals. But many of the reports reviewed in my study did not include indicators of the resilience of marine life and ocean.

Whales swim near an offshore oil rig.

Among the reports that included information on marine life, approaches to measuring impact and progress were not standardized, resulting in unsatisfactory and ineffective quantitative assessments of the environment. The leaders of these companies spoke about the importance of action and the disclosure of progress in this area, but they lacked specific knowledge to measure and manage their impact.

Read More: Pacific Killer Whales Dying – New Research Shows Why

It is clear from reports and interviews that ESG reporting standards need to be established and clearly indicate how companies can fulfill their social responsibility in this area.

Surface metrics

My research also confirmed previous work that ESG marine life reports are qualitative and superficial.

Round fish pens are lined up off the coast of the island.
Fish farm in Greece.

Many leaders reported that they face multiple societal challenges and do not prioritize reporting on marine life, such as the impact of their activities on marine animals, their efforts to conserve biodiversity and ocean pollution. Instead, they stated that their ESG reports were designed to provide an overall summary of their commitments and progress towards ocean sustainability.

However, executives acknowledged that their maritime operations were considered less important to the general public than other issues because they were less visible. Accordingly, the sections of the ESG reports on ocean life were not as detailed as others, such as clean energy.

Doesn’t want to change

The latest and most disturbing finding was the reactionary approach of leaders to change. They described how they would take the necessary steps to change, but only when necessary to survive.

As one CEO put it, “There are so many challenges and we cannot always be proactive. If we were required to make changes to our operations and reporting, we would always do so. But the push has to come from the public or the regulators. ”

This is a problem given the importance of the ocean ecosystem to the health of the entire planet. Tiny ocean plants called phytoplankton, for example, produce 50 percent of the oxygen in the air we breathe. However, there is some hope.

As Peter Drucker, an Austrian-American management consultant, educator and writer, has aptly said, “What is measured becomes manageable.” Without meaningful, concrete and quantitative indicators to measure progress and innovation that support change, success in achieving environmental goals is unlikely.

The results of my research are somewhat encouraging, as they show that leaders are willing to invest more resources in sustainability efforts. However, it is clear that for such an effort there must be a clear path and support from all stakeholders. It is worrying that efforts to ensure the sustainability of our most precious resource are vague and not considered a top priority.

This article is republished from – The Conversation – Read the – original article.

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