Principles and Strategies of Sustainable Business Development

Question:

Discuss about the Roles Of Leadership That Are Relevant To Corporate Greening In Ensuring Corporate Sustainability.

A business can achieve sustainability through proper strategic management. However, green business or sustainable business has minimal effect on the environment, economy, society and the community. Such business tries to meet the triple bottom line strategy (Galea, 2017). However, sustainable business consists of human right policies and progressive environmental policies. It is crucial for every business to maintain the environmental sustainability to gain the competitive advantages. In order to make a business green, it is crucial for the every business industry to serve the products, which are environmentally friendly. This study deals with the development of the strategies in the context of BHP Billiton to make their business sustainable. BHP Billiton is an Australian mining industry and it is the fourth largest organization in the mining industry of Australia. However, adoption of the triple bottom line strategy will be discussed in this study. On the other hand, principles of the sustainability and the market issues regarding the sustainability will be analyzed in this section.

Maintenance of the sustainability is crucial for every business to achieve the competitive advantages in the global market. One of the major principles of the sustainability is a protection of the human right (Robertson, 2017). It is important for any business to respect and support the proclaimed human right and they should not abuse the human right. However, elimination of the discrimination in respect of occupation and employment and reduction of child labor is another major principle of the sustainability. On the other hand, business should take a precautionary approach to meet the environmental challenges (Ragazzi & Ghidini, 2017). In the context of BHP Billiton, it is mandatory to develop environmental responsibility and adopt environmentally friendly technologies.

BHP Billiton focuses on the protection of human rights, as it is one of the major strategies of the business to maintain the environmental sustainability. They focus on the improving living standards and developing the economy of the economy to make their business sustainable. Social investment, indigenous people, and engagement of the stakeholders are their major priorities (Bhp.com, 2017). Several issues are associated with the corporate business environment regarding the sustainability. One of the major issues that may come in future is the resource scarcity. Due to the growth of the population and high consumption of the natural resources resource scarcity can be taken place. This will affect the business of BHP Billiton. This resource scarcity will result into the higher price, changing supply landscape and market volatility. Growing inequality is another sustainability issue in the near future in a business. In the global business the tension between free movement, employment rate, the living standard of the people and free trade influence such inequality in the business, which is a major concern for the future (Ragazzi & Ghidini, 2017).

Future Sustainability Challenges

One of the major future challenges for BHP Billiton is increased risk and hazards in their business. Health risk is a common factor for the mining industry hence; the climate change may bring the risk for the health of workers. This risk is categorized as operational risk. Apart from this, strategic risk and financial risk are other risks associated with the sustainability. However, often-societal challenges may bring the strategic risk to the business (Bhp.com, 2017). As for example, resource depletion causes risk for maintaining the sustainability of a business. On the other hand, an organization may face the high cost of operation due to huge consumption of the natural resources. In the context of BHP Billiton, they will face operational risk during the mining, on the other hand, financial risk is another sustainability issue that may occur in future. Apart from this, BHP Billiton is a petroleum and metal mining company thus; scarcity of the resources will be a major future risk for them that will affect the sustainability of the business.

Environmental Protection Act is the major regulatory framework that is associated with sustainability. However, maintenance of the environmental sustainability is a major issue in the recent years. However, BHP Billiton is situated in Melbourne where it is crucial for this organization to protect the environment while conducting their mining operation. Environment protection is the common sustainability issue in both local and national level. According to the Environmental protection and Biodiversity Conservation Act, 1999 the natural resources of the environment should be protected during any business operation (Kourula, Pisani & Kolk, 2017). Therefore, environmental sustainability issue is a major concern both the local and global level.

BHP Billiton focuses on the Health, safety, Environment, and Community (HSEC) standards to keep sustainability in the business. As health, safety, community, and environment are the major regulatory issues of sustainable business. This HSEC standard is aligned with the international policies. BHP Billiton follows the ICMM sustainable development framework that also focuses on the requirements of HSEC (Bhp.com, 2017). Hence, it has been found that HSEC is an organizational policy, which also fulfills the requirements of the national policy. On the other hand, BHP Billiton also tries to maintain the human right to reduce the sustainability issues like inequality. Protection of the human right is a crucial part of the business sustainability if it is not maintained properly then business can be affected. On the other hand, United Nations Declaration of Human Right is a national policy that focuses on the human rights and security. Hence, the organizational policy regarding the protection of the human right is relevant to the national policy however, it does not cover another requirement of the national policy that the security.  Hence, it can be said that the sustainability issues regarding the environmental protection and human right influence the regulatory frameworks in both local and national level.

Regulatory Frameworks and Reporting

Triple bottom line or TBL is a tool that enables an organization to meet the sustainability goals (Kandachar & Halme, 2017). In the context of BHP Billiton protection of the environment and the human right are their main areas of sustainable business. Hence, by following this accounting framework (TBL) this organization will be able to focus on the environmental, financial and the social dimensions to achieve sustainability. By maintain the human right and producing an environmentally friendly product they can achieve sustainable business in near future.

BHP Billiton contains simple and diverse portfolio with low-cost operation process across the world. They have a multifunctional team in order to connect with the entire organization and share the business practice, however, maintenance of the human right, compliance with the HSEC are the major areas of their business. They have adopted technology to get a significant return on their assets (Bhp.com, 2017). However, in the recent year, this organization has been facing strategic issues due to the emission of green house gas and climate change as this is an energy-oriented product manufacturer. However, in their manufacturing process huge amount of fossil fuel is required that increase the green house gas. In order to deal with this issue, BHP Billiton has decided to adopt regulatory change. This makes the service users more concern, as a result, this will bring a big threat to the position of this organization and conduction of the business. For this organization, communication with the stakeholders will be helpful to understand the requirements regarding the sustainability. However, such communication will help to get stakeholders feedback regarding their strategic issues, which will allow them to identify the strategic imperatives for the sustainable business (Charter, 2017). Therefore, use of renewable resources during the manufacturing they will be able to make their business unique and environmentally friendly, which has less impact on the society and environment. This will help them to gain competitive advantages in the global market.

Mandatory reporting is associated with the changing corporate culture, equality, cost saving and standardization (Schaltegger & Wagner, 2017). In the context of BHP Billiton mandatory reporting legislation needs professional’s report regarding the sustainability issues in the business. On the other hand, voluntary reporting enables an organization to increase their flexibility. In the context of BHP Billiton, the voluntary report will help them to increase proximity and flexibility in the business. This will allow the organization to comply with the sustainable requirements. One of the major risks of the external reporting is the inappropriate data representation as the external audit agency has a poor idea of the internal operation process (Abraham & Dao, 2017). Hence, in the context of BHP Billiton, the external reporting may execute inappropriate data regarding their business operation, which may affect their brand image and growth of the organization.

Conclusion

The entire study gives a brief idea regarding the sustainability issues in the context of BHP Billiton. However, it has been found that this mining industry also refines the oil, which consumes high energy. In order to maintain the environment sustainability and to deal with the climate change communication with the stakeholders is crucial for this country. Use of renewable resources will be effective for this organization to gain competitive advantages by creating the environmentally friendly business.

References    

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