Integrating Sustainability Issues Into Project Management

Importance of Sustainability in Project Management

The sustainability is a practical loom in the commercial world, to ensure feasibility and truthfulness in long-term by utilising the funds and plummeting ecological force without compromising with product excellence, competitiveness, and profit margins (Epstein, 2018). Sustainability maintains or manages a balanced approach to the environment, human health, and better business management (Eizenberg & Jabareen, 2017). The concerns towards environment have become increased for all the corporates with the rapid development of the business economy. The corporates are majorly responsible for the environmental problems at a greater level (Waas et al, 2014).

(Source: Macro Properties, 2018)

The business literature has forecasted that sustainability plays a prominent role in the 21^st century. The business has to understand the social anticipation which comprises the incorporated arrangement such as financial, communal, and ecological factors (Wood et al, 2014). It is the moral responsibility of the companies in the corporate world to use natural resources and also explore new resources with sustainable alternatives (Clayton & Radcliffe, 2015). Some of the business still has not taken the ethics and social responsibility into consideration. It has created a great impact on the environment by destroying the environment and their long-term benefits. The vendor must use renewable resources rather than exhaust the funds which help to diminish pollution and harmful waste (Epstein, 2018). Most of the organization is not utilizing the administration of the environment with carefulness even though the firms do not appreciate and support the factors of the environment into the strategic plan (Benn et al, 2014).

Most of the companies are facing issues in adopting sustainability in their organization. In the following report, there will be a detailed analysis of sustainable issues faced by the company Daimler, and the reason to adopt the sustainability in their organization. The CEO of the organization need to know about the importance of the sustainability and the issues they have faced by not adopting the sustainability in their organization.

The company Daimler is one of the topmost automotive companies. It distributes into Daimler Trucks, the Mercedes-Benz Cars, Daimler Financial Services, Mercedes-Benz Vans, and Daimler Buses. It is the thirteen biggest car manufacturers in the world which was founded in 1883 (Bruner, 2017).

(Source: Steelguru, 2018)

The Daimler Group is of the largest manufacturer of first-class cars and also the world largest producers of commercial vehicles at the worldwide level. It is an automotive group with an assurance to fineness and the company has a goal to accomplish sustainable development and industry-leading prosperity which increases the value of the company (Spekman et al, 2017).  The company has an aim to be world’s leading automotive companies which is intended to inspire the customers with their brands, products, services as well as strives to occupy the leading for sustainable drive systems (Andersen & Zaelke, 2017). 

Sustainable issues faced by Daimler

In the recent scenario, human face a variety of serious sustainable development issues and ecological issues which become one of the important topics among the individuals at the global level. Sustainable expansion is a new sculpts of the expansion which has turn out to be a inclination of societal expansion in most of the countries (Owusu & Asumadu-Sarkodie, 2016). The changes in the environment are mainly caused by individual developments and innovations. The nature of the surroundings has transformed with the reason to overdo of natural resources (Lieb & Lieb, 2010).  Therefore, the environment of the earth has been greatly damaged as well as made changes in the normal surroundings since individuals rely on natural resources for the continued existence, and it may cause numerous resources to drain (Anuar & Abdullah, 2016). The major concern which has been occurred is global warming. The conservatory result increases the warmth of the earth, which is the main reason for global warming (Andersson & Ohman, 2017).

(Source: Ajino Moto, 2018)

All these ecological concerns direct to the devastation of the surroundings. The industry of the automobile industry is one of the growing businesses in the recent timeline. However, various researchers and analysts have concluded that the government of various countries has also take participation in promoting their business in order to attract most of the customers and in turn enhance the economy of the nation (Eagle et al, 2015). The main issue that has been faced by automobile industries are based on the environmental and safety related factors. It depends on finite planetary resources. The engines of the cars emit heat, noise, and gasses which are inflecting the critical impact on the environment causes the changes in climate as well as global dimming. The combustion of the fuel release CO2 (Carbon-dioxide) and also generate the greenhouse gasses in the atmosphere (Schaltegger & Wagner, 2017). It has contributed its part in causing the global warming and the acidification of the ocean. Some of the automobile industries have been found to release other poisonous gasses in the whole environment which involve nitrogen dioxide, nitric oxide, and carbon monoxide. The toxic organic compounds such as tetraethyl-lead, hydroxyl radicals, and hydrocarbons are also emitted in the environment (Van Poeck et al, 2016). These factors majorly contributed to cause the anthropogenic climate changes in the atmosphere which has been analyzed by The Environmental Change Institute of Oxford. In most of the places, the cirrus cloud has been perceived due to the over emission of water vapor. These are some of the environmental-related issues which have been faced by most of the industries in the recent time. Moreover, most of the automobile industries have faced the sustainable issues which occur due to the emitting noise and air pollution in the atmosphere (Howes et al, 2017).

Environmental Issues in the Automotive Industry

Backyard Barometer is the primary information to trail the attitude of the nation near the surroundings over a twenty year time; it mutual with the new Roy Morgan study of 1800 Australians. It presents that Australian have a very strong resemblance with the forest, beaches, oceans, and natural world which carry more accomplishment to care for the usual habitats of Australian (Whitelaw, 2018). In Australia, defending the Great Barrier Reef is the major ecological concern with the review of the 94 percent that protection is important. Some of the individuals have reviewed that generally state of the Great Barrier Reef is deteriorating or getting of inferior quality while compared with the 10 years ago. Approximately half of the Australian has respondent that the Reef is in the terminal turn down, with the coral bleaching and weather modify which saw as the top two pressures (Esparon et al, 2015).

(Source: Guevarra, 2011)

The logging, as well as clearing of land, is also destroying the natural habitats. Mining and energy exploration has an issue of waste disposals such as dumping and toxic runoff. The high density of urban areas is also putting a stress on the environment with the demand for energy, the problem of waste disposal and pollution (Dover, 2018). These issues will still remain at the forefront of political and everyday life. The climate change and the other environmental issues have had a great impact on the political and on the economy in Australia for several decades with the higher emission of carbon per capita (Higgins et al, 2018).

The company Daimler faces the issue of sustainability. The company is going through the potential encroachment measures from the Brussels subsequent to the company found guilty in keep on using a super greenhouse gas in air conditioning system in their cars. Mobile Air Conditioning (MAC) dictate obliges for the car companies of Europe to limit the global warming potential (GWP) of their air conditioning refrigerants from 1^st January 2006 to elements less than 150 times more influential than carbon dioxide. The substitution refrigerant called as HFO-1234yf which had been validated by all of the European car companies which also cover the German Automotive Association in which Daimler is a member (Bovens, 2016). But it has been found that Daimler was not using the new refrigerant which was replaced by the government of Europe. The company has a reviewed that HFO-1234yf could be extremely combustible, as due to the demand of elevated security at Mercedes-Benz, that chemical would not use in their product. Therefore, the company has continued to use R134a refrigerant in its vehicles. Undoubtedly, HFO-1234yf is measured mildly combustible but it has been passed for safe use by European regulators, the US Environmental Protection, car companies, and other nationwide authorities. The new finding of Daimler Company has been challenged extensively and although the less colorfully by the automobile industry of engineering society. Due to the installation of a defeat device by the company, the actual operation of the cars releases NOx emissions higher than anticipated.  As a consequence, the company was needed to take back 4,900 cars across the world and 1370 thereof in Germany (Ewing, 2018).

Australian Ecological Concerns

One more case of the company has been found, the company has come under the case of excessive emission in their vehicles.  The transport Ministry of Germany has confirmed that approximately 774,000 Mercedes-Benz vehicles in Europe were originated to be running with the unauthorized “defeat” devices. Following this issue, the department has instructed Daimler AG to pull 238,000 cars off from the roads of German.  The article was run by the Bild am Sonntag which is a local news outlet in Germany road about the company Daimler that the software of the company was identifying that possibly will stop the flow of AdBlue under few situation on its OM 501 truck engine. The Stuttgart, Germany based carmaker has reviewed that the engines used in the Mercedes- Benz trucks, could exceed the emission of nitrogen oxide gas under certain conditions. The company escaped expensive fines following conversation with the Transport Minister and agreed to upgrade the diesel emission software in Vito vans, the GLC sports utility vehicle, and C-Class sedan, for escaping the costly fines (Stumpf, 2018). The Daimler was also sued by shareholders over whether the company has misled the investors about the severity of the diesel emission scandal.

Decline in Share Price

The scandal case of company directly impacted on the share price of the company. At 0836 GMT, the share price of Daimler was fallen down from 2.5 percent, at 61.19 euros, underperforming the Stoxx 600 automobile index which was 0.48 percent lower. Therefore, the scandal case was done by a company directly impacted on the share price of the company (Business News, 2017).

Impact on Reputation

Daimler is one of the biggest companies in the world.  Any single mistake directly affected the image of the company. The good reputation in the market is the crucial part of the success in the competitive world. It helps in bringing the greater volume of investors and client. The scandal case of the company ruined their image in the market. The shareholders were dissatisfied from such case and they filed against the company to mislead the investors about the rigorousness of the diesel emission scandal.

Legal Repercussions

It was the responsibility of the company to properly check the device in the vehicles before realizing in the market. The company has failed to do so. This cause legal repercussion against the company, as the company was instructed to take off 238,000 cars from the road of Germany. The company has pleaded guilty by the transport ministry of the country to breach the regulation of the country. The authority has imposed fine of around $2.30 billion for conniving on the price and also passing the costs of emissions rules on to the customers (Price, 2018).

Impact of Sustainability on Business Management

From such scandals, the extra time and amount were unnecessarily invested by the company to re-fix the problem. The company has taken off cars from the market which has created a huge loss for the company. The company was ordered to make changes in the cars in which huge amount has been invested unnecessarily. It cause loss of time and amount by the company.

Loss of Customer Faith

The scandal case of the company rued their image in the market. The customers have lost their faith in the company. The company was known for their quality and services, but from such case, it took time for the company to regain the faith of customer in the market. It caused a fall in the share price of the company as well as loss of faith among customers which also affect the price and demand of their vehicles. Therefore, it would be tough for the company to regain the faith of the customers as well as investors. It was the responsibility of the company to cater the quality product to the customers by not affecting the environment, but they failed to do so.

Created Long-Term Orientation

The turbulent financial market, changing trade agreements, unable consumer purchasing pattern, and incompatible communal policies make it highly tricky for the company to act for the long-term. The scandal case of the company would create long-term orientation for them.

Reaction of Investor

Every scandal case is to be expected to be eliciting few level of the short-term response; therefore, the key significance for the market lies in the long-term belongings on the shares. The consequence from the Daimler scandal in Germany is the best instance of corporate scandal. The company was known for the quality but then had a great impact on the sector and possibly for the asset in that part of the globe. From such scandal, the investors assess the likely impacts of the business scandal on the precise stock. The shareholders have sued the company for misleading them for the case of diesel emission scandal.

Resilience

It would be tough for the company to shift on from such a shame and would be important to achieved transformed footing in the market. It would be tough for the company to retain in the competitive market with the existing product, as most of the customers have lost their faith in the product of the company, therefore, the company needs to take certain steps to regain the faith and able to retain with the existing product. It would increase the cost to the company which they need to bear it (Laufer & Wang, 2018).

Daimler is one of the biggest companies at the global level. The company has a huge amount of competitors in the global market. The scandal case of the business provided an opportunity for their competitors to cover the market of Daimler. It would be a huge loss for the company to survive in the competitive world. Therefore, the competitors of the company could take an advantage from such a scandal case.

Strict Regulation  

From such scandal case, the company has not only lost the faith of the customers but also lost the faith of the government. It would be tough for the company to sustain with such strict regulation by the authority. In the future, if the company will launch a new product on the market, the government would strictly check and impose regulation on the company.

Employee turnover

The turnover of employee would be increased from such scandal case. The image of the company has greatly affected from such scandal case, most of the employees prefer to work in the reputed companies. Therefore, from the scandal case, the efficient employee would move to other competitive company which causes loss of asset to the company because the employees are the main asset of the company.

The sustainability exposure is defined as the exercise of measuring, disclosing, and also being able to be responsible for the in-house and the exterior accountholders for their presentation by the company towards their goal that also targets towards the sustainable development of the country (Higgins et al, 2015).

In June 2017, the task force on Climate-Related Financial Discloser (TCFD) has released the framework along with the recommendation for the company to a consistent set of financial risk for voluntary (Junior et al, 2014). The framework considers the liability, physical, and liability risk which is associated with the change in climate and also set a benchmark for the effective disclosure across the industry. The work of TCFD guides the company to understand the requirement of discloser in the financial market which is required to measure and respond to the climate change risks and opportunities. It not only encourages the companies to align their disclosure with the need of investors but also include climate-related assessment in their financial reporting (Higgins et al, 2018).

The ASX Council Recommendation creates an expectation for the companies to establish a code of conduct to promote and maintain the ethical and responsible decision making. The recommendation of ASX states that the confidence of the investors can be enhanced if the company clearly articulates the practice by which, it can intend directors as well as the key executive to abide. Depending on the content of the code of conduct, the confidence of stakeholder of other company could also be enhanced for that company (Dumay & Hossain, 2018).

CDP provides a framework for companies to measure as well as disclose their Greenhouse Gas (GHG), water, and supply chain performance. The objective of CDP is the mitigation of climate change and protection of natural resources. According to Certified Practicing Accountants Australia’s (CPA Australia) 2004-2007 Sustainability report, Potential, Practice, and Performance, exist a strong correlation relating sustainability reporting as well as the low possibility of corporate distress. To address the diverse needs of the business community of Australia, the main principle of sustainability was identified to be flexibility; therefore, listed entities could firstly consider and then disclose the sustainability or non-financial information that is pertinent to the (Siew, 2015).

The main concept of sustainable growth has been developed with the formation of report “Our Common Future” which has been issued by the World Commission on Environment and Development (WECD). To emphasize the importance on the sustainability development, the government of Australia has embraced the term of Ecologically Sustainable Development to make sure that there is a stable approach to dealing with the issues of social, economic, and environment. The strategy of ESD has been developed with the motive to meet the needs of Australian in the present scenario while conserving the ecosystem for the benefits of future generation (Junior et al, 2014).

The reporting framework GRI is introduced to be adopted by all the association for reporting on their social, performance of environment and economic irrespective of their location, sector, or size. It contains the content of general and specific sector that has been approved by the gathering of investors at global level. It is to be applied usually for reporting the sustainability performance of the organization. In the present, it is made up of the philosophies for which defines the gratified of reports as well as to confirm the eminence of stated information (Dumay, 2016).

Decision making plays a prominent role in the organization. Some of the decisions are not important whereas some of the decisions are important for the organization. There are different models in decision makings such as normative, descriptive and so on which help in decision making. There is some initiative that could be taken by the company. These are explained in below points:

Integrated public policy, smartly create

It would be difficult for the company to make the sound decision and policies when it is related to the policies of the environment. The companies need to know the clear and steady direction of what the government thinks related to the issues such as a national cap, carbon pricing, and trade system for the emission of the greenhouse gases. According to such requirement, the company can make an investment in new technology and new standards for sustainability (Epstein, 2018).

Communicating the goal within the organization

It is an important task for Daimler for building and maintaining sustainability. The corporate social responsibility is a big responsibility for the companies, or for a single employee or a single department, for that matter.

Mitigating and adapting the changes in the climate

Changes in the climate are one of the main issues that were brought to the notice of the leaders.  The impact of climate changes would force the company to adapt and redefine the policies with the reason that a change in the climate may be the sign of global warming. Therefore, the company should be ready to adopt such changes (Rao & Tilt, 2016).

Embedding the Sustainability in the corporate culture

The employees of the company must regards, the corporate social responsibility department with respect, as many of these in the company would try to eliminate these departments with the reason that they may seem like cost center to them. Therefore, in order to make sure that the sustainability of the organization is duly followed, the culture must be embedded into the organization. This would help Daimler to main sustainability within the organization with due respect.

There are certain recommendations which are provided to the company which would help in maintaining sustainability. The recommendations are explained in below points:

Building a national dialogue on the responsible consumption

From the scandal case, the company loses the faith of the customers. The sustainability require the involvement of the customers therefore, the company is required to bring the customers in the confidence by taking certain steps such as sustainability program should be launch, educating the customers (Sanchez, 2015).

Sustainability measuring and reporting

Given the explosion of the sustainability ranking as well as reporting the standards  of sustainability, Daimler needs to recognize the streamline reporting to reduce or eliminate, resolve the inconsistencies which produce positive impact (Rao & Tilt, 2016).

Collaborating for Sustainability

The sustainability issues of Daimler require systematic changes. The systematic changes will need collaborating among the stakeholders of the company. Business needs to communicate with their competitor and affected stakeholders to tackle sustainability challenges.

Public Policy and climate change

Changes in the climate are one of the utmost substantial challenges of present and future generations. It greatly distresses all aspect of the country economy with society and environment. Daimler needs to play a superior role in decarbonizing the economy of the country as well as constructing pliability to impacts on climate.

Incorporation of the social license

The member of the community must let the company operate in their region. The maintenance of the social license could able to guide the manager in ascertaining the frame of the sustainability, as the way of managing and handling the risk and also creating of the efficiency (Rao & Tilt, 2016).

 Engaging in the value chain members

There must be an association across the Daimler and value chain. The company must try to their best to limit the impact of their business operation on to the environment. It would be able to impact it more and make it big advances when they come together and align with the action of the suppliers as well as the distributors along with the other member of the value chain.

Support the sustainability-related innovations

The main objective of Daimler is to grow with innovations. The smart companies are those that create their sustainability as the innovation of the new frontier therefore, Daimler should create such conditions that could support the sustainability with the innovations. Innovating for sustainability would help in to reduce the impact of the company on the environment and it would also create the social changes that could benefit the business as well as re-imagine the models of the business (Rao & Tilt, 2016).

Reducing the burden of sustainability reporting

It is become ostensible that Daimler spends a huge amount of resources and tome in their organizing and managing the programs of sustainability. But the company is more require managing an investment in the human resources and their amount of resources sent which could be used to reduce the impact on the environment. Daimler, therefore, must call its investors and the third parties by creating a streamlined method.

Conclusion

From the above, it can be concluded that sustainability in the business play a prominent role in the business world. Most of the companies are not adopting sustainability on their organization which caused a change in the climate and depilation of the resources. The companies are the main responsible for creating pollution in the environment by realizing the excess amount of carbon emission in the environment. They are the main reason for realizing greenhouse which causes global warming. Acting sustainable as a company is becoming more crucial and purposeful every day. Daimler is one of the biggest manufacturing companies in the automobile industry. Some of the cases have been found against the company in which the company was caught in the scandal case of diesel emission with the one more case of excessive emission in their vehicles. Such cases created a great impact on the company. The reputation of the company would be ruined with the legal repercussion, employee turnover, and loss of faith among customers. Therefore, there are certain sustainable reporting which a company need to take in a mind and the decision would be taken accordingly. Daimler should take certain steps and should adopt sustainability in their organization which would help the company to sustain in the competitive world.

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