Life Cycle Assessment in Built Environment - Myassignmenthelp.Com

Questions: 1. As an accountant of the company, you would like to have a better understanding of how the sustainability of the company will impact on the stakeholders. You believe the most efficient way is to identify important stakeholders. Refer to the case and identify five relevant stakeholder groups and discuss how different accounts could be used to satisfy each groups information requirements.2. In order to enhance companys performance, the CEO thinks it might be insufficient to use profit as the only performance indicator, and is considering using a range of key performance indicators to manage the business. You believe the Balanced Scorecard is a useful performance measure framework that can be used, as it gives management an overall picture of companys performance. You have been asked to develop a Balanced Scorecard to assist RTXM in managing its overall companys performance and demonstrate how it works to the management and staff in next company meeting. You need consider ONE of the m ost important metrics that could be used for each of the four perspectives of performance and explain the reason why it has been selected and how it can be used to improve companys performance.3. The CEO believes the company was attractive because of its previous low price strategy but has also noticed unprecedented awareness from customers on the companys social responsibilities. The CEO approaches you to discuss the selection of supplier, which supplier is better for companys strategic development. Provide an explanation to the CEO with reference to the potential costs and benefits of working with both Super Cheap and Green Fashion.4. After your analysis above, the CEO starts realizing the importance of working with social and environmental friendly suppliers, however, still does not have a comprehensive understanding to the positive and negative impact his companys products might have both socially and environmentally. You decide to use the Life Cycle Analysis (LCA) for a product that the company offers to enhance their understanding. Draw the LCA, and select one or two stages of the LCA, identifying a total of four possible social and environment impacts. If the impact is detrimental either socially or environmentally, give suggestions to minimize the impact. If the impact is positive, give suggestions as to maximize the benefit. You are required to undertake some research to answer this question.5. Subsequently the company decides to contract with the Green Fashion. Some important shareholders attempted to block this proposal. Their belief, as the owners of this company, is that the company should aim to maximize the value of their shares, however, the new business plan could significantly increase the costs and therefore reduce the profit. You are required to identify an organisation, business or industry and explain whether and how it could potentially increase the value of its shares in the long term by being accountable to its major stakeholders. You are required to undertake some research to answer this question. Answers: Answer 1 The five key stakeholders along with the relevant accounts for satisfying the informational needs are highlighted below (Deegan, 2014). Shareholders The decision regarding supplier can impact the profitability of the company and hence the net worth. As a result, the existing 20 shareholders of the company are stakeholders. The key accounts of importance for the shareholders would be the net profit to begin with but would include metrics related to injuries to workforce (including those of suppliers). Customers Sustainability has become increasingly important for customers who desire to buy goods from manufacturers having ethical practices. As a result, the sourcing decision could impact the preferences of customers making them stakeholders. The sourcing policy along with the metrics related to environment sustainability and consumer complaints refunds are essential. Also, the sales account in terms of price charges would be critical. Government/Professional Bodies Ethical sourcing has become significant ever since the abysmal labour practices followed in the sweat shops have come to light. As a result, there have been agreements in the clothing industry whereby the big brands have taken measures to focus on ethical sourcing. Key account closely watched would relate to the sustainability report, the sourcing policy, employee related injuries along with performance metrics. Suppliers The sourcing policy adhered by the company has a impact on the present as well as potential suppliers in the future. The informational needs can be fulfilled from the sustainability report besides the balance sheet which would indicate the financial strength of the company. Lenders The sustainability practices adopted by the company could impact the lenders owing to potential financial impact of any lapse. In case of sourcing from Bangladesh, there is considerable risk to the business which could increase credit risk. Key accounts would be the sourcing policy, sales, profits along with liquidity indicators (both short term and long term). Answer 2 Balanced scorecard is a tool to ensure that the performance metric of the business are broad based and hence not too much biased towards economic performance. Considering that the balanced scorecard enables the business to focus on other critical aspects such as learning and customer satisfaction, hence this leads to higher sustainability for the business. There are essentially four perspectives namely financial, customer, internal business processes along with learning and growth. The most critical metric for each of these performance dimensions has been outlined below (Adams, Neely and Kennerley, 2007). Financial The two key important metrics would be sales growth along with profit margin. However, the more significant of the two metrics would be profit margins especially considering that the company would go with expensive but green supplier. As a result, the margins in short term could be under pressure and as a result series of cost cutting measures may be initiated by the company whose effectiveness would be captured by this metric. Customer The number of customers complaints received as a percentage of transactions should be the appropriate metric. This becomes significant in the wake of increasing complaints from the customer that the business faces in wake of expansion. Keeping customer complaints under check would enhance the customer satisfaction. Internal business processes The product quality is a critical metric in this regard. The company should aim to bring the damaged or defective goods to less than 0.5% of the total goods manufactured. This would lower the costs related to repair, replacement and quality check and would enhance the overall customer satisfaction along with profitability. Learning and growth The company should aim to improve the online shopping experience as it an area of weakness and has tremendous scope for growth. Also, this would help the business lower down costs and improve operational profitability. A suitable metric could be clicks generated along with conversion rate of clicks. Answer 3 In order to choose between the two suppliers, a cost benefit analysis needs to be performed as indicated below. Supplier 1: Super Cheap Benefits: It would provide a vast array of products desired by the business at very cheap prices in limited time which would help the company enhance the market share and the profitability of business. Higher profitability in turn would lead to creation of wealth for shareholders Costs: Owing to poor past record with regards to sustainability and labour practices, negative publicity can be generated for the company especially in case of any unfortunate incident. This is especially likely in an environment where customers are quite sensitive about social responsibilities of business. The company could potentially invite lawsuits for unethical sourcing involving practices such as child labour which besides financial costs could adversely impact the expanding business. Green Fashions Benefits: The company boasts of ethical practices which the company can promote amongst the customers and hence look to charge premium from the customers. No risk to the reputation in the long run Matching value system and sustainability goals make the relationship sustainable Costs: The associated costs of the products would be higher forcing the company to alter business model and look at other ways to bring down operational costs. Conclusion The preferred choice would be Green Fashions even though in the short run, the company may have to alter the business model to accommodate the higher costs. However, in the long run, the company does not face high risk of reputation and customer loss on account of unethical sourcing. Besides, the common values make the business relationship more sustainable. Answer 4 The various stages of the LCA are highlighted below (Finnveden et. al., 2009). The two stages which have been chosen for this analysis are inventory analysis and impact assessment. In inventory analysis, the focus is on the inputs and the outputs generated. The impact assessment focuses on the effect related to the use of resource and related emissions and classifying the same in different categories of impact (Crawford, 2011). The product can be chosen as a T-shirt. The various social and environment impacts are outlined below (Finnveden et. al., 2009). In case of unethical sourcing (i.e. by choosing suppliers such as Super Cheap), the environment would be damages severely owing to the discharge of the untreated waste directly into rivers. In order to mitigate the same, the company should choose a supplier which minimises waste generation or disposes the same in a responsible manner. Further, pollution of the river could have severe environmental consequences to the marine life which is apparent from Super Cheap practices. In order to mitigate this, it becomes necessary that supplier should comply with environmental norms and ensure that the marine life is not adversely impacted. There are adverse social consequences with regards to various settlements near the polluted water bodies owing to the manufacturing of T-shirts. As a result, they might be required to migrate to another place where drinking water is available. In order to reduce this undesirable effect, the dumping of waste and pollutants in rivers should not be practiced and only such suppliers should be entertained. Further, it is quite possible that these t shirts are produced using child labourers who are employed in sweat shops. This leads to their exploitation and hampers their education growth. For mitigation, it is imperative that a supplier should be chosen that does not use child labour so that this social menace can be discouraged. Answer 5 The clothing industry in the west (whether be it US or UK) is an example of industry which can improve and act in the interest of the majority shareholders so as to create wealth for them in the long run. A key practice which is followed by major players in this industry is outsourcing their cloth manufacturing to South East Asian countries which happen to be major textile manufacturers. One of the key reasons for this outsourcing is the lure of lower costs owing to availability of cheap labour. However, the sub-contractors and contractors in these countries in a bid to further lower costs tend to deploy a sizable amount of child labour. It is estimated by the ILO (International Labour Organisation) that about 170 million children across Asia work as child labour with a predominant share being concentrated in the garment industry (Moulds, 2016). Considering the complexity of the global supply chains, at times the big brands are not aware of such practices at the site of contractor. However, there have been instances in the past when despite being aware of such practices, no concrete action has been taken in order to safeguard their own interest of maximising profitability. However, this goal is not achieved as has been seen from the experience of Nike and Adidas which have faced tremendous implications for running sweat shops for manufacturing of shoes. It is essential that the clothing industry takes a clue from their experience and understand that in the long run, wealth can be generated for the majority shareholders only through sustainable and ethical business practices (Hymann, 2017). Going forward, it is expected that this practice would tend to diminish which would auger well for the cloth industry in the west despite some hiccups on the cost side. References Adams, C.; Neely A. and Kennerley M. (2007)Performance measurement frameworks: a review, 3rd ed., Cambridge: Cambridge University Press Crawford, R.H. (2011) Life Cycle Assessment in the Built Environment, 2nd ed., London: Taylor and Francis. Finnveden, G., Hauschild, M.Z., Ekvall, T., Guine, J., Heijungs, R., Hellweq, S., Koehler, A., Pennington, D. and Suh, S. (2009) Recent developments in Life Cycle Assessment, Journal of Environmental Management, 91(1),pp. 1-21 Hymann, Y. (2017) Child Labour in the fashion industry, [Online] Available from: https://goodonyou.eco/child-labour/ [Assessed March 9, 2018] Moulds, J. (2016) Child Labour in the fashion supply chain, [Online] Available from: https://labs.theguardian.com/unicef-child-labour/ [Assessed March 9, 2018]