An effort to measure and assess Nutreco’s performance on sustainability by identifying performance-indicators that are accepted by her
stakeholders.
‘Measuring Sustainable Performance’
Mattijs Endedijk
University of
Groningen
‘Measuring Sustainable Performance’
Author: M.H. Endedijk
Student Number: 0973653
Student at: University of Groningen
Faculty of Management and Organization
Landleven 5
9747 AD Groningen
The Netherlands
Client company: Nutreco
Veerstraat 38
5831 JN Boxmeer
The Netherlands
Supervisors: Drs. A. Smeenge RA (University of Groningen) Mr. Drs. H.A. Ritsema (University of Groningen) Ir. H. Teunissen (Nutreco)
Groningen, November 2004
The author is responsible for the contents of the report; the copyright of the report belongs to the author.
‘Then I say the earth belongs to each generation during its course, fully and in its own right.
The second generation receives it clear of the debts and encumbrances, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence.’
Thomas Jefferson, September 6th, 1789
In front of you, you have the report that I have written for Nutreco. The report and the research that has been done to write it, form the final part of the master degree in accountancy at the faculty of Management and Organization, University of Groningen. The subject of the research lay in the field of sustainability, sustainability reporting and sustainable performance. The reason that I chose these interesting and dynamic topics is that they combine the things that I have learned at the faculty of Management and Organization during the last five years, with things that I have learned during my years that I studied biology at the University of Groningen.
Making such an effort enabled me to learn many things: about sustainability, about doing proper research, about writing a report and, particularly, about myself. When I started the research, I was very positive that I would provide Nutreco with a practical and useful answer to their questions. During time, however, I discovered the vastness of the subject of sustainability and the difficulties that arise when doing research. When the months started to pass by, I came to the conclusion that even ten reports like mine would not answer the questions that I would like to be answered. And although I have finished my research, there still is plenty research that has to be done in this field.
I would like to thank all the people that have helped me with this research and report. First, a sincere thanks to my supervisor at Nutreco, who gave me the opportunity to write this report, Harm Teunissen. His critical remarks have made me see things that I would otherwise never have seen and have encouraged me to draw conclusions that I otherwise never would have dared to draw. Also I would like to thank André Alferink, for his considerations. Other people from Nutreco that I would like to thank are Frank van Ooijen and Marit Husa, for giving me the information about the Nutreco sustainability policy. The same applies to Rob van Tilburg and Folkert van der Molen from DHV, who delivered information about sustainability in general.
Furthermore I would like to thank my supervisors at the University of Groningen. Mr.
Smeenge and Mr. Ritsema.
Finally I would like to thank you, Harriët. Your support has been great and I doubt if I would ever have finished this research in a proper way without it. I am in great debt.
Groningen, November 2004,
Mattijs Endedijk
Preface
Introduction 5
Chapter 2: The Nutreco Company 6
§ 2.1 Introduction 7
§ 2.2 Sustainability reporting at Nutreco 8
Chapter 3: Research objectives and design 10
§ 3.1 Research quality 11
§ 3.2 Thesis
11
§ 3.3 Research design and approach 14
Chapter 4: Sustainability and sustainability reporting 16
§ 4.1 Sustainability 17
§ 4.2 Sustainability reporting 20
§ 4.3 The role of sustainability at Nutreco 23
§ 4.4 Conclusion 24
Chapter 5: Sustainability and stakeholders 26
§ 5.1 Stakeholders 27
§ 5.2 Sustainability stakeholders 33
§ 5.3 Stakeholders at Nutreco 34
§ 5.4 Conclusion 42
Chapter 6: Measurement of sustainable performance 43
§ 6.1 Performance measurement in general 44
§ 6.2 Measurement of sustainable performance 45
§ 6.3 Sustainability performance measurement at Nutreco 46
§ 6.4 Conclusion 49
Chapter 7: Possibilities for measurement systems 50
Conclusion 57
Bibliography 60
Appendix 1: The Nutreco credo I
Appendix 2: The Nutreco Mission statement II Appendix 3: The Nutreco strategic perspective III Appendix 4: Companies using the GRI reporting guidelines IV Appendix 5: Organisational Stakeholders of the GRI XI Appendix 6: Business codes of international firms XIII Appendix 7: The 15 objectives of the 2001 report XVI
Contents
Since its emergence in the early 1960’s, the concept of sustainable development has gained an important position in the focus of interest of many people. They realize that the natural resources are not infinite and that mankind should make an effort to create a sustainable world that provides welfare for its present and future generations.
Due to this focus on the topic, many companies are faced with a serious interest in their contributions to sustainable development. Multiple groups of stakeholders, represented by governments and non-governmental organizations (NGO’s), put often heavy pressure on companies to provide information concerning their contribution to sustainable development, or the lack of it. Companies responded to this pressure with the publication of public available reports.
This practice of sustainability-reporting gained significant importance during the 1990’s and as a result of this trend, several reporting-standards concerning sustainability were drafted.
However until today there is no such thing as a set of general accepted sustainable accounting principles, although there are some noticeable efforts. The most important one today is the Global Reporting Initiative, a multi-stakeholder institution.
One of the companies reporting in line with the GRI is Nutreco Holding N.V. Since the year 2000 a yearly social and environmental report is published by them. In 2003, their 2002 report was awarded with the ACC-award by NIVRA, the Dutch institute for certified public accountants, and VMA, the association for environmental accountants.
However, notwithstanding the granting of this award, Nutreco has difficulties assessing its sustainable performance and, more specific, the perception of this performance by its stakeholders. A relevant benchmarking model for sustainable performance with the right performance indicators, which are accepted by Nutreco’s stakeholders and a corresponding set of benchmarking partners, would be very welcome. However, to create such a model within the limits of a student’s final thesis appears to be a mission impossible. The main reason for this impossibility is the complexity of this model, in combination with the uncertainty surrounding its elements. Sustainability and stakeholders are for example concepts that are not as undisputed as profitability and shareholders. The same applies to the performance indicators. There is simply no general accepted set of performance indicators that covers the subject of sustainability, let alone a set that also gives attention to stakeholders, like there are performance indicators as ROI, ROA and EBITDA for financial performance.
As a result, the focus in this research lies on performance indicators concerning sustainability and their connection with stakeholders’ interests. Hence the objective of this research is: To enable Nutreco to identify possibilities to measure and assess its performance on the subject of sustainability, taking into account the interests of Nutreco’s stakeholders.
Following this objective, the central question will be:
What possibilities are there to measure and assess Nutreco’s performance on the subject of sustainability, taking into account the interests of Nutreco’s stakeholders?
In the following chapters an effort has been taken to answer this question. The next chapter holds a description of Nutreco, its sustainability policy and an introduction to the reasons and objects of the research, which is methodically described in chapter three. Chapter four describes the concept of sustainability and assesses the level at which sustainability is present at Nutreco. Chapter five will deal with stakeholders, both in general and at Nutreco.
Chapter six describes the requirements for identifying performance indicators and if these requirements have been met at Nutreco. Chapter seven will discuss a possible method for implementing performance indicators. Conclusions and recommendations can be found in chapter eight.
Introduction
The Nutreco Company
Introduction
In this chapter the Nutreco Company is described: its history, its structure and its main activities. Attention is also given to an introduction to the role of sustainability at Nutreco at this moment.
Chapter 2
Key issues in this chapter:
• History and structure of Nutreco
• Sustainability at Nutreco
§ 2.1 Introduction
Nutreco Holding N.V. is an international food company that is present at various stages of the fish, poultry and pork production chains. It has its activities organized into two separate business streams, Nutreco Aquaculture and Nutreco Agriculture that each in its turn comprises several business units, as shown in the organization structure of figure 2.1. The company was founded in 1994 as a result of a management buyout, but the roots of the individual companies within Nutreco go back as far as 1899, when the oldest Nutreco company, Skretting, was founded in Norway.
Fig. 2.1: Organization structure of Nutreco Holding N.V.
During the 20th century, more companies were raised that today are a part of the Nutreco Holding, like Hendrix and Trouw in the 1930’s. In the 1970’s these companies were brought together with other companies like Moore-Clark from Canada and Nanta and Sada from Spain by BP Nutrition. The 1980’s brought the expansion of fish farming by Mares Australes, now part of Marine Harvest. At the same time, Trouw Chile began to produce fish feed.
Marine Harvest is a merger of Mares Australes and Marine Harvest McConnell that also had farming facilities in Scotland. In 2000 the activities were expanded with activities in Norway, Ireland and France as a result of the acquisition of Hydro Seafood. In 2001 followed the purchase of Agrovic, a poultry producer in Spain and Ham holding and the meat processing facilities of Laurus in the Benelux. In that same year, Nutreco started activities in the United States with the acquisition of the premix activities of Ducoa.
On September 13th 2004, Nutreco announced the merge of its fish farming activities with those of Stolt-Nielsen from Norway. The name of the new company will be Marine Harvest and Nutreco will own 75 percent of it. When the merger has been completed, a stock market flotation is planned.
Today, Nutreco comprises over 120 production and processing plants in 22 countries, employing approximately 13.000 people. In 2003 Nutreco’s sales were 3.674.300.000 euros.
Aquaculture Agriculture
Processing/marketing salmon
Salmon farming
Farming other fish species
Feed for salmon, trout and other fish species
Processing/marketing poultry and pork
Breeding
Compound feed for poultry, pigs & others
Premixes, feed specialities and nutrition
services
§ 2.2 Sustainability reporting at Nutreco
Since the year 2000, Nutreco has been publishing an annual social and environmental report, though it has no legal obligation to do so. There is legislation in the Netherlands (Wet Milieubeheer, chapter 12, 1997) that obliges companies that have a certain impact on the environment to publish two yearly environmental reports: one public report and one report that is directed at the authorities. The obligation is linked to provincial environmental permits and applies to certain companies (about 300) that are active in the following industries: metals, chemicals, rubbers and synthetics, electrical engineering, paper and cardboard, textiles and carpets, food, oil and coal, construction materials, electrical production, airports and waste treatment.
Nutreco’s main activities do however have an impact on several subjects society is concerned of, like animal welfare, human resource policies, food safety and the environment. Due to these concerns, Nutreco is subject to the attention of a wide and global range of stakeholders.
In the past years Nutreco has been in dialogue with many stakeholders, resulting in often constructive cooperation, but also sometimes in aggressive accusations by (groups) of stakeholders. However, Nutreco is convinced that it should maintain a culture of openness and accountability that requires reporting the good news as well as the bad news.
Nutreco has formulated the Nutreco Credo, a mission statement concerning social and environmental issues (see appendix 1). In this credo, Nutreco highlights the focal points of its policies: Consumers, employees, the environment, animal welfare and the community.
This credo has been the same during the four social and environmental reports that Nutreco has published since the year 2000. The way this credo is translated into the social and environmental report has changed however. In fact, it has changed every year from 2000 until today, as is shown in figure 2.2. In the first report Nutreco’s social and environmental performance is reported alongside the elements of the Nutreco credo.
2000
• Consumers
• Employees
• Environment
• Animal welfare
• The Community
• Society and shareholders
2001
• A partnership with Society
• The food chain
• Safe, healthy and nutritious food
• Sustainable develop- ment makes sense
• Keeping the balance in food production
• Growing fish demand
• Aquaculture in Chile
2003
• Nutreco People
• Approaching sustainability
• Aquaculture and society
• Nutreco food quality
• Nutreco in the community 2002
• Aquaculture and society
• Food quality
• Animal welfare
• Investment in the community
The 2001 report, however, shows a shift in the construction of reporting performance from the credo to the ‘highlighting of some social and environmental features of Nutreco’. These features included issues as ‘a partnership with society’, ‘sustainable development makes sense’ and ‘keeping the balance in food production’. In the year 2002 report, Nutreco changed the focus into four key areas of performance: aquaculture & society, food quality, animal welfare and investment in the community. The year 2003 report showed an expansion to five key areas by adding the subjects of Nutreco people and approaching sustainability and skipping animal welfare from the list.
The Nutreco social and environmental reports are prepared using the standards provided by the Global Reporting Initiative (GRI). The GRI is an international multi-stakeholder partnership among NGO’s, businesses, accounting societies, labor organizations and the United Nations Environment Programme (UNEP). It has drafted a set of guidelines for sustainability reporting that companies may voluntarily use. In September 2004, more than 500 companies worldwide are known to use the GRI guidelines in their reports. These companies include multinationals like General Motors, Citigroup, Shell International, BP and IBM, but also local companies.
The Nutreco social and environmental reports are not accompanied by a report of an independent auditor. They are however presented with a statement of DHV, an international consulting and engineering company that has its mission in ‘providing sustainable solutions in markets’. DHV assists Nutreco with the gathering of the necessary information, the analyzing of it and the presentation in the social and environmental report. Therefore, DHV analyzes the quantitative data for credibility and completeness and tries to find relevant benchmarks for the results, although that appears to be difficult, especially for environmental results.
In 2001, the 2000 social and environmental report won the ACC-award for best first time sustainability report. The ACC-award is yearly adjudged by NIVRA, the Dutch institute of certified public accountants, and VMA, the Dutch association for environmental accountants.
In 2003, Nutreco’s 2002 social and environmental report was granted the ACC-award for best sustainability report.
The ACC-award is an independent, non-commercial prize that is supported by the Dutch Ministry of Economic Affairs. Its focus is on the report as a mean to communicate and to provide information. It is the quality of the report that is awarded, not the quality of the sustainable strategies or the level of sustainability within an organization. As a result, the granting of the ACC awards in 2000 and 2002 has provided Nutreco with feedback concerning its performance on the reporting of sustainability. However, its performance on the mere subject of sustainability is far more difficult to measure. Nevertheless, performance on sustainability and, especially, the perception of this performance by Nutreco’s stakeholders, is seen as an important issue within Nutreco.
Research objectives and design
Introduction
This chapter describes the preparations that preceded the actual research. Paragraph 3.2 explains the way a research design contributes to the quality of research. The third paragraph defines the problem that is to be researched, the thesis. In my layout, the thesis consists of the research objective, a conceptual model, the research questions and the research conditions. The last section of this chapter describes the research approach.
Chapter 3
Key issues in this chapter:
• Research quality (§ 3.1)
• Thesis (§ 3.2)
• Research design and approach (§ 3.3)
§ 3.1 Research quality
De Leeuw (1996: 20-24) proposes that in business research one of the most important criteria of quality is utility; Qualitative business research should be useful. De Leeuw describes three conditions for qualitative (useful) research:
• Relevance
• Reliability
• Efficiency
The first condition, relevance, means that the result of the research complies with a certain need for knowledge. In this case this means that this need should be present at the customer, Nutreco Holding. In order to guarantee relevance, an indication of the problem was introduced in paragraph 2.2. The result of the indication is the thesis, as described in paragraph 3.2.
Because the thesis has been formulated in deliberation with the customer, relevance is guaranteed in a certain way.
Reliability means that one can trust the results of the research. To achieve this, the right methodology should be chosen in connection with the type of research. In paragraph 3.3 a description can be found of the type of research and the accompanying methodology. Another assurance of reliability is the supervision of this research by the University of Groningen.
The third condition, efficiency, entails the purposeful search to a solution. This efficiency is, again, guaranteed by the thesis, because of its tuning with customer’s wishes and the guidance that it provides in the research. In addition, the conceptual and research model of figures 3.1 and 3.2 provide a tool to conduct efficient research.
§ 3.2 Thesis
De Leeuw (1996: 2) defines research as the process of systematically searching for/designing of useful solutions for problems. Business research in particular should be both valid and relevant and should be conducted in a methodological responsible way; all choices should be conscious and with reason.
One of the most important steps in research is translating substantial questions into methodological questions (De Leeuw, 1996: 65). He states that a classical thesis has three parts: an objective, one or more central questions and a description of the research conditions.
§ 3.2.1 Research objective
A research objective embodies for whom research is conducted, what it should produce and why this product is relevant (De Leeuw, 1996: 85). In this research the objective is to enable Nutreco to identify possibilities to measure and assess its performance on the subject of sustainability, taking into account the interests of Nutreco’s stakeholders.
When this objective is compared to De Leeuw’s requirements of an objective, it is clear that the research is conducted for Nutreco, it should produce a benchmark, which is relevant because it enables Nutreco to measure and asses its performance on sustainability.
§ 3.2.2 Conceptual model
A conceptual model expresses the assumed coherence and causalities between the relevant concepts and the way they contribute to the final result. In this light I have made two conceptual models; one giving the ‘big picture’ (fig. 3.1) and one showing the actual concepts that are included in my thesis (fig. 3.2).
Fig. 3.1: ‘Great’ conceptual model Sustainability
concept
Sustainability standards
Stakeholders
Accepted standards
Performance
indicators PI’s useful for benchmarking
Planned type of benchmark Nutreco’s
sustainable performance
Sustainable performance of
other companies
Benchmark
Management report
Sustainability standards
Stakeholders
Performance indicators
Reporting Stakeholders Performance Measurement
Filter: SUSTAINABILITY
Requirements
Sustainability standards
Possible PI’s
Sustainability concept
Accepted standards
In the ‘great’ conceptual model, the final goal, that exceeds however the limits of my research, has been set out. This final goal is to make it possible to assess the sustainable performance of Nutreco, by comparing it with the sustainable performance of relevant other companies.
These benchmarks should be based on standards that are accepted by Nutreco’s stakeholders and that will lead to performance indicators that can be measured and compared. There are however far too much uncertainties surrounding the several elements of the ‘great’ conceptual model, to actually make the expectations that it creates happen.
Therefore, the focus will only be on a part of this model: the upper left corner. In this corner, the realization of performance indicators for sustainability is explained.
In fig. 3.2 there is zoomed in, on a conceptual way, at the upper left corner of the ‘great’
conceptual model. The goal that is pointed out in this model is the identification of possible performance indicators for sustainability, by assessing the concepts of reporting, stakeholders and performance measurement with a ‘sustainability filter’. This should lead to requirements for the reporting of sustainable performance that takes the interests of stakeholders into account. These requirements will be compared with the current status of sustainability reporting at Nutreco. This comparison will probably lead to the excavation of gaps and inconsistencies. With the use of existing standards for the measurement of sustainable performance, an attempt will be made to fill up these gaps and inconsistencies.
§ 3.2.3 Central question
A central question should be in conjunction with the objective, it must, however, be formulated in for research accessible terms (De Leeuw, 1996: 85). In this research, the central question is:
What possibilities are there to measure and assess Nutreco’s performance on the subject of sustainability, taking into account the interests of Nutreco’s stakeholders?
§ 3.2.4 Sub-questions
Normally a central question is far too complex to carry out valid research. Therefore, the central question should be divided in several sub-questions. If necessary, these sub- questions can be divided in several sub-sub-questions. When all these questions have been answered, the central question has been answered too.
1. What is sustainability reporting and what role does it play at Nutreco?
1.1. What is sustainability?
1.2. What is a sustainability report?
1.2.1. Are there general accepted standards?
1.3. Which role does sustainability currently play at Nutreco?
1.3.1. Is the current social and environmental report a sustainability report?
2. Which role do stakeholders play in identifying sustainable performance?
2.1. Which role do stakeholders play in general?
2.2. What makes a common stakeholder a sustainability stakeholder?
2.3. Which role do stakeholders play at Nutreco?
2.3.1. Who are Nutreco’s stakeholders 2.3.2. What are their attributes?
3. How can one measure sustainable performance?
3.1. How to measure performance in general?
3.2. Is this possible for sustainability?
3.3. Are the requirements met at Nutreco?
4. Which possible measurement system could be suitable for Nutreco?
§ 3.2.5 Research conditions
Conditions can be divided into conditions concerning the results and concerning the research process (De Leeuw, 1996: 85). In this research, the results conditions should be considered in terms like: ‘useful to the organization’ and ‘making a contribution to the organization’s sustainability policy’.
The process conditions are more tangible: the time span is six months and the research must be conducted in a scientific valid way that leads to a public report. If there are problems concerning publication due to competitive sensible information, two reports have to be produced: one full report for the organization and the teachers and one public report that has been stripped from sensibilities.
§ 3.3 Research design and approach
De Leeuw (1996: 94-98) identifies several types of research by method, such as desk research, laboratory research, survey, case study and comparative research. In the following section, an overview is given of the research questions with their probable research methods:
1. What is sustainability reporting and what role does it play at Nutreco?
1.1. What is sustainability?
1.2. What is a sustainability report?
1.2.1. Are there general accepted standards?
1.3. Which role does sustainability currently play at Nutreco?
1.3.1. Is the current social and environmental report a sustainability report?
2. Which role do stakeholders play in identifying sustainable performance?
2.1. Which role do stakeholders play in general?
2.2. What makes a common stakeholder a sustainability stakeholder?
To answer these first questions, desk research is needed: literature about sustainability and the sustainability standards will be reviewed and conclusions will be drawn to answer these questions.
2.3. Which role do stakeholders play at Nutreco?
2.3.1. Who are Nutreco’s stakeholders 2.3.2. What are their attributes?
To answer these two questions desk research is needed. Literature about stakeholders, together with internal documents of Nutreco will be the data sources. Additionally, however, it may be necessary to do some survey research when the documents do not provide enough information to answer the questions. If so, interviews are needed with some involved persons both within and outside Nutreco.
3. How can one measure sustainable performance?
3.1. How to measure performance in general?
3.2. Is this possible for sustainability?
3.3. Are the requirements met at Nutreco?
4. Which possible measurement system could be suitable for Nutreco?
The questions three and four must, again, be answered with desk research: literature about performance, compared with the current sustainability reports of Nutreco should make an answer to these questions possible.
When the required activities for this research are put in the perspectives of description, analysis and design, the research model as shown in figure 3.3 can be made.
Describe Analyze Design
Fig. 3.3: Research design
During the research, this model can be used as a guideline to ensure the structure and utility of the separate activities.
Theory about Sustainability,
Current status of Nutreco’s sustainability
reporting activities Theory about
performance indicators
Theory about stakeholders
Requirements
Management report Performance
measurement systems
Sustainability and Sustainability Reporting
Introduction
This chapter describes the concept of sustainability and the reporting about it. The first paragraph handles its emergence, its place in the current economic dogma of welfare maximization and the attitude of society towards sustainability. The second paragraph discusses the practices of sustainability reporting and several sustainability standards that can be used for that. The third paragraph analyzes the current status of the issue of sustainability at Nutreco.
Chapter 4
Key questions in this chapter:
• What is sustainability?
(§ 4.1)
• What is sustainability reporting? (§ 4.2)
• What place does sustainability have at Nutreco? (§ 4.3)
§ 4.1 Sustainability
§ 4.1.1 The beginning
In spite of what quite a few people think, sustainability is not a very new concept for mankind.
Its origin lies, in fact, at the end of the 18th century, when the mathematician, economist and priest Thomas Robert Malthus wrote his Essay on the principle of population (1798). In this work, which is seen as the father of the concept of human carrying capacity, Malthus wrote that the human population was able to expand exponentially under optimal conditions.
Agriculture, on the contrary, has a fashion of increasing linearly. Malthus predicted that there would come a point in time, were the population would become too large to be fed.
Until the late 1950’s population growth versus food capacity was the main focus of the sustainability-concept. This view changed in the early 1960’s, when the factor of pollution of the environment was introduced with the publication of Rachel Carson’s Silent spring (1962).
This work meant a turning-point: from that point the earth could not anymore be seen as resistant to human damage.
The next evolution of the view on sustainability was generated by the space flights of the Americans and Russians and the pictures they made of the earth from out of space at the end of the 1960’s. These photographs catalyzed the idea that the earth is a finite entity with some possible serious problems that rise above the national boundaries.
With the sustainability-concept becoming a theme at the center of the global focus, several conferences were held and reports were published concerning the topic. In 1972 the Club of Rome (a global think-tank consisting of scientists, economists, businessmen, civil servants and former and present politicians that had been founded in 1968) constructed a number of global growth scenarios. That same year the United Nations Stockholm conference on the human environment was held; this conference was the first time in human history that all nations recognized unsustainability as a global problem.
In 1983 a commission was appointed by the United Nations to propose strategies for sustainable development. This commission was chaired by the Norwegian prime-minister Gro Harlem Brundtland. Its report ‘Our common future’ that was published in 1987 is widely seen as a landmark that triggered a range of activities concerning sustainability. The 1992 and 2002 United Nations ‘Earth Summits’ in Rio de Janeiro and Johannesburg are two examples of that. The Brundtland report adopted some important perspectives on sustainability, such as the ‘Polluter Pays Principle’ and the notion that poverty and sustainable development are incompatible.
§ 4.1.2 The meaning
The concept of sustainability seems to be inevitably connected to another concept: that of development. Sustainability is a derivate from the Latin root sustinere, which means to underhold or to hold up from underneath. One of the most common felt implications of sustainability is continuity (Caldwell, 2002: 461). In addition, however, sustainability requires an object (what should be sustained), a subject (by whom), parameters (quality, length of time) and conditions.
This definition of sustainability with its continuity focus risks becoming an oxymoron when combined with development. Development, after all, implies change; its dictionary definition is
‘to make or become bigger, fuller, more elaborate or systematic’. Hence the oxymoron;
continuity in change seems to be a contradiction, unless a continuity in certain aspects of change is intended (Caldwell, 2002: 461).
One of the most common used definitions of the concept of sustainable development is the one published by the Brundtland commission in 1987, mentioned in paragraph 4.1.1:
'Development that meets the needs of the present without compromising the ability of the future generations to meet their own needs.'
Traditionally the view of sustainable development or sustainable management identifies three involved fields of interest: social, economic and environmental (or people, profit and planet).
These fields or spheres interact dynamically. In this traditional view, sustainable development is about balancing the three spheres and especially making the spheres concerning people and planet more significant.
One of the greatest disadvantages of this traditional view is that sustainable development becomes a trade-off between profit and the other two spheres in every negotiation. Another latency in this view is that it fails to acknowledge that many environmental problems are systematic and interdependent (Bell and Cheung, 2002: 413).
Fig.4.1: Shift from traditional view on sustainable development to one that nature imposes limits on all human activities
Bell and Cheung’s ideas about sustainability can roughly be summarized in figure 4.1, where the shift from the traditional view to the view Bell and Cheung propose can be seen.
§ 4.1.3 Sustainability and welfare
Welfare maximization does not necessarily imply sustainable development and sustainable development does not necessarily imply welfare maximization. However, Ng and Wills (2002:485) propose that in practice welfare maximization requires sustainable development.
They introduce the distinction between weak and strong sustainability. Weak sustainability proposes the maintenance of total capital, which consists of both natural and man-made capital. Strong sustainability advocates the more radical maintenance of specific items of resources or at least the maintenance of natural capital. Their opinion is that weak sustainability is necessary to provide welfare maximization.
The concept of weak sustainability is often criticized for its assumption that natural capital can be substituted by artificial capital. These criticisms often are like the following rhetorical question: ‘If all the forests have been destroyed and an amount of machines of similar total value is built, is that sustainable development?’ According to Ng and Wills these problems will not arise when the relevant marginal valuations are used, instead of the prices prevailing at the moment of calculation. When there are certain critical values for some natural resources that are necessary for the long-term survival of the whole bio-ecology, the marginal value of these resources will rise to infinite heights when the critical values come in sight.
The proposition that welfare maximization requires sustainable development is based on the idea that welfare is not something for today’s western people, but concerns the total human population, now and in the future. In this broader definition of welfare, the costs future generations are charged with as a result from present and past activities should be accounted for too. And in these external costs of production and consumption or more specific, the
failure is the lack of effective ownership of the global natural capital and hence the absence of effective charges on the use and damages to the global natural capital. Many individual producers and consumers ignore the costs they impose to others, simply because of the absence of a price for certain scarce resources. This market failure leads to excessive use of these resources, without paying.
§ 4.1.4 Sustainability and society
Perhaps the largest difficulty in coping with the world's sustainability problem is its complexity and, following, society's traditional response to complexity: compartmentalization of the problem. Our knowledge has been organized in discrete disciplines with specialized experts that tend to lose the perspective on the problem as a whole. Similarly a gap has originated between the fields of politics, science and technology, business and environmental protection.
Bell and Cheung (2002:415) state that these groups 'appear to live in different worlds' and hence do not recognize the impact of decisions in one sphere on all the others. They advocate that society has to overcome its myopia of over-specialization and look at the world as one planet where ‘everything is connected to everything else’.
Caldwell (2002:466) argues that there are some conditions to let sustainable development become an issue in national politics. In the first place there ought to be a constituency for such a policy and, secondly, decision makers should favor long-range sustainability above short-range expediency. In order to reach the above conditions, a third is necessary; an ecological-ethical ideology with an explicit political expression. This is essential for a common denominator to become an effective constituency.
According to Caldwell (2002:466) there are many obstructions in present day politics in order to meet the conditions to let sustainable development become a matter of national policy. The long-range time horizons, for example, seem to be forgotten many times by politicians whose first priority is political survival in the short term. Second there is often a popular myopia that does not accept deprivations of many conveniences of the developed countries. Examples of these conveniences are private transportation, cheap consumer goods and virtually unlimited waste dumping. And, finally, there is the habit of ‘single issue’ politics that most environmental and social movements practice. These compartmentalized movements compete with each other for the attention of the decision-makers and as a result, coherent sustainability policies let alone effective implementation of them are virtually non-existent.
§ 4.2 Sustainability reporting
§ 4.2.1 Introduction
Although there is no common global consensus about the way to cope with sustainability problems, the pressure imposed on companies to provide more information about their policies and activities concerning the subject has definitely risen the last decades. As a result, since the early 1990’s the practice of corporate environmental reporting showed a dramatic increase, especially in Europe and North America. It was in 1993 when a benchmark report containing a ‘five-stage reporting framework’, co produced by SustainAbility, a UK consulting firm, the International Institute for Sustainable development and Deloitte Touche Tohmatsu, was introduced. This reporting framework can be seen as a landmark in sustainability reporting (Wheeler and Elkington, 2001) and was based on the ‘triple-bottom-line model’
(3BL).
The triple-bottom-line model focuses not only on economic value that firms add, but also on the environmental and social value that is added or destroyed by the firm. In its narrowest definition it can be seen as a framework for measuring corporate performance. In a more broad way, 3BL is a mindset of values, issues and processes to be addressed by companies, in order to minimize the damage they cause and to create value in economic, social and environmental way.
One of the key conclusions of the 1993 report was the recognition of the importance of communicating about the interests of (key-) stakeholders.
In 1996 and 1997, two further benchmark reports were published by SustainAbility, this time on behalf of the United Nations Environment Programme (UNEP). These reports refined the five-stage reporting framework. Parallel to the SustainAbility reports, accountancy firm KPMG published international surveys of sustainability reporting in 1993, 1996, 1999 and 2002. In these surveys, the top 100 companies in several countries have been queried if they issue an environmental, social, social and environmental or sustainability report. The results of this survey, that are shown in figure 4.2, tell that the percentage of these top 100 companies that
Fig. 4.2: Corporate reporting by the top 100 companies in several countries
does issue such a report has risen from 13% in 1993 to 28% in 2002. When the Global Fortune Top 250 is reviewed, 45 percent of it (112 companies) publishes a separate corporate report, apart from their financial reports.
These numbers proof that the reporting of other information than financials, has become a common phenomenon during the last decade. This does however not mean that all these
% Corporate reporting
at top 100 28% (11 countries vs. 1999)
24%
23% (19 countries)
17%
13%
1993 1996 1999 2002
(10 countries) (13 countries) (11 countries) 19 (countries) Source: KPMG
the concept of sustainability. They may report environmental data, but no social. Or they may report about their social performance, but not about their environmental performance.
§ 4.2.2 Guidelines and standards for sustainability
When so many companies have decided during the last years to do some kind of sustainability reporting, one should expect that there are reporting guidelines and standards available for these companies. Well, there are, although there is no set of standards or principles that is generally accepted on a global basis. The most important set of guidelines is provided by the Global Reporting Initiative, a set of guidelines that Nutreco has been using to prepare its social and environmental reports. There are however other guidelines, like the ones provided by ACCA (the Association of Chartered Certified Accountants). There are also guidelines that only concern one of the three aspects of sustainability, like the SA 8000 (social accountability)and ILO’s (International Labor Organization) decent work principles, that cover social aspects and UNEP (United Nations Environment Program) that covers environmental aspects.
Global Reporting Initiative
In the fall of 1997, the Global Reporting Initiative (GRI) was originated by the Coalition for Environmentally Responsible Economies (CERES), in collaboration with the Tellus Institute, a non profit research and consulting organization that focuses on environmental stewardship and equitable development. Shortly thereafter, the GRI was backed by UNEP. In the years following, GRI became an independent body under Dutch law, official collaborating with UNEP.
The GRI is an international multi-stakeholder partnership among NGO’s, businesses, accounting firms, labor organizations and UNEP. These stakeholders form a council that advises the GRI board in its efforts to draw a set of generally accepted sustainability reporting guidelines. In April 2004 this council welcomed its 100th member. A complete list of GRI stakeholders can be found in appendix 5.
Informs Informs Informs
Fig. 4.3: Organization of the GRI reporting principles Transparency
Inclusiveness
Completeness Relevance
Accuracy
Comparability
Neutrality Timeliness Clarity
Sustainability context Decisions about
what information to
report
Quality/
reliability of reported information
Accessibility of reported information
Auditability
In March 1999, a first draft of GRI’s Sustainability Reporting Guidelines was released. The following year, a pilot test was run among 21 companies and its conclusions led, together with comments from multiple stakeholders’ perspectives, to revised guidelines in June 2000 and again in August 2002. With these voluntary guidelines, the GRI tries to assist investors, governments, companies and the broader public in assessing the progress made towards sustainability and to improve related analysis and decision making (Massie, 2001: 60). To achieve this, the guidelines are based on 11 reporting principles, grouped into clusters as shown in figure 4.3.
These reporting principles form the root of the GRI performance indicators. These performance indicators are grouped under the three dimensions of sustainability: economic, environmental and social. Within these indicators, a distinction has been made between core and additional performance indicators. Reporting ‘in accordance’ with the GRI guidelines requires at least using the core indicators. Additional indicators are optional.
Besides the core indicators, there are four other conditions for a corporate sustainability report to be issued ‘in accordance’ with the GRI guidelines:
• A record of vision and strategy, including a CEO statement; an organizational profile including its operations, stakeholders, scope of the report, the organizational structure, government policies, management systems and stakeholder engagement efforts.
• A content index, connecting each element of the report to the corresponding GRI indicators.
• Compliance with the 11 reporting principles.
• A statement by the board or CEO that the report was prepared in accordance with the guidelines.
Though the choice to report in accordance with the GRI guidelines is voluntary, during the past years the list of companies reporting in accordance with the guidelines has grown to a number of 417 (see appendix 4). And although the GRI is subject to various forms of criticism, its multi stakeholder base makes its acceptance wide and global.
§ 4.3 The role of sustainability at Nutreco
Since the year 2000, Nutreco has published a yearly social and environmental report. This report is prepared with the use of the GRI guidelines, but is not ‘in accordance’ with these guidelines, since Nutreco does not report on all the core performance indicators that the GRI dictates. Nutreco does not use any of the additional performance indicators that the GRI provides.
The name social and environmental report suggests that these reports only cover the social and environmental aspects of sustainability. And although some attention is given to economic performance by the disclosure of the performance on eight GRI economic performance indicators, this disclosure only occupies half a page of the 72 of the 2003 report.
This indicates that the Nutreco social and environmental report can not be seen as a full sustainability report, since the attention to economic performance is simply too small. There is however a separate annual report that covers the financial results of Nutreco.
Although the social and environmental report is not a 100% sustainability report, it is the report that is the most concerned with sustainability of the two reports. On page 7 of the 2003 report, Nutreco declares that ‘in all activities, the objective is to achieve sustainability’. The definition of sustainability that Nutreco uses for this objective is the one provided by the World Business Council for Sustainable Development: ‘Sustainable are forms of progress that meets the need of the present without compromising the needs of future generations to meet their needs’. This definition is the same that was published in the Brundtland report of 1987.
Besides this sustainability objective, Nutreco mentions the conditions under which it wants to achieve that objective: ‘Sustainability must be approached while meeting the requirements and preferences of consumers for affordable, attractive, nutritious, safe and high-quality foods’.
In its 2003 social and environmental report, Nutreco has divided the accounting for the social and environmental aspects of sustainability into five topics: Nutreco people, Approaching sustainability, Aquaculture and society, Nutreco food quality and Nutreco in the community.
Nutreco people
The first topic is the Nutreco people. It covers eight pages of disclosure about the Nutreco workforce, like the number of them and the turnover, gender distribution, employee consultation initiatives, pay and pensions, redundancies, absenteeism and training and development.
Approaching sustainability
This section covers twelve pages that start with a description of the Health, Safety, Environment and Quality (HSEQ) policy and the accessory HSEQ audit system. What follows is an enumeration of initiatives and measures that have been taken in order to pursue the HSEQ policy and that covers mostly environmental topics like using resources, environmental impact, animal welfare and a list of indicators. The section ends with a list of objectives that have been set in the 2001 report and the pages where the possible fulfillment of these objectives has been described.
Aquaculture and society
In the eight pages of this section an initiative is described that was launched in June 2002, by Hans den Bieman, the chief operating officer of Nutreco aquaculture. Nutreco has identified six key issue clusters within this initiative:
1. Sustainability of the feed chain
2. Waste discharge and the biodiversity impact of fish farms
3. Possible threats to wild salmon from sea lice transfer and escapees 4. Health and safety issues: contaminants, use of chemicals, colorants 5. Animal welfare: density in pens, treatment of fish, harvesting 6. Social issues: being a good neighbor, treating employees fairly
It strikes the attention that these six clusters comprise at first glance the complete social and environmental aspects of sustainability in one business stream. There is however no topic about agriculture and society, the other business stream of Nutreco.
Nutreco food quality
Eight pages have been spent on the topic of food quality. Some attention is given to the flavor and to nutritional value and fat in relation to health and obesity. The most attention however is reserved for food safety and the Nutreco initiatives that are related to it. Food safety is a part of the social responsibility of a company. The question rises however if food safety should be seen as an integral part of sustainability. It seems obvious that dangerous food should not be seen as sustainable, because it is disastrous for either people planet or profit. Unscrupulous pursuit of food safety may nevertheless have some serious consequences. Production of perfectly safe food may be nice for the consumer in question, but can have severely unsustainable effects on the planet and other people. Nutreco does not mention this possible paradox.
Nutreco in the community
The last topic, Nutreco in the community, covers four pages and mentions the debates and dialogues with different stakeholders that Nutreco has initiated or has been part of.
When analyzing the choice of the topics, there does not appear to be a real consistency across them. The first topic, Nutreco people, seems logical, when one divides the different aspects of sustainability into several sections. Other possible topics in that line could be
‘Nutreco and society’ and ‘Nutreco and the environment’. This division is however not made.
Another topic is called ‘aquaculture and society’. In a report that is methodological consistent, another topic, that of ‘agriculture and society’, can be expected, because aquaculture and agriculture are the two business streams of Nutreco. Again this division has not been made.
Another inconsistency that can be mentioned is within one of the topics: ‘approaching sustainability’. The description starts with the HSEQ policy, outlining the intentions that Nutreco has in providing a safe and appropriate working environment for their employees, in contributing to food safety, in continual improving environmental performance and in being conscious and attentive to communities and society. This policy is broad, displaying both environmental and social aspects. One should subsequently expect a description of initiatives that Nutreco has taken on these broad subjects. The descriptions that follow do nevertheless concentrate on environmental initiatives on topics like the use of resources, animal welfare and a set of indicators like water discharge, energy use, waste treatment and odor complaints. Following these indicators, however an enumeration is published that, just like the HSEQ policy, concerns the broad environmental and social aspects of sustainability: the objectives of the 2001 report.
§ 4.4 Conclusion
Sustainability is a dynamic concept that is continuously subject to discussion. There are several definitions of the term, which however do have a very common tendency: sustainable are those activities that meet the needs of the world today, without compromising the needs of the future world. The key to achieving sustainability is a proper arrangement of the three aspects of sustainability: people, planet and profit. Initiatives that are taken at the moment strive to balance the three, but that may not be sufficient, though it seems a good start.
The growing concern about the unsustainability of our world has led to pressure on companies to provide more information than just financials. As a result, firms have started to provide environmental reports that later became social and environmental or sustainability reports. Various sets of guidelines and standards for sustainability reporting have been drafted, of which the Global Reporting Initiative seems to be the leading one.
Nutreco uses the GRI guidelines to prepare its yearly social and environmental report. It does
all the core indicators. It discloses its social and environmental impacts and activities on the basis of a set of topics that appears to lack a real consistency, because Nutreco does not chose to use a clear conceptual running thread. There are nevertheless several options for a little more consistency, like the classification that is used in the Nutreco HSEQ policy, the classification of the objectives in the 2001 report, the classification of the GRI performance indicators or the partition between agriculture and aquaculture.
Sustainability and Stakeholders
Introduction
This chapter describes the relation between sustainability and stakeholders. In the first paragraph of this chapter the stakeholders’ approach is explained. Special attention has been given to its relevance and to the different categories of stakeholders. The second paragraph discusses the possible difference between ordinary and
‘sustainability’ stakeholders. In the third paragraph, the role of stakeholders at Nutreco is discussed: they are defined and their attributes are pointed out.
Chapter 5
Key questions in this chapter:
• What role do stake- holders play in general?
(§ 5.1)
• What makes a stake- holder a sustainability stakeholder? (§ 5.2)
• What role do
stakeholders play at Nutreco? (§ 5.3)
§ 5.1 Stakeholders
Stakeholders are like a twin brother of the sustainability concept. Most companies that have a sustainability policy, do recognize their stakeholders in a certain way. The role of stakeholders in corporations has however been the subject of various often overheated discussions between various publicists, both scholars and businessmen. Before trying to define the term
‘stakeholder’, the question rises if stakeholders should be considered as relevant at all.
§ 5.1.1 Stakeholders versus stockholders
The question if managers should take into account any interests beyond the stockholders’
ones, has been asked many times by publicists over the last decades. Already in the 1930’s, Berle and Means (1930; 1932) raised the issue whether shareholders in public owned corporations should be given the same legal rights and protections as owners of other kinds of property. Their answer to this question was negative, because, in their opinion, these shareholders were not able to adequately undertake all the necessary responsibilities that ownership normally implies. Hence, Berle and Means draw the conclusion that stockholders should not necessarily be given all the rights that ‘normal’ owners of property have, although that doesn’t mean that management should be free to run the business in their own interests.
Although Berle and Means have been celebrated as the most important intellectual ancestors of the finance model, their view on the property rights of stockholders is often ignored by the advocates of the same finance model (Blair, 1995: 203). Their view is represented in the so called ‘stockholder theory’: the view that managers have a so called fiduciary duty to act only in the interests of stockholders. Advocates of the stockholder theory criticize the notion that managers should take other interests beyond the stockholders’ ones into account. Their criticism centers around the supposed threat to private property rights and the distortion of traditional notions of accountability (Barry 2002). Stakeholderism, as the adversaries name the theory, aims to take rights away from the owners and leads inevitably to politicization of the firm, because many groups and a number of competing interests should be considered.
Advocates of the stockholder theory deny the concept of corporate responsibility and any form of obligations to any stakeholders but stockholders. One of the most well known of these criticasters is Milton Friedman, the 1976 Nobel Prize winner for economic sciences. In 1970 he published a short but extremely controversial essay, titled ‘The social responsibility of business is to increase its profits’. In this essay, Friedman condemns any form of corporate responsibility. In his condemnation, Friedman goes rather far. He accuses the advocates of corporate responsibility of preaching ‘pure and unadulterated socialism’.
The key argument of Friedman is that corporate executives, who are trying to fulfill corporate responsibility, are wandering from their fiduciary duty. They will be spending someone else’s money for a general social interest. This spending will have an effect; decrease of returns to stockholders, increase of prices or lowering of wages. In Friedman’s view, this means that the executive is spending money that belongs to stockholders, customers or employees. By doing this, the executive fails to serve as an agent of these parties and is in fact imposing taxes on them. Furthermore, he is also deciding how this ‘tax’ will be spent. According to Friedman, this proofs that the doctrine of social responsibility involves acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources.
Despite the nearly sacred fiduciary duty that many scholars and managers preach, there are many arguments that suggest alternative views on the position of stockholders and stakeholders in the modern corporation. Blair (1995: 202) states that when managers only pursue the maximization of shareholder return, they tend to strive to maximize the share price, assuming the central maxim of finance theory that the price of stock today fully reflects the market’s best estimate of the value of all future profit and growths, which is not an undisputed assumption.
Freeman (1994) as well excavates the flaws in managerial capitalism, which seeks to maximize the interest of shareholders. He makes notion of the problems of externalities, moral hazards and monopoly power that undermine one of the central notions of managerial capitalism: that it would create the greatest good for the greatest number and as a result, there would be no need for any form of intervention by government.
Externalities exist due to the ‘free-rider’ problem that affects for example public goods as water and air. Due to this problem, no firm has an incentive to incur the cost of the cleanup or of non-pollution, since the marginal gain of the action of one firm is so small. Freeman states that this is the way firms reason since the industrial revolution and hence try to internalize the benefits and externalize the costs of their actions.
Moral hazards occur when the purchaser of a good or a service can pass the costs of it to a third party. In such situations there is no incentive, neither with supplier nor costumer, to economize and, hence, the result is excessive use of the resources.
The third argument that Freeman notions, again questions the competitive behavior of firms.
In his opinion, firms are ‘seeking to monopolize a small portion of the market and are trying not to compete with each other’. This had led to monopolies and oligopolies, not the most efficient corporate forms and possible means for abuse of market power.
As a result of these economic facts of life, the external control on firms has risen and constraints have been created on the possibility of management to act purely in the interest of stockholders.
While the opponents and adversaries of the recognition of stakeholders have not ended their discussion, they have been passed by reality. Kaptein (2004: 17) notions that of the two hundred largest multinationals, 52.5% have a business code that actually delineates company responsibilities towards stakeholders or employees. In appendix 6, an overview can be found with the responsibilities found by Kaptein. In the same research, Kaptein mentions the great differences in the intended level of return to shareholders (p. 21). This level is not always maximum, as the adversaries of stakeholder theory would like to see, but ranges from
‘acceptable’ (Shell) and ‘sufficient’ (HP) via ‘satisfactory’ (Philips) to ‘superior’ (Ito Yokada Group), ‘best possible’ (Merck), ‘excellent long term’ (British Telecom) and ‘maximize long term’ (BP).
Other empiric research (Donaldson & Preston, 1995) also proofs that firms actively pursue the satisfaction of stakeholder interests. However, as Harrison and Freeman (1999) point out, the pursuit of the satisfaction of stakeholder interests is done for economic reasons, not for its intrinsic merit. The satisfaction of stakeholder interests has an instrumental basis: firms have noticed that concern for stakeholders can improve the financial performance of the firm.
Maybe this proofs that both the proponents as the opponents of stakeholder theory are right:
recognition of the rights of other stakeholders than stockholders is useful, because it raises the return to shareholders.
§ 5.1.2 Definition and categorization of stakeholders
Freeman (1984) brought stakeholder theory into mainstream attention. His original definition of a stakeholder is still widely used. Freeman defines a stakeholder as ‘any group or individual who can affect or is affected by the achievement of the firm’s objectives’. According to Goodpaster (1991), Freeman’s definition of a stakeholder implies two types of stakeholders: first there is the strategic stakeholder, the one who can affect a firm. Second there is the moral stakeholder, the one who is affected by the firm. However, these definitions do not provide an account of how stakeholders manage a firm to enable them to achieve their interests.
Frooman (1999) defines three general questions that have to be answered when developing response strategies to stakeholders:
Who are they? → Their attributes
What do they want? → Their ends
How are they going to try to get it? → Their means
§ 5.1.2.1 Attributes
Mitchell et al. (1997) claim that stakeholder salience, the degree to which managers give priority to competing stakeholder claims, is positively correlated to 3 attributes: power, legitimacy and urgency. With these attributes a model can be constructed that gives a qualification to different classes of stakeholders.
Figure 5.1: Stakeholder attributes according to Mitchell et al. (1997)
In order to define the stakeholders that are the most crucial ones to a firm, Mitchell et al.
(1997) have divided the seven types of stakeholders into three categories, based on the number of attributes they have: Latent stakeholders (possessing only one attribute), expectant stakeholders (with two attributes) and finally the definitive stakeholders, possessing all three possible attributes, as shown in figure 5.1.
Latent Stakeholders
Latent stakeholders get only little attention or no attention at all by managers. Similarly, latent stakeholders do not pay much attention to the firm, since they own only one attribute. There are three types of latent stakeholders; first there are the so called dormant stakeholders, which have power, but no legitimate relationship or an urgent claim. They can have coercive power, or they may be able to spend a lot of money, or may have easy access to media attention. However, they are not likely to use the power, since they lack legitimacy and an urgent claim. Management should, however, be on its guard, because a dormant stakeholder can obtain a second attribute and hence become more salient.
Second, there are discretionary stakeholders. They posses the attribute of legitimacy, but do not have power or an urgent claim and hence can not lay pressure on management to engage in an active relationship. This does not mean that discretionary stakeholders cannot have an active relationship with a firm, because managers may choose to engage in corporate philanthropy towards discretionary stakeholders, as a result of a sense of corporate social responsibility. Examples of such relations are hospitals and charities that receive funding and manpower from corporations.
1. Dormant Stakeholders 2. Discretionary Stakeholders 3. Demanding stakeholders 4. Dominant Stakeholders 5. Dangerous Stakeholders 6. Dependent Stakeholders 7. Definitive Stakeholders 8. Non-Stakeholders
