Sustainability Performance Interpretation - Case Study Example

Sustainability Performance Interpretation Introduction In order to put the business relevance of a business model into perspective with regards of how one entity performs as compared to another, both internal and external performance indicators are essential. Considering three business entities within the entertainment industry, film, factors that relate to the performance and sustainability are considered to show how the business entities are able to sustain stable business environment. Among the considered indicators to test how one company performs both internally and externally include economic, environment, human rights, social labor practice, social product responsibility, and social society indicators. These factors considered individually do not make a case of how each company is able to sustain its performance. However, when the indicators considered as a set, they show whether a company is performing in accordance to the expectations of the active market, the society, and whether it is meeting core business goals. In this interpretation paper, data on the above-listed indicators is used to compare how each business model performs with regards to subcategories of the listed indicators. However, since the entertainment industry as well as any other for-profit business environment is coupled with factors such as competition as well as the dire need for competitive advantage, this interpretation also considers the performance of each business model with reference to its potential rivals. INTERPRETATION Caesars Entertainment Economic Indicators With reference to the economic indicators, two subcategories under Caesar’s economic performance are of relevant significance to the company. Among these include the basic components of the business’s global operations and indirect economic impacts. Under both subcategories, the business sustainability report shows numerical data as well as some discussion on the same. This approach gives the business model a rating of three under each subcategory showing that the business’s performance and sustainability is average. Environment Indicators With respect to the multiple environment impact subcategories, it is observed that Caesars Entertainment only reports on only 8 of them. However, one major observation is that, besides the rating of 0 under the rest, the reported areas are rated 5 as the company offers discussion of details, provides numerical data or multiple years, and indicates positive trend under each category. The reported subcategories for sustainability performance under environment include energy consumption, energy intensity, water volume, direct and indirect emission of greenhouse gases, intensity of greenhouse gases, and the weight of both hazardous and non-hazardous waste. Human Rights Indicators Under Caesars Entertainment sustainability performance report, chances are that the company has no recognition of human rights as it does not report in any of the provided subcategories. Overall, the company has zero cumulative points indicating that it does not offer discussion of human rights’ policies, no numerical data available, and neither does it consider negative of positive trends on the same. Social Labor Practice Indicators For Caesars Entertainment, 44% of the indicators have information provided. However, among the best rated subcategories of the Human Rights Indicators include rates of injuries/occupation diseases/absenteeism/lost days/fatalities at work and provision of employees with performance reviews. The poorly rated areas under the social labor practice indicator have an average rating of 3 for providing numerical data of only one year and include employee safety as dictated by union coverage agreements and provision of training to employees based on employment category and gender. A negative trend is observed under the breakdown of employee governance based on gender and age group among other diversity indicators hence the rating of 4. Social Product Responsibility The social product responsibility indicator for the Caesars Entertainment takes into account 67% of the total areas observed. Based on this information, information regarding fines for non-compliance with laws and regulations, breach on customer privacy, and non-compliance with marketing communication regulations all rate averagely at 3. Customer satisfaction measures rate 5 while non-compliance with labelling and provision of service information rate poorly at 1. Finally, report on sale of banned and/or disputed products rates at two showing that it does not indicate numerical data and does not provide yearly trends. Social Society Indicators Caesars Entertainment’s inability to provide comprehensive information under the observed subcategories of the sustainability performance indicators is confirmed under the social society indicators after registering only 18% of the required fields. The company provides information with negative trends on anti-corruption policies to rate at 4 and rates averagely at 3 under engagement of local community. Carnival Cruises Economic Indicators Carnival cruises on the other hand, has four major areas from which the economic indicators are significantly impacting the business model’s sustainability. Based on the business sustainability report, it is observed that among the indicators include global operations, impact of development on infrastructure, climate related risks, and indirect economic impacts as well as their corresponding extends of the impacts. Under the global operations of the business, Carnival Cruises, the business’s sustainability performance report indicators numerical data across multiple years as well as the consideration of negative trend. Under the risks posed by climate, the sustainability performance report fails to provide numerical data but offers some discussion on the same. Both infrastructure investments and indirect impacts show are rated 3 each indicating that the sustainability performance offers both numerical data and discussion but only for one year which is insignificant if trends were to be drawn. Environment Indicators Although there are multiple subcategories of environment indicators for the Carnival Cruises to report on, the business sustainability performance report manages to offer discussion, numerical data, positive, and negative trends for both one and multiple years. Among the subcategories of environment indicated rated 2 for lacking numerical data include reduction in energy requirements, habitat protection, protection of animals, mitigation of environmental impacts of products, and the cost of environment protection. Since the average rating of 3 years almost shows neutrality, the impacts on environment is minimal and of low significant in the sustainability performance, consideration of subcategories rated 4 for the inclusion of negative trend and 5 for inclusion of positive trend over multiple years is considered. Due to negative trend incurred, a rating of 4 is reported under sanction for violation of environment laws, weight of hazardous and non-hazardous waste, reduction of greenhouse gases, and emission of ozone depleting substances, indirect emission of greenhouse gases, and volume of water rate 4 for incurring negative trends. Human Rights Indicators Carnival’s sustainability performance under human rights is below the 3-point mark for average in most of the subcategories provided. For human rights’ policies, freedom of association, child labor, forced/compulsory labor, and human rights’ grievances; the company rates below average at two for lacking numerical data under each of these areas. The company, however, rates 5 for indicating positive trend, provision of numerical data across multiple years, and offering discussion of incidents of discrimination and corresponding courses of action. Social Labor Practice Indicators Carnival Cruises provides information for 63% of the considered indicator subcategories under the social labor practice domain. Although the company does not offer information worth 5-point rating besides training of employees based on gender, it provides some discussion for the screening of suppliers’ labor practices and rates 1 under this subcategory. In addition, the company rates 2 for the filing, addressing, and resolution of labor practice grievances. Under occupational hazards such as diseases and injuries as well as lost days, the company rates 4 as it indicated a negative trend over multiple years. Finally, the average rating of 3 is registered under governance bodies based on age groups gender and other diversity indicators. Social Product Responsibility Carnival Cruises continues to be a leading entity in the provision of information about its sustainability performance as it offered information on 78% of the observed areas under social product responsibility. The company offered information on all areas observed except under the measurement of customer satisfaction and information on banned and/or disputed products. However, while under other observed indicators the company provided information rated above average of 3, all the provided information under the areas observed rated 2 showing no indication of numerical data nor trends. Social Society Indicators Although Carnival Cruises provides information in most of the observed areas under social society indicators, it has below average rating in all subcategories except under anti-corruption policies which rates 5 for comprehensive information. The company provides 55% information for the areas observed. Royal Caribbean Cruises Economic Indicators Royal Caribbean Cruises has four subcategories that add up to its sustainability performance report to provide significance and relevance of the business operations. Under the global operations and basic components, the business is rated 4 as it considered numerical data, discussion of the same, as well as the provision of negative trend. With reference to reporting of risks associated with benefit plan obligations, the business rates 5 as it offers numerical data of multiple years, discussion, and shows positive trend. Poor rating of 2 is observed under reporting of risks associated with climate change as discussion of details is provided but no numerical measurement is provided. Lastly, impact of infrastructure investments is rated averagely at 3 as the business offers discussion but only offers numerical data for only one year. This is a constraint in the analysis of trends over a longer period of time. Environment Indicators For Royal Caribbean Cruises, a trend in the company’s sustainability and performance report is observed. The company’s report does not provide any data related for rating below 3 and shows multiple areas rated 0. However, among the significant subcategories of the environment indicated include a rating of 5 under the reporting of the weights of hazardous and non-hazardous wastes, intensity of greenhouse gas-emissions, direct greenhouse emissions, volume of water consumed, intensity of energy, and total energy consumption. Human Rights Indicators As far as the cross-company analysis is concerned, it shows that Royal Caribbean Cruises almost imitates Caesars Entertainment in reporting of human rights. Royal Caribbean only offers information on screening of suppliers with reference to their regard for human rights. Under this subcategory, the company provided numerical data for multiple years and indicates a positive trend on top of providing details on the same. Social Labor Practice Indicators Royal Caribbean Cruises offers information in 31% of the indicator’s components providing discussion only under employee performance reviews to rate at 1, average rate of 3 for the screening of supplier labor practices and representation of workers in formal joint management and safety committees. Lastly, the company rates 5 for the provision of comprehensive information, both descriptive and quantitative across an array of years regarding governance and classification of employees with respect to gender and age group among other diversity indicators. Social Product Responsibility Royal Caribbean Cruises provided information in 44% of the areas observed under the social product responsibility and emerging as the poorest information issuer under the indicator. The highest rating of the company is average and registered under product and service categories involving safety and health impacts, breaches and loss customer privacy and data respectively as well as fines for laws and regulations’ non-compliance. Social Society Indicators In only three areas observed, Royal Caribbean Cruises rates below average in its sustainability performance reporting. However, the company fairs way better that Caesars Entertainment in overall reporting at 27% of the total areas observed. Cross-Company Sustainability Performance Interpretation Under economic indicators, multiple subcategories are considered but the only relevant subcategories for all companies include global operations for each company, risks associated with climate change for Royal Cruises and Carnival Cruises rated two for lack of numerical data, benefit plan obligations for Royal Cruises, infrastructure investment for Royal and Carnival Cruises each rated 3 for failure to provide numerical data across multiple years, and reporting of indirect economic impacts rated at 3 for Ceasers Entertainment and Carnival Cruises. Under economic indicators, Ceasers Entertainment offers the worst sustainability performance information as it has 6 cumulative points against 12 and 14 for Carnival and Royal Caribbean Cruises respectively. For environmental indicators, Royal Cruises and Ceasers Entertainment almost rate the same for cumulative points as they each have 43 and 40 points respectively. However, in terms of overall sustainability performance, it is seen that Carnival Cruises has the best environment sustainability performance reporting strategy as it has 83 cumulative points for reporting in most of the category’s subcategories. Among the poorly reported areas, human rights indicators show that Caesars Entertainment has no account of human rights indicators while Royal Caribbean Cruises reports under only one subcategory involving external entities, suppliers. Under the human rights indicators, Carnival Cruises rated best for cumulatively accruing 16 points against 0 and 5 for Caesars Entertainment and Royal Caribbean Cruises respectively. While Royal Caribbean Cruises offers fairs better than Caesars Entertainment in most of the already discusses indicators, it performs poorest under the social labor practice indicators as it only manages 13 points of the 66 allocated under the indicator. Caesars Entertainment manages the second position with 27 points and as observed earlier, Carnival Cruises tops the list with 36 points which is above 50% of the total grade allocated to the indicator. Although Caesars Entertainment rates better than Royal Caribbean Cruises, they have a close relation in reporting such that the former cumulatively scores 17 and the latter scores 14 points. However, these two companies combined do not match the reporting competency of Carnival Cruises whose cumulative score is 45 and reporting on 78% of the observed areas. Under social society responsibility, Carnival Cruises fairs better as it reports in 55% of the areas and cumulatively scores 13 points. Conclusion Carnival Cruises has a better sustainability performance record under all observed indicators. In second place is the Royal Caribbean Cruises while the least sustainable performance is observed under Caesars Entertainment. Read More