Sustainability Reporting by Outdoor Equipment Vendors

Sustainability Reporting by Outdoor Equipment Vendors

Imke Wasner (European Research Center for Information Systems, Department of Information Systems, University of Münster, Münster, Germany) and Tim A. Majchrzak (European Research Center for Information Systems, Department of Information Systems, University of Münster, Münster, Germany)
DOI: 10.4018/jsesd.2013040105
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Abstract

Supply chains for various goods span across multiple nations. Often, lower developed countries are involved in which no adequate background institutions have been established. Consequently, sustainable behavior of multinational corporations is important. To make companies’ performance regarding sustainability more transparent, various international institutions developed guidelines for sustainability reporting. Based on the predominant Global Reporting Initiative (GRI) framework, they have analyzed the reports of two outdoor equipment vendors, namely Timberland LLC and The North Face. Consumers of outdoor products are expected to be more aware of the impact their purchases have. The authors briefly introduce the GRI framework and the concerned sector. The two companies’ actions are compared in detail and their actions assessed based on theories of ethical business operation. Afterwards implications of the findings are discussed. The authors’ results suggest that companies in this sector are conscious about sustainability but individual performance greatly differs.
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Introduction

The supply chains of today’s companies do not stop in one country. They are reaching across the world and frequently also lower developed countries (LDC) are included. For a variety of reasons, sourcing in LDCs often is cheaper – or at least perceived cheaper – than in the so called industrial nations. Adequate background institutions are often not established in LCDs (De George, 1993, p. 43). As a consequence, sustainability of production often is not given due to neglected labor standards, acceptance of ecological hazards and similar phenomena. For small and medium-sized companies (SMEs) it is hard to keep track of the full supply chain and they have little to no bargaining power with suppliers. The situation for multinational corporations (MNC) is different.

A subgroup of customers and – to an increasing extent – the general public is becoming aware of unsustainable supply chains (N. A., 2012; Prokesch, 2012). In fact, they begin to ask how products have been manufactured and whether it might be unethical to purchase products that have been produced in circumstances of violations of human rights or excessive pollution. Moreover, companies begin to realize that controlling the supply chain in terms of sustainability can be advantageous both from marketing and production perspective.

Therefore, sustainability and sustainable behavior is becoming increasingly important. To provide more transparency for what companies are doing from this point of view, different international institutions developed guidelines for sustainability reporting. The sustainability report is one instrument to support the publication of environmental, social and ethical issues concerning the company to the stakeholders. The most widespread framework has been developed by the Global Reporting Initiative (GRI) (Dumay, Guthrie, & Farnetti, 2010, p. 532).

To understand better how sustainability reports are used, we analyzed and compared two companies that release reports. The GRI framework is used for our analysis and we draw from theories of ethical economic behavior for comparison. We have chosen a distinctive commercial field, namely outdoor equipment production. Due to the kind of product offered, we expect typical customers to be aware of ecological and social challenges of production. Simply speaking, the majority of people that buy products that support them in outdoor activities such as hiking will have at least some awareness of the possible endangering of the environment by production. Unsurprisingly, two notable companies in this field – Timberland LLC and The North Face – issue sustainability reports. This is currently not common in many other industrial sectors. We have selected the two companies as they are competitors but in a first scan differences in their sustainability approaches were notable. Our work does not only concern the companies individually but also compares their approaches.

Our article makes a number of contributions. First, it summarizes the background of the Global Reporting Initiative and related ethical theories. Second, it describes comprehensively the status quo of two companies. Third, it compares the companies and highlights both specific findings and general conclusions that can be drawn. Fourth, it gives a detailed outlook to the questions that have yet to be answered. Particularly the combination of ethical theories and sustainability is a unique feature of this article.

This paper is structured as follows. The next section gives detailed background information on the Global Reporting Initiative and then explains our research’s theoretical underpinning as well as its method. The following section presents the case of the two outdoor equipment vendors. First, they are briefly explained. Second, reporting results according to the GRI are compiled for them. Next we compare and analyze the results; this leads to the discussion afterwards, which also highlights future research questions. Finally, in the last section we draw a conclusion.

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