Reporting on CSR and Ethical and Sustainable Management in Food Industry in Slovakia as an EU Member

Reporting on CSR and Ethical and Sustainable Management in Food Industry in Slovakia as an EU Member

Renata Paksiova (University of Economics in Bratislava, Slovakia) and Kornélia Lovciová (University of Economics in Bratislava, Slovakia)
DOI: 10.4018/978-1-5225-8970-9.ch013
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The food industry is an important sector in each country with regards to food self-sufficiency, and it is a subject of stricter monitoring compared to other sectors. Disclosure of non-financial information significantly compliments the image of each company and contributes very effectively to the decision making of their customers, not only from the supply chain. Interest in non-financial information as parts of CSR from the perspective of the ethical and sustainable supply chain management is increasing. In the social, environmental, and economic spheres, it is important to determine the specificities of food industry reporting in order to achieve sustainable development. The aim of this chapter is a theoretical analysis of the reporting of non-financial information according to their disclosure requirements in the food industry by enterprises in Slovakia and a quantitative analysis of their reporting in the structure of SK NACE for 2017 in the context of the ethics and sustainability. Slovakia has more requirements for company reporting in the annual report since 2017.
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The food industry holds a significant position in the economy of the Slovak Republic, because it is closely related to agricultural primary production. It has a significant impact on the employment rate and health of the population, as well as on the development of individual regions of the SR. In line with the Food Industry Development Plan 2014 - 2020, it is imperative to perceive the food industry as a strategic industry that provides for Slovakia’s food sovereignty with a potential to generate its self-sufficiency at 80% to 2020 and includes the objectives in Table 1.

Table 1.
Food industry development concept objectives
Food Industry Development Plan 2014 - 2020 of the SR Objectives
1.Increase food self-sufficiency to 80% of the current consumption in the SR
2.Improve food industry market position in the SR
3.Boost the level of competitiveness of the food industry

Source: (Rokovanie vlády SR, 2018)

In April 2018, the Slovak Agriculture and Food Chamber drew attention to the dwindling trend of the food industry in every indicator, which is the result of wholesale practices, whereby retail supermarkets try to negotiate the lowest prices possible with suppliers, and in some cases, suppliers are forced to provide food products and services at prices below the cost of production.

Even in the food industry, profit is seen as the primary goal, but in the long run, the pressure to increase profits when struggling for customers in the food industry can have the opposite effect. Food industry businesses generally hold the positive view that, if they want to create and they add their interest in society and environment, they will benefit not only themselves but also society as a whole. In this context, they have recently become important factors of ethics and sustainability in the supply chain. Therefore, the food business should take into account the ethical behavior of suppliers as they choose them to ensure further production of food products and services, taking into account all CSR attributes. The desired situation is to make it possible for businesses on the market to be ready to continuously improve the food products and services and reduce negative environmental impacts, for example through waste reduction or the greening of production processes, in line with the positive perception of this behavior by consumers (Ulker- Demirel & Demirel, 2016) across the supply chain. If a food industry business wants to be a sustainable one, it needs a reliable base in supplier-customer relationships. Supplier selection, which takes into account responsible business, calls for the need to detect corporate social responsibility in the supply chain before concluding long-term supplier-customer relationships and contracts. The necessary information on CSR can be provided in annual reports as one of the most important freely available sources of information on any businesses.

Key Terms in this Chapter

Register of Financial Statements: It is set up by the Accounting Act to improve and simplify the business environment and reduce the administrative burden of in the field of entrepreneurship. At the same time, it should improve the availability and quality of information on entities. Users can search through the list of entities free of charge, view, store and print available financial statements and other documents published in the Register, such as annual reports.

Food Security: It can be defined as a state where all people at all times have physical and economic access to sufficient, safe and nutritious food meeting their nutritional needs and food preferences for an active and healthy life.

SK NACE: Slovak Statistical Classification of Economic Activities.

Sustainable Development: According to the United Nations, the concept of sustainable development allows us to meet present needs without the imperilment of the future generations.

Behavior Ethics: It is a new field of social scientific research that seeks to understand how people actually behave when confronted with ethical dilemmas. It refers to behavior that is judged according to generally accepted norms of behavior.

Annual Report: An accounting record that provides information on an entity's development, status, and significant risks and uncertainties to which it is exposed. The information is provided in the form of a balanced and comprehensive analysis of the status and the forecast of the development and contains important financial and non-financial indicators, including information on the environmental and employment performance of the entity, with reference to the relevant data in the financial statements.

Food Industry: It is a complex, global collective of diverse businesses that supplies most of the food consumed by the world's population.

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