The purpose of this “Sustainable Investment and Trade” report is to conduct a sustainability report for a chosen company of choice. The company is chosen as Pioneer Chemicals. Pioneer Chemicals is a Delhi (Capital of India) based manufacturer of chemical products. The report is structured into three sections as following:

• The first section analyses the lifecycle environmental and social impact of operations from the concerns of different stakeholders for Pioneer Chemicals, and how these stakeholders concerns affect the company.
• The second section critically assesses the adequacy of the company’s sustainability plan for dealing with the environmental and social impacts and the concerns of stakeholders.
• The third section presents an investor’s critical assessment of the company including the adequacy of its business plan in taking advantage of ‘green’ business opportunities as well as dealing with the negative impact of its current business.

Introduction

Pioneer Chemicals is a Delhi based manufacturer of chemical products. The company is an old and known company operating in Indian chemical industry having operation in both within the country and outside the country.  The company deals in every sort of   chemicals comprising industrial, laboratory   solvents, Silicones etc. The company makes and market products in both small and bulk packs. The company has a variety of just about ten thousand chemicals and cater to each sort of industry in the forms of plastics, pharmaceuticals, food processing. Pioneer Chemicals is distributing chemical products ever since several decades and notably the company has the leading position in small pack industrial chemicals in India. The company gives the credit of this achievement to its unique facility well-resourced with competently and proficiently managed research and development and strict quality control. As per the company promise, quality is the nerve system and more importantly the company has a fortunate track record of order deliverance with nil defects. However, our purpose here is to assess the company’s sustainability status from the stakeholders’ perspective, particularly in the context of environmental and social impacts (The Pioneer Chemicals Company, 2012).

Stakeholder’s Concerns and their Impact

The stakeholder perspective is linked to mutual relationships stuck between the organization and its stakeholders in view of the fact that the stakeholders may well advantage from the organization and so organization from the stakeholders. Although the relationships stuck between organization and stakeholders are generally interdependent, the stakeholders put up a system from the company’s perspective such as the stakeholders are as well allied in the midst of themselves in the course of their relationships to the company. For   benefitting from this system and to produce sustainable riches for every one of parties incorporated, an organization ought to deal with its stakeholder relations (Sachs and Munshi, 2003). Such managing comprises the recognition of the foremost stakeholders, becoming familiar with their concerns and wishes with that of the organization of jointly advantageous relationships established. The final creation of successful stakeholder relationships is the license of the organisation to maneuver, an advantage exclusive of which the organization might not survive.

The stakeholder perspective categorizes  the company’s  stakeholders into three categories as per the company’s  strategic background, for this reason on the one end putting  together the resource-linked  perspective  and the business formation  perspective  into the stakeholder perspective structure, and moreover  pulling  out the structure by means of social and political  environments (Post, Preston and Sachs 2002).  The primary category consists of the company’s own possessions in the forms of shareholders, staff and business associates. This grouping replicates the resource linked perspective as the entire of the organisation’s possessions are embodied in various modes by different stakeholders. Above and beyond, the organisation’s link with its stakeholders sets aside it to create the possessions obtainable and prolifically serviceable.  The next category comprises the stakeholders controlling the company’s sector in the forms of regulatory bodies, staff unions, and strategic partners. Reliant on the sort of relations that the organization has built up with its stakeholders, they tend by and large mutual and trustworthy in their transactions with the organization, as affirmed in the business sector structure perspective. The final category comprises the company’s societal and political surroundings in the forms of governments, communities, and private companies. The stakeholder perspective therefore offers a wide-ranging angle on the functioning of the organization; it breaks through the strategy-structure-culture grouping and directs the organization   to fit into place in unremitting social and environmental pressures.

So far India is concerned; an environmental viewpoint ought to conduct the assessment of every business activity, acknowledging the role of natural resources and the livelihoods of local community, where the former relates to environmental concern whereas the later relates social concern.  This acknowledgement ought to be informed through an all-inclusive recognition of the discernments and beliefs of local community as regards their stakes in the resource utilized by companies. In order to guarantee  the sustainability in terms of natural resources and the  livelihoods of local community, the acknowledgment of the entire stakeholders  in it and their roles in its protection and management is indispensable (Bahuguna,  2012). It ought to be guaranteed that this applies, specifically to local communities, particularly female community and additional disadvantaged groups living in deficiency of food and health. There is necessity to set up distinct and enforceable rights comprising customary rights and protection of possession, and to make certain equivalent access to land, water and additional natural and biological capital.

On the other hand, human health in its extensive sagacity of physical, mental and spiritual happiness is to a great degree reliant on the access of the people to a hale and hearty environment. For a hale and hearty, creative and gratifying life each human being must have the physical and fiscal access to a balanced diet, safe drinking water, hygienic air, cleanliness, environmental cleanliness, basic health care facilities and educational facilities. Accessibility to safe drinking water and a hale and hearty environment ought to be a fundamental right of each person in the country, as per the Constitution of India (Bahuguna, 2012).

Markedly here people of India keep on being defenseless to a twofold saddle of diseases.  Conventional diseases in the forms of malaria and cholera, created by risky drinking water and deficiency of environmental cleanliness, have not yet been controlled. Essential health and educational facilities in the country necessitate to be strengthened. For companies in India,  it becomes obligatory both constitutionally and legally to be in terms of food , health and hygiene. However, gradually managing environment through various green efforts becomes imperative.

From the stakeholders’ perspective of sustainability, Pioneer Chemical too have three categories of stakeholders. The first category consists of the company’s own possessions in the forms of employees, customers, suppliers and investors. The second category comprises the stakeholders controlling the company’s industry in the forms of regulators, unions, joint venture partners.  Finally the third category comprises the company’s social and political surroundings in the forms of   governments, communities, and private companies. In relation to these three stakeholders, Pioneer Chemical is appearing more concerned about the first and second, but when it come third category; the company’s performance is loose and negligent. For the cases of employees, customers, suppliers and investors, the company is committed for welfare and so is the case of regulators, unions, joint venture partners. However, government (environmental policy commitment) and communities concerns are less considered. This is because in the short-term financial goal the company overlooks environmental and social concerns. But the company can not afford overlooking environmental and social concerns, because it operates in hazardous category of industry that requires more regulated in terms of protecting environment and local community.

Sustainability Plan and Handling Environmental and Social Impacts

In accordance with the stakeholder perspective of sustainability (Post et al., 2002), a company  might last with the passage of  time if it is capable to combine  and keep up sustainable and heavy-duty  associations with each and every one member  of its stakeholder set of connections.  These associations are the indispensable possessions that managers in the company ought to deal with, and markedly they are the definitive sources of company survival and wellbeing (Post et al., 2002). As of this perspective, a firm generates value as soon as it takes on a decision-making method, which is sustainable leaning. By and large, corporate sustainability may well be regarded as an open approach that comprises an assortment of distinctiveness, particularly concerning to the appropriate amalgamation of green and societal facets (Schaltegger and Burritt, 2005). Rightly supposed that sustainability is the competence of a company to carry on its actions without letting up, containing of appropriate notice of their effect on accepted, societal and human  assets. A sustainability-leaned company is one that builds up with the passage of time by means of taking into contemplation of the   social and environmental proportions of its procedures and feat. For that reason, fiscal and viable accomplishment, societal authenticity and effective utilization of natural resources are tangled as per a synergetic and spherical analysis of the firm’s plans. In this framework, value making procedures are extensive and common and meet, in diverse modes, the stakeholder prospect.

To put it precisely taking on this stakeholder perspective of sustainability (environmental and social concerns) for Pioneer Chemical implies addressing environmental and social effects of business activities and taking the managerial steps by the company in this direction in both formal and informal manner. In this framework of action, the achievement of managerial attempts of the company might not be measured in accordance with a shareholder standpoint, but just through taking on a more holistic and wide-ranging stakeholder structure. Pioneer Chemical necessitates suitable systems to determine and   be in charge of its own behaviour for evaluating whether the company is acting in response to stakeholder concerns of environment and societal impacts in an effectual manner and for communicating and demonstrating the results accomplished. It would be worth to assess a model of environmental and societal reporting by the company as sustainability report.

The time-honored environmental and  social   concerns in the report of sustainability  elucidate added as public relations aspects  rather  as effectual tactics  to organize and deal with the performance of the firm (Cerin, 2002 ). On the other hand, there are methodologies such as the balanced scorecard, the GRI Sustainability Reporting Guidelines and the Sustainability Integrated Guidelines for Management (SIGMA Project, 2003). Management in the companies may well opt one or all of these methodologies or tools as per suitability. However, in order to avoid the complexity, companies have opportunity to opt a general sustainability reporting approach that comprises procedures of annual report, social report and environmental testimony.

The yearly statement comprises the profit and loss report, the balance sheet and the declaration of cash flows.  Moreover, ratios and indicators ought to be comprised for testing out the   competitiveness of the business in the areas of investment, promotion, procedures, know-how and value. More importantly , valuable  information from a societal and green perspective  is previously described in annual reports with reference to concerns linked to risk management, probable accountabilities, research and development plans etc. Overall, each country and the business sector in the country have an explicit regulation in relation to these (Cerin, 2002). The societal account measures the effect of the firm and its actions on the diverse stakeholder grouping. As a result, it is a method accomplished of holding up the management executive course of action and the corporate communication/engagement guidelines. In accordance with the defined approach, it is poised of the ethical guidelines, the value-added testimonial and the scrutiny of stakeholder relationships (Cerin, 2002).

The ethical guidelines enclose explicit corporate commitments en route for the stakeholder groups as per the sustainability perspective of the company. In relation to these pledges the   social performance of a business is evaluated all the way through the additional two components. The environmental reporting structure surrounded by this targets  to take account of the entire  methodologies recognized and come together an accounting method gathering  corporate information  with the dimension of in-house costs and benefits  connected to the managing environment  options created in relation to  products and procedures  (Burritt et al., 2002). In accordance with this method, the environmental accounting consists of input–output analysis, LCA and cost–benefit analysis linked to managing environment of products/procedures. For that reason, two vital sorts of data pouring are the entity of the environmental accounting order namely flows linked to business information, power and resources analysis flows linked to fiscal items such as financial environmental report.

So far as the case of Pioneer Chemical is concerned, the sustainability policy of the company in terms of environmental and social impact, the result is half accomplishing appropriately whereas completely negligent of the remaining half. In more clear words, in its annual report the company adequately present the profit and loss analysis, the balance sheet and the declaration of cash flows from the perspective of stakeholders such as owners/managers, shareholders, employees and suppliers. When   comes to social report, the company presents its community welfare steps that are far less than the expected. Finally when it comes to environmental report, the company fails to present the elementary input–output analysis or cost–benefit analysis. Therefore, Pioneer Chemical needs to improve its social report as per ethical guidelines for the chemical industry in the country and cost–benefit analysis of environmental management.

Green Business Plan

India’s well-built place as regards the decisive success factors for the chemical industry may well assist it try to be like the sensation tale of Europe in a comparable structural agenda. Nevertheless chemical companies in India ought to deal with the rising concern of sustainability particularly in the context of environmental management or green planning. Augmentation in the Indian chemicals industry is driven for the most part through vigorous domestic demand with exports oriented growth in specific segments (Keller, Kadakia and Nigam, 2011). Discovering these opportunities may well turn into an exclusive  opportunity for Indian chemical companies like Pioneer Chemicals  not just  to fight current competition by means of  corresponding the performance of their products but to  make fresh products and businesses that might  be converted into  globally competitive accordingly forming  momentous  export opportunities. But such companies will need to plan for green transformation.

Green Transformation is developing a mantra of rising worth for chemical companies in business surroundings with unparalleled echelons of awareness for sustainable growth. An incorporated approach all through the value chain comprising   procurement, product design, manufacturing method and marketing all along with plenty reporting and risk management at every phase is turning out to be decisive.  Companies may well not just generate value all the way through green product/ process advancement but as well generate end consumer pull all the way through component branding in green products. Companies that set up standard green leadership in the midst of the entire stakeholders would have a discrete first mover benefit over their rivals (Keller, Kadakia   and Nigam, 2011).

Accordingly Pioneer Chemicals need to put into practice a Green Transformation   plan, where by means of this method the company will be able to generate value all the way through green product/ process advancement and also generate end consumer pull all the way through component branding in green products. This way the company will have a discrete first mover benefit over their rivals.

Conclusion and Recommendations

Pioneer Chemical is appearing more concerned about the first and second, but when it comes third category; the company’s performance is loose and negligent. For the cases of employees, customers, suppliers and investors, the company is committed for welfare and so is the case of regulators, unions, joint venture partners. However, government (environmental policy commitment) and communities concerns are less considered. This is because in the short-term financial goal the company overlooks environmental and social concerns. But the company can not afford overlooking environmental and social concerns, because it operates in hazardous category of industry that requires more regulated in terms of protecting environment and local community.

The sustainability policy of the company in terms of environmental and social impact, the result is half accomplishing appropriately whereas completely negligent of the remaining half. In more clear words, in its annual report the company adequately present the profit and loss report, the balance sheet and the declaration of cash flows from the perspective of stakeholders such as owners/managers, shareholders, employees and suppliers. When   comes to social report, the company presents its community welfare steps that are far less than the expected. Finally when it comes to environmental report, the company fails to present the elementary input–output analysis or cost–benefit analysis. Therefore, Pioneer Chemical needs to improve its social report as per ethical guidelines for the chemical industry in the country and cost–benefit analysis of environmental management.

Pioneer Chemicals need to put into practice a Green Transformation   plan, where by means of this method the company will be able to generate value all the way through green product/ process advancement and also generate end consumer pull all the way through component branding in green products. This way the company will have a discrete first mover benefit over their rivals.

References

Burritt R.L., Hahn T. and Schaltegger, S. (2002), “Towards a comprehensive framework for environmental management accounting –links between business actors and environmental management accounting tools”, Australian Accounting Review, 12, 2, pp.39–50.

Cerin P. (2002), “Characteristics of environmental reporters on the OM Stockholm Exchange”, Business Strategy and the Environment, 11, 5, pp.298–311.

Post J.E., Preston L.E. and Sachs S. (2002), “Managing the extended enterprise: the new stakeholder view”, California Management Review, 45, 1, pp.6–28.

Post, J. E., Preston, L. E. and Sachs, S. (2002), Redefining the Corporation: Stakeholder Management and Organizational Wealth, Stanford University Press, Stanford.

Schaltegger S. and Burritt R. (2005), Corporate sustainability. In The International Yearbook of Environmental and Resource Economics 2005/2006, Folmer H, Tietenberg T (eds). Elgar: Cheltenham; pp.185–222.

Web sources

Bahuguna, S. (2012),  “Sustainable Development in India: Perspectives”. [Online] viewed on 15^th Dec., 2012 from http://www.moef.nic.in/divisions/ic/wssd/doc4/consul_book_persp.pdf

Keller, A. Kadakia, P. and Nigam, A. (2011), Competing successfully in Indian Specialty Chemicals Industry, Tata Strategic Management Group. [Online] viewed on 14^th Dec., 2012 from http://tsmg.com/download/article/Competing%20successfully%20in%20Indian%20Specialty%20Chemicals%20Industry.pdf

Sachs, S. and Munshi, N. (2003), Interrelatedness and Value Creation in Firm-Stakeholder Networks. Paper presented at the Academy of Management, Seattle. [Online] viewed on 15^th Dec., 2012 from http://www.fh-hwz.ch/display.cfm/id/100438

SIGMA Project (2003),  “The SIGMA Guidelines. Putting Sustainable Development into Practice – a Guide for Organisations”, BSI, London. [Online] viewed on 14^th Dec., 2012 from http://www.projectsigma.co.uk/Guidelines/SigmaGuidelines.pdf

The Pioneer Chemicals Company (2012), “Home”. [Online] viewed on 16^th Dec., 2012 from  http://pioneerchemicals.co.in/