APPLICATION OF A SUSTAINABILITY BALANCED SCORECARD IN …

APPLICATION OF A SUSTAINABILITY BALANCED SCORECARD IN THE INDUSTRIAL PACKAGING SECTOR. A CASE STUDY ANALYSIS

ON CORPORATE SUSTAINABILITY MANAGEMENT AND PERFORMANCE MEASUREMENT

Master’s Thesis

submitted in fulfilment of the requirements for the academic degree of

Master of Science

in the

International Joint Master’s Programme in Sustainable Development

at the

Institute of Systems Sciences, Innovation and Sustainability Research

University of Graz

by

LILLA ZOMBORI

Supervisor: PROF. DR. RUPERT J. BAUMGARTNER

Second Reader: DR. AGNI KALFAGIANNI (Utrecht University)

Graz, 2020

AUTHOR’S DECLARATION

Unless otherwise indicated in the text or references, or acknowledged above, this thesis is

entirely the product of my own scholarly work. Any inaccuracies of fact or faults in

reasoning are my own and accordingly I take full responsibility. This thesis has not been

submitted either in whole or part, for a degree at this or any other university or institution.

This is to certify that the printed version is equivalent to the submitted electronic one.

07. October 2020

Day Month Year Signature

iii

Table of contents List of Acronyms .............................................................................................................................................. vi

List of Tables ................................................................................................................................................... vii

List of Figures ................................................................................................................................................ viii

List of Appendices ............................................................................................................................................ ix

1. Introduction .............................................................................................................................................. 1

1.1. Problem Background ....................................................................................................................... 2

1.1.1. Sustainable Development ........................................................................................................ 2

1.1.2. Corporate Sustainability .......................................................................................................... 3

1.1.3. Sustainable Strategic Management ......................................................................................... 4

1.1.4. Corporate Sustainability Performance Measurement Systems ................................................ 5

1.1.5. The Packaging Industry ........................................................................................................... 6

1.1.6. Corporate Sustainability in the Packaging Industry ................................................................ 7

1.2. Problem Definition ........................................................................................................................... 8

1.2.1. Corporate Sustainability Management and Performance Measurement .................................. 8

1.2.2. Sustainability Challenges in the Packaging Industry ............................................................ 11

1.3. Conceptual Research Design ......................................................................................................... 12

1.3.1. Research Objective ................................................................................................................ 12

1.3.2. Research Questions ............................................................................................................... 13

1.3.3. Scientific Relevance and Knowledge Gap ............................................................................ 13

1.3.4. Societal Relevance ................................................................................................................ 14

2. Research Design and Framework ........................................................................................................... 15

2.1. Research Framework ..................................................................................................................... 15

2.2. Theoretical Framework .................................................................................................................. 15

2.3. Conceptual Framework .................................................................................................................. 16

2.3.1. United Nations Sustainable Development Goals................................................................... 16

2.3.2. Sustainability Balanced Scorecard ........................................................................................ 17

2.4. Analytical Framework ................................................................................................................... 19

3. Research Method and Strategy ............................................................................................................... 20

3.1. Research Strategy for Desk-Based Research ................................................................................. 23

3.1.1. Methodology ......................................................................................................................... 23

iv

3.1.2. Research Material and Data Collection ................................................................................. 23

3.2. Research Strategy for Semi-Structured Expert Interviews ............................................................. 24

3.2.1. Methodology ......................................................................................................................... 24

3.2.2. Selection of Interviewees ...................................................................................................... 28

3.2.3. Research Planning ................................................................................................................. 32

3.3. Research Strategy for Sustainability Report Analysis ................................................................... 33

3.3.1. Methodology of Qualitative Content Analysis ...................................................................... 33

3.3.2. Selection of Company Sample .............................................................................................. 36



3.4. Research Strategy for Case Study Analysis ................................................................................... 42

3.4.1. Methodology ......................................................................................................................... 42

3.4.2. Selection of Case Study ......................................................................................................... 43



4. Preparations for the Sustainability Balanced Scorecard ......................................................................... 47

4.1. Principles of Developing the Sustainability Balanced Scorecard .................................................. 47

4.2. Sustainable Development Indicators .............................................................................................. 48

4.3. Sustainable Development Indicators Identified Through Literature .............................................. 50

4.4. Sustainable Development Indicators Identified Through Expert Interviews ................................. 51

4.4.1. Sustainability Challenges and Drivers in the Industrial Packaging Sector ............................ 52

4.4.2. Environmental Indicators ...................................................................................................... 58

4.4.3. Economic Indicators .............................................................................................................. 63

4.4.4. Social Indicators .................................................................................................................... 68

4.4.5. Aggregated Results ............................................................................................................... 71

4.5. Sustainable Development Indicators Identified Through Sustainability Report Analysis ............. 76

4.5.1. Environmental Indicators ...................................................................................................... 77

4.5.2. Economic Indicators .............................................................................................................. 78

4.5.3. Social Indicators .................................................................................................................... 80

4.5.4. Aggregated Results ............................................................................................................... 84

4.6. Portfolio of Identified Sustainable Development Indicators .......................................................... 87

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5. The Case Study and the Sustainability Balanced Scorecard ................................................................... 90

5.1. Introduction of the Business Case .................................................................................................. 90

5.2. Sustainable Strategic Management in the Business Case .............................................................. 91

5.3. Formulation and Application of the Sustainability Balanced Scorecard ........................................ 93

5.3.1. Choosing a Strategic Business Unit ...................................................................................... 93

5.3.2. Environmental and Social Exposure ..................................................................................... 95

5.3.3. Determination of Strategic Relevance of Environmental and Social Aspects ....................... 97

5.4. The Strategy Map of the Sustainability Balanced Scorecard ....................................................... 104

6. Discussion ............................................................................................................................................. 110

6.1. Evaluation and Assessment .......................................................................................................... 110

6.2. Recommendations ........................................................................................................................ 112

6.2.1. Processes to Upscale Corporate Sustainability in the Industrial Packaging Sector ............. 112

6.2.2. Good Practices .................................................................................................................... 114

6.3. Critical reflection ......................................................................................................................... 115

6.4. Limitations ................................................................................................................................... 117

6.5. Outlook and future research ......................................................................................................... 117

7. Conclusion ............................................................................................................................................ 119

8. References ............................................................................................................................................ 120

Appendices .................................................................................................................................................... 133

Appendix A. Supplementary Information Regarding Expert Interviews .................................................. 133

Appendix A1. Interview Guide for Internal Participants ...................................................................... 133

Appendix A2. Interview Guide for External Participants ..................................................................... 135

Appendix A3. Aggregated Results of Indicators Obtained Through Expert Interviews ....................... 137

Appendix B. Supplementary Information Regarding Sustainability Report Analysis .............................. 138

Appendix B1. Indicators Identified Through Sustainability Report Analysis ...................................... 138

Appendix B2. Aggregated Overview of Indicators By Analysed Company ........................................ 157

Appendix B3. Aggregated Results of Indicators Obtained Through Sustainability Report Analysis ... 158

Appendix C. Supplementary Information Regarding Case Study Analysis .............................................. 159

Appendix C1. Corporate Sustainability Strategy of the PalletBiz Franchise Network ......................... 159

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List of Acronyms

3Rs Reduce, Reuse, Recycle BSC Balanced Scorecard CAGR Compound Annual Growth Rate CER Corporate Environmental Responsibility CSA Case Study Analysis CSR Corporate Social Responsibility EMEA Europe, Middle East, Africa EPAL European Pallet Association EU European Union EU EMAS EU Eco-Management and Audit Scheme FSC Forest Stewardship Council FSSD Framework for Strategic Sustainable Development GHG Greenhouse Gas G-PAT Group Profit After Taxes GRI Global Reporting Initiative IKA International Key Account IPPC International Plant Protection Convention KPI Key Performance Indicator MDGs Millennium Development Goals MNE Multinational Enterprise MS Milestone PEFC Programme for the Endorsement of Forest Certification ROE Return on Equity RQ Research Question SBSC Sustainability Balanced Scorecard SDD Sustainability Disclosure Database SDI Sustainable Development Indicator SFI Sustainable Forestry Initiative SME Small- and Medium-sized Enterprise SOP Standard Operating Procedure SPMS Sustainability Performance Measurement System SQ Sub-Question SR Sustainability Report SRRS Standards Report Registration System TBL Triple Bottom Line TCO Total Cost of Ownership UN United Nations UNEP United Nations Environment Programme UN-GA United Nations General Assembly UN SDGs United Nations Sustainable Development Goals UN-WSSD United Nations World Summit on Sustainable Development WCED World Commission on Environment and Development

vii

List of Tables Table 1. Life cycle stages of packaging and associated environmental impacts ............................................. 12

Table 2. Items of inquiry for internal participants .......................................................................................... 26

Table 3. Items of inquiry for external participants .......................................................................................... 27

Table 4. Participant sample of internal interviewees ...................................................................................... 31

Table 5. Participant sample of external interviewees ...................................................................................... 31

Table 6. Company sample for sustainability report analysis .......................................................................... 40

Table 7. Framework for the identification of the environmental exposure of a business unit ........................ 48

Table 8. Indicators of sustainable development for industry: a general framework ....................................... 51

Table 9. Sustainability challenges and drivers in the industrial packaging sector, as per expert interviews .. 52

Table 10. Indicating factors of corporate sustainability in the industrial packaging sector ............................ 56

Table 11. Motivating factors for engaging in corporate sustainability in the industrial packaging sector ...... 57

Table 12. Environmental indicators and their potential operationalization, as per expert interviews ............. 63

Table 13. Economic indicators and their potential operationalization, as per expert interviews .................... 67

Table 14. Social indicators and their potential operationalization, as per expert interviews .......................... 71

Table 15. Sustainable development indicators with high frequency of references, as per expert interviews . 73

Table 16. Sustainable development indicators with moderate frequency of references, as per expert

interviews ........................................................................................................................................................ 74

Table 17. Sustainable development indicators with low frequency of references, as per expert interviews .. 76

Table 18. Identified sustainable development indicators for a SBSC in the industrial packaging sector ....... 88

Table 19. Environmental exposure of PalletBiz ............................................................................................. 96

Table 20. Social exposure of PalletBiz ........................................................................................................... 97

Table 21. Lagging indicators at PalletBiz ....................................................................................................... 98

Table 22. Leading indicators at PalletBiz ....................................................................................................... 98

viii

List of Figures Figure 1. Research framework ........................................................................................................................ 15

Figure 2. Research strategy ............................................................................................................................ 21

Figure 3. Research planning for interviews .................................................................................................... 32

Figure 4. Research planning for qualitative content analysis ......................................................................... 41

Figure 5. Research planning for case study analysis ...................................................................................... 46

Figure 6. Tallies of occurrence of environmental indicators, as per sustainability report analysis ................ 78

Figure 7. Tallies of occurrence of economic indicators, as per sustainability report analysis ........................ 79

Figure 8. Tallies of occurrence of social indicators from the group "employment and labour conditions”, as

per sustainability report analysis ..................................................................................................................... 81

Figure 9. Tallies of occurrence of social indicators from the group "human rights”, as per sustainability

report analysis ................................................................................................................................................. 82

Figure 10. Tallies of occurrence of social indicators from the group "society", as per sustainability report

analysis ............................................................................................................................................................ 83

Figure 11. Tallies of occurrence of social indicators from the group "product responsibility", as per

sustainability report analysis ........................................................................................................................... 84

Figure 12. Sustainable development indicators identified through sustainability report analysis .................. 86

Figure 13. Customer perspective of PalletBiz .............................................................................................. 100

Figure 14. Internal process perspective of PalletBiz .................................................................................... 102

Figure 15. Learning and growth perspective of PalletBiz ............................................................................ 103

Figure 16. Strategy map of PalletBiz ............................................................................................................ 109

ix

List of Appendices Appendix A. Supplementary Information Regarding Expert Interviews ...................................................... 133

Appendix A1. Interview Guide for Internal Participants .............................................................................. 133

Appendix A2. Interview Guide for External Participants ............................................................................. 135

Appendix A3. Aggregated Results of Indicators Obtained Through Expert Interviews ............................... 137

Appendix B. Supplementary Information Regarding Sustainability Report Analysis .................................. 138

Appendix B1. Indicators Identified Through Sustainability Report Analysis .............................................. 138

Appendix B2. Aggregated Overview of Indicators By Analysed Company ................................................ 157

Appendix B3. Aggregated Results of Indicators Obtained Through Sustainability Report Analysis ........... 158

Appendix C. Supplementary Information Regarding Case Study Analysis ................................................. 159

Appendix C1. Corporate Sustainability Strategy of the PalletBiz Franchise Network ................................. 159

1

1. Introduction Businesses, companies, and the corporate world at large are an integral part of life as we

know it in the anthropogenic era. The concept of sustainable development has been an

emergingly hot topic in corporate settings for years, and new evidence keeps surfacing at an

exponential rate with the aim of convincing more and more businesses of the imperativeness

of incorporating sustainability in all companies (Quintos, 2020). A survey by McKinsey &

Company from 2011 demonstrates how already ten years ago more companies than ever

were increasingly committed to implementing sustainability measures to improve and

optimize processes, achieve financial growth, and generate value for their organization rather

than putting all efforts on selling a “flawless” corporate image and reputation (McKinsey &

Company, 2011). As the survey notes, corporate goals in terms of sustainability can spread

out on a wide spectrum, including objectives towards “saving energy, developing green

products, or retaining and motivating employees”. However, analysing and evaluating

corporate testimonials has made it evident that even though sustainability is a growing

concern on many business agendas, “most still take a fragmented, reactive approach –

launching ad hoc initiatives to enhance their “green” credentials, to comply with regulations,

or to deal with emergencies – rather than treating sustainability as an issue with a direct

impact on business results” (McKinsey & Company, 2011). The central question is,

consequently, how it can be avoided to use sustainability simply as a façade in business

settings, and instead have it meaningfully integrated into operations via a strategic approach

that might pave the way towards real transformation and change (Benn et al., 2014).

Certain business sectors – for instance the extractive (oil and gas), transportation, retail, or

pharmaceutical industries – are more often discussed both in public and academic domains

with regards to sustainability due to the controversial or impactful nature of their operations;

and are, therefore, forced to reflect on such scrutiny (Global Reporting Initiative [GRI],

2013). This can, however, often lead to “greenwashing” of processes and external

communication instead of taking actual and science-based action towards the strategic

integration of corporate sustainability (Parguel et al., 2011). Many other industries on the

other hand are paid less attention in terms of corporate sustainability or sustainable

development in general, which has created a significant knowledge gap in research. One

such industry is the packaging sector (Hillier et al., 2017; Verghese & Lewis, 2007), which

occupies a central focus in this present study.

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1.1. Problem Background

1.1.1. Sustainable Development

To date there is no consensus on a universal definition to capture the concept of sustainable

development, as the conceptualisation arguably depends on the perspective of the researcher,

as well as on the context of application (Sachs, 2015). The first and one of the most

widespread definitions followed the 1972 UN Conference on the Human Environment,

“where the challenge of maintaining sustainability in the context of economic growth and

development was first brought to the global forefront” (Sachs, 2015, p. 4). The definition –

embodying an intergenerational and ethical perspective (Baumgartner, 2014; Sachs, 2015) –

was captured by the Brundtland Commission, suggesting that “sustainable development is

development that meets the needs of the present without compromising the ability of future

generations to meet their own needs” (World Commission On Environment and

Development, 1987, p. 43). The 1992 UN Earth Summit is regarded as a direct consequence

and steppingstone of the introduction of the concept, having developed Agenda 21 as a

concrete materialization and intergovernmental action plan for the pursuit of sustainable

development (Azapagic & Perdan, 2000). At the 2002 UN World Summit on Sustainable

Development (UN-WSSD) the concept was approached more practically and holistically,

while it was noted that the corresponding efforts promote the “integration of the three

components of sustainable development – economic development, social development, and

environmental protection – as interdependent and mutually reinforcing pillars” (UN-WSSD,

2002, p. 8).

This research employs the concept of sustainable development for strategic development of

business enterprises; therefore, the applied definition needs to be further concretized to the

research area. Robért et al. (2002), for instance, developed the Framework for Strategic

Sustainable Development (FSSD), which is based on four principles (system conditions) for

sustainability, according to which “nature is not subject to systematically increasing…

1. concentrations of substances extracted from the Earth’s crust;

2. concentrations of substances produced by society;

3. degradation by physical means;

4. and, in that society human needs are met worldwide” (Robèrt et al., 2002, p. 198).

3

In any case, in this study it is accepted and taken for a fact that sustainable development is a

desirable objective for the entire society that should be reflected by “current decisions made

with some degree of concern for impacts on future generations” (Atkinson, 2000, p. 236).

1.1.2. Corporate Sustainability

The realization that the world of business must consider and address the concept and the

corresponding issues of sustainability is fast-spreading (Searcy, 2012). In fact, the realization

is accompanied by “increasing pressure to act and report on sustainability strategies”, upon

which “an overwhelming number of principles, tools, result indicators, and reporting

formulas have emerged, some of which are adopted by corporations to demonstrate their

commitment to sustainable development” (Beloff et al., 2004, p. 271). Just as in the case of

sustainable development, however, “there is no standard recipe” for corporate sustainability,

as it is a “custom-made process” (van Marrewijk & Werre, 2003, p. 107). A rather general

conceptualization is provided by Székely & Knirsch (2005), noting that sustainability for

businesses “involves sustaining and expanding economic growth, shareholder value,

prestige, corporate reputation, customer relationships, and the quality of products and

services”, as well as “adopting and pursuing ethical business practices, creating sustainable

jobs, building value for all the company’s stakeholders, and attending to the needs of the

underserved” (p. 628). According to Baumgartner (2014), “corporate sustainability

management has to focus on innovation and stakeholder requirements and on efficiency, as

well as on the effectiveness of business processes in line with the FSSD principles” (p. 260).

Some definitions focus on the business continuity aspect. For instance, Dyllick & Hockerts

(2002) transport the Brundtland definition into the context of business, and define corporate

sustainability as “meeting the needs of a firm’s direct and indirect stakeholders (such as

shareholders, employees, clients, pressure groups, communities, etc.), without

compromising its ability to meet the needs of future stakeholders as well” (p. 131). Other

conceptualisations look at the integration of the three pillars. For example, van Marrewijk

and Werre (2003) argue that “corporate sustainability (…) refers to a company’s activities –

voluntary by definition –, demonstrating the inclusion of social and environmental concerns

in business operations and in interactions with stakeholders” (p. 107). Amini and Bienstock

(2014) claim that corporate sustainability “embraces the idea that an organization, in order

to remain fundamentally sustainable in the long term, must consider all of the contexts in

which it is embedded: economic, social and environmental” (p. 13). Beloff et al. (2004)

introduce a corporate sustainability framework that “makes explicit the various

4

considerations important to the practical implementation of sustainable development in

industry” (p. 271), comprising the following perspectives:

1. triple-bottom-line (TBL), to demonstrate the three pillars of sustainability;

2. life-cycle, to consider impacts along the entire value chain;

3. set of lenses, to define the scope and boundaries of the sustainability challenge.

In this paper it is recognised that academic circles lack a universal definition both for

sustainable development and corporate sustainability; consequently, the below

argumentation by van Marrewijk and Werre (2003) is supported and further applied in the

course of the research:

“Each organization should choose its own specific ambition and approach regarding corporate

sustainability, matching the organization’s aims and intentions and aligned with the organization’s

strategy, as an appropriate response to the circumstances in which it operates. A differentiated set of

definitions and approaches to CS (i.e. corporate sustainability, the ed.) can assist an organization in

finding an appropriate path given its context and the dominant values within the organization” (p.

107).

In addition to the definition outlined above and to be utilized as a theoretical backbone for

this research, it is recognized and accepted that principally speaking, corporate sustainability

is a characteristically self-regulating exercise (Searcy, 2012), during which a business entity

“establishes its own standards of behaviour where no such statutory and/or regulatory

requirements exist” (Hemphill, 1992, p. 915).

1.1.3. Sustainable Strategic Management

The business case for sustainability has been widely researched, and is strongly supported

by certain circles within academia (Salzmann et al., 2005; Searcy, 2012; Weber, 2008).

Some point out that evidence suggests that the “principles of sustainability help businesses

to reduce unnecessary risks, avoid waste generation, increase material and energy efficiency,

innovate new, environmentally friendly products and services, and obtain operating permits

from local communities”, overall resulting in the establishment of a potentially more

profitable stance (Székely & Knirsch, 2005, p. 628). Consequently, the management of a

given company can and will expect that their contributions to and investments in sustainable

development will pay off in enhanced business performance and materialization of long-

term interests. As a result, (responsible) leadership and vision have a significant role in

sustainable strategic management (Székely & Knirsch, 2005). Additional success factors

5

with regards to strategically achieving and managing sustainability include flexibility to

change, as well as openness and stakeholder engagement (Székely & Knirsch, 2005).

The construction, development, and management of a sustainability strategy requires the

consideration and understanding of various interrelated factors. These include the value

drivers that the stakeholders of the company deem important, as well as programs and

initiatives that facilitate realizing its sustainable development goals (Beloff et al., 2004).

1.1.4. Corporate Sustainability Performance Measurement Systems

A corporate sustainability performance measurement system (SPMS), in general, is a

strategic instrument to frame, plan, manage, guide, and monitor the processes undertaken by

the company under the umbrella of corporate sustainability (Tangen, 2005). Considering that

by definition, a SPMS must consider sustainability issues, it is “broader than a performance

measurement system that limits its focus to environmental or social issues” (Searcy, 2012,

p. 240). In this paper the following definition is applied to capture SPMSs:

“SPMS is a system of indicators that provides a corporation with information needed to help in the

short- and long-term management, controlling, planning, and performance of the economic,

environmental, and social activities undertaken by the corporation” (Searcy, 2012, p. 240).

A SPMS can therefore be understood and conceptualized as a set of sustainable development

indicators (SDIs). A considerable part of the existing research on SPMSs concerns the

indicator design process, with the GRI being attributed with the most well-known set of

corporate SDIs that cover a comprehensive range of sustainability themes (Lambrechts et

al., 2019; Searcy, 2012). The United Nations Environment Programme (UNEP) argues that

the GRI “produces what has become the leading global framework for sustainability

reporting”, as well as performance measurement (UNEP, 2013, p. 21), with a manifold of

measures included in the GRI Standards (GRI, 2020a). An extensive amount of literature,

however, has gone beyond the indicators suggested by the GRI (Searcy, 2012), with several

publications focusing on, as one delineated example, a balanced scorecard approach to

SPMS (Dias-Sardinha & Reijnders, 2005; Figge et al., 2002a; Hubbard, 2009). In this paper,

the sustainability balanced scorecard (SBSC) is an integral part of the conceptual framework

as a mean of materializing and operationalizing the theoretical concept of SPMS by

representing a strategic instrument. Explicit focus is put on the construction (i.e.

development of indicator selection criteria and indicator design process) (Searcy, 2012) and

practical application of the SBSC within this research. This exercise is undertaken in order

6

to investigate the “relationship between the design process employed and the success of the

implementation effort” (Searcy, 2012, p. 244).

As described above based on available literature, therefore, it is recognized that the GRI is

classified as a universal SPMS and framework with generic standards, promising extensive

merit in terms of corporate sustainability, especially with regards to reporting (Searcy, 2012).

In fact, GRI-based corporate sustainability reports were used at certain points of this paper

as research material as well (read more in Section 3.3). However, in this research it was

targeted to generate value by developing an integrated SPMS that includes additional factors

and aspects besides the universal approach of the GRI, thereby creating a framework along

both generic and unique measures that is potentially industry or even business unit-specific.

1.1.5. The Packaging Industry

The packaging sector plays a crucial role in any company, as an optimized value chain can

significantly contribute to more efficient, cost-conscious, and sustainable transport and

storage of the traded goods (Lambrechts et al., 2019). There are various fragmentations and

clusters applied within the packaging industry to differentiate among companies and

business models that produce and provide packaging. Saphire (1994) describes three main

categories:

- Primary (consumer, retail) packaging, which is used until the product is consumed,

therefore its lifespan is rather limited. This type of packaging plays a big role in

attracting the consumers, as well as in general communication. Examples include

bottles, boxes, or cans.

- Secondary packaging, which serves as an additional packaging to the primary level,

mostly to facilitate self-service sales by grouping the same type of individual primary

packages together. This type of packaging is even shorter-lived than the primary one,

as this is almost always immediately thrown out after opening the product. Examples

include paperboard cartons, or plastic rings that bound cans together.

- Tertiary (transport, distribution, logistical) packaging, which is used to transport

goods from their manufacturing site to their destination. This type of packaging

serves the protection, distribution, and easy handling of the transported product.

Examples include pallets, crates, or void fill packaging.

Verghese & Lewis (2007) build on these clusters and distinguish the groups of consumer

and industrial packaging, based on where (i.e. in which supply chain) the packaging is

7

purposed. Consumer packaging is, thus, “for products intended for consumption by

individual consumers or households”, while industrial packaging is “packaging which

remains in an industrial supply chain, including both packaging used to contain industrial

products (…), as well as transport packaging used to facilitate the movement of filled

primary and secondary packaging” (Verghese & Lewis, 2007, p. 4383). In this paper,

corporate sustainability management and performance measurement is discussed within the

context of the industrial packaging sector.

The estimated annual turnover of the global packaging market is around USD 500 billion,

of which approximately 20% is accounted to industrial packaging (Hillier et al., 2017),

which is still significant with regards to cost and environmental impact (Verghese & Lewis,

2007)1. The Global Pallets Market in particular was valued at USD 59.91 billion in 2018,

and is projected to reach USD 88.69 billion by 2026 (Fortune Business Insights, 2018). The

packaging sector and the respective supply chains comprise organizations that supply raw

materials for packaging (such as wood or metal), manufacturers, transport and logistics

companies, distributors, waste contractors, etc. Some organizations fulfil several roles

simultaneously, for instance production and transport at once (Verghese & Lewis, 2007).

1.1.6. Corporate Sustainability in the Packaging Industry

As a result of intergovernmental and international activization around sustainability from the

‘90s, a variety of action plans and strategies have started to unfold, many of which

concentrated on sustainable development of the “industry” as a whole. For example, as

delineated in the Declaration by the Council of Academies of Engineering and Technological

Sciences (1996), it is recommended that “industry should seek to balance the efficiency of

its operations with its responsibilities for socially compatible environmental actions”

(Azapagic & Perdan, 2000, p. 243). Principally, industrial sectors are encouraged to focus

on life-cycle-inspired sustainability efforts that are integrated into the production processes

– i.e. on the prevention of pollution or cleaner production through waste reduction and

efficient usage of raw materials – instead of end-of-pipe solutions. Not only is this a more

desirable approach from an environmental perspective, but from an economic aspect as well,

as it could lead to reduced costs and increased profits on the long run (Azapagic & Perdan,

2000).

1 These impacts are further demarcated in Section 1.2.2. of this paper.

8

As a result of internal efforts and external scrutiny, the packaging industry is reportedly

increasingly committing to sustainability by navigating towards business strategies that

incorporate environmental and social performance into traditional, profit-oriented portfolios

(Hillier et al., 2017; Verghese & Lewis, 2007). Part of these engagements have materialized

in taking part in voluntary environmental management systems – e.g. ISO 14001, Forest

Stewardship Council (FSC) (FSC, 2020), Programme for the Endorsement of Forest

Certification (PEFC) (PEFC, 2020), or EU Eco-Management and Audit Scheme (EU

EMAS) (European Comission, 2020) – that facilitate monitoring their environmental

performance. However, there is still room left for improvement in terms of more

comprehensive and data-driven SPMSs that strategically integrate the unique traits of the

industry at large as well (Azapagic & Perdan, 2000).

1.2. Problem Definition

1.2.1. Corporate Sustainability Management and Performance Measurement

Despite the above-described increasing interest in and efforts to commit to sustainable

development within the corporate world (Baumgartner, 2014), many endeavours turn out to

produce solely superficial and ineffective results; or in a worse case, even greenwashing

(Aguilera et al., 2007; Baumgartner, 2009; Baumgartner & Ebner, 2010; Searcy, 2012). This

challenge originates from a conundrum that it is often lost on corporations how to

incorporate the concept of sustainability into business strategies and performance

measurement systems substantially and effectively, as “it seems that sustainability issues are

pursued more coincidentally than with a clear strategy” (Baumgartner & Ebner, 2010, p. 77).

The situation is further complicated by the fact that businesses do not necessarily know how

and where to start with regards not only to developing a corporate sustainability strategy, but

also to developing a corresponding monitoring scheme. There are various frameworks and

instruments outlined in theory; however, their practical application is much more nuanced

(Baumgartner, 2014). The above begs for the question: “how to develop, implement, control,

and improve corporate sustainability strategies” (Baumgartner, 2014, p. 259), and how to

track and follow up on the reflecting actions and processes? How to measure corporate

progress towards sustainability (Azapagic & Perdan, 2000)? More explicitly, based on

suggestions identified within literature (Azapagic & Perdan, 2000; Baumgartner, 2014;

Schwarz et al., 2002), the following considerations can be outlined. How to make sure that

the strategies and linked performance measurement systems corporations develop for this

purpose are in fact

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- simple and cost-effective to develop;

- addressing the most important and relevant sustainability aspects and the actual needs

of the company by reflecting the management’s interpretation of sustainable

development;

- relevant, useful, and reproducible both on company and industry levels;

- addressing the impacts caused by the operations;

- consisting of appropriate management levels;

- understandable to various stakeholder groups;

- comparable with competitors within the industry; and

- feasible to implement through reflective action?

Is it enough to work around corporate social responsibility (CSR) (Aguilera et al., 2007), or

should the company focus more on corporate environmental responsibility (CER)

(DesJardins, 1998; MacDonald, 2005), or is combining both aspects the answer (Lehtonen,

2004)? Is it even possible for a business to develop and apply a holistic and comprehensive

framework for managing and monitoring corporate sustainability performance that

potentially brings back quantifiable and qualifiable results; and if so, what are the steps that

lead there (Baumgartner, 2014)? What are the most applicable tools and instruments that

facilitate translating a strategy into actionable and monitorable steps (Baumgartner, 2009)?

How can generic frameworks, such as the FSSD or SBSC be operationalized to a specific

industry or company? A well-designed sustainability strategy and a corresponding

performance measurement system consider and incorporate the social and environmental

pillars into the strategic management procedures of a company (Baumgartner & Ebner,

2010). How to decide, however, which sustainable development indicators to assign to the

respective dimensions?

There is essentially an infinite amount of designs and transition routes towards sustainable

business operations, implying that there is not one good or universal way to achieving

sustainability (Broman & Robèrt, 2017). Corporations should therefore focus their efforts

on identifying the sustainability aspects most relevant and applicable to their business, as

well as on strategically combining them with the basic sustainability principles, “allowing

for flexible adoption as the development unfolds and the contextual conditions change”

(Broman & Robèrt, 2017, p. 27). As Searcy (2012) notes, “there are a number of strategies

corporations may employ to build the internal capacity needed to pursue a commitment

toward corporate sustainability (…), and a key component (…) will be the development of

10

a corporate sustainability performance measurement system” (p. 240). There is, therefore, a

substantial consensus that in order to transfer the concept of sustainability into business

operations, the identification of practical SDIs, as well as understanding of how they could

be measured is essential (Azapagic & Perdan, 2000; Schwarz et al., 2002). Despite the

existing literature and research on SDIs, “many corporations have struggled to develop,

implement, use, and improve SPMSs that address the needs of both their internal and

external stakeholders”, as well as the general sustainability concerns (Searcy, 2012, p. 241).

A common practice when composing SPMSs and agendas is having the process driven

primarily by commercial interests, when ideally a balance should be established between

economic growth, natural preservation through reduced demands on finite resources, and

social advancements (Hillier et al., 2017). SPMSs should not try to hide the actual impacts

of the operational activities to look good on paper or to attract more investors. Instead, it

should facilitate the company becoming more transparent (even if it means publishing less

attractive, but real performance reports), as well as taking on a more responsible role and

preparing preventive and mitigative actions. Overall, the SPMS can and should provide

information for a company “to assess how well it is doing in meeting its sustainability

priorities” (Searcy, 2012, p. 241), while also offering a value-based decision-support tool for

the management (Beloff et al., 2004; Figge et al., 2002b).

What complicates matters further is that governments hardly support businesses with the

incorporation of sustainability through scientific evidence and fact-based guidance, therefore

“the majority of these efforts are voluntary initiatives that represent forms of firm-, industry,

or business-level self-regulation” (Searcy, 2012, p. 240). In addition to the internal corporate

efforts, customers are also demanding more eco-efficient products while increasingly

pressuring companies to operate their business activities in a more environmentally-

conscious manner, thereby furthering the case of integrating sustainability into

organisational agendas and marketing initiatives (Azapagic & Perdan, 2000; Buxel et al.,

2015; Thorn et al., 2011). Companies however often struggle to comply with such demands,

mainly due to the “management’s limited understanding and knowledge regarding general

environmental traits of the company’s products and services, as well as critical sustainability

drivers throughout the entire product life-cycle” (Buxel et al., 2015, p. 110). In order to

overcome such limitations and blind spots with regards to sustainability, top management

and decisionmakers need to be provided with appropriate and useful tools and measures that

can facilitate narrowing the knowledge gap, as well as transitioning the company towards

11

effective corporate sustainability management and performance measurement (Buxel et al.,

2015).

1.2.2. Sustainability Challenges in the Packaging Industry

The more general sustainability concerns of climate change and resource depletion have

commonly been accompanied by industry-specific considerations as well. Based on this,

Lambrechts et al. (2019) argue that “the rise of global supply chains and an increased

stakeholder consciousness had led to an increased interest in sustainability” within the

sectors attributed to value chains, i.e. logistics and packaging (p. 2). Packaging is often a

hidden, or even forgotten part in the value chains, considering that the focus is commonly

on the goods instead; the packaging and its by-products can at times remain ignored and

poorly managed (Verghese & Lewis, 2007). When attention is paid to the packaging sector,

however, research shows that the industry has been subject to controversy due to its

perceived negative impacts on the environment – the cost of which are often not even borne

by the individual companies (Hillier et al., 2017). Table 1 (Verghese & Lewis, 2007, p. 4386)

summarizes the environmental impacts associated with specific stages of the life-cycle of

packaging. Based on this overview, it can be extracted that “impacts include consumption

of non-renewable resources, generation of air emissions in production, transport and use,

and production of solid waste requiring disposal in landfill” (Verghese & Lewis, 2007, p.

4382). Contrasting the critique with regards to the negative environmental effects of the

packaging sector, some argue that the industry has a great potential to be(come) a significant

contributor to sustainable development (Hellström & Saghir, 2007; Nilsson et al., 2011;

Nordin & Selke, 2010), especially within the areas of eco-efficiency in the supply chain and

transport (Emblem, 2012; Hellström & Saghir, 2007), waste management (Nilsson et al.,

2011), and product development through life-cycle assessment (Kooijman, 1993). Lindh et

al. (2016) support these claims, adding that via its functions (e.g. protection, handling

facilitation, and communication) and features (e.g. mechanical properties, unitization, reuse,

or recyclability) packaging can – directly and indirectly – contribute to the three pillars of

sustainability. Such contributions can be identified through, for instance, reduced use of raw

materials and decreased material waste along the entire life-cycle, reduced risk for human

health hazards, and increased handling and transport efficiency (Lindh et al., 2016).

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Table 1. Life cycle stages of packaging and associated environmental impacts

Life cycle stage Impacts

Growing, harvesting or extraction of raw materials Land degradation

Biodiversity loss

Pollution from oil spills

Manufacture and packaging of product Energy consumption

Emissions to air and water

Global warming

Solid and toxic wastes

Transport of product to the consumer Energy consumption

Solid wastes

Waste disposal and recovery Litter

Air emissions from landfill

Leachate from landfill in groundwater

Note. Adapted from “Environmental innovation in industrial packaging: a supply chain approach,” by K. Verghese & H. Lewis, 2007, International Journal of Production Research, 45, p. 4386.

1.3. Conceptual Research Design

1.3.1. Research Objective

The research was carried out within the theme of corporate involvement in and contributions

to sustainability; more specifically, within the focus area of sustainable strategic

management and corporate SPMSs. The objective of the author was to depict the process of

integration and implementation of corporate sustainability in small and medium-sized

enterprises (SMEs) within the industrial packaging sector. More explicitly, the author looked

at means of identifying the most relevant sustainability challenges and of developing

appropriate and reflective solutions within packaging companies. Consequently, the aim was

to construct an analytical framework of SDIs that is fitted for the industrial packaging sector,

as well as to formulate and apply a SBSC to a real business case to demonstrate practical

utilization. A research framework around the theoretical concept of corporate sustainability

and sustainable strategic management was employed to capture corporate sustainability

performance measurement in the domain of industrial packaging companies.

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1.3.2. Research Questions

The author targeted to answer the following research question (RQ), divided into three sub-

questions (SQs):

How can SMEs develop and apply a strategic framework for corporate sustainability

management and performance measurement in the industrial packaging sector?

- SQ1: What are the challenges and drivers of sustainable development in the

industrial packaging sector?

- SQ2: What sustainable development indicators can be identified in the industrial

packaging sector to analytically frame and measure sustainability performance?

- SQ3: How can a sustainability balanced scorecard be formulated and applied in the

industrial packaging sector?

By exploring and analysing the outlined questions and research area, it was targeted to

contribute to academic research concerning sustainable strategic management and

performance measurement, as well as eco-controlling. Additionally, it was aimed to generate

practical knowledge regarding the application of corporate sustainability in the industrial

packaging sector by expecting to achieve and distribute tangible results and information that

can potentially be re-used or replicated in real business scenarios as well.

1.3.3. Scientific Relevance and Knowledge Gap

Most of the existing academic literature and debate regarding packaging and its impact on

the environment, as well as its potential links to sustainability are centred around consumer

packaging (Verghese & Lewis, 2007). Consequently, there is a strong literature base, as well

as several national and international policies and regulations in place that, among various

issue areas, target reduced consumption of resources, decreased waste generation and more

efficient waste management through recycling and product stewardship within the domain

of consumer packaging (Verghese & Lewis, 2007). There is, however, a clear lack of

research and a corresponding knowledge gap with regards to corporate sustainability

management and performance measurement within the context of the industrial packaging

sector. Furthermore, literature is lacking on what the best practices for companies that

operate in the industrial packaging sector are for gathering, analysing, using, and tracking

sustainability data; as well as on what the most fitting processes and tools are to use for such

organizations. Principally, there is a lack of knowledge and research regarding the general

implementation process of sustainability in the industrial packaging sector; in this paper,

14

therefore, the above-described sustainability challenge is discussed within this specified

industry. Several sample sets of SDIs have been published at the levels of individual

corporations or sectors (Searcy, 2012), however, there are no records of implementation of

SDIs within the industrial packaging sector, nor of the SBSC within this context. In this

research, therefore, not only theoretical background on sustainable strategic management

and SPMS is provided for SMEs in the industrial packaging sector, but practical (and

therefore replicable) knowledge is also distributed that is expected to bridge some gaps in

existing research. The research objectives are justified by Searcy (2012), noting that “there

is a need for research on addressing both procedural and contextual issues associated with

the design, implementation, and use of a corporate SPMS” that is tailored to the industrial

packaging sector (p. 246), as this specific exercise was targeted in this study.

1.3.4. Societal Relevance

Besides offering some insights for the academia, this research also provides contributions

from a business and societal point of view by analysing and discussing the materiality of

SDIs for the packaging sector. Consequently, this study was expected to contribute to

understanding the nature of SPMSs, while emphasizing the need for developing, adopting,

and meaningfully integrating an appropriate and strategic corporate sustainability approach

in the selected industry. Packaging is an integral part of any business and is deeply

interconnected with logistics and supply chain, the complex system of which arguably

creates value for all participants and stakeholders (Lambrechts et al., 2019). It is, therefore,

of societal relevance to take a closer look at the impacts the packaging industry creates from

a sustainability point of view, as well as at how the sector can be better operationalized in

terms of sustainability performance measurement. External and internal stakeholders are

increasingly paying attention to the environmental and social performance of businesses and

are simultaneously requiring more action-oriented initiatives and fundamental changes in

light of the TBL (Lambrechts et al., 2019). This research was expected to adhere to this

aspect as well by offering a framework that could potentially facilitate the transition towards

enhanced corporate sustainability in the industrial packaging sector.

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2. Research Design and Framework

2.1. Research Framework Figure 1 visualises the research framework, which is based on a transdisciplinary research

approach that involves the interaction of various academic disciplines, as well as the

corporate dimension as a non-academic discipline (Lang et al., 2012). The framework

comprises three main parts: the theoretical framework, which positions the research into

context; the conceptual framework, which facilitates the delineation of the key concepts; and

the analytical framework, which allows for the identification and demarcation of the

sustainability indicators. The components of the research framework are described in the

following sections.

Figure 1. Research framework

2.2. Theoretical Framework Drawing on identified literature and as demonstrated in Figure 1, the implementation and

integration of a corporate SPMS is at the cross-section of four fields: sustainable

development, corporate sustainability, sustainable strategic management, and the principle

of corporate SPMSs. Consequently, an integrated and cascade-like theoretical framework of

these four areas was employed in this research to provide a comprehensive and scientific

16

theoretical background to an otherwise practice-oriented research. The four components

have already been elaborated in Sections 1.1.1 – 1.1.4., therefore they are not detailed further

in this sub-chapter.

2.3. Conceptual Framework The conceptual framework demarcates the key concepts that have been regarded

fundamental for the research, based on either academic (theoretical) or practical relevance.

These are essentially concepts that facilitate depicting the implementation mechanisms of

corporate sustainability, as well as sustainable strategic management and performance

measurement. The identified concepts are discussed in the following sections.

2.3.1. United Nations Sustainable Development Goals

The United Nations Sustainable Development Goals (UN SDGs) are outlined in a resolution

that was the outcome of the UN summit for the adoption of the post-2015 development

agenda, targeting to “shift the world on to a sustainable and resilient path” while considering

the three pillars of sustainable development in a balanced, integrated, and indivisible manner

(United Nations - General Assembly [UN-GA], 2015, p. 1). Having been accepted by all UN

member states in 2015 as a form of extension and continuation of the Millennium

Development Goals (MDGs), the 17 SDGs and the associated 169 targets are expected to

inspire and trigger action in areas that are deemed substantial for humanity and the planet,

with the aspiring objective of nearing critical sustainability issues to a potential solution,

and, ultimately, an end by 2030 (UN-GA, 2015).

The scope of the agenda is unprecedented, ambitious, and transformational, as it brings and

bounds the most critical sustainability areas together in an interlinked and dependent fashion.

The Goals are as follows:

1. End poverty in all its forms everywhere.

2. End hunger, achieve food security and improved nutrition and promote sustainable

agriculture.

3. Ensure healthy lives and promote well-being for all at all ages.

4. Ensure inclusive and equitable quality education and promote lifelong learning

opportunities for all.

5. Achieve gender equality and empower all women and girls.

6. Ensure availability and sustainable management of water and sanitation for all.

7. Ensure access to affordable, reliable, sustainable, and modern energy for all.

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8. Promote sustained, inclusive, and sustainable economic growth, full and productive

employment, and decent work for all.

9. Build resilient infrastructure, promote inclusive and sustainable industrialization and

foster innovation.

10. Reduce inequality within and among countries.

11. Make cities and human settlements inclusive, safe, resilient, and sustainable.

12. Ensure sustainable consumption and production patterns.

13. Take urgent action to combat climate change and its impacts.

14. Conserve and sustainably use the oceans, seas, and marine resources for sustainable

development.

15. Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainably

manage forests, combat desertification, and halt and reverse land degradation and

halt biodiversity loss.

16. Promote peaceful and inclusive societies for sustainable development, provide access

to justice for all and build effective, accountable, and inclusive institutions at all

levels.

17. Strengthen the means of implementation and revitalize the Global Partnership for

Sustainable Development (UN-GA, 2015, p. 14).

Even though the Goals are universal, and their implementation is clearly outlined and

defined, their actual realisation is dependent on high-level decision-makers, policies, and

regulations within the nations. This means that the SDGs might materialise quite differently

throughout the globe as a function of “national realities, capacities, levels of development,

and national policies and priorities”, whilst, however, also respecting international law and

commitments (UN-GA, 2015, p. 3).

2.3.2. Sustainability Balanced Scorecard

The SBSC originates from the concept of the Balanced Scorecard (BSC), which is

considered a strategic management tool that facilitates identifying fundamental and

strategically important issue areas within corporations, as well as delineating the

contribution of the identified issues to a potential success of the company (Kaplan & Norton,

1997). The BSC can be described as a function of four perspectives:

- financial, which “indicates whether the transformation of a strategy leads to

improved economic success”;

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- customer, which “defines the customer/market segments in which the business

competes”;

- internal process, which “identifies those internal business processes that enable the

firm to meet the expectations of customers in the target markets and those of the

shareholders”; and

- learning and growth, which “describes the infrastructure necessary for the

achievement of the objectives of the other three perspectives” (Figge et al., 2002a, p.

270).

The four perspectives comprise a hierarchic system that is rooted in the corporate business

strategy, and is centred around profit generation, i.e. the financial perspective (Figge et al.,

2002a). The strategic objectives are attributed with associated indicators that are expected to

measure and assess the perspectives. These are lagging indicators, which are “formulated for

the strategic core issues of each perspective derived from the strategy of the business unit”;

and leading indicators, which “express the specific competitive advantages of the firm and

represent how the results (…) should be achieved” (Figge et al., 2002a, p. 271). By outlining

goals, as well lagging and leading indicators suitable for a certain business strategy, the

indicators are incorporated in the four perspectives (Kaplan & Norton, 1997); and

consequentially this process “translates strategy in terms of objectives, measures, and targets

in the four perspectives” (Figge et al., 2002a, p. 271).

Figge et al. (2002a, 2002b) recognised that the methodology behind the concept of BSC

could be used to incorporate environmental and social dimensions into the general and profit-

centred corporate management as well, as it is desirable and advised that corporate strategies

include agendas that enhance performance in all three pillars of sustainability at the same

time. The integration of the environmental and social dimensions in the BSC can materialise

in three ways: a) by integrating the environmental and social aspects in the four BSC

perspectives; b) by introducing an additional non-market perspective into the BSC; or c) by

deducting a derived environmental and social scorecard (Figge et al., 2002a). Option c)

cannot be developed simultaneously with a traditional BSC, only by conjunction with a) or

b) (Figge et al., 2002a). Overall, “the first two variants (subsumption and addition) refer to

the structure of the core scorecard for a business unit”; while the “derived

environmental/social scorecard is deduced from the core scorecard”, making it only a

possible second step, not an independent alternative (Figge et al., 2002a, p. 275).

19

In summary, the SBSC “serves to describe and translate an existing strategy consistently in

order to enhance the successful execution of the strategy” (Figge et al., 2002a, p. 277;

Kaplan & Norton, 1997, p. 36). The overall result of the process of SBSC formulation is a

strategy map, in which “all economic, environmental, and social aspects that have been

identified as strategically relevant are represented in the hierarchical network of cause-and-

effect chains” (Figge et al., 2002a, p. 281). The use of the SBSC in this paper as an

instrument of corporate SPMS is validated, as the SBSC “fulfils the central requirement of

the sustainability concept for a permanent improvement of the business’s performance in

economic, ecological, and social terms” while taking un-monetizable soft factors (e.g.

environmental or social objectives) into account (Figge et al., 2002b, p. 7).

2.4. Analytical Framework The analytical framework outlines the SDIs identified as potentially relevant and important

for the industrial packaging sector in terms of sustainability performance measurement. The

composition of the SDIs as the analytical framework is, consequently, part of the main

findings of this research. The process of identifying the SDIs and formulating the framework,

as well as developing the overview of the indicators for potential use in a SBSC are

showcased in Chapter 4., therefore they are not discussed further in this sub-chapter.

20

3. Research Method and Strategy In this research not only was it targeted to present an analytical framework of the identified

SDIs as part of corporate strategic sustainability and performance management, but it was

also aimed to demonstrate the formulation and practical application of the SBSC as the

corresponding developed measure. From a sequential perspective, the research process was

built on a theoretical framework around corporate sustainability and SPMS, serving the base

for narrowing the scope to corporate sustainability within the domain of the investigated

industry. As a next step, the SDIs were identified for the industrial packaging sector to

analytically frame the research. Finally, to present the practical utilization of the SDIs as part

of a SPMS, a SBSC was formulated and applied for the potential use of the industry at large

through a real-life business case. Considering the above, the research carries the attributes

of a practice-oriented and exploratory approach, and was qualitatively driven (Noor, 2008).

The process of conducting a qualitative research is argued to be a strategy that can pay out

very well when constructed carefully and methodologically, as “insights obtained from

qualitative research can not only add texture to an analysis but also demonstrate meanings

and understandings about problems and phenomena that would otherwise be unidentified”

(Berg, 2009, p. 147). The research questions mirrored these objectives and answering them

required an integrated strategy framework and a multi-method approach, the components of

which are presented in the following sections, while the complete research strategy is

visualised in Figure 2.

The first part of research strategy was linked to SQ1 and targeted to identify and describe

sustainability challenges and drivers that were perceived in the industrial packaging sector,

as well as to explore potential reflective actions that were perceived to be – in some shape

or form – in effect at the time of the research. In this section it was expected to produce

descriptive knowledge. According to Kothari (2004), descriptive research “includes surveys

and fact-finding enquiries”, with the purpose of providing a “description of the state of

affairs as it exists at present” (p. 2). In order to answer SQ1, desk-based literature reviews

and semi-structured expert interviews were applied as the research method. The utilization

of these methods was justified as they facilitate depicting a phenomenon from various

aspects as well, thereby providing an all-round picture, including both academic evidence

and personal perceptions and concerns. Semi-structured interviews were particularly fitting

as they “offer sufficient flexibility to approach different respondents differently while still

21

covering the same areas of data collection” (Noor, 2008, p. 1604). The research strategy for

the desk-based research and expert interviews is further detailed in Section 3.1. and 3.2. of

this paper, respectively. The outcome of the first part of strategy, i.e. the findings connected

to SQ1 are discussed and disclosed in Section 4.4.

Figure 2. Research strategy

22

The second part of the strategy was connected to SQ2 and targeted to identify the most

critical factors and indicators for the formulation of a SBSC. In this section it was expected

to produce a mix of information containing descriptive and prescriptive knowledge. In order

to answer the sub-question, applied (or action) research was employed, as it “aims at finding

a solution for an immediate problem facing a society or an industrial/business organization”

(Kothari, 2004, p. 3). More explicitly, action research is an “approach in which the action

researcher and members of a social setting collaborate in the diagnosis of a problem and in

the development of a solution based on the diagnosis” (Bryman, 2012, p. 397). It is highly

common in business and management research (Bryman, 2012). Within the boundaries of

an action research, an integrated research method of semi-structured interviews (by working

with the same participants as in the prior part), and sustainability report analysis was applied,

with the complementation of desk-based research. Similarly to the previous part, the

interviews provided perceptions and opinions of experts and members of the investigated

industry; while a qualitative content analysis of sustainability reports (SRs) shed light on

what sustainability factors, measures, and indicators were critical for competitors and other

players within the packaging sector. The research strategy for the sustainability report

analysis is further elaborated in Section 3.3 of this paper. The outcome of the second part of

strategy, i.e. the findings connected to SQ2 are discussed and disclosed in Chapter 4.

The third part of the strategy was linked to SQ3 and targeted to demonstrate the practical

formulation and application of the SBSC. In this section the case study analysis (CSA) was

applied as the research method, as it facilitates gaining a comprehensive view and

understanding of a specific phenomenon (Gummesson, 1991). Furthermore, it can provide a

holistic overview due to the multifaceted sources of evidence, as well as some extent of

generalizations and replications (Noor, 2008). Finally, it can capture the ever-changing

properties of organizational activity (Hartley, 1994). The research strategy for the CSA is

further detailed in Section 3.4. of this paper. The outcome of the third part of strategy, i.e.

the findings connected to SQ3 are discussed and disclosed in Chapter 5.

Overall, in the first part of the strategy primary and secondary information was collected and

analysed through literature reviews and expert interviews. In the second part, primary and

secondary data was collected and analysed through expert interviews and qualitative content

analysis, while empirical data was also generated by developing an analytical framework of

SDIs for the potential integration in the SBSC. In the third part, empirical data was generated

by conducting a CSA with a real business case with the objective of formulating and

23

applying a SBSC. Data collection in this paper is referred to as a process of gathering and

compiling information from external sources; while data generation is regarded as a process

that produces novel information that is based on evidence from research materials, data

collection methods, as well as own results (Yin, 2011).

Based on the outlined principles, the research strategy as a function of the applied methods,

as well as the procedure for material and data collection, processing, and analysis are

described in the following sections.

3.1. Research Strategy for Desk-Based Research

3.1.1. Methodology

The purpose of pursuing the method of desk-based research in this paper was to establish a

fundamental base of knowledge comprising existing literature and evidence on the studied

matters. “Reviewing and understanding existing literature before initiating the own research”

was essential not only for the composition of a scientific research framework, but also for

the limitation of bias (Yin, 2011, p. 13). Through the desk-based research secondary data

was collected to frame the research in multiple aspects, as well as to facilitate developing

own observations and results. The overall objective was to gather scientific evidence and

material with regards to corporate sustainability, SPMSs, and the SBSC that would later

serve as the base for own conclusions. The selected research methods and the integrated

strategy were also appropriated by desk-based research, and the corresponding processes fed

from respective, peer-reviewed, and widely cited academic literature.

The method was primarily applied via the utilization of the Google Scholar, Google Books,

and Web of Science search engines. By running several various searches with appropriate

keywords that reflected the areas of interest, a vast collection of research material was

obtained through varying databases, but most commonly from Scopus and ScienceDirect.

3.1.2. Research Material and Data Collection

The above-described research strategy required the conduction of desk-based reviews of

relevant literature, including books, articles, documents, reports, and existing case studies in

order to construct the theoretical and conceptual frameworks, as well as to acquire secondary

information on the perceived sustainability challenges and drivers within the industrial

packaging sector. Further data was collected from additional research materials that

concerned existing SDIs for potential SPMSs in other industries, in order to expand the

analytical base of the SBSC.

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3.2. Research Strategy for Semi-Structured Expert Interviews

3.2.1. Methodology

The purpose of pursuing the method of interviewing in this paper was to complement the

secondary information collected through desk-based research by acquiring primary

information from a different source of data: personal communication and exchange of

knowledge. The objective was to obtain first-hand information from experts with regards to

sustainability challenges in the industrial packaging sector, as well as to personal perceptions

on potential SDIs that might be suitable to include in a SBSC. The interviews therefore

served as a resource both for data collection and as a base for data generation, thereby

fulfilling a two-tiered role. The overarching aim was to acquire in-depth understanding of

the experience and knowledge of the sample on a pre-determined topic, not statistical

generalisation.

Interviewing can be defined as “a conversation with the purpose to gather information” from

the interviewee (i.e. subject) (Berg, 2009, p. 101). The notion of interviewing can be

conceptualized variously, such as an “encounter” (Goffman, 1967), or a “face-to-face

interactionary performance” (Babbie, 2007). The types of interviews can be categorized

differently, but in this paper only one family of classifications is delineated, following the

clusters identified by literature (Babbie, 2007; Byrne, 2012; Frankfort-Nachmias &

Nachmias, 2007; Merriam, 2001): standardized (formal or structured), unstandardized

(informal or nondirective), and semi-standardized (guided-semi-structured or focused)

interviews, with the primary difference between these structures being “their degree of

rigidity with regard to presentational structure” (Berg, 2009, p. 104). In this research semi-

structured qualitative interviews were applied, as the primary goal was to “encourage an

interviewee to talk, perhaps at some length, about a particular issue or range of topics” by

“facilitating an ontological position which respects people’s knowledge, values, and

experiences as meaningful and worthy of exploration” (Byrne, 2012, p. 208).

According to Berg (2009), during semi-structured interviews the same set of prepared and

standardized questions around a specific topic is asked of each interviewee. The order of the

questions is flexible, the only criteria is that the flow of the interview is ought to be consistent

and systematic. However, the interviewer is encouraged to explore the topic with the

interviewees beyond the predetermined questions as well. An overview of the principal

attributes of semi-structured interviews is listed below.

25

- Interview is more or less structured.

- Questions may be reordered during the interview.

- Wording of questions is flexible.

- Level of language may be adjusted.

- Interviewer may answer questions and make clarifications.

- Interviewer may add or delete probes to interview between subsequent subjects

(Berg, 2009, p. 105).

It was acknowledged that researchers must consider carefully how they wish to develop their

questions and interview schedules, thus, the below steps suggested by literature (Berg, 2009;

Bryman, 2012; Patton, 2002; Selltiz et al., 1959) were followed during the construction of

the interviews:

1. Determining the scope and objectives of the research.

2. Outlining relevant conceptual fields and interview topics and listing embedded items

of inquiry.

3. Formulating relevant questions for items of inquiry.

4. Deciding on question sequencing and coherence, while making sure that questions

from all the four core types (essential, extra, throwaway, and probing (Berg, 2009, p.

113)) are included.

5. Examining and revising wording of questions.

6. Pre-testing the pilot interview guide.

7. Planning for spontaneous or unanticipated areas besides the scripted scope with a

consistent guideline of potential questions, in order to remain in control in all parts

of the interaction.

8. Practicing and role-playing the interviews.

9. Finalizing the interview guide.

As per the outlined suggestions, the relevant conceptual fields and embedded items of

inquiry were delineated during the process of constructing the interview guide. Principally,

the items of inquiry were formulated based on what specific aspects of the main categories

and conceptual fields were deemed essential for uncovering potentially desired information

related to the research questions. In order to facilitate and structure the development of the

script, the overviews illustrated in Table 2 and Table 3 were created separately for the

internal and external stakeholders, serving as a base for the actual guide and questions for

26

the interview. These items of inquiry covered a comprehensive set of areas, starting with the

collection of basic demographic and professional background information in order to draft

up an interviewee profile for each participant. The questions then moved on to the

assessment of the interviewees’ factual knowledge, as well as personal perceptions regarding

sustainability, thereby creating a benchmark for the area of the central research question later

in the interviews. These questions served the purpose of acquiring some insight into the

participants’ general understanding of sustainability-related matters, as well as of guiding

the interview towards the central topic. This section was followed by questions on

sustainability within the industrial packaging sector, therefore, the material collected here

was the core of the interviews, with multiple questions focusing on performance

measurement and potential indicators. The last part of the interviews focused in on corporate

sustainability within the industrial packaging sector with questions mostly concerning the

case company itself. The target here was to collect information on current and planned

practices and strategies of the company that could potentially contribute to formulating some

performance indicators, and ultimately the SBSC. The interviews were planned to start from

a wider and more general perspective, to slowly narrow the scope along the more and more

specific questions in order to continuously collect information regarding the main topics of

interest: sustainability challenges and drivers in the industrial packaging sector, as well as

potential SDIs for the SBSC. The identified items of inquiry, as well as the interview guide

were formulated based on extensive literature (Azapagic & Perdan, 2000; Buxel et al., 2015;

Büyüközkan & Çifçi, 2011; Figge et al., 2002a; Hillier et al., 2017; Kunz et al., 2014; Searcy,

2012). The interview guide is found in Appendix A.

Table 2. Items of inquiry for internal participants

Demographics Association with company

Knowledge of sustainability

Perceptions of sustainability

Industrial sustainability

Corporate sustainability

Age Job title Education in sustainability

Personal experience in sustainability

Motivation Motivation

Gender Location of employment

Work experience in sustainability

Personal understanding of sustainability

Processes and measures

Processes and measures

Nationality / Ethnicity

Duration of employment

General characterisation of sustainability

Challenges and drivers

Stakeholders

Education Main responsibilities

Performance

27

Table 3. Items of inquiry for external participants

Background information Knowledge of sustainability Industrial sustainability

Job title Work experience Motivation

Location of employment Expertise Processes and measures

Duration of employment General characterisation of sustainability Challenges and drivers

Main responsibilities Performance

Stakeholders

Considering that the selected interviewees (see Section 3.2.2.) were expected to be residing

in various geographic locations, web-based distance interviewing via Skype was the only

viable method. However, “e-interviews” are deemed an appropriate solution when the

researcher is applying a semi-structured interview schedule with a fairly prepared guideline

of questions (Berg, 2009). It was acknowledged in the planning phase of the e-interviews

that some traits of a face-to-face interview would be lost via the selected form of execution,

e.g. the interpretation of body language or non-verbal expressions, however, given the

physical constraints, it was the only feasible way. All interviews were asked and permitted

to record.

The conduction of the expert interviews was followed by the analysis of the obtained data,

which is regarded rather complicated and poorly described in qualitative research, as there

are no concrete operational procedures or guides on which the process can be based (Berg,

2009). The analysis of the data, therefore, is “primarily determined by the nature of the

project and the various contingencies built in during the design stages” (Berg, 2009, p. 147).

Despite the lack of procedural guidelines on analysing the interview material, literature does

provide some suggestions with regards to organizing the collected data, which were followed

in this research as well. The recommendations were as follows:

1. Transcribing the recorded interviews into written form (Berg, 2009).

2. Establishing a comprehensive and systematic filing system for the indexing, sorting,

and classification of the coded data (Lofland & Lofland, 1984).

3. Looking for patterns methodologically in the coded data from each transcript (Glaser

& Strauss, 1967).

Bryman (2012) notes that transcribing interviews is quite time-consuming, suggesting that

five-six hours per every hour of the interview would most likely be dedicated to the

28

transcription. This suggestion was considered and built into the planning as well (see Section

3.2.3). Taking into account that it is recommended not to leave the effective analysis of the

collected data until all interviews have been conducted and transcribed due to the ever-

increasing pile of text to be analysed (Lofland & Lofland, 1995), the ongoing conduction of

the interviews and the data analysis was carried out somewhat simultaneously.

The application of semi-structured interviews as per the above-described purposes in this

paper was justified, as by enabling the interviewees to express their perceptions on a certain

topic with some level of guidance the interviewer created a system that made sure to “reflect

an awareness that individuals understand the world in varying ways” (Berg, 2009, p. 107).

This system was achieved by tailoring the language or tone of the prepared and standardized

questions to the actual interviewee, as well as by spontaneous probes, when prompted (Berg,

2009). Furthermore, this discursive method facilitated the creation of a research environment

in which personal values and perceptions were encouraged to express, thereby enriching and

expanding the knowledgebase of the research (Byrne, 2012). Literature also suggests that

(qualitative) interviewing is one of the most widely employed research methods associated

with a qualitative research strategy (Bryman, 2012), which was applied in this study as well.

Finally, through conducting the semi-structured qualitative interviews, it was enabled in the

research to “achieve a level of depth and complexity that is not available to other, particularly

survey-based approaches” (Byrne, 2012, p. 210).

3.2.2. Selection of Interviewees

It is argued that semi-structured interviews are “high-preparation, high-risk, high-gain, and

high-analysis operations” (Wengraf, 2001, p. 5), implying that the selected sample should

not be too large due to time and resource constraints (Byrne, 2012). Onwuegbuzie & Collins

(2007) further add that “sample sizes in qualitative research should not be so small as to

make it difficult to achieve data saturation, theoretical saturation, or informational

redundancy. At the same time, the sample should not be so large that it is difficult to

undertake a deep, case-oriented analysis” (p. 289). These implications were considered and

applied in this research as well, as demonstrated in the following descriptions.

The sampling of the context followed the scope and questions of the present study. As

outlined above, the interviews were conducted with a two-fold target: (a) to acquire

understanding of the sustainability challenges and drivers within the industrial packaging

29

sector; and (b) to collect potential SDIs for the construction of the SBSC. The context was,

therefore, appropriated by the targets and the respective research sub-questions (SQ1-2).

During the process of the target selection, various criteria were considered. The sampling of

the participants followed the guidelines of non-sequential (fixed), a priori purposive

sampling, an approach that entails sampling interviewees not on a random basis, but with a

strategy that is clearly established at the outset of the study, in order to construct a group

whose participants are relevant to the questions and scope of the research (Bryman, 2012).

The sample was fixed early on, thereby classifying the selection process as non-sequential

(Bryman, 2012). In order to frame the establishment of “criteria concerning the kinds of

cases needed to address the research question” and the identification of the appropriate cases,

the element of generic purposive sampling was integrated into the strategy as well (Bryman,

2012, p. 422). The outlined sampling strategy enabled the researcher to explore the

similarities and differences among the interviewees’ perceptions, values, and personal

opinions with regards to the focus area. Additionally, the strategy allowed for the

identification and selection of a diverse group of participants, representing various

nationalities and ethnicities, job backgrounds and work experiences, levels of expertise, as

well as knowledge and understanding of sustainability and industrial matters. Consequently,

the interviewees differed from each other as a function of some critical key characteristics

to provide the research with a more holistic and multi-perspective set of primary information.

The target sample was divided into two groups as a function of the relationship to the case

company that was to be analysed later in the research2: internal and external. The internal

group comprised representatives of the selected business case, and the external group

included participants that did not directly represent the case company, but that had an indirect

relationship with either the company or its industry.

Reflecting on the aspects and considerations outlined above, the selection criteria for the

identification and selection of internal participants were as follows:

1. Candidates should be a variety of diverse stakeholders representing various levels

and internal processes of the organization, including top management, board

members, and staff.

2. Candidates should represent a diverse demographic background in terms of age,

gender, nationality and current residence, and education.

2 Information regarding the CSA and the selected business case is disclosed in Section 3.4.

30

3. Candidates should demonstrate extensive knowledge of the industrial packaging

sector, including the aspects of operations and processes, market, customers, and

partners.

4. Candidates should demonstrate at least some knowledge of the organizational

operations, strategies, and decision-making.

5. Candidates should demonstrate at least some knowledge of environmental and

sustainability concerns.

Additionally, based on the considerations delineated above, the selection criteria for the

identification and selection of external participants were as follows:

1. Candidates should be regarded field experts with extensive knowledge of and

competencies in environmental and sustainability coordination and management.

2. Candidates should be in a position that clearly reflects their competencies and

background in sustainability.

3. Candidates should demonstrate at least some knowledge of the industrial packaging

sector.

4. Candidates should be associated with an organization that is relevant in terms of the

industrial packaging sector and sustainability management.

Upon outlining the target sampling based on the selection criteria, a shortlist of candidates

was first developed, after which the potential research participants were approached. Table

4 and Table 5 illustrate the final sample, comprising 10 interviewees in total: eight internal

and two external. The researcher had already established a rapport with some of the

interviewees due to being employed at the same company for over three years. The

researcher expected that this pre-existing relationship would contribute towards productive

and fruitful interviews.

During the development and expansion of the sample it was closely monitored and ensured

that it was still aligned with the initial targets (Byrne, 2012). It was accomplished to build

an objectively diverse group of participants in terms of nationality, with Romanian (4),

Danish (2), Polish (1), Kuwaiti (1), South African (1), and Hungarian (1) interviewees

included in the sample. The age distribution among the participants ranged from 30-66. The

gender ratio of females to males was 1:9, showcasing an underrepresentation of women in

the study. This is partially due to the fact that the company had not been employing that

many women in relevant positions and with backgrounds at the time the research was

31

developed; and partially because the other women that had been contacted for the study did

not wish to participate in the interviews. Each participant held some form of a higher

education certificate, including bachelor’s, master’s, and college degrees. The interviewees

were of widely ranging academic and professional backgrounds, from engineering through

economics to business management. While none of the participants had enrolled in education

directly connected to sustainability, some recalled having related classes, while others noted

that they educated themselves on the matter through personal research. All interviewees had

encountered sustainability-related topics and projects through their work and professional

experience, equipping them with unique outlooks and perspectives on the subject, which

ultimately facilitated the collection of both varying and somewhat similar opinions and

testimonials, depending on the context.

Table 4. Participant sample of internal interviewees

ID Job title Nationality Field of expertise Relevance

1

Chairman of the Board;

Chief Financial Officer (CFO)

Danish

- Business optimization and strategic development

- Financial monitoring - Economic management

Top management and board member

2

Managing Director (MD) of Central Europe region;

Chief Operating Officer (COO)

Danish

- Business optimization and strategic development

- Commercialization management

Top management and board member

3

MD of South-East Europe region;

Chief Technology Officer (CTO)

Romanian

- Machines engineering - Wooden pallets and packaging - Production optimization

Top management and field expert

4 Production Manager Romanian

- Forest engineering and management

- Production optimization Field expert

5 Finance Executive Romanian - Financial administration - Economic management Board member

6 Supply Chain Manager Polish - Supply chain operations

- Logistics optimization Senior staff

7 Production Manager Kuwaiti - Wooden pallets and packaging

- Production optimization Top management and field expert

8 Sales & Marketing Manager

South African

- Sales and marketing strategy - Business development Senior staff

Table 5. Participant sample of external interviewees

ID Job title Company Nationality Field of expertise Relevance

1 President Association for Forest Certification Romanian

- Forest certification management

- Auditing (FSC / PEFC) - Chain of custody

Field expert

2 Secretary General

Hungarian Association of Packaging and

Materials Handling

Hungarian

- Materials and packaging handling

- Intergovernmental cooperation

Field expert

32

Calendar week (2020)

Milestone

3.2.3. Research Planning

The research planning followed the considerations and steps outlined in the methodology

and was translated into a time plan accordingly. The time plan for the research strategy of

the semi-structured expert interviews is illustrated in Figure 3.

The time plan was scheduled for the calendar weeks 18-25 in 2020 and contained four

milestones (MS) with attributed steps. MS1 concerned the initiation phase and entailed the

identification and selection of relevant internal and external stakeholders (i.e. interview

participants). A target selection and the corresponding final sample was developed based on

the selection criteria outlined in Section 3.2.2., as well as on the recommendations of the

case company in terms of potential participants. MS2 was processed parallelly with MS1, as

it was regarded as the initiation and preparation phase as well. During MS2 the scope and

objective of the respective research strategy was outlined, in order to develop the semi-

structured interview guideline. MS3 concerned the actual conduction of the interviews after

the appointments had been properly set up with the participants. MS4 entailed the phase of

data analysis, which ran simultaneously with the interviews in order to keep up with the

incoming information that was mounting up at a speedy rate. The transcription and coding

took place during this final stage. Afterwards, the writing up of the results into the respective

parts of the thesis – description of sustainability challenges and drivers and delineation of

identified SDIs (Chapter 4), formulation and application of the SBSC (Chapter 5), and

discussion (Chapter 6) – was planned to be conducted as well.

Figure 3. Research planning for interviews

18 19 20 21 22 23 24 25

Identification of interviewees

Composition of interview guide

Conduction of interviews

Analysis and assessment of data

Identification of selection criteria

Sampling

Identification of scope & objectives

Preparation, revision, and finalization script

Schedul-ing

Interviewing

Transcription, coding, and writing up of data and results

33

3.3. Research Strategy for Sustainability Report Analysis

3.3.1. Methodology of Qualitative Content Analysis

To methodologically frame the research strategy for sustainability report analysis,

qualitative content analysis was applied (Bryman, 2012; Elo & Kyngäs, 2008; Hsieh &

Shannon, 2005; Mayring, 2004). The purpose of pursuing the method of qualitative content

analysis in this paper was to collect secondary data by analysing SRs and websites of a

selected company sample, as well as to generate empirical data by utilizing the collected and

analysed information to produce categorizations of SDIs that are commonly measured and

reported on within the industrial packaging sector, and are, therefore, potentially applicable

for the SBSC. The aim was, thus, first to collect and analyse information on the industrial

trends; and second, to use that information as a baseline for generating the SBSC in the

selected sector.

The method of qualitative content analysis materialises as a flexible strategy of “searching-

out of underlying themes in the materials being analysed” (Bryman, 2012, p. 557). It is a

systematic and objective, but highly complex process (Elo & Kyngäs, 2008; Mayring, 2004),

considering that it is expected to gather a rich and in-depth set of (textual) data; however,

finding analytic paths and patterns through this richness is quite challenging, as “there are

few well-established and widely accepted rules for the analysis of qualitative data” (Bryman,

2012, p. 565). Content analysis is, therefore, outlined as a method that “describes a family

of analytic approaches ranging from impressionistic, intuitive, interpretive analyses to

systematic, strict textual analyses”, thereby targeting to classify “large amounts of text into

an efficient number of categories that represent similar meanings” (Hsieh & Shannon, 2005,

p. 1277-8, based on Rosengren, 1981 and Weber, 1990). Building on previous approaches

(Berelson, 1952; Downe-Wamboldt, 1992; Rosengren, 1981; Weber, 1990), there are

various definitions on the method. Mayring (2000) conceptualises qualitative content

analysis as an “approach of empirical, methodological controlled analysis of texts within

their context of communication, following content analytical rules and step by step models,

without rash quantification” (p. 2.). Hsieh & Shannon (2005) define it as a “research method

for the subjective interpretation of the content of text data through the systematic

classification process of coding and identifying themes or patterns” (p. 1278). Patton (2014)

approaches the concept from a more general perspective, and suggests that the method

“refers to any qualitative data reduction and sense-making effort that takes a volume of

qualitative material and attempts to identify core consistencies and meanings” (p. 541).

34

Hsieh & Shannon (2005) differentiate between three approaches to “interpret text data from

a predominantly naturalistic paradigm”: conventional, directed, and summative (p. 1278). In

this research, a directed approach to content analysis was applied, in order to conceptually

extend the framework of a SBSC as a form of SPMS. Elo & Kyngäs (2008) suggest a

different set of approaches: inductive and deductive. In this research, content analysis was

employed in an inductive way, considering that distinct occurrences were observed and

extracted from the specific SRs, to be later incorporated into a larger frame (Chinn &

Kramer, 1999).

As per the recommendations of Hsieh & Shannon (2005), Elo & Kyngäs (2008), and Zhang

& Wildemuth (2017), the steps of the content analysis process were as follows:

1. Selecting unit of analysis.

2. Delineating key concepts or variables as initial coding categories.

3. Determining operational definitions for each category, in line with the respective

applied theory.

4. Collecting data from the preferred sources and through proper channels.

5. Coding, grouping, and categorizing the collected data with predetermined codes that

had been derived from theory.

6. Developing the conceptual model, comprising the categories.

Just as during the expert interviews, the thematic analysis and coding of the incoming

information were an ongoing process, simultaneously with the data collection itself. Coding

here was referred to as a collective of “shorthand devices to label, separate, compile, and

organize original data” (Charmaz, 1983, p. 186), which in qualitative research implies “a

constant state of potential revision and fluidity” (Bryman, 2012, p. 568).

The thematic, directed, and inductive analysis was assisted by the concept of Framework by

Ritchie et al. (2003), “a matrix-based method for ordering and synthesising data”, which

entailed developing an index or code of central themes and subthemes to be illustrated in a

matrix (p. 219). These identified themes and subthemes were “recurring motifs in the texts

that were then applied to the data” (Bryman, 2012, p. 622). The central theme in the present

study was SDIs within the industrial packaging sector and was attributed with the three

pillars of sustainability – economic, environmental, and social – as the subthemes.

Considering that the sampled companies were planned to be collected from the GRI database

(see Section 3.3.2.), it was fitting to incorporate the structure of the GRI standards into the

35

coding process (GRI, 2020a). The three universal standards reflect the three dimensions of

sustainability and contain topic-specific groups of indicators. Whether and which indicators

are included in a corporate SR is dependent on the company, enabling the SR to provide “an

inclusive picture of an organization’s material topics, their related impacts, and how they are

managed” (GRI, 2020a). By using a coding framework based on the GRI standards it was

facilitated to cross-reference the individual SRs with the topic-specific groups of indicators

to see which company had been reporting on which indicators exactly, as well as to observe

how they had operationalized the selected indicators to their business and sector in terms of

sustainability performance measurement. This exercise was ultimately expected to result in

valuable insights with regards to which SDIs were most commonly measured and reported

on within the packaging industry.

To sum up, the data that had been extracted from the SRs was first filled into a schematic

framework that was built according to the GRI standards. This exercise was done for each

company in the sample, an overview of which is found in Appendix B1. The fragments in

the cells were assigned a page number to indicate where exactly they had been found in the

corporate reports. Subsequently, to provide an aggregated overview of the results, the table

in Appendix B2 was created, displaying a matrix of which SDIs were found in which

companies’ reports exactly, thereby facilitating the tallying and the organization of the

results for the next step. Finally, to analyse the sustainability aspects and SDIs that had been

screened and identified, the extracted information was coded into a coding framework found

in Appendix B3, “offering a detailed description and definition for each indicator, thus

allowing for uniform and reliable analysis” (Lambrechts et al., 2019, p. 6). This coding

framework was developed according to the GRI standards and disclosures (GRI, 2020a) and

the sustainability indicators and descriptions identified by Lambrechts et al. (2019). These

results were further analysed, which was followed by conclusions regarding occurrence and

potential industrial trends.

The application of qualitative content analysis as a method to frame sustainability report

analysis as per the above-described purposes was justified, as it promised a vast amount of

extensive, in-depth, and publicly available data that was easily accessible via the Internet.

This is due to the fact that “recognizing the importance of accountability to stakeholders and

learning to be more open, companies view sustainability reporting as a step toward more

transparent communication” (Beloff et al., 2004, p. 273), which has resulted in an increased

production and publishing of SRs, readily available for content analysis. Furthermore,

36

Bryman (2012) and Hsieh & Shannon (2005) note that the collection and qualitative analysis

of texts, reports, documents, and other types of written content is one of the main research

methods attributed to qualitative research strategies. Additionally, it is a validated research

method for developing replicable interpretations from data to their context while generating

new knowledge, as well as serving as a practical guide to action (Elo & Kyngäs, 2008;

Krippendorff, 1980), which was the overarching purpose of the research as well. Finally, Elo

& Kyngäs (2008) suggest that the outcome of a qualitative content analysis is generally

concepts and categories which contribute to developing an outlined model or conceptual

system, which in the case of this research was the SBSC as an SPMS. Finally, to have a

scope that covers SRs disclosed in the GRI database was justified as per the objective of the

overall study, as the GRI is regarded a legitimate sustainability reporting standard

(Lambrechts et al., 2019; Zenya & Nystad, 2018).

3.3.2. Selection of Company Sample

The sampling of the context followed the scope and questions of the research during this part

of the overall strategy as well. As outlined above, the sustainability report analyses as a form

of qualitative content analysis were conducted with the overarching target of collecting

potential SDIs for the construction of a SBSC in order to complement the results obtained

through expert interviews and desk-based research. The context was, therefore, appropriated

by the target and the respective research sub-question (SQ2).

The sampling of the companies followed similar guidelines to the interviewee selection, in

that, it entailed a fixed, a priori purposive sampling process. The sampling strategy was

targeted to construct a selection of companies that were relevant to the scope of the research,

i.e. corporations operating in the packaging sector that had already established and published

SRs as per their sustainable development agendas. This strategy enabled the researcher to

gather a more in-depth understanding of the industrial players in terms of sustainability, as

well as to identify common and different trends and preferences with regards to sustainability

performance measurement and corresponding SDIs.

To realize the above-described objectives through sustainability report analysis, the

sampling criteria for the identification and selection of the companies were as follows:

1. Company should be a large organization or multinational enterprise (MNE) with

clear affiliations to the packaging industry.

37

2. Company should have a publicly available (i.e. published on a corporate website) SR

in English, which had been disclosed through the GRI. The report should have been

made according to one of the following GRI sustainability reporting guidelines: GRI-

Standards or GRI-G4 reporting framework3.

3. The corporate SR should not be dated before 01. January 2015.

4. Authenticity and credibility of identified company, as well as the corporate website

should be confirmable (Bryman, 2012).

To identify corporations with SRs that had been published through the GRI, the

Sustainability Disclosure Database (SDD) of the GRI was first used (GRI, 2020b). Before

initiating the search, it was found that the GRI had incorporated a selected global industry

classification standard into its database. According to this classification standard, the

industry within the focus of this study was categorized with the following path: materials

sector → materials industry group → containers and packaging industry (MSCI, 2020). After

some randomized searches within the GRI database, it was discovered that the containers

and packaging industry and its sector, however, were not included among the sector filters,

therefore filtering out this desired industry exclusively was not possible. To clarify this issue

the researcher contacted the GRI, who explained that it was dependent on the reporting

organization under which sector and industry they would classify themselves. This

development allowed to researcher to assume that either not enough companies had

categorized themselves under packaging to justify the addition of a specified filter for them

in the GRI database (and therefore ended up under the “other” filter); or companies had

categorized themselves under different sectors, believing those were more fitting to their

main profiles. The fact that packaging companies could not be simply filtered via the SDD

certainly complicated matters, however, the below strategy was created to overcome the

challenge.

First, the following search coordinates were entered into the SDD. Assuming that some

packaging companies might be likely to use some version of the word “packaging” in their

name, the search term “pack” was entered into the search bar. At this stage, only the company

size filter was set up (to “large” and “MNE”) to see which sectors would appear most

3GRI-G4 was the fourth set of guidelines of the GRI, released in 2013, and ultimately succeeded and replaced by the GRI-Standards. Reports that are made with these frameworks include a GRI Content Index, which was essential for the proper identification of the SDIs selected by the company sample. Limiting the scope to these two frameworks has also contributed to some extent of universality along the content analysis, as well as facilitated the identification of similar trends within the reports (Lambrechts et al., 2019).

38

frequently among the search results for corporations with the search term “pack” in their

name. The search resulted in 13 organizations, out of which three qualified as per the

selection criteria outlined above.

Second, it was discovered that the GRI was operating another database for GRI standards

reports besides the SDD that had been submitted by corporations using the GRI Standards

Report Registration System (SRRS) (GRI, 2020c). Through some randomized initial

searches, it was established that the SDD and the SRRS were not completely concurrent,

consequently, the same search as in the previous step was conducted. The search resulted in

12 organizations, out of which four were new entries that qualified as per the selection

criteria.

Finally, by examining the search results from the previous two steps, it was observed that

most of the entries were classified under the sectors “forest and paper products” and “other”.

The next target, therefore, was to run separate searches with the sector filter set to these

categories, respectively, to then cross-reference the results with their corporate websites to

see if they have any affiliations with packaging. When filtering large companies and MNEs

in the “other” sector, 1206 organizations were found. Assuming that only a small ratio of

these would most likely be actually attributable to packaging, the cost (i.e. investment of

time and efforts) outweighed the potential benefits; consequently, this category was

dismissed after all. When filtering large companies and MNEs in the “forest and paper

products” sector, 135 organizations were found. This was a more manageable amount to

manually cross-reference, and the procedure resulted in five companies that qualified as per

the selection criteria.

In total, the search resulted in the final sample of 12 large organizations and MNEs that

reported at least once since 2015. The sample of analysis comprised a diverse group of

companies in terms of primary business profile as a variation of packaging, as well as in

terms of locations. The profiles included plastic, glass, and wood-based packaging, it was

therefore expected that the results of the analyses would provide comprehensive insight and

potential SDIs that would be generally applicable to any business profile within the industrial

packaging sector. Additionally, the sample included organizations throughout the world with

reports from Asia (1), Europe (8), and North America (3), thereby promising some unique

geographical perspectives as well. The analysed reports had used different types of GRI

sustainability reporting guidelines: 11 reports were based on GRI-Standards, and one on the

39

GRI-G4 reporting framework. An overview of the complete company sample, the corporate

information that qualified the enterprises, as well as the information on the SRs under

analysis is presented in Table 6.

These selection criteria were set up in order to limit the search to a processable amount of

content. Additionally, having such strict criteria contributed to an effective and productive

research, as the companies and reports identified via these criteria resulted in the analysis of

truly relevant content. It was acknowledged that the selection criteria and the search

methodology as explained above were built partially based on literature, and partially on

personal preferences and decisions. However, the outcome of the search was solid results

that set up the analysis of material that was deemed appropriate and relevant for the overall

research.

During the process of sampling and the qualitative content analysis in general, the limitations

and critique of the selected method were considered and acknowledged. The restrictions

include the following aspects: firstly, the validity and truthful nature of the information and

data published by the selected company could not be fully ensured without insider

knowledge. Secondly, the researcher assumed that the public records would mostly reflect

the reality, but it was also acknowledged that companies would most likely only publish

documents and reports that presented them in a favourable light, therefore caution was

exercised during the analysis through a critical lens. Thirdly, considering that the Internet is

an ever-changing ecosystem with essentially zero control or scrutiny, “it is doubtful whether

we could ever know how representative websites are on a certain topic”, including the

published records (Bryman, 2012, p. 554).


During the above-described method of research, data from documents, reports, and other

materials (in)directly connected to sustainability that were public domain (i.e. that were

made available by the company sample externally on their corporate website) were collected

and used.

40

Table 6. Company sample for sustainability report analysis

Company Country Sector Profile Size Number of employees

Publication year of first SR

Frequency of SR

Revenue (mio EUR)

Ratio of women

Ratio of female

managers SR SR type Website

ALPLA Austria Other Plastic packaging Large 20 867

(2018) 2019 -

3 660 (2018)

25% (2018) n/a Sustainability Report

2018 (ALPLA, 2019) GRI-

Standards ALPLA (2020)

BillerudKorsnäs Sweden Forest &

paper products

Wood-based

packaging MNE 4 596

(2019) 2013 Annual 2 317 (2019)

23.7% (2019)

23.9% (2019)

Annual and Sustainability Report 2019

(BillerudKorsnäs, 2020a)

GRI-Standards

BillerudKorsnäs (2020b)

DS Smith UK Forest &

paper products

Packaging MNE 30 000 (2018) 2014 Annual n/a 22%

(2018) n/a Sustainability Report 2019 (DS Smith, 2019)

GRI-Standards

DS Smith (2020)

Graphic Packaging International

USA Forest &

paper products

Wood-based

packaging Large 17 500

(2017) 2018 Annual 3 983 (2017)

19.5% (2017)

24% (2017)

2017 Sustainability and Social Responsibility

Report (Graphic Packaging, 2018)

GRI-Standards

Graphic Packaging

(2020)

Intertape Polymer Group Canada Other Packaging MNE n/a 2019 - 1 048

(2019) n/a n/a 2018 Sustainability

Report (Intertape Polymer Group, 2019)

GRI-Standards

Intertape Polymer Group

(2020)

IPACKCHEM France Chemicals Plastic packaging Large 378

(2019) 2019 - 73 (2019) n/a 19%

(2019) 2019 Integrated Report (IPACKCHEM, 2019)

GRI-Standards

IPACKCHEM (2020)

Mondi Group Austria Forest &

paper products

Packaging MNE 26 100 (2018) 2019 - 7 481

(2018) 21%

(2018) 16.5% (2018)

Sustainable Development Report 2018 (Mondi,

2019)

GRI-Standards Mondi (2020)

Packaging Corporation of America (PCA)

USA Forest &

paper products

Packaging Large 14 950 (2018) 2018 Annual 6 309

(2018) 17%

(2018) 12.5% (2018)

2018 Responsibility Report (PCA, 2019)

GRI-Standards PCA (2020)

Segezha Group Russia Forest &

paper products

Packaging Large 12 976 (2017) 2015 Unsystematic 556

(2017) 35%

(2017) 20%

(2017)

2016-2017 Sustainable Development Report

(Segezha Group, 2018) GRI-G4 Segezha Group

(2020)

Sisecam Glass Packaging Turkey Other Glass

packaging Large 21 968 (2018) 2014 Annual 2 050

(2018) 20.8% (2018)

22% (2018)

2018 Sustainability Report (Şişecam Group,

2019)

GRI-Standards

Şişecam Group (2020)

Smurfit Kappa Ireland Forest &

paper products

Wood-based


(2019) 2012 Annual 9 000 (2019)

19% (2019)

21% (2019)

Sustainable Development Report 2019 (Smurfit

Kappa, 2020a)

GRI-Standards

Smurfit Kappa (2020b)

Stora Enso Finland Forest &

paper products

Wood-based


(2018) 2003 Annual n/a 26% (2018)

20% (2018)

Annual Report 2018 (Stora Enso, 2019)

GRI-Standards

Stora Enso (2020)

41


Milestone


The research planning followed the considerations and steps outlined in the methodology

and was translated into a time plan accordingly. The time plan for the research strategy of

the qualitative content analysis of corporate SRs is illustrated in Figure 4.

As the results of the qualitative content analysis (i.e. potential SDIs for the SBSC) were

planned to complement and therefore to be combined with the results of the desk-based

research and the expert interviews, the planning schedule coincided with these phases of the

research as well. The simultaneous conduction of the interviews and the qualitative analysis

of the SRs was needed in order to establish a continuous in-flow of data and information to

construct and develop the SBSC as comprehensively as possible. The results of the various

phases of the research, therefore, were compiled separately. Nevertheless, the data collection

procedure ran parallelly in order to ensure that the construction of the SBSC would start

immediately after some definitive information via various approaches had been collected.

Figure 4. Research planning for qualitative content analysis

16 17 18 19 20 21 22 23

Identification of companies & SRs

Composition of coding framework

Collection of data

Analysis and assessment of data

The time plan for the qualitative content analysis, thus, was scheduled for the calendar weeks

16-23 in 2020 and contained four milestones with attributed steps. MS1 entailed the

initiation phase with the identification and selection of relevant industrial packaging

companies and their SRs to be analysed. A target selection and the corresponding final

sample was developed based on the selection criteria outlined in Section 3.3.2. During MS2

the coding framework was constructed in order to provide boundaries for the analysis. MS3

entailed the data collection and extraction procedure from the previously outlined research

material to provide the content for the analysis. MS4 entailed the phase of data analysis,

which ran simultaneously with the data collection in order to keep up with the incoming

information. The coding took place during this final stage; and afterwards, the writing up of

Identification of selection criteria

Sampling

Coding and writing up of data and results

Construction

Extraction of information from SRs

42

the results into the respective parts of the thesis – delineation of the identified SDIs (Chapter

4), formulation and application of the SBSC (Chapter 5) and discussion (Chapter 6) – was

planned to be conducted as well.

3.4. Research Strategy for Case Study Analysis

3.4.1. Methodology

The purpose of pursuing the method of CSA in this paper was to generate empirical data by

formulating and applying the conceptually pre-designed SBSC as a SPMS in practice

through a real business case from the industrial packaging sector. The aim was to build on,

as well as complement the theoretical knowledge and information that had been acquired in

the prior stages of the research with an exercise based on a real-life scenario, thereby

demonstrating the practical utilization of the discussed instrument of SBSC.

The core principles of a CSA can be encapsulated as an “intensive study of a single unit for

the purpose of understanding a larger class of (similar) units”, and it is “best understood as

an ideal-type rather than a method with hard-and-fast rules” (Gerring, 2004, pp. 342, 346).

Gerring (2004) compiled a list of traits and attributes of the CSA based on previous academic

work (Campbell & Stanley, 1963; Eckstein, 1975; George & Bennett, 2004; Yin, 1994),

which were considered in this research as well. As per Gerring (2004), a case study might

refer to works where

- the underlying method is qualitative, small-N;

- the research is ethnographic, clinical, participant-observation, or otherwise “in the

field”;

- the research is characterized by process-tracing;

- the research investigates the properties of a single case (p. 342).

Building on the rather broad and general characterizations of the CSA demarcated above,

the method needed to be concretized further along pre-determined steps. The design process

of the CSA in this research followed the phases outlined by Yin (2011, p. 6):

1. Defining the case, considering that the case serves as the unit of analysis.

2. Selecting the case study design, in which the number of cases and units of analysis

comprising the case study are determined.

3. Determining whether theory will be used in the design work as a proposition and pre-

set perspective.

43

The concrete decisions with regards to the key phases of CSA design are elaborated in the

next section.

Overall, the application of CSA along the above-described purposes was justified for several

reasons in this research. As detailed below, the selected case was aimed “to be an object of

interest in its own right”, while the researcher targeted to provide an “in-depth elucidation

of it” (Bryman, 2012, p. 69). As the corresponding research objective was to showcase the

formulation and application of a SBSC through a real business case, the employment of the

CSA was expected to provide an appropriate methodological framework. The CSA allows

for focusing in on a specific issue or matter through a selected unit of example from the real

world (Yin, 2011), which coincides with the purposes of this research as well. Furthermore,

the application of the CSA is suitable when a research deals with exploratory questions that

target to shed light on the “how” aspect of a phenomenon (Yin, 2011), which is specifically

the case with regards to SQ3 of this paper, the respective sub-question related to this part of

the research strategy. As it is explained in the next section, this part of the research relied on

data that had been collected in “natural settings” (i.e. through original fieldwork within a

real-world context), which is a favourable prerequisite of the CSA (Yin, 2011, p. 5).

While considering all above aspects, it must also be noted that it has been emphasised at

various points of the paper that the matters discussed in the research would not and could

not be fully generalisable. This consideration was reinforced in the case study design as well:

given that the SBSC cannot be universally produced, its practical application is not

universally pertinent and therefore replicable either. The overarching objective for

conducting the case study was to demonstrate practical utilization of a theoretical concept

and instrument via a real business case; these results, however, do not necessarily hold up in

another context. The standard criticism regarding CSA as a statistically ungeneralizable

method (Bryman, 2012; Yin, 2011) therefore, obtains some validity in the domain of this

study as well. Nevertheless, statistical generalisation was not the objective of this research

in the first place.

3.4.2. Selection of Case Study

The research and the corresponding case study design in this paper was targeted to be

developed around a single organization. As per the categorizations of Yin (2009), this study

was planned to be classified and interpreted as a representative or exemplifying case, as it

was expected to “exemplify a broader category of which it is a member” (Bryman, 2012, p.

44

70). The broader category in this sense were companies operating within the industrial

packaging sector. To insert the above into the methodological classifications provided by

Yin (2011) in terms of CSA design, the following cornerstones were determined for this

research:

1. The unit of analysis is a single organization from the industrial packaging sector.

2. As the CSA is limited to a single organization, the design of a holistic, single-case

study is applied to facilitate finding answers to how the organization can formulate

the SBSC as a SPMS, which is embedded in its sustainable strategic management

and agenda. Consequently, this indicates a single-case design with a single-unit of

analysis.

3. The theoretical proposition of the SBSC concept as a strategic, value-based tool for

sustainable strategic management (Figge et al., 2002b) is used to provide a scientific

framework, as well as to conceptually ground the research.

Building on the above cornerstones, the first step in the CSA was to appoint an organization

as the unit of analysis. The case selection was expected to be in line with the overarching

theme and focus of the research, which is corporate sustainability within the industrial

packaging sector. Consequently, the sampling of the case company as the single case and

single unit of analysis in this research followed the below criteria:

1. Company should be a SME with clear associations to the industrial packaging sector.

2. Company should have, at a minimum, an initial sustainability strategy, outlining the

corporate mission and vision in terms of sustainable development and business

operations.

3. Company should be motivated to achieve a high and deep level of commitment to

sustainable development, which should be demonstrated by concrete actions

(monetary pledge, assigned resources, declaration on external communication

channels, etc.).

4. Company should not yet have a fully developed SPMS in place as part of their

sustainable strategic management.

The result of the selection process was a SME with international affiliations within the

industrial packaging sector. The company is introduced in more detail in Section 5.1. As it

is elaborated in the respective section, the selected organization fulfils all pre-requisites

outlined as the sampling criteria. The primary reason for selecting the specific company,

45

however, was that the researcher had been employed at the organization for over three years

at the time of the research. Thereby, this circumstance was expected to be a contributing

factor to conducting a successful CSA with a practice-based approach that was rooted in

years of experience and compiling knowledge both of the company and its industry. The

selection of the case company granted no reason for any conflict of interest; nevertheless, it

may have opened some doors to a certain extent of bias during the composition of the

research design and strategy. Potential biases and related remarks are further discussed in

Section 6.3.


In this part of the research, the primary source of research material was information and data

that had been acquired from and through the case company directly. The case company has

been producing various types of material, some of which were made available publicly, and

some were shared only internally. Externally accessible documents included annual reports,

public relation material, mission statements, news feed, and advertisements. Internally

available material comprised the internal news feed, organizational documents, documents

on corporate strategy and policies, memos, files, and internal and external correspondence.

Additionally, as the researcher had been employed at the case company for over three years

at the time of the research, a great extent of the information base originated from own

observations, insights, and piled-up knowledge, as well as from formal and informal

communication with the management and staff. Some quotes and observations were also

extracted from the expert interviews (see Section 3.2) to introduce and explain the case

company’s approach to corporate sustainability through versatile perspectives.


The research planning followed the considerations and research design outlined in the

methodology and was translated into a time plan accordingly. The time plan for the research

strategy of the CSA is illustrated in Figure 5.

The time plan was scheduled for the calendar weeks 26-33 in 2020 and contained five

milestones with attributed steps. MS1 entailed the collection, preparation, and analysis of

corporate research material that had been obtained from the case company to ensure

complete understanding of internal strategies and management processes, as well as general

approach to sustainability. MS2 was carried out partially parallelly with MS1, as it also

focused on data organization. MS2 was dedicated to the collection, preparation, and merging

46


Milestone

of data and information that had been acquired in the prior steps of the research, i.e. the

expert interviews and the SR analysis, the result of which was a complete overview of the

potential SDIs to be included in the SBSC. MS3 was the phase in which the conceptual

design of the SBSC took place, primarily rooted in previously identified academic literature.

MS4 concerned the actual formulation and application of the SBSC via a practice-based

approach by utilizing the selected single unit of analysis of the case organization. Finally, in

MS5 all collected and generated information was converged to write up the results,

observations, and the concluding remarks of the overall research. The respective parts are

found in Chapters 4-6.

Figure 5. Research planning for case study analysis

26 27 28 29 30 31 32 33

Organization of corporate research

material

Organization of data from prior steps

Preparation of conceptual framework

Formulation and application of SBSC

Assessment of case study results

Collection, preparation and analysis of material

Collection, preparation and merging of data

Conceptual design of SBSC

Writing up of data and results

Practical design and construction of SBSC

47

4. Preparations for the Sustainability Balanced Scorecard

4.1. Principles of Developing the Sustainability Balanced Scorecard When developing a SBSC, some basic requirements must be met. Namely, (1) the process

must result in the incorporation of environmental and social management to business

management; (2) the formulated SBSC must be business unit-specific; and (3) environmental

and social factors of a business unit must be incorporated in accordance with their strategic

relevance (Figge et al., 2002a).

The leading principle of the process is to incorporate the strategically relevant environmental

and social aspects into the conventional BSC by integrating them into the four basic BSC

perspectives, or by introducing an additional non-market perspective (Figge et al., 2002a).

It is important to note that “certain environmental or social aspects can be subsumed under

the four conventional BSC perspectives parallel to the introduction of a specific perspective

for other strategically relevant environmental or social aspects” (Figge et al., 2002a, p. 275).

According to Figge et al. (2002a, p. 277), the process comprises the steps as follows.

1. Choosing a strategic business unit. An attributed pre-requisite to this step is to ensure

that the business unit is assigned a sustainability strategy. In SMEs, the corporate

level may be chosen as the business unit.

2. Identifying the (potentially strategically) relevant environmental and social factors.

This step leads to a map of environmental and social exposure with regards to the

selected business unit by labelling the ecological and social interventions that are

rooted in the standard operating procedures and products of the business unit. When

exploring environmental exposure, the framework showcased in Table 7 (Figge et

al., 2002a, p. 277) can be used as a baseline by cross-referencing the procedures and

products of the business unit with the outlined indicators. When exploring social

exposure, it is recommended to use a framework that classifies social aspects as a

function of the actors involved (along their various social claims) by applying a

stakeholder approach (Clarkson, 1995; Freeman, 1984).

3. Determining a connection and relevance of the identified factors to the strategy of

the selected business unit. This step results in linking the conventional financial, as

well as environmental and social aspects – which are perceived to be the most

relevant strategically – “casually and hierarchically towards the long-term success

48

measured by the financial perspective” (Figge et al., 2002a, p. 279). A distinction

can be made between the following three stages of strategic relevance:

a. Strategic core issues, which need to be attributed by lagging indicators in

each perspective.

b. Performance drivers, which are represented by leading indicators to

demonstrate how the results in each perspective are expected to be achieved.

c. Hygienic factors, which are mirrored by diagnostic indicators to delineate the

bare minimum conditions that are required for a successful execution of the

business strategy (Figge et al., 2002a, p. 279).

4. Deciding whether adopting an additional non-market perspective is necessary. This

means that going through the four core perspectives of the conventional BSC must

be the first phase, which must be followed by an exploration to see whether

“strategically relevant environmental or social aspects exist that significantly

influence the success of the business unit’s strategy via mechanisms other than the

market system” (Figge et al., 2002a, p. 280).

Table 7. Framework for the identification of the environmental exposure of a business unit

Type of environmental intervention Business unit-specific occurrence

Emissions (to air, water, and soil) …

Waste …

Material input / material intensity …

Energy intensity …

Noise and vibration …

Waste heat …

Radiation …

Direct interventions on nature and landscape …

Note. Adapted from “The sustainability balanced scorecard – linking sustainability management to business strategy,” by F. Figge et al., 2002, Business Strategy and the Environment, 11, p. 277.

4.2. Sustainable Development Indicators Simply put, “indicators are communication tools that simplify information in an attempt to

mediate between scientific communities and decision-makers” (Székely & Knirsch, 2005, p.

641). There are many approaches to capture SDIs, multiple of which are industry-specific

and coming from sectors that are perceived and regarded as “big polluters” with high social

impact such as the oil and gas, chemicals, mining, automotive, forestry and paper,

pharmaceuticals, or utilities sector (KPMG, 2017). While several methods for SDI

49

generation take environmental and economic aspects into account, most neglect to consider

the social aspects of sustainability, and are, arguably, not reporting on the full sustainable

development picture (Azapagic & Perdan, 2000).

To develop a SPMS comprising SDIs that can potentially provide a comprehensive and all-

round picture of the sustainability performance of the given company, a few

recommendations based on previous best practices should be taken into consideration.

Firstly, it is suggested not to consider too many components as it might make the SPMS less

versatile and useful, since “it is best to have a core set of simple, widely applicable metrics

and to construct complementary metrics to meet the needs of specialized industries”

(Schwarz et al., 2002, p. 57). However, the indicators should not be oversimplified or

constructed to include only “conventional” metrics, which is often the case when developing

the environmental indicators that mainly measure material and energy consumption, and

some emissions (Azapagic & Perdan, 2000). Secondly, while the identification of a unit of

analysis is important, the boundaries of the research should not be solely a particular

production site; instead, the up- and downstream effects of the operations throughout the

value chain should be considered when applicable (Azapagic & Perdan, 2000). Thirdly,

when selecting the indicators, the factors of data availability, as well as the extent of

simplicity of analysis with regards to the chosen SDIs should be examined prior to the actual

analysis, resulting in a gradual development and implementation process of the SPMS

(Azapagic & Perdan, 2000). Principally, by applying a SPMS that comprises a carefully

selected set of SDIs it is possible to measure relative progress or deterioration towards

sustainability regularly (e.g. annually, bi-yearly, quarterly, etc.); while “describing the

absolute state of sustainability of industrial systems” is neither possible, nor meaningful

(Azapagic & Perdan, 2000, p. 248).

Although the construction of a completely universal or generic SBSC as a SPMS is not

recommended according to the principles and guidelines of developing the SBSC, Azapagic

& Perdan (2000, p. 246) suggest that there is some merit in standardizing the SDIs that

comprise the SBSC to some extent, as this might facilitate

- “comparison of similar products made by different companies;

- comparison of different processes producing the same product;

- benchmarking of units within corporations;

- rating of a company against other companies in the (sub-)sector; and

50

- assessing progress towards sustainable development of a (sub-)sector”.

The methodology of developing the SBSC via a case study in the industrial packaging sector

draws on and follows the logic outlined above, and thereby considers indicators that are

generic for all industry, as well as ones that are sector-specific (Azapagic & Perdan, 2000).

It is important to note that the quantitative indicators must be placed into context by

complementing them with appropriate metrics. Azapagic & Perdan (2000) in principle argue

that “it is not possible to fix a single measure of normalization that would apply uniquely in

all cases”, and thus suggest “to express the indicators of sustainable development per unit of

service that the system delivers”, depending on the goal of the assessment (p. 246). The

normalization of qualitative indicators to a unit of measure is pointless (Azapagic & Perdan,

2000).

4.3. Sustainable Development Indicators Identified Through Literature Following the guidelines by Azapagic & Perdan (2000), certain generic SDIs can be

considered even for an industry- or case-specific SBSC, as such universal indicators can be

argued to be applicable to any industrial sector. Azapagic & Perdan (2000) also highlight

that the framework of a SPMS should be based on a life-cycle approach that considers the

complete value chain of materials and energy, suggesting that this approach “provides a full

picture of the interactions of human activities with the environment and identifies hot spots

in the system, which can be targeted for improvements” (p. 249). The framework of

indicators for industrial (i.e. for any company operating in an industrial setting) application

developed by Azapagic & Perdan (2000) is widely cited and considered rather extensive,

holistic, and comprehensive (Searcy, 2012), and its components are showcased in Table 8

(Azapagic & Perdan, 2000, p. 250). The components are categorized into clusters that are

“relatively well defined” while “many companies and organizations are already using them

routinely” (Azapagic & Perdan, 2000, p. 248). This framework is utilized as a point of

reference in this paper, and the SDIs that are defined later through the collection and analysis

of primary and secondary data build on these classifications as well.

51

Table 8. Indicators of sustainable development for industry: a general framework

Environmental indicators Economic indicators Social indicators Environmental impacts

- Resource use - Global warming - Ozone depletion - Acidification - Eutrophication - Photochemical smog - Human toxicity - Ecotoxicity - Solid waste

Financial indicators

- Value added - Contribution to GDP - Expenditure on

environmental protection

- Environmental liabilities

- Ethical investments

Ethics indicators

- Preservation of cultural values

• Stakeholder inclusion

• Involvement in community projects

- International standards of

conduct • Business

dealings • Child labour • Fair prices • Collaboration

with corrupt regimes

• Intergenerational equity

Environmental efficiency

- Material and energy intensity

- Material recyclability - Product durability - Service intensity

Human-capital indicators

- Employment contribution

- Staff turnover - Expenditure on health

and safety - Investment in staff

development

Welfare indicators

- Income distribution - Work satisfaction - Satisfaction of social

needs

Voluntary actions

- Environmental management systems

- Environmental improvements above the compliance levels

- Assessment of suppliers

Note. Adapted from “Indicators of sustainable development for industry: A general framework,” by A. Azapagic & S. Perdan, 2000, Process Safety and Environmental Protection, 78, p. 248.

4.4. Sustainable Development Indicators Identified Through Expert Interviews In this section it is presented and analysed what SDIs might potentially be included in a

SBSC within the industrial packaging sector as reflective measures to the sustainability

challenges and drivers identified in the industry. The observations are outlined as per the

opinion of a selected group of individuals who are directly involved in the packaging sector,

as well as have some connections to (corporate) sustainability through work experience or

education. The information presented here was obtained through expert interviews, the

procedure of which is explained in Section 3.2. The objective in this part was to acquire

52

insider insights into corporate sustainability within the industrial packaging sector via

engaging with experts who are closely related to the field, and therefore have specific

knowledge and information regarding perceived sustainability challenges, as well as

potential indicators for a SPMS to be applied in the packaging industry.

4.4.1. Sustainability Challenges and Drivers in the Industrial Packaging Sector

Considering that the currently available literature is rather limited on the relation of

sustainability and the industrial packaging sector (see Section 1.3.3.), a portion of the expert

interviews was dedicated to explore the perceptions of the participants on persisting

sustainability challenges in the studied industry. Consequently, a set of questions was

directed at perceived sustainability issues in the sector to learn more about strategic drivers

that can potentially encourage or nudge corporations to develop reflective action plans with

regards to sustainable development. Table 9 provides an overview of various factors of

challenges that were perceived to be closely connected to the industrial packaging sector by

the experts, presenting a set of drivers that potentially requires concrete action.

Table 9. Sustainability challenges and drivers in the industrial packaging sector, as per expert interviews

Challenges and drivers Frequency of references

Unsustainable raw material sourcing and supplier selection High

Improper waste management High

Overall image of packaging sector High

Impactful logistics and transport Moderate

Pollution Moderate

Lack of knowledge of (corporate) sustainability Moderate

Labour rights Moderate

Automatization Low

Lack of collective thinking Low

Inadequate legislation Low

Energy and resource consumption Low

Lack of financial allocations to sustainability Low

Lack of know-how of process optimization Low

Lack of interest Low

Greenwashing Low

Price sensitivity of consumers Low

The factors are assigned a level of frequency of references to demonstrate by how many

interviewees the respective aspects were mentioned. The assigned levels are ≥7, 4-6, and 1-

3 to depict high, moderate, and low frequencies, respectively. It is important to emphasize

53

that the listed entries were not mentioned verbatim by all participants. The categorizations

in the table represent the variety of aspects that were noted by the interviewees who used

varying language and words to describe certain phenomena. Similarities were later found in

the content, which were then coded into a systematic framework as part of the qualitative

content analysis.

The sustainability challenge of sourcing raw material (i.e. wood) from unsustainable or

uncertified sources through irresponsible suppliers was one of the most highly frequently

mentioned aspects among the experts. One interviewee pointed out that “choosing the good

suppliers has the most environmental impact, because in this we can include our raw

material suppliers and service providers"; while another added that “cutting out of non-

certified wood, selling and using it, it is also a risk that can damage the wood industry on a

bigger scale”, highlighting the complexity and interrelatedness of the sector. Another expert

emphasized that the industry has high potentials of being sustainable, but only with the right

procedures, sustainably managed forests, and legal cuttings:

“If you use a wooden package, a pallet, it is doing its service, and then it is recycled to other products, or

used as a fire fuel. Cutting forests is not a bad thing, the main problem is with how you cut it, and whether

it is legally cut. If you are using legal wood from a sustainably managed forest, you are not doing anything

wrong. The forest is cut down when the trees become old, when their growing has become linear or when

they stop being a carbon pool. Then they are cut, and a new forest is installed, and they become a new

carbon sink.”

The factor of waste management was also highly frequently cited, some noting that the

improper handling of waste is one of the main sources of pollution in the industry. Material

reusage and recycling was frequently mentioned as a driver, with one participant also

offering solutions on how the rate of recyclability of packaging could potentially be

increased, thus contributing to more sustainable operations: “When a pallet becomes waste,

it becomes a valuable raw material. The packaging industry can do a lot for sustainability

by using such material compositions that are well recyclable or usable at a later stage of the

life-cycle. The best would be to manufacture products from only one or one type of material

as that facilitates easier recycling”. In accordance with available literature, the experts also

highlighted that the packaging industry in general is often attributed with a negative image

due to its perceived controversial environmental impacts, which, as some participants

pointed out, could potentially be overcome if external parties understood the essential

services packaging fulfils by protecting the stored goods, thus extending their life

54

expectancy. In fact, one participant noted that the industry might not be as impactful as others

suggest in the first place: “we are not energy intensive, we do not generate a lot of hazardous

or chemical waste in our production process. Our products do not necessarily end up in

water systems. In our context, it is just to maintain what we have already put in place from

the sourcing side of things". Moderately frequently referenced sustainability challenges

included the impactful attributes of logistics and transport, which are – by nature – a part of

packaging-related supply chains, as well as pollution. A general lack of knowledge of

corporate sustainability and thus, the required actions and related performance measurement

was also often cited as a challenge, as well as the attained responsibility towards workers

and employees as part of compliance with labour laws. A few experts warned of the

challenge of automatization in terms of replacing human resources with machinery for

higher efficiency, noting that “when labour is becoming a substantial cost in the entire

supply chain, it develops a need to replace people with machines. You are investing, you are

becoming more environmentally friendly but there is also a social problem developing as a

lack of places of work”. Others cited, with low levels of frequency, a lack of collective

thinking, which might hinder the industry from transitioning towards sustainable operations

as a whole; inadequate legislation, resulting in too few or too ineffective regulations; and the

factor of energy and resource consumption. A few experts pointed out a general lack of

financial allocations to sustainability and profit-centredness in general within corporations,

which, as one participant explained, might have rooted from companies believing that they

have to choose between either making a profit or being sustainable: “The key is to see that

profit is not diametrically opposed to the people and planet. They should be together.

Because some companies say that if we do something for our people, we have to cut our

profit. This is completely wrong. This is the key, to put the 3Ps - profit, planet, people –

together”. Related to this factor, a few experts cited a lack of know-how of process

optimization towards sustainability, or worse case, a lack of interest in general: “In our

industry there are some really big companies, like sawmills, but there are also so many of

the small producers with less workers, and they just do not care about sustainability – as

long as the price they got for the final product is as low as possible, then they can earn as

much as possible. So, there is a lack of seeing this opportunity”. A few participants warned

of greenwashing as a potential challenge. A final factor was cited to be the price sensitivity

of consumers and end-users towards sustainable products and solutions: “We in packaging

need to come up with solutions to protect the stored goods while providing packaging that

create as little waste as possible. The pricing of such packaging solutions should and must

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mirror these efforts. The end-user must acknowledge and accept that sustainability costs

money, and in many cases, it is more expensive than the easiest or unsustainable solutions”.

As a next phase and as detailed in Section 3.2.1., in order to lead the interviewees to the main

topic of interest, they were asked what in their opinion qualified a company that operates in

the industrial packaging sector sustainable in the first place. The most frequently mentioned

factor was responsible sourcing, i.e. a process and way of operation that implies that the raw

materials that are later used for the manufacturing of the products come from sustainable

and verified sources through responsible and certified foresting and trade. Connectively, the

participation in and possession of certification schemes and standards, such as ISO (9001,

14001), FSC, or PEFC was referenced by many interviewees as well. Adherence to the 3Rs

(reduce, reuse, recycle (Shekdar, 2009)) and orienting towards circular economies through

more sustainable waste management was also an oft-cited aspect. As one expert noted,

“lot of the packaging is being wasted, which is first of all a waste of energy and resources that went

into producing them, but it is also creating environmental and climate issues. We are contributors to

enormous waste problems, and we as an industry have responsibilities to participate in programs and

concepts and product development activities that will get rid of the waste problems. If we can do that,

not only do we solve big energy and material waste, which is a huge economic factor, but it will also

benefit ourselves, and we will also solve a big part of the world’s problems with environmental and

climate issues”.

Some participants leaned on the conventional sustainability definitions and highlighted that

considerations of balancing the three sustainability dimensions, the protection of the

environment, next generations, and the future in general was a good indication that a

company is thinking sustainably. Legal compliance in terms of environmental regulations

was also moderately frequently mentioned. Some answers focused on the economic aspects,

highlighting the factor of long-term and healthy growth, as well as sustainable investments

in employees, societal development, and machines and innovations. Investments in modern

and green technology and solutions were sometimes mentioned as facilitators to achieve

energy efficiency and overall production and supply chain optimization, which could also

point towards sustainable business operations according to some participants. A few

interviewees noted the factor of community outreach as more of a social aspect. Finally, in-

place reporting schemes and overall transparency of the operating procedures was mentioned

by a few as well. Table 10 provides an overview of the general indicating factors of corporate

sustainability within the industrial packaging sector, as per the results of the interviews. The

56

same logic was applied as with Table 9 in terms of the frequency of references, as well as

coding processes.

Table 10. Indicating factors of corporate sustainability in the industrial packaging sector

Indicating factor Frequency of references

Responsible and sustainable sourcing High

Certification schemes and standards High

3Rs / circularity / waste management High

Balancing sustainability dimensions Moderate

Environmental protection Moderate

Consideration of next generations and future Moderate

Legal compliance Moderate

Long-term healthy growth Low

Sustainable investments (people, society, innovations, machines, etc.) Low

Energy efficiency Low

Production and supply chain optimization Low

Community outreach Low

Transparency through reporting schemes Low

After mapping out what the general indications of corporate sustainability might be, the

interviewees were asked about what factors might motivate a packaging company to start

pursuing sustainability initiatives and connected performance measurement. The factor of

external pressure and accountability towards stakeholders, such as clients or civil society

was the most frequently referenced driving force, demonstrating the gravity of corporations

having to answer to parties that might hold them accountable for inaction or wrongdoing. As

one participant noted, “there are some huge retailers and end-chainers which are selling

final consumer products, and which are imposing to their suppliers to implement different

strategies and policies on CSR”, implying that companies must often meet certain criteria of

their clients in order to keep that specific customer. Another participant added that “all the

time, clients are pressing. They do not want to work with a company that is not sustainable.

If you want the business, you should fulfil the requirements”. This factor was closely

followed by mentions of image and marketing, as well as individual and collective corporate

values and CSR as motivating aspects. One expert noted that

“not only individual companies, but companies working together as an industry have a collective

responsibility in setting up structures where the fact that many companies do the same will solve a

sustainability problem, may that be waste, labour conditions, code of conduct in a supply chain that

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you implement together with your suppliers, or by companies forming associations or being part of

organizations that can influence the politicians to actually make the right laws”.

These three most oft-cited drivers illustrate that packaging companies appear to face a

combination of internal and external motivating factors that might come to play in this

context. Some economic considerations were moderately frequently mentioned, such as

profit generation and optimization, or being able to survive and stay competitive as an entity

in general. The first indicates that corporate sustainability, when done correctly, can result

in lucrative financial returns, which is obviously desired. The latter implies that there is a

current trend in which corporations do put an intensified focus on being (or at least

appearing) sustainable, which has led to companies having to present sustainability-related

initiatives in order to remain a relevant and competitive player on the market. Less often

referenced drivers by the interviewees were compliance with legislation; the opportunity to

acquire a better understanding of how the company influences certain variables through a

comprehensive impact assessment; and an industrial revolution. The last factor implies that

the packaging sector is in fact in need of a somewhat universally structured SPMS, and an

industrial revolution in which the packaging companies move as one towards a sustainable

future might be an inducing or a motivating aspect. Table 11 provides a summarized

overview of the motivating factors for engaging in corporate sustainability and performance

measurement in the industrial packaging sector, as per the results of the interviews. The same

logic was applied as with Table 9 in terms of the frequency of references, as well as coding

processes.

Table 11. Motivating factors for engaging in corporate sustainability in the industrial packaging sector

Motivating factor Frequency of references

External pressure / accountability High

Image and marketing High

Individual and collective corporate values, CSR High

Profit generation and optimization Moderate

Survival / competitiveness Moderate

Legislation Low

Impact assessment Low

Industrial revolution Low

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4.4.2. Environmental Indicators

An overview of the environmental indicators, as well as their categorization and

operationalization that resulted from systematically organizing and coding the interviews

and the perceived trends in the answers is showcased in Table 12. The analysis of the

interviews produced eight environmental SDIs, which were delineated based on

commonalities in the participants’ answers. Similarly to the previous sections, the below

listed indicators were not mentioned verbatim by all participants, rather, the categorizations

and codes were created in accordance with some identified trends and parallel thinking

among the interviewees. The frequency of references demonstrates by how many

participants a specific mean of operationalization of a given indicator was mentioned. Just

as in the previous sections, high, moderate, and low levels were assigned to frequencies of

≥7, 4-6, and 1-3, respectively. The eight SDIs are “waste management”, “production

optimization”, “materials management”, “energy management”, “product efficiency”,

“procurement and sourcing”, “biodiversity and environment”, and “compliance”.

The SDI “waste management” was mentioned highly frequently by the participants in

relation to the rate of production from packaging waste, such as waste of wooden raw

materials, sawdust, and other fractions of packaging, for instance chips and cut-offs. One

expert described the importance of utilizing all resources to the fullest extent as follows:

“In the sawmill industry there has been a saying in the past twenty years that the only thing wasted

should be the noise from the machines. All other things should be used. You use the sawdust for

something, you use the chips for something, you use the cut-offs for something, you optimize the

cutting of the wood, you use the bark, even, for something”.

Another participant used a concrete example of how waste can be utilized in production by

noting that “we use our own core product, the sawdust, as a fuel for the boiler to heat the

trees and kiln the pallets, which has made us become more efficient from an economic point

of view, and also more green from an environmental point of view”. Another expert compiled

on this point, adding that “by organizing this internally at the company that you use every

waste fraction you have for something viable, then you actually also influence your own

profit”. An additional, frequently mentioned mean of operationalizing the SDI “waste

management” was the rate of packaging buyback, recycling, and reusing. Buyback here is

referred to as a transaction, in which a packaging producer purchases previously sold

packaging units after they have been used (PalletBiz, 2020). Connected to this point, one

participant noted that the perspectives of “design for recycling” and “design from recycling”

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should be integrated into the product development processes to optimize waste management.

The prior means that the product, which eventually becomes packaging waste, must be

suitable for reuse and recycling as raw material. The latter means that the produced

secondary material should be suitable to substitute the primary raw material. Additional, less

frequently referenced metrices to quantify this SDI included the rate of waste reduction, the

amount of wooden and plastic waste generated, and the number of depots within the network

that are equipped with repair and recycling facilities.

The SDI “production optimization” was generally centred around the legality of the

production processes, as well as production efficiency. The most oft-cited metric in this

regard was the number of policies, standards, and/or certification schemes on production, as

that is believed to signal whether and how a production facility is complying with regulations

and standards, such as the FSC or PEFC, in case the facility is part of the certification

programs. Some participants noted that this SDI could be quantified by the production

efficiency via output, machines, and workers as well. A few experts focused in on the

capacity of sawmills within the production specifically, noting that measuring the yield of a

sawmill can quantify how much a company can utilize from a cubic metre of wood logs.

This can be important, as one participant noted, because “you can cut the logs intelligently,

or you can generate a lot of waste. If you have a higher yield and a higher utilization of the

wood, that means something from an environmental point of view: less waste and better

utilization of the wood, of the resources”. The rate of stock optimization was mentioned as

an additional metric here, connected to the principle of responsible consumption and

production, meaning that the production should be carefully planned in order not to overload

the stocks as that could lead to deterioration and waste of products. Overall, this SDI was

noted as highly critical, because, as one expert put it, “the more optimal your production

process is, the less likely it is you yield waste and utilize unnecessary efforts and energy in

your production”.

The SDI “materials management” was most often characterized by resource efficiency (i.e.

the rate of utilization of raw material), highlighting that not only can raw materials, such as

wood be spared through efficient resource use, but substantial reductions in waste can be

achieved as well. Proper raw material sourcing can extensively contribute to this factor.

Ordering cut-to-size elements instead of whole parts that later need to be cropped and

partially wasted, for example, is a much more conscious solution both economically and

environmentally, while it also facilitates faster production via optimized assembling

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processes. Resource consumption (i.e. the amount of raw material or wood used) was

moderately frequently mentioned as another mean to quantify the SDI. Additionally, a few

participants referenced the rate of sustainably sourced or PEFC/FSC-certified raw materials

for consumption, noting that it is important to know “how much of the wood you are using

in your packaging industry is actually coming from sustainable sources so that you can

honestly claim that you are assisting in keeping life intact, and that it is something you can

hand over to the next generations”. Finally, the rate of biodegradable materials for

consumption was mentioned by some participants as well.

The SDI “energy management” was most often suggested to be quantified by energy

efficiency. Some participants also mentioned energy consumption and the rate of reduction

in energy use as a potential way to measure the SDI. Green technology that primarily utilizes

renewable energies was referenced to be a substantial enabler of achieving higher levels of

energy efficiency, and, consequently, reductions in energy consumption.

The SDI “product efficiency” was generally metricised by the number of cycles in usage per

product, indicating the period one product remains in circulation before entering the end-of-

life management phase. Some experts suggested to collect the number of memberships and

participation in collection and pooling systems as well, noting that industrial product

standards further facilitate re-introducing packaging units to the market after collection and

repair processes. Such industrial standards include the European Pallet Association (EPAL)

(EPAL, 2020); UIC, the worldwide railway organization (UIC, 2020); and the International

Plant Protection Convention (IPPC) (IPPC, 2020). Their creating associations are famous

for developing technical product specifications and classifications in order to provide the

industry with manufacturing guidelines for packaging units that are universally

exchangeable in certain product-specific pools. Pallets with an EPAL trademark, or with a

UIC + EUR trademark signal that they (a) have been produced and classified according to

set quality standards; (b) are suitable for international trade; and (c) are suitable for

collection, repairing, recycling, and reusing in an exchangeable pallet pool among certified

manufacturers (EPAL, 2020; UIC, 2020). This means that EPAL and UIC + EUR-licensed

producers can not only manufacture and trade packaging units with these trademarks, but

they can also buy back, repair, and re-sell trademarked units that have been sold by another

manufacturer and used by a client. This system creates a product pool, to and from which

any licensed entity can add or take trademarked products. This is highly desirable, because,

as one expert put it “the fact that you can standardize things and as a company can become

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a member of an association where things are being standardized and thought through will

facilitate recycling and waste management”. The above-described metrics related to life-

cycle management and pooling are, therefore, connected to the recyclability and reusability

of a product, which are, according to some participants, interrelated with product efficiency.

Additionally, some experts referenced the rate of purpose fulfilment of a product as a

potential metric related to the SDI. According to a participant, sustainable packaging must

be effective, efficient, safe, and cyclic. More specifically, the product should provide

protection for the stored good to the highest extent, and it should enable the circularity of

materials. The expert noted that “our main task is to find solutions for protecting the goods

with packaging that creates as little waste as possible”. The product efficiency can be

influenced by many factors, such as material and energy consumption, emissions, and waste

management. As per the expert, the products should be designed in such a way that

- the utilized materials can remain in circularity for as long as possible,

- the virgin materials can be substituted by secondary raw materials,

- the usage of renewable resources is prioritized, and

- they are recyclable.

As one participant pointed out, recyclability and reusability depend fundamentally on the

product design. To optimize the packaging to be recyclable to the fullest extent, the

following aspects should be considered, as per the expert:

- minimizing material consumption;

- using single-material solutions, or useable compounds and mixtures;

- avoiding the use of added substances, when possible;

- minimizing the colouring of the packaging materials;

- applying an easily identifiable indication of the separation of the packaging

components and the type of material.

The SDI “procurement and sourcing” was referenced primarily in relation to supplier

assessment and compliance to ensure proper chain of custody between forest and end-user

in the wood industry. This metric highlights the importance and necessity of purchasing and

sourcing only from legal, verified, and responsible sources, which is a fundamental building

block of having a sustainable supply chain. Supplier assessment was suggested to be

enforced by internal measures, such as code of conduct or a supplier scorecard. These tools

are notably suitable for setting up requirements for existing suppliers that must be complied

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with in order to remain in partnership; as well as for evaluating potential new suppliers

whether they are fitting to become part of the supply chain in terms of sustainable operations.

Supplier assessment can thus be quantified by the share of verified and sustainable existing

suppliers, and by the rate of new sustainable suppliers. Enforcing these measures is essential,

as one participant explained, because

“you as an industry in a specific country can work together with your particular suppliers in your

supply chain and you can influence the way these things are handled by developing codes of conduct

suppliers more and more live by, and that way you can influence as an individual company your

supply chain so that your supply chain becomes more sustainable”.

Another expert added that these practices are indeed needed “to make sure that we are

sourcing from suppliers who utilize the best standards and practices for wood production

and wood processing”. Connected to the first metric, the participants frequently mentioned

that proper supplier assessment necessitates that supply chains are certifiably sustainable,

which can therefore be scrutinized by policies, standards, and certification schemes related

to purchasing and processing. The number of such control mechanisms, such as FSC, PEFC,

or ISO certifications or memberships in associations related to sustainable forestry and

sourcing is, therefore, another potential mean to quantify the SDI.

The SDI “biodiversity and environment” was most frequently suggested to be quantified by

measuring greenhouse gas (GHG) emissions, as well as reductions in pollution due to

sustainable actions, such as better waste management or energy efficiency via renewable

resources. Some participants, however, drew attention to the fact that it is little known in the

industry how to measure direct or indirect emissions as a result of corporate operations,

suggesting that most SMEs are not aware of their exact ecological footprint. Some experts

mentioned the importance of monitoring the impact on biodiversity in the area of operations

in general as well, noting that the related actions could be metricised by the territory or

volume of re-harvested vegetation.

The SDI “compliance” was generally referenced by the legality of operations and was

suggested to be quantified by occurrences of non-compliance with national or international

environmental regulations. Additionally, some participants noted that the SDI could be

metricised by the number of third-party audits via certification schemes as well, as audits on

environmental aspects via, for instance, the ISO 14001 standard, could be a potential

compliance verification tool according to standardized key performance indicators (KPIs).

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Table 12. Environmental indicators and their potential operationalization, as per expert interviews

Indicator Operationalization Frequency of references

Waste management Rate of production from packaging waste High Rate of packaging buyback, recycling and

reusing High

Rate of waste reduction Moderate Amount of wooden / cardboard waste

generated Low

Amount of plastic waste generated Low Number of depots in network with repair /

recycling services Low

Production optimization Number of policies, standards, and/or certification schemes on production

High

Production efficiency via output Moderate Production efficiency via machines Moderate Production efficiency via workers Moderate Capacity of sawmills Low Rate of stock optimization Low Materials management Resource efficiency High Resource consumption Moderate Rate of sustainably sourced raw materials Low Rate of biodegradable materials Low Energy management Energy efficiency High Energy consumption and rate of reduction Moderate Product efficiency Number of cycles in usage per product Moderate Participation in collection and pooling systems Moderate Rate of purpose fulfilment Low Procurement and sourcing Supplier assessment High Number of policies, standards, and/or

certification schemes on production High

Biodiversity and environment

GHG emissions High

Re-harvested vegetation Moderate Compliance Legality of operations Moderate Number of audits via certification schemes Moderate

4.4.3. Economic Indicators

An overview of the economic indicators, as well as their categorization and

operationalization that resulted from systematically organizing and coding the interviews

and the perceived trends in the answers is showcased in Table 13. The analysis of the

interviews produced eight economic SDIs, which were delineated based on commonalities

in the participants’ answers. The processes of the analysis, categorizations, and coding

followed the same logic and procedure as previously described in Section 4.4.2. The eight

SDIs are “product efficiency”, “economic performance”, “market share”, “investments”,

“local value creation”, “competition”, “purchasing and partnerships”, and “compliance”.

The SDI “product efficiency” from an economic perspective was most frequently suggested

to be operationalized by the number of repairing and reusing a product per customer. As it

is noted above, various participants mentioned that keeping a product in a collecting –

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repairing – reusing – re-selling cycle for as long as possible is economically desirable. It

costs significantly less to prepare a used product for it to be re-introduced into the market

again than to manufacture the same product from scratch. This way, value is re-created, the

amount of waste is reduced, and the operations can orient towards higher extents of

circularity. One participant explained the environmental and economic benefits of this

procedure through an example:

“How many times you succeed to repair and reuse a pallet for a client is a very important indicator.

We had contracts and clients to whom we used to deliver the new pallets, and after they had used the

pallets to send the goods to the stores, for example, we collected the pallets, sorted them, repaired

them, and gave them back to be reused again. So, if you can produce a good pallet and can repair it

to be used 5-6 times, that means something, it has some economic relevance. If a new pallet costs 8

EUR, and you are buying new pallets all the time, then each time you are paying 8 EUR to transport

your goods. Or, you can pay 8 EUR plus 5 times the cost of reusing the pallet for 4 EUR. So, 28 EUR

for 6 times, that means 4.6 EUR per pallet per usage, instead of paying the full amount of 8 EUR for

the new pallets. This can add up to a substantial economic impact”.

The SDI “economic performance” was most often referenced to be operationalized as the

amount of economic value generated and distributed in accordance with long-term financial

strategies and action plans targeting business stability. Sustainable profit generation and

distribution appeared to be on a lot of participants’ minds, urging for a balance between

making profits and investing in environmental and social aspects. Some participants also

suggested to quantify the SDI by the value or savings generated through repairing, reusing,

and reselling products, or, more generally, through sustainable actions. It was generally

agreed on that when monetary resources are allocated to sustainability, it will eventually pay

off in even bigger returns. One expert noted that “if you can operate more efficiently with

the resources by recycling, by these kinds of developments, then there will be a profit margin

in that. Especially in our sector, the recycling of our materials is extremely important

because it is more profitable to recycle than to produce new”. Additionally, a few

participants referenced the amount of economic value distributed locally, as well as the

amount of taxes paid locally as another potential mean of operationalizing the SDI.

The SDI “market share” was mainly referenced to be metricised by the number of clients

won by the presence of a sustainability agenda, as most participants shared the opinion that

sustainable sourcing, production, and general operations can potentially lead to a gain in

market share. As one expert put it, “customers are very important stakeholders because this

is where sustainability becomes profitable. If we can fulfil customer needs by being more

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and more sustainable, we also make more money”. Another participant compiled on this

point, adding that “many of the bigger companies see it as a great value if we can make sure

that whatever we deliver to them in terms of products and services live up to sustainability

standards that will help them in their sustainability accounting that they do and where they

are responsible towards their investors and shareholders”. Finally, another expert brought

up an opposite perspective, focusing on what might happen in case of a lacking sustainability

agenda:

“We see that even the biggest companies in the industry that are part of our portfolio, they have many

good intentions in place, protocols related to sustainability and how they audit their suppliers. But I

would be actually more interested in seeing not the hard punishment, but the harsh realities of saying

that if you do not live up to this, then sorry it is a no-go”.

The SDI “investments” was most often operationalized by the economic value invested in

sustainable innovations (e.g. equipment, machinery, technology, product development, etc.

that facilitate modern, green, and efficient production and processes), employees, and

society. One participant viewed the big picture when noting that “in order to protect, and in

order to have and ensure environmental and social activities, you need to invest”. Others

drew attention to a connection between investments, competitiveness, and productivity by

claiming that “if we are not ready to go for new things, we will not be competitive, even if

we produce the best pallets in the world”; as well as “if you invest in a new machine that is

more productive and uses less energy, you become more sustainable and you are also

making money”. One expert collected instances of potential technological innovations that

might lead to operationalized processes and operations, adding that

“we have to be technically innovating. It could be the design of the products so that they become more

recyclable, it could be the design of our products in such a way that we can track them. Then there is

development in the direction of digital tools whereby you can monitor the movements of the packaging

so that you always know where it is, and you can optimize the way you move it around and collect it

again and so on”.

Another mean of metricising the SDI was referenced as value invested in environmental

protection, a rather broad category that would need to be specified further. Finally, some

experts looked at operationalizing the SDI by the value invested in sustainable geographical

network expansion, as decisions on where to establish new locations, factories, etc. appear

to be loaded with extensive responsibility. Opening a new site, for instance, does not only

concern the company, but the local community as well from an environmental, economic,

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and social perspective. As one expert noted, responsible network expansion is a great

potential way to give back to society, but it must be thought through carefully:

“You must consider where you invest geographically, and that you invest in such a way that you as a

company are not dependent on the development in one region or one part of the world; or even if you

are only in one country, maybe you consider whether you should be in more parts of that country

depending on what happens in terms of the environment or the movement of labour. This way we have

a more balanced utilization of land, people can get jobs, they do not have to move into the city and

create environmental or climate problems”.

Another participant built on this sentiment, adding that

“I have had very nice experiences from seeing how a small investment has developed people, giving

jobs, growing those jobs, growing those salaries, and thereby participating in social development and

balancing of social development between some countries that are very developed and those that were

less developed at the time”.

The SDI “local value creation” was often metricised by the monetary resources spent on

local hiring and purchasing with regards to operational costs. Some experts noted that

companies are responsible for giving back to the local communities of their operations in

terms of monetary value, as hiring locals both as employees and management, as well as

partnering up with local suppliers and other members of a potential supply chain contributes

to local economic development. As one participant highlighted, “it is not sustainable on

long-term to not invest or ensure that you are taking and training the local communities,

because you have to prioritize the local community for your company. Workers, they have

to be hired with priority where the resources are taken, possessed, or consumed.”

The SDI “competition” was scarcely mentioned. When referenced, it was suggested to be

operationalized by non-compliance with regulations on fair competition, such as engaging

in dumping prices, monopolies, and trusts. A few experts connected competition with

sustainability in terms of interindustry collaboration, noting that such cooperation could

potentially facilitate more fundamental changes not only in the industry, but in the world of

business in general as well. One participant was cited to mention that

“you as a company can do your certain part, but it will become so much more effective if things could

be done collectively. Because suddenly certain aspects are possible which you cannot do as a

standalone company. There are not so many groups because companies are fighting each other

instead of working together, and that is one of the challenges and barriers to sustainable

development”.

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The SDI “purchasing and partnerships” was most frequently referenced with regards to

monetary value spent on sustainable sources and suppliers. The justification of having

verified suppliers was already covered in Section 4.4.2., but this aspect was suggested to be

metricised from an economic perspective as well, as figures on spending on sustainable

sources compared to unverified suppliers signal the actual financial commitment to

responsible and sustainable sourcing. Additionally, some experts suggested to monitor the

existence and number of protective corporate policies towards suppliers, which is suggested

to be a form of commitment to ensure a fair and flourishing partnership. Such policies can

include clauses for on-time payments, consequences of contract violations, pre-agreed

requirements for the quality of provided products and services, etc.

The SDI “compliance”, similarly to the environmental component, was generally

operationalized by the legality of commercial operations and was suggested to be metricised

by the number of policies, standards, and certification schemes related to sustainable value

creation and distribution activities.

Table 13. Economic indicators and their potential operationalization, as per expert interviews


Product efficiency Number of repairing and reusing a product per customer

High

Economic performance Economic value generated and distributed High Value / savings generated through repairing,

reusing and reselling products Moderate

Value generated through sustainable actions Moderate Value distributed locally Low Taxes paid locally Low Market share Clients won by sustainability agenda Moderate Investments Value invested in sustainable innovations High Value invested in employees High Value invested in society High Value invested in environmental protection Moderate Value invested in network expansion Moderate Local value generation Local hiring Moderate Local purchasing Moderate Competition Prohibition of dumping prices, monopolies,

and trusts Low

Interindustry collaboration Low Purchasing and partnerships Value spent on sustainable sources /

suppliers Moderate

Protective policies Low Compliance Number of policies, standards, and/or

certification schemes on sales Low

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4.4.4. Social Indicators

An overview of the social indicators, as well as their categorization and operationalization

that resulted from systematically organizing and coding the interviews and the perceived

trends in the answers is showcased in Table 14. The analysis of the interviews produced nine

social SDIs, which were delineated based on commonalities in the participants’ answers.

The processes of the analysis, categorizations, and coding followed the same logic and

procedure as previously described in Section 4.4.2. The nine SDIs are “local community”,

“health and safety”, “employees”, “labour laws”, “human rights”, “human resource

development”, “product safety and quality”, “customer satisfaction”, and “compliance”.

The SDI “local community” was generally characterized as measures of outreach towards

the local community of the operations. The participants most often operationalized the SDI

by the provision and number of sponsorships and empowerment programs that are ought to

be offered to the local communities in order to lift up, as well as socially and economically

support the general population, and especially those in marginalized social groups.

Marginalization was noted to occur all through Europe, effecting women in particular; and

it is a phenomenon that was seen fundamentally problematic to an even greater extent in the

Global South, where the youth, women, and particularly women of colour need tremendous

support. Other experts suggested to quantify the SDI by the provision and number of

education programs offered to the local communities that could facilitate imparting fact-

based knowledge with regards to the industrial packaging and forestry sectors. Such

programs could put a stop to the spreading of misinformation around the industries, and the

communities could learn about how exactly the sector is operating, how it affects the

environment, or how it contributes to economic and social development. In return, the

communities could offer well-informed suggestions on what the industry could do to orient

towards sustainable development from their perspective. A few participants offered

additional potential metrics to operationalize the SDI, including financial and non-financial

contributions, as well as protective policies to safeguard the locals and their areas of living.

Such policies are generally referenced to be included in the code of conduct.

The SDI “health and safety” was highly frequently referenced, with one participant noting

that “the most important resource a company has is the human resource”, suggesting that

this resource must be provided with physical security at all costs. Most experts

operationalized the SDI by metrics on safe and healthy working conditions, such as number

of accidents, time lost due to accidents, number of sick days, etc. A few participants noted

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that metricising the number of trainings provided to the workers and employees on health

and safety could further improve the corporate stance on secure working conditions. It could

also demonstrate that the workers are continuously trained on the proper handling of

equipment, as well as on general safety standards.

The SDI “employees” followed a logic similar to the “health and safety” SDI in terms of

operationalization, in that it was generally agreed on that employees should be provided with

proper financial security, being the heart of any company. Financial security was referenced

as the provision of stable, competitive, and non-discriminatory remuneration. A few experts

suggested to measure the rate of employee turnover as well, as it could be an insightful metric

in terms of how well a company is able to maintain its staff. Additionally, a few participants

noted to track the number of people allocated to sustainability-related offices and areas of

work, as that could very well indicate commitment (or its lack thereof) towards corporate

sustainable development.

The SDI “labour laws” was generally less frequently referenced on its own, as it was

indicated by most of the participants that compliance with regulations regarding labour and

human resources should be evident in any company, and most ideally integrated into the

corporate code of conduct. The metrics a few of the interviewees mentioned with regards to

this SDI included the number of incidents of non-compliance with national and international

legislation on freedom of association and bargaining, child labour, as well as forced and

illegal labour and exploitation. Some experts suggested to track the number of protective

policies in place with regards to compliance with labour laws.

The SDI “human rights” was highly frequently mentioned during the interviews. It was

mostly operationalized as the rate of diversity with regards to age, gender, and race, and was

suggested to be metricised by breakdowns of employees as a function of these

characteristics. Connected to this point, the rate of female participation and the proportion

of women in leadership positions was emphasized as a significant point of interest,

considering that the packaging industry was noted to be heavily male-dominated by the

participants. To support racial and cultural diversity it was also suggested to explore

memberships in empowerment programs and certificates that promote the integration of

marginalized communities into the business world. A particular example of such a program

was noted to be BBBEE, the Broad-Based Black Economic Empowerment certificate, which

aims to aid in the economic participation and development of previously disadvantaged

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communities and individuals in South Africa (Wikipedia, 2020). Another highly frequently

referenced metric to operationalize the SDI was the number of incidents of discrimination

and acts of inequality on the basis of gender, age, race, culture, religion, etc.

The SDI “human resource development” was less frequently referenced, and it was

generally operationalized as the number of training programs provided for the employees.

Continuously training human resources was noted to contribute to having a well-equipped

workforce that knows exactly what to do and what the best or most optimal means are to

execute those tasks. As one participant noted, “you will have better productivity with a

person which knows what his tasks are, and when you have a more dedicated person it is

better than having a worker that is not that much motivated or stimulated, or not feeling

appreciated by the management”. Other participants piled on to this notion and suggested to

track the levels of employee engagement and satisfaction, as loyal and appreciated workers

were referenced to be the backbone of any business. One expert noted in relation to the above

that “involving staff in different activities may mean better loyalty. Sometimes, when a

company is not performing well from an economic aspect, you can go through this financial

crisis by having loyal employees that accept to stay in the company with half of the salary

for a shorter period”.

The SDI “product safety and quality” was highly referenced in relation to the levels of

fulfilment of product purpose. According to one expert, sustainable packaging should not

only fulfil the basic protective functions of the stored goods, but it should also provide

additional services that serve the convenience of the consumers and users. The product

should also be safe to use, thereby complying with regulations on product design, and it

should be able to prevent counterfeiting of the stored good. Other, less frequently mentioned

aspects of operationalization of the SDI included participation in quality and product

standards, as some experts noted that such standards provide companies with universal

guidelines in terms of production while also signalling to the customers that the products

have been made in accordance with respective quality schemes. Industrial product standards

include, as described in Section 4.4.2. in more detail, EUR, EPAL, and IPPC; and a highly

referenced universal quality standard to acquire was ISO 9001.

The SDI “customer satisfaction” was less frequently mentioned as a separate aspect, and

more in relation to the SDI “product safety and quality”, as the rates of satisfaction were

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generally referenced as a result of how well the product is fulfilling its purpose from the

perspective of the customer in terms of quality and services.

The SDI “compliance” was highly referenced as operationalized by the presence of and

adherence to a corporate code of conduct, and more generally to CSR guidelines. A code of

conduct was noted to be complied with not only by suppliers and partners, but by the internal

stakeholders as well, covering points from procurement through business operations to

corporate ethics. Additionally, some participants suggested that the SDI could be metricised

by the number of third-party audits via certification schemes as well, as audits on social

aspects (e.g. human rights or labour laws) via, for instance, the ISO 45001 standard, could

be a potential compliance verification tool according to standardized KPIs.

Table 14. Social indicators and their potential operationalization, as per expert interviews


Local community Sponsorships, empowerment programs Moderate Education programs Moderate Financial contributions Low Non-financial contributions Low Protective policies Low Health and safety Working conditions High Trainings Low Employees Financial security Moderate Rate of employee turnover Low Human resources allocated to sustainability Low Labour laws Freedom of association and bargaining Low Child labour Low Forced and illegal labour and exploitation Low Protective policies Low Human rights Diversity High Non-discrimination and equality High Female participation and leadership Moderate Human resource development

Training programs Low

Employee engagement and satisfaction Low Product safety and quality Fulfilment of product purpose High Participation in quality standards Low Participation in product standards Low Customer satisfaction Fulfilment of product purpose Low Compliance Code of conduct High Number of audits via certification schemes Moderate

4.4.5. Aggregated Results

Table 15, Table 16, and Table 17 display the SDIs identified and obtained through the expert

interviews. The SDIs are accompanied by means of potential operationalization with high,

moderate, or low frequency of references by the interview participants, respectively. The

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method of assignment of high, moderate, and low rates of frequencies to the respective

means of operationalization is outlined in Section 4.4.1.

Table 15 provides an overview of the identified SDIs and their respective means of potential

operationalization with high frequency of references. Most of the results are well in line with

the industrial sustainability challenges and drivers, as well as indicating factors of corporate

sustainability that had been cited by the participants and summarized in Table 9 and Table

10, respectively. Environmental aspects, such as responsible and sustainable sourcing; the

possession of and participation in certification schemes and standards; and waste

management with a strong focus on the principles of 3Rs were highly frequently referenced

by the participants as factors that might indicate sustainable operations. These aspects are

mirrored by many of the highly frequently referenced SDIs and means of operationalization

as per the results of the interviews. For instance, the rate of production from packaging waste

and the rate of packaging buyback, recycling, and reusing correspond with the factor of waste

management. Metricised practices (such as the number of verified suppliers in the supply

chain) related to supplier assessment correspond with the factor of responsible sourcing. The

number of policies, standards, and/or certification schemes corresponds with the factor of

participating in such industrial standards. Other, frequently referenced metrics regarding the

environmental dimension include measuring the levels of resource and energy efficiency, as

well as GHG emissions.

In terms of economic SDIs, some of the potential means of operationalization reflect the

expected monetary benefits and returns of operating a sustainable business. For instance, as

it was explained in detail in Section 4.4.3., repairing and reusing a product multiple times is

not only desirable from a material usage and environmental point of view, but it is also an

economically more conscious solution both for the producer and the customer. The

monitoring of the amount of generated and distributed economic value was also highly

referenced, along with the factor of sustainable investments in innovations, employees, and

the society at large.

As for the social sustainability pillar, the provision of a healthy and safe working

environment was highly referenced with a potential monitoring of, for instance, sick days,

or work-related illness and accidents. It was also often cited to measure the rate of diversity

via a breakdown of employees, as well as the number of incidents of discrimination or acts

of inequality. The fulfilment of product purpose was highly frequently suggested to be turned

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into a KPI in terms of product safety and quality as well. To bound the social aspects, it was

highly referenced to metricise the presence and enforcement of a corporate code of conduct.

Table 16 and Table 17 illustrate an overview of the identified SDIs and their respective

means of potential operationalization with moderate and low frequency of references,

respectively. Most of the results, similarly to the results of Table 15, are well aligned with

the factors of sustainability (as well as their frequency of references) that can potentially

indicate sustainable corporate operations according to the interview participants.

Table 15. Sustainable development indicators with high frequency of references, as per expert interviews

Sustainability Indicator Operationalization Environmental

Waste management Rate of production from packaging waste Rate of packaging buyback, recycling and reusing Production optimization Number of policies, standards, and/or certification schemes on production Materials management Resource efficiency Energy management Energy efficiency Procurement and sourcing Supplier assessment Number of policies, standards, and/or certification schemes on production Biodiversity and environment GHG emissions

Economic Product efficiency Number of repairing and reusing a product per customer Economic performance Economic value generated and distributed Investments Value invested in sustainable innovations Value invested in employees Value invested in society

Social Health and safety Working conditions Human rights Diversity Non-discrimination and equality Product safety and quality Fulfilment of product purpose Compliance Code of conduct

The various SDIs and their potential means of operationalization with moderate and low

frequency of references have been introduced and explained in detail in Sections 4.4.2-4.4.4,

these specifications are, therefore, not discussed further in this section. A main takeaway of

the general assessment of the aggregated results of the expert interviews is, however, that

several SDIs have been identified via the interviews, along with varying, potential means of

operationalization and metricising of those SDIs. As explained in the introduction of Section

4.4., the interview participants used different language and descriptions to express their

thoughts on corporate sustainability and sustainability performance measurement in the

industrial packaging sector. The classifications applied for the identified SDIs and means of

operationalization were the results of the qualitative content analysis of the interviews. The

participants did not use the same words and phrases to describe certain phenomena.

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Nevertheless, a core element of the content analysis was to identify commonalities in the

answers, as well as to establish corresponding coding schemes that would later facilitate the

construction of an analytical framework in terms of identified SDIs and respective

qualitative and quantitative metrics. Subsequently, the labels and categorizations assigned

to the distinct indicators and their potential means of operationalization were the consequent

results of the content analysis.

Table 16. Sustainable development indicators with moderate frequency of references, as per expert interviews


Waste management Rate of waste reduction Production optimization Production efficiency via output Production efficiency via machines Production efficiency via workers Materials management Resource consumption Energy management Energy consumption and rate of reduction Product efficiency Number of cycles in usage per product Participation in collection and pooling systems Biodiversity and environment Re-harvested vegetation Compliance Legality of operations Number of audits via certification schemes

Economic Economic performance Value / savings generated through repairing, reusing, and reselling products Value generated through sustainable actions Market share Clients won by sustainability agenda Investments Value invested in environmental protection Value invested in network expansion Local value generation Local hiring Local purchasing Purchasing and partnerships Value spent on sustainable sources / suppliers

Social Local community Sponsorships, empowerment programs Education programs Employees Financial security Human rights Female participation and leadership Compliance Number of audits via certification schemes

As outlined above, Tables 15-17 summarize the identified SDIs and their respective means

of potential operationalization as a function of high, moderate, and low frequency of

references, respectively. It is essential to highlight, however, that merely because a certain

metric was mentioned or referenced less frequently by the participants, it is not definitely

the case that that metric is less important or relevant for the industrial packaging sector to

measure. The frequency of references, therefore, is not considered a direct indicator of

importance in this paper; rather, it was applied with caution as the researcher believes that

each identified mean of operationalization has a potential merit in corporate sustainability

performance measurement. This belief is justified by the way the expert interviews and the

75

conditions had been constructed. The sampling of the participants was based on the intent to

select a diverse group of interviewees with different demographic, academic, and

professional backgrounds. This diversity was assumed and expected to facilitate the

collection of data and information from various perspectives of the participants, thereby

creating a broad and colourful picture that comprises both similar and different opinions and

information. Some perspectives trending towards similarity have been identified in terms of

the SDIs and potential means of operationalization, and these are mirrored by the higher

levels of frequency with regards to mentions or references. These more popular or evident

aspects are listed in Table 15. Additionally, perspectives on a set of widely ranging issues

were obtained as well, these are referred to as references with moderate or lower levels of

frequency and are represented in Table 16 – 17. It is, however, not for the researcher to say

that these aspects are less relevant or meaningful: the levels of frequency simply signal that

these are more unique and less conventional aspects that did not occur to all participants, but

only to a few. This can be explained by the various backgrounds of the participants: each

interviewee was specialised in certain area, consequently, it is justifiable that their answers

would be somewhat connected to their area of expertise as well.

To conclude the aggregate results of the expert interviews, both trends towards

commonalities, as well as more unique perspectives were identified through the qualitative

analysis of the contents. All answers were deemed valuable with a certain extent of merit,

therefore, in this research it is suggested to take all SDIs and their potential means of

operationalization that had been delineated through the interviews into consideration for a

SBSC that is tailored to a specific business case in the industrial packaging sector. A

complete overview of the SDIs and all potential metrics obtained through the interviews is

provided in Appendix A3.

76

Table 17. Sustainable development indicators with low frequency of references, as per expert interviews


Waste management Amount of wooden / cardboard waste generated Amount of plastic waste generated Number of depots in network with repair / recycling services Production optimization Capacity of sawmills Rate of stock optimization Materials management Rate of sustainably sourced raw materials Rate of biodegradable materials Product efficiency Rate of purpose fulfilment

Economic Economic performance Value distributed locally Taxes paid locally Competition Prohibition of dumping prices, monopolies, and trusts Interindustry collaboration Purchasing and partnerships Protective policies Compliance Number of policies, standards, and/or certification schemes on sales

Social Local community Financial contributions Non-financial contributions Protective policies Health and safety Trainings Employees Rate of employee turnover Human resources allocated to sustainability Labour laws Freedom of association and bargaining Child labour Forced and illegal labour and exploitation Protective policies Human resource development Training programs Employee engagement and satisfaction Product safety and quality Participation in quality standards Participation in product standards Customer satisfaction Fulfilment of product purpose

4.5. Sustainable Development Indicators Identified Through Sustainability Report Analysis

In this section it is presented and analysed what SDIs were found to be externally reported

by a selected set of corporations operating in the packaging sector at the time of the research.

As explained in Chapter 3., the base of the corporate sustainability reports under analysis

were the GRI standards as an overarching reporting scheme in order to get a better

understanding of how companies in the packaging sector from all over the world track,

measure, and report on sustainability issues and performance. Consequently, the results

demonstrate which SDIs were included in the analysed reports, based on which trends could

be determined in terms of which indicators were most frequently reported on in the

packaging sector during the research. In the following sections each sustainability pillar is

attributed with a total tally of occurrence of the SDIs from the respective category that had

77

been identified through the SRs. As the objective in this part of the research was to determine

or establish industrial trends, only those SDIs are described in detail that had been found in

at least 6 out of 12 SRs, thereby providing insight into the most popular, and presumably

most relevant SDIs in the packaging sector as per the sustainability report analysis, broken

down according to the TBL.

4.5.1. Environmental Indicators

The tallies of the SDIs regarding the environmental component are displayed in Figure 6.

Each SDI was operationalized separately in terms of calculation and metrics in the reports,

however, these environmental indicators were often interlinked due to their effects on each

other, and as a result of a comprehensive approach towards environmental sustainability

from the analysed organisations’ perspective. The SDI “energy” occurred in all SRs,

implying that this aspect is generally monitored in the industry with regards to energy

consumption and intensity. Energy reduction or utilizing energy from renewable sources is

also a common initiative, along with a general ecologisation and modernisation of the

manufacturing processes that build on a significant share of renewables in the energy mix.

Both SDIs “materials” and “emissions” appeared in 11 of the analysed SRs. The former

emphasises the importance of sustainable materials management and overall resource

efficiency, recycling, and a transition towards circular economy by entailing such metrics as

total material consumption and ratio of recycled materials for production. The latter focuses

on mitigating climate change and transitioning towards a low-carbon economy by reducing

CO2, GHG, and other emissions, such as NOx and SOx; as well as by generally decreasing

the emission intensity. The SDIs “waste and effluents” and “environmental compliance”

occurred in 10 reports. The SDI “waste and effluents” highlights actions towards enabling

circular (bio)economy based on renewable and recycled materials and more sustainable

waste management systems through reducing and reusing significant amounts of waste. It is

generally metricised by the categorizations of waste, the use of waste disposal systems, and

the amounts of recycled waste and effluents. The SDI “environmental compliance”

concerns adherence to environmental legislation and regulations, and is generally

operationalized by occurrences of non-compliance, and only in two cases by monetary fines

for non-compliance. Often the ISO 9001, 14001, and 45001 standards were mentioned as

the base of adherence to environmental policies and guidelines. Some non-specificity of this

SDI was experienced throughout the analysed reports, as the SRs included this aspect in

rather general terms, without detailing to what subjects these regulations and potential non-

78

compliance exactly apply. Both SDIs “water” and “biodiversity” appeared in nine reports.

The former applies to responsible water stewardship through regulated emissions to water

and water consumption and is metricised by the volumes of water withdrawn and recycled

or reused. The latter entails actions towards maintaining biodiversity in the areas that are

affected by the operations of the organizations. This is to be done through sustainable

forestry and adherence to acquired certifications standards, e.g. Sustainable Forestry

Initiative (SFI), PEFC, or FSC, as well as chain of custody-certified sourcing and

manufacturing processes. The SDI “supplier environmental assessment” appeared in seven

reports, and it is principally discussed by points of demands and general conduct for

suppliers that are set up by the companies, expecting compliance in terms of sustainable raw

material extraction and sourcing. Consequently, the suppliers are often required to be FSC

or PEFC certified besides meeting the criteria or guidelines as per the own sustainability

standards of the company. The compliance of the suppliers is to be regularly audited by the

company. The SDI is generally metricised by the number of new suppliers using

environmental criteria, and the monitoring of environmental performance and impact of

suppliers.

Figure 6. Tallies of occurrence of environmental indicators, as per sustainability report analysis

4.5.2. Economic Indicators

The outcomes of the SDIs regarding the economic aspect are presented in Figure 7. Both

SDIs “economic performance” and “market presence” were found in eight SRs. The former

entails various sub-factors and attributes, for instance the presence of market and innovation

leadership, the rate of sustainable economic growth, the revenue generated by innovations,

12

11

11

10

10

9

9

7

0 2 4 6 8 10 12

Energy

Materials

Emissions

Waste and effluents

Environmental compliance

Water

Biodiversity

Supplier environmental assessment

Environmental indicators

79

product development, or general financial stability and control mechanisms. In the context

of this SDI the concept of circular business models and green funding were also often cited

in the SRs. This SDI is generally operationalized through the amount of direct economic

value generated and distributed. The latter SDI concerns the economic impact of the

company on the local (labour) market in terms of workforce and supplier diversity, and it is

generally explained by practices for local hiring and the proportion of senior management

that is hired from the local community. Similarly, both SDIs “anti-corruption” and “anti-

competitive behaviour” occurred in seven SRs. These SDIs are rather self-explanatory as

they indicate adherence to anti-corruption regulations and antitrust and anti-competition

laws, respectively. Any activity that might advance the company unfairly or unlawfully is

prohibited, such as money laundering, engaging in bribery, etc. The former SDI is

operationalized by the number of confirmed incidents of corruption and actions taken to

ensure compliance with anti-corruption standards. The latter SDI is metricised by the number

of legal actions against anti-competitive behaviour, anti-trust and monopoly practices, and

against unfair competition in general. The SDI “procurement practices” was found in six

reports, mostly concerning the promotion of responsible and sustainable sourcing in terms

of the economic involvement of local partners and fair market share. The SDI is generally

operationalized by the practices and proportion of spending on local suppliers. The SDI

“indirect economic impacts” appeared only in three SRs, therefore it is not deemed relevant

for the industry in this research.

Figure 7. Tallies of occurrence of economic indicators, as per sustainability report analysis

8

8

7

7

6

3

0 2 4 6 8

Economic performance

Market presence

Anti-corruption

Anti-competitive behaviour

Procurement practices

Indirect economic impacts

Economic indicators

80

4.5.3. Social Indicators

Building on the clusters identified by Lambrechts et al. (2019), the social SDIs were

categorized into the groups “employment and labour conditions”, “human rights”, “society”,

and “product responsibility”. These groups and their attributed SDIs are explained in more

detail below, respectively.

Employment and labour conditions

Figure 8 illustrates how many times SDIs related to “employment and labour conditions”

appeared in the analysed SRs. The SDI “health and safety” was present and reported on in

all the selected SRs, which can be explained by a general pursuit of providing employees

with a safe, hygienic, and regulated work environment where the emphasis is on the

prevention of accidents and illness, as well as on safety awareness. Risk assessments are also

often reportedly carried out to identify workers and specific work areas that might be subject

to greater risks and are therefore required to be monitored more closely. Trainings are a tool

often used as well to educate workers about the proper and safe ways of carrying out

procedures. Most reports produced metrics on the types and rates of injuries, occupational

diseases, lost days and absenteeism, and number of work-related fatalities. The SDI

“diversity and equal opportunity” was present in 10 out of 12 SRs, which provides a glimpse

into how the industrial world might also be on the right path towards promoting diversity,

equality, and unconditional inclusion. This indicator is most generally validated by

showcasing the diversity of governance bodies and employees through a breakdown of the

staff by e.g. gender, region, age, disabilities, etc.; as well as by providing insight into the

ratio of basic salary and remuneration of women to men. The SDI “training and education”

occurred in nine SRs, projecting that most of the examined organizations attribute high

importance to professional and human resource development at the workplace, as providing

such opportunities is expected to raise morale, loyalty, and the likelihood of the employees

staying longer with the company. Most of the companies reportedly have their own talent

management and skill advancement programs, as well as education centres as a form of

investment in their staff. This SDI is most often metricised as employees (e.g. percentage or

hours per employee) that receive work-related training, or that are provided with

development opportunities. Finally, the SDI “employment” was found in eight SRs, mostly

focusing on the provision of fair and equal employment conditions in terms of hiring and

turnover, as well as remuneration and other forms of compensation and benefits. The SDI

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“labour management relations” only occurred in five SRs, therefore in this research it is

not considered a generally applied indicator in the industry.

Figure 8. Tallies of occurrence of social indicators from the group "employment and labour conditions”, as per sustainability report analysis

Human rights

Figure 9 provides an overview of how many times SDIs related to “human rights” appeared

in the analysed SRs. The SDIs “non-discrimination”, “child labour”, and “forced and

compulsory labour” occurred in six SRs each. At first this result may seem surprising as it

might be expected that these indicators would be the bare minimum companies are attentive

of or reporting on. These aspects were mentioned throughout the reports; however, they were

not always officially disclosed via the GRI standards. The reason for this might be that, as

the SRs note, these principles are generally laid down in the corporate code of conduct,

which is often regarded as the companies’ book of rules or collection of policies that is

attributed with regulatory powers, and which must be complied with by all stakeholders of

the organization. These three SDIs principally concern the adherence to basic human rights

standards and policies, as well as the prohibition of violating local and international

regulations on anti-discrimination, unlawful underage labour, and any form of slavery-like

labour. Those companies that do disclose these SDIs report on incidents of violations, or

operations and suppliers at risk of violation. The SDIs “freedom of association and

collective bargaining” and “human rights assessment” appeared only in four SRs each, the

SDI “indigenous rights” in three, and the SDI “security practices” in two; therefore, these

are not discussed as relevant indicators for the industry in this research.

12

10

9

8

5

0 2 4 6 8 10 12

Health and safety

Diversity and equal opportunity

Training and education

Employment

Labour management relations

Social indicators: Employment and labour conditions

82

Figure 9. Tallies of occurrence of social indicators from the group "human rights”, as per sustainability report analysis

Society

Figure 10 demonstrates how many times SDIs related to “society” appeared in the analysed

SRs. The SDI “local communities” appeared in 10 reports, projecting that most of the

analysed companies actively take initiative as part of enhanced corporate citizenship to give

back to the communities of their operations by supporting local programs and contributing

to the advancement of the community. Some of the most frequent initiatives include the

provision of trainee- or apprenticeships and scholarships to engage with and franchise the

local youth; the empowerment of younger girls by demonstrating how women can become

a more integral part of an otherwise male-dominated industry as engineers and future leaders;

the financial contributions to combat environmental challenges, such as deforestation,

littering, or water pollution; the provision of educational programs on sustainable industrial

operations including forest and waste management; and the offerings of charitable donations.

These actions of community outreach and value creation for society are generally integrated

into the CSR strategy of companies. The SDI “compliance” was found in 10 SRs as well,

expectedly in line with corporate principles of complying with local and international laws

and regulations on social criteria. Just as in the case of environmental compliance, only two

reports mentioned tracking and reporting on the monetary value of significant fines for non-

compliance, leaving the declaration of the rest rather vague. The SDIs “supplier social

assessment” and “public policy” were found only in four and three SRs, respectively; they

are, therefore, not regarded as relevant SDIs for the industry in this paper.

6

6

6

4

4

3

2

0 2 4 6

Non-discrimination

Child labour

Forced and compulsory labour

Freedom of association and collective bargaining

Human rights assessment

Indigenous rights

Security practices

Social indicators: Human rights

83

Figure 10. Tallies of occurrence of social indicators from the group "society", as per sustainability report analysis

Product responsibility

Figure 11 provides an overview of how many times SDIs related to “product responsibility”

occurred in the analysed SRs. The SDI “customer health and safety” was found in nine

reports, prevailing that ensuring the health and safety of the customers through appropriate

product stewardship is of great importance. The adherence to sustainable, ecological, and

responsible production standards is also often highlighted. This indicator generally entails

reporting on incidents of non-compliance concerning the health and safety impacts of

products and services throughout the life-cycle. The SDI “marketing and labelling”

appeared in eight SRs, focusing on adherence to proper marketing and labelling customs,

intellectual property rights and trademark standards. It most often requires reporting on the

type of product and service information that is expected by producers, as well as on

corresponding non-compliance. Similarly, the SDI “customer privacy and satisfaction”

occurred in eight SRs as well, enhancing the principle of safe product equals satisfied

customer. The indicator entails adherence to data security standards, and often implies the

usage of customer satisfaction surveys. The SDI indicates reporting on substantiated

complaints concerning breaches of customer privacy and losses of customer data.

10

10

4

3

0 2 4 6 8 10

Local communities

Compliance

Supplier social assessment

Public policy

Social indicators: Society

84

Figure 11. Tallies of occurrence of social indicators from the group "product responsibility", as per sustainability report analysis

4.5.4. Aggregated Results

Figure 12 displays an aggregated overview of the tallies of occurrence of all SDIs that had

been identified in the SRs. The figure includes those SDIs that were found in at least six

reports, thereby qualifying as indicators potentially relevant for the packaging industry. As

per the results, it is apparent that the SDIs “energy” from the environmental category and

“health and safety” from the social subcategory “employment and labour conditions” are

the only indicators that were present in all reports, thereby implying a universal applicability

and importance. The environmental SDIs “materials” and “emissions” were mentioned in

all reports except for one; and are followed by 10 respective occurrences of the SDIs “waste

and effluents”, “environmental compliance”, “diversity and equal opportunity”, “local

communities”, and “(societal) compliance”. Then follows several SDIs from different

groups, occurring in eight to nine SRs, including “water”, “biodiversity”, “economic

performance”, “market presence”, “training and education”, “employment”, “customer

health and safety”, “marketing and labelling”, and “customer privacy and satisfaction”.

Subsequently, various SDIs occurred in six to seven reports, including “supplier

environmental assessment”, “anti-corruption”, “anti-competitive behaviour”,

“procurement practices”, “non-discrimination”, “child labour”, and “forced and

compulsory labour”. Overall, 25 SDIs of the three sustainability dimensions were identified

as potentially relevant for the packaging industry, as per the results of the sustainability

report analysis.

9

8

8

0 2 4 6 8 10

Customer health and safety

Marketing and labelling

Customer privacy and satisfaction

Social indicators: Product responsibility

85

One of the major takeaways from the results is that the environmental aspect was the most

universally reported on as per the SRs, indicating an industrial trend on environmental

performance measurement as a function of various factors and SDIs. The environmental

category could be considered as externally oriented, i.e. these SDIs reflect commitment

towards improving and protecting the ecosystem, as well as mitigating climate change. The

targets comprised by these SDIs show that the companies, at least on paper, understand their

potential impact and are beginning to see the full picture, which is much greater than the

individual, profit-fuelled corporate goals. The fact that almost all environmental SDIs of the

GRI were found to be reported at the majority of the analysed packaging companies indicates

that there might be indeed a transition on the way from a strictly economic perspective

towards a more inclusive perspective in terms of business operations and demeanour. Again,

it must be highlighted that just because an aspect or an SDI is reportedly measured in terms

of performance, it does not automatically make the reporting company sustainable, as these

reports must be viewed and interpreted through critical thinking and evaluation. It must

always be critically assessed whether a company discloses SRs as an attempt of

greenwashing, or might it really have the interests of the planet and society as a whole at

heart, as being able to analytically evaluate this difference lies at the core of sustainability

report analysis. It is not the presence of the SR that counts, but its content, and the contents

must be carefully reviewed for suspected inconsistencies or non-specificities that can

potentially invalidate the report or the claims (Lambrechts et al., 2019), which is exactly

what happened in the case of some infamous greenwashing attempts by the fast-fashion

companies H&M and Zara (Cotton, 2018), or the car manufacturing giant Volkswagen

(Hotten, 2015).

As for the social indicators, these are covered in a more varying fashion. It projects

reassurance, however, that there are commonly reported SDIs both from the perspective of

internal and external orientation. SDIs that suggest internal focus, such as “health and

safety” or “diversity and equal opportunity”, indicate that workforce satisfaction and

compliance with labour laws is of utmost importance at most companies. Additionally, some

of the externally oriented SDIs focusing on external stakeholders, such as “local

communities” or “customer health and safety”, indicate that it might be an industrial trend

to tend to the needs and requirements of the external groups as well, mostly in line with CSR.

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Figure 12. Sustainable development indicators identified through sustainability report analysis

Finally, as for the economic component, internally and externally oriented SDIs appear to

be equally trending in the industry, although they generally occurred in less reports on

average than environmental and social SDIs. “Economic performance”, one of the SDIs

with the highest occurrence in this group signals internal orientation. On the other hand, the

remainder of the SDIs within this category were reported on with similar frequencies,

indicating a simultaneous external focus as well.

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Energy

Materials

Emissions

Waste and effluents


Water

Biodiversity



Market presence

Anti-corruption



Health and safety



Employment

Non-discrimination

Child labour


Local communities

Compliance




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Sustainable development indicators

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During the analysis that had been carried out in this research, no significantly outstanding

inconsistencies were spotted. The GRI standards do require the reporting of metricised

indicators, and the provision of data in number form facilitates the analysis of more objective

information. However, as mentioned in the previous sections, some indicators were

reportedly measured quite vaguely at the analysed companies, leaving further room for either

the corporations to specify the operationalization process, or GRI to develop more precise

descriptions and calculation methods for certain indicators.

4.6. Portfolio of Identified Sustainable Development Indicators The process of selection of the SDIs for a SBSC in the industrial packaging sector followed

the results of the expert interviews and the sustainability report analysis. As delineated in

Section 4.4.5., all indicators referenced by the interview participants were attributed with

some merit as all contributions and suggestions had been considered to be equally important

or relevant, regardless of how frequently that specific indicator or aspect was mentioned. As

for the results of the sustainability report analysis, however, the target was to identify

industrial trends in terms of how frequently a specific indicator was found in the SRs of

selected packaging companies. In this case, therefore, only SDIs found in at least 6 out of 12

SRs was deemed relevant for the purposes of this paper.

To draw on the multifaceted results of the different methods of data collection applied in this

paper, the findings of the subsections were merged to showcase the final portfolio of the

identified SDIs that are applicable to be potentially integrated into a SBSC that is specifically

developed for a business case in the industrial packaging sector. The identified indicators,

as well as their potential means of operationalization are delineated in Table 18. The final

portfolio comprises 10 environmental, 9 economic, and 14 social SDIs.

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Table 18. Identified sustainable development indicators for a SBSC in the industrial packaging sector


Waste management Rate of production from packaging waste (materials recycled) Rate of packaging buyback, recycling and reusing Rate of waste reduction Categorizations of waste (e.g. amount of wooden / cardboard, plastic waste) generated Waste and effluents recycled Number of depots in network with repair / recycling services Production optimization Number of policies, standards, and/or certification schemes on production Production efficiency via output Production efficiency via machines Production efficiency via workers Capacity of sawmills Rate of stock optimization Materials management Resource efficiency Resource consumption Rate of sustainably sourced raw materials Rate of biodegradable materials Energy management Energy efficiency and intensity Energy consumption and rate of reduction Practices concerning energy use reduction Product efficiency Number of cycles in usage per product Participation in collection and pooling systems Rate of purpose fulfilment Procurement and sourcing New suppliers screened using environmental criteria Monitoring of environmental performance and impact of suppliers Number of policies, standards, and/or certification schemes on production Biodiversity Number of operational sites connected to protected or highly biodiverse areas Actions to protect and restore biodiversity in affected areas (e.g. re-harvested vegetation) Emissions CO2 (incl. GHG), NOx, SOx and PM emissions Emission intensity Practices concerning emissions reduction Water Water withdrawn Water recycled / reused Compliance Legality of operations, adherence to environmental laws and regulation Total number of non-compliance occurrences Fines for non-compliance Number of external audits via certification schemes

Economic Product efficiency Number of repairing and reusing a product per customer Economic performance Economic value generated and distributed Value / savings generated through repairing, reusing and reselling products Value generated through sustainable actions Value distributed locally Taxes paid locally Market share Clients won by sustainability agenda Investments Value invested in sustainable innovations Value invested in employees Value invested in society Value invested in environmental protection Value invested in network expansion Local value generation and market presence

Practices for local hiring

Proportion of senior management hired from the local community Practices and proportion of spending on local suppliers Competition Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices, or in general

against unfair competition Interindustry collaboration Purchasing and partnerships Value spent on sustainable sources / suppliers Protective policies Anti-corruption Confirmed incidents of corruption Actions taken to ensure compliance with anti-corruption standards Compliance Number of policies, standards, and/or certification schemes on sales

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Social Employment & labour conditions

Health and safety Types and rates of injury, occupational diseases, lost days and absenteeism, number of work-related fatalities

Actions to improve occupational health and safety Human resource development Employees that receive work-related training, education, programs and advancement Development opportunities Employee engagement and satisfaction Diversity and equal opportunity Diversity of governance bodies and employees Gender pay gap Breakdown of employees by gender, region, and age Female participation and leadership Employment Financial security, employment compensations and social benefits New employee hires and rate of employee turnover Human resources allocated to sustainability

Human rights Non-discrimination Adherence to anti-discrimination policies Total number of incidents of discrimination and corresponding corrective actions Child labour Adherence to regulations on prohibition of child labour Operations and suppliers identified as at risk for child labour Forced labour and exploitation Adherence to regulations on prohibition of unfree and slavery-like practices Operations and suppliers identified as at risk for forced, illegal or compulsory labour or

exploitation Freedom of association and collective bargaining

Operations and suppliers identified in which the right to freedom of association and collective bargaining may be at risk

Labour laws In-place protective policies for employees Society

Local community Operations with local community engagement and development programs Sponsorships, empowerment programs Education programs Total value of financial and other contributions to advance local community In-place protective policies to safeguard local communities and indigenous rights Compliance Adherence to societal / socioeconomic laws and regulations Total number of non-compliance occurrence Fines for non-compliance Code of conduct Number of external audits via certification schemes

Product responsibility Customer health and safety Incidents of non-compliance concerning the health and safety impacts of products and services

throughout the life-cycle Marketing and labelling Type of product and service information required by producers Incidents of non-compliance Product safety and quality Fulfilment of product purpose Participation in quality standards Participation in product standards Customer privacy and satisfaction

Substantiated complaints concerning breaches of customer privacy and losses of customer data

Fulfilment of product purpose

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5. The Case Study and the Sustainability Balanced Scorecard4

5.1. Introduction of the Business Case As outlined in Section 3.4.2., the selected unit of analysis of the single-case design in this

research was a single organization, PalletBiz. PalletBiz is an international franchise network

that comprises wood and metal packaging units, logistics companies, and distribution depots.

The network currently consists of franchisees from Bahrain, Denmark, Moldova, Poland,

Romania, Saudi Arabia, South Africa, and the United Arab Emirates, while the entity of the

master franchisor is registered in Hungary. Although the mother company is registered in

Hungary as the franchisor, the main headquarters that are responsible for the central

coordination and management of the operations of the network are in Copenhagen, and

function under the department of Global Sourcing and Sales (GSS) (Zombori et al., 2020).

The registration of the franchisor entity in Hungary was justified by administrative purposes;

however, as the company is of Danish origins and in Danish ownership, the corporate

governance remains to be driven by GSS in Denmark. PalletBiz is a mid-sized company with

approximately 170 employees, and with a total network turnover of €17 million (PalletBiz,

2020). The consistent network growth and the corresponding combined compound annual

growth rate (CAGR) in the past three years (2017-19) has been 28%. The revenue of the

company is built from franchise fees, royalties, consulting fees, and proceeds from trade

(Zombori et al., 2020).

The franchise partners that comprise the international franchise network operate in a mixture

of industries, thereby representing a combination of various business profiles. The PalletBiz

Franchise Group can, therefore, be categorized under several industries, such as materials

packaging and handling, production, manufacture, logistics and supply chain, etc.

Principally, however, the corporation prefers being identified primarily as a player of the

industrial packaging and handling sector with affiliations within wood and metal

manufacturing, as well as forestry and supply chain. The product line both for own

production and trade comprises industrial packaging units, such as pallets, boxes, and crates

that are made of wooden and metal materials. Complementing the physical products, the

company also offers a wide range of services related to industrial packaging, such as pooling,

4As elaborated in Section 3.4.3, the researcher was an employee of the studied business case at the time of the research. Consequently, the case study was primarily built on internal information, as well as own knowledge and observations with regards to the company. Thus, disclosed information in this chapter that is not attributed with a direct reference or source was obtained either through corporate research material or own experience.

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pallet repair and buyback; handling (e.g. strapping, container packing, lashing, or montage),

and consulting. The service of consulting has its own branch within the organization, aiming

at optimizing the packaging and handling portfolio of the clients in terms of cost, quality,

and sustainability (Zombori et al., 2020).

The internal processes of the company are structured as standard operating procedures

(SOPs) and are attributed to the respective organizational departments. SOPs have been

developed to cover the areas of sourcing and supply chain coordination; production; sales

and account management; product development and marketing; business administration and

human resources management; and operative management that oversees and coordinates the

above-mentioned functions (Zombori et al., 2020).

The PalletBiz network serves markets throughout EMEA (Europe, Middle East, Africa) with

the franchisees primarily focusing on their own countries and regions in which their

operations are embedded. Principally, the network functions in a B2B setup, thereby the

clientele mostly comprises other business entities. The demand for the product line that is

offered by PalletBiz is quite high within industries that rely on durable packaging of quality

materials, therefore, the majority of the customer base is from the automotive,

manufacturing, and consumer goods-producing sectors (Zombori et al., 2020).

5.2. Sustainable Strategic Management in the Business Case Considering that PalletBiz operates in an industry that is heavily dependent on the abundance

of quality raw materials (particularly wood), as well as on other resources such as energy,

fossil resources, and water, the company must strategically deal with its impact on the

environment. Being of Scandinavian origins, the network is a strong advocate of sustainable

development, and is committed to “greening” its operations as much as possible. Currently

there is no separate department dedicated to sustainability coordination and management

within PalletBiz, therefore, the existing strategy is not as explicitly outlined, comprehensive,

and detailed as Baumgartner (2014) recommends.

However, the Group did develop a document that delineates the sustainability mission and

vision, as well as a basic corresponding strategy, as shown in Appendix C1. According to

the categorizations of sustainability strategies by Baumgartner & Ebner (2010), PalletBiz

falls into the group of conservative (efficiency) strategy, with a focus on eco-efficiency and

cleaner production (p. 78).

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Despite the lack of an overarching and in-depth sustainability strategy that has materialised

in specified actions, some concrete steps directly connected to sustainability did take place

within the PalletBiz Group. Such initiatives include actively opposing irresponsible

deforestation by committing to maintain forest biodiversity through sourcing wood and raw

materials strictly from responsible and certified suppliers; or working towards achieving ISO

14001 and FSC certifications for the production and trade of wooden products. The latter

has only been realized by the Romanian and Saudi Arabian franchisees so far. In addition to

the environmental concerns, PalletBiz also considers its corporate social responsibilities that

are communicated and made available internally and externally in the form of a list of

objectives. The objectives are detailed in the code of conduct of the company, and outline

engagement to

- the prevention of child labour

- the prevention of forced or bonded labour

- the provision of legal working hours and wages

- the provision of workers’ accident insurances

- non-discrimination

- freedom of association

- the avoidance of harassment and unduly harsh treatment of employees

- subscription to anti-corruption and anti-bribery and the prevention of same.

In addition to the facts and figures on PalletBiz, participants from the expert interviews who

were employed at the case company (see Section 3.2.) were asked about the organizational

approach and perspectives on the corporate sustainability strategies as well. Some experts

highlighted the focus that is placed on sustainable and efficient resource management, as

well as process and cost optimization throughout the value chain:

"We try to find and implement a sustainable process in every phase of our supply chain and

operations, starting from the responsible consumption and production, which means choosing the

right suppliers who are using sustainable solutions for their production and can provide proof of that.

So, we always ensure that the sources we are using are not damaging the environment and are

sustainable".

Others added that “we try to become more sustainable when it comes to the selection of the

suppliers for both raw material and services. Also, we focus on optimizing the production,

on saving energy”; while another expert noted that “we are trying to cut down the costs to

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be more efficient from a production point of view. This means we use less energy, less fuels,

less resources to produce the same."

Some experts emphasized the fact that the business case of sustainability was getting

integrated into the overall strategies of the Group: “Sustainability of a business is one of the

main goals we have. Each manager should have this goal to run a sustainable business. If a

business is not sustainable, it will die, sooner or later”. Another participant added that

“the most important aspect for a board, as well as top management is to find the balance where we

as a business can thrive, and where we as a business can be sustainable in implementing sustainability

factors. We have to be aware of finding a balance where we can play a part, take a more active part

as a company in influencing sustainability positively, and still be able to have a company that makes

a profit, to be able to maintain that sustainability profit.”

Finally, some experts framed the company’s approach to corporate sustainability from a

managerial perspective: "I see sustainability as a high-level decision, to balance our

business from economic motives, profit motives, and then balance that with sustainability

motives or drivers from the company”; while another participant added that "we want to

make sustainability much more transparent by putting indicators on all those aspects that

we have decided are important for our company."

5.3. Formulation and Application of the Sustainability Balanced Scorecard

5.3.1. Choosing a Strategic Business Unit

As delineated in Section 4.1., the formulation of a SBSC that can applied within the industrial

packaging sector can be demonstrated through a specific case company for the sake of

understandability. Using a selected business case facilitates the development of the scorecard

via a concrete corporate framework and makes the process less hypothetical and abstract,

and more practical and tangible instead. It has been mentioned various times in this paper

that a completely universal or industry-wide application of the same SBSC is not necessarily

recommended due to its many unique features that are connected to specific business cases

and the respective requirements of the corresponding strategies. Nevertheless, the

formulated SBSC and the described steps along the way in this research are expected to

facilitate a fairly easy reproduction of both the formulating process, as well as the final SBSC

that is generic in terms of industrial attributes, and at the same time specific to the business

case at hand.

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Following the guidelines as per literature (Figge et al., 2001, 2002a, 2002b), the first step in

the formulation process is to select a business unit for which the SBSC will be developed.

Figge et al. (2002b) suggest that in SMEs this can be the corporate level, and this reasoning

was accepted and applied in this research as well. Thus, the strategic business unit in this

paper is PalletBiz. As highlighted by literature (Figge et al., 2001, 2002a, 2002b), “step zero”

of the formulation process is to ensure that the selected business unit is assigned a

(sustainability) strategy. There exists a PalletBiz corporate strategy referencing

sustainability as well – even though it is not fully extensive, it served partially as the basis

of the SBSC formulation process. The sustainability strategy is found in Appendix C1.

Besides an initial sustainability strategy, the case company has developed a comprehensive

corporate strategic plan for the next four years (2020-24) as well. In the following section

the overarching strategy – which was at the core of the formulation of the SBSC – of the

PalletBiz Group is delineated.

As described in Section 5.1., PalletBiz produces and trades with industrial packaging and

handling materials (currently primarily from wood and metal), while also offering related

services, as well as consultancy. The production facilities are spread out in the franchise

entities throughout EMEA. PalletBiz-owned manufacturing plants are currently found in

Bahrain, Romania, Saudi Arabia, and South Africa – these franchisees produce and trade

packaging materials that have been made in-house. Raw materials and elements needed for

the construction of the packaging units are generally sourced locally in the case of Europe

and Africa; while in the Middle East the practice is to source regionally, as well as from

South America due to lower prices. PalletBiz sees itself as a premium provider of packaging

and handling solutions with a widely ranging product and service portfolio, principally

targeting bigger national and international customers. So far, environmental and social

aspects have been considered to some extent within the Group, with a varying level of

individual engagement among the franchise entities. However, a corporate-wide and

universal strategic inclusion of sustainability factors has not yet taken place.

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The top-level strategy is the basis for developing a SBSC for PalletBiz which, to some extent,

is expected to be suitable to be utilized and applied by the packaging industry at large as

well.

5.3.2. Environmental and Social Exposure

As per Figge et al. (2002a, 2002b), the second step in the SBSC formulation process is to

identify and map out the environmental and social exposure of the business unit based on

such aspects that potentially affect the business unit from a strategic point of view.

As suggested by Figge et al. (2002b), first the framework of environmental exposure must

be developed to “identify all environmental interventions which originate from a business

unit’s operations and products” (p. 14). Consequently, environmental aspects of potential

Top management wants Group earnings to grow considerably rapidly and increasingly, targeting to achieve an ambitious but potentially feasible increase of Group Profit After Taxes (G-PAT) of 1552% within the next four years. At a first glance this objective may seem radical, however, the management believes that in the case of a SME it is possible to reach such a goal through accelerated business and exponential growth in turnover. The desired growth is planned to be achieved through the combined CAGR rising from 28% to 61%, and to be principally driven by new additions of franchise operations in several new countries, as well as existing operations maturing and accounting for an increased market share together. The strategy largely depends on investments in continued organizational development, digitalization, market development in current and new regions, as well as supply chain footprint in the form of distribution and production hubs in a variety of countries. When the planned market development- and investment plans are fully implemented, the Return on Equity (ROE) is expected to increase from 18% to 32% within the current strategy period. The growth is expected to be financed by increased working capital.

The management sees great opportunities in a transforming market around packaging, believing that a product-oriented business should transition into solution-oriented business to maximize on potentials, as well as to stay ahead of the game. This belief is encapsulated by the corporate mission, which is as follows: “By combining and leveraging of the increasing network strength – we strive to offer Premium Pallets & Packaging solutions for cross-border clients as a ”one-call-for-all”. PalletBiz’s mission is further to be a “lean and green network that considers its corporate, social as well as environmental responsibility – all while satisfying shareholder interest.”

The vision and top-level strategy of PalletBiz that is ought to facilitate meeting the targets towards economic success is captured as follows: “To be an increasingly strong contributor to the local communities in which we are operating. Living by and respecting our corporate and social responsibility, while aiming to be among the Top-10 providers of quality handling and packaging materials and related consulting services – with a solid footprint in EMEA and emerging footprint in North America – by 2024.” This vision is expected to be achieved through three strategic growth enablers:

• a unique go-to-market model and value proposition – based on a consultative approach that primarily targets large International Key Accounts (IKAs) – that is ought to drive market disruption through (a) transparency in customer product mixes and purchase prices; (b) convenience of a “one-call-for-all”; (c) cost improvements and savings; and (d) increased sustainability by arranging recycling, buyback and pooling schemes for the customers’ packaging materials;

• a franchising business system that is the driver of quality network growth; • clustering through a client-driven footprint that is ought to provide the corporation with control

over the regional supply chain of hubs and depots.

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importance for PalletBiz were mapped out, initially regardless whether they were

strategically relevant (Figge et al., 2002b). Based on the framework by Figge et al. (2002b,

p. 14), the specific environmental impacts of PalletBiz that comprise the profile of

environmental exposure were collected, and are hereby outlined in Table 19.

Table 19. Environmental exposure of PalletBiz

Type of environmental intervention Business unit-specific occurrence Emissions • Direct CO2 (incl. GHG), NOx, SOx and PM

emissions generated in production • Indirect emissions generated along the value

chain Waste • Residues and waste from packaging production,

as a function of material (wooden / cardboard, plastic, metal)

Material input and intensity • Raw material (wood) consumption, including logs and cut-to-size elements

Energy intensity • Energy consumption of production preparations (pre-product phase)

• Energy consumption of product assembly (product phase)

• Energy consumption of product treatment (kiln drying, heat treatment – post-product phase)

Noise and vibration • Noise pollution in production Waste heat • Waste heat generated in production Radiation Land use • Operations connected to protected or highly

biodiverse areas

Note. Based on “The sustainability balanced scorecard – theory and application of a tool for value-based sustainability management,” by F. Figge et al., 2002, Greening of Industry Network Conference, 2, p. 14.

After mapping out the environmental exposure of the business unit, potentially strategically

relevant social aspects should be identified, most preferably by using a stakeholder approach

(Freeman, 1984) to develop a “useful framework to classify the actors which are concerned

with different social claims” (Figge et al., 2002b, p. 15, based on Clarkson, (1995)). Such

framework should be designed to comprise potentially relevant stakeholder groups that can

be categorized into internal stakeholders, stakeholders along the value chain, stakeholders in

the local community, and societal stakeholders (Figge et al., 2002b, p. 15). Building on these

clusters, Figge et al. (2002b) suggests to identify all pertinent stakeholder groups as a first

step, which is to be followed by mapping out the specific social claims and issues of these

groups that should be addressed by PalletBiz. Table 20 provides an overview of the specified

framework based on the work by Figge et al. (2002b, p. 16) that illustrates the social

exposure of the examined business unit.

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Table 20. Social exposure of PalletBiz

Direct stakeholders Indirect stakeholders

Internal Along the value chain Community Societal Internal Along the

value chain Community Societal

Employees of PalletBiz

Job security

Working conditions, health. and safety

Payment

Diversity and equality

Personal development

Suppliers of PalletBiz

Successful and lasting business relations

Contractual compliance

Employees

of suppliers

Job security

Working conditions, health, and safety

Payment

Locals in the areas of operations

Local (non)-monetary value creation

Regional development and economic growth

Indigenous rights

Preservation and respect of areas of living

Industrial associations

Product and quality standards

Customers

Product and service quality

Product efficiency

“One-call-for-all” solutions


Legal and sustainable operations

Government

Unemployment

Regional development

United Nations

SDGs NGOs

Forest & biodiversity protection

Human rights protection


5.3.3. Determination of Strategic Relevance of Environmental and Social Aspects

After identifying potentially relevant environmental and social aspects, Figge et al. (2002b)

propose to proceed with the identification of those of strategical relevance, as this step is

expected to “translate the verbally formulated strategy of a business unit into casually linked

objectives and indicators” (p. 16). According to Kaplan & Norton (1997), this process should

be carried out in a top-down fashion in order to capture the strategically relevant aspects in

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the four perspectives of a conventional BSC – financial, customer, process, and learning and

growth –, and, simultaneously, to “link them casually and hierarchically towards the long-

term success measured by the financial perspective” (Figge et al., 2002b, p. 16). As an

additional measure, the environmental and social aspects must be considered besides the

conventional aspects as well (Figge et al., 2002b).

As a first step in this phase, lagging indicators representing strategic core issues must be

defined in each perspective (Figge et al., 2002b). Combining the generic categories provided

by Kaplan & Norton (1997, p. 4), the potential indicators identified in Section 4.6. of this

paper, and the SDGs of interest as per the corporate sustainability strategy of the examined

case company, Table 21 provides an overview of the formulated lagging indicators for

PalletBiz.

Table 21. Lagging indicators at PalletBiz

Financial perspective

Customer perspective

Process perspective

Learning and growth perspective

Non-market perspective

• Revenue growth

• Asset utilization

• Market share

• Customer acquisition

• Innovation process • Production process • Investment

process

• Employee retention

• Employee satisfaction

• Legality and compliance

• Transparency and legitimacy

Note. Based on “Balanced scorecard: Strategien erfolgreich umsetzen,” by R.S. Kaplan & D.P. Norton, 1997, p. 4.

As a next step, leading indicators (i.e. performance drivers) must be defined to demonstrate

“how the results in each perspective, reflected by the lagging indicators, are to be achieved”

(Figge et al., 2002b, p. 17). Table 22 illustrates the formulated leading indicators for

PalletBiz – similarly to above, by combining the generic categories provided by Kaplan &

Norton (1997, p. 4), the potential indicators outlined in this research, and the SDGs of

interest of the company.

Table 22. Leading indicators at PalletBiz



Process perspective



- • Product and service attributes and development

• Market development

• Image and reputation

• Capitalization development

• Cost indicators • Quality

indicators

• Structural and organizational development

• Work environment

• Responsible consumption and production

• Partnerships for the goals

• Code of conduct

Note. Based on “Balanced scorecard: Strategien erfolgreich umsetzen,” by R.S. Kaplan & D.P. Norton, 1997, p. 4.

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In the following sub-sections the five perspectives are further defined and delineated for

PalletBiz across strategic core aspects and performance drivers via the above-described top-

down method to ensure that “ hierarchical cause and effect chains both within and between

the perspectives are identified, linking up to the financial perspective” (Figge et al., 2002b,

p. 18).


In accordance with the corporate strategic plan of PalletBiz as outlined above, the following

measures and lagging indicators comprise the financial perspective:

• An increase of G-PAT by 1552% within the next four years as top financial target

and measure.

• This is to be achieved by an increase in CAGR from 28% to 61%, and

• an increase of ROE from 18% to 32%.


Two strategic core elements have been identified as lagging indicators for PalletBiz in the

customer perspective: market share and customer acquisition. The company aims for a

significant increase in CAGR, for which it is of essence that the market share is levelled up

as well. Top management believes that customer acquisition in terms of large IKAs will lead

to the desired goals. Meeting the customers’ demands with solution-based portfolios as a

“one-call-for-all” instead of simply offering packaging products does not only promise new

accounts, but might also put PalletBiz ahead of the game and the market in general with a

unique business offering as a versatile SME.

The leading indicators summarize the above-described value proposition of PalletBiz.

Corporate research has shown that the targeted client segment demands durable and quality

packaging materials that have been sourced and produced through sustainable methods, for

which they are willing to pay higher prices as well. They also require consulting services

more frequently that help them not only to optimize their spend on packaging and total cost

of ownership (TCO), but also to integrate the aspect of sustainability into their packaging

portfolio through add-on services related to circularity, such as the 3Rs, buyback, and

pooling. Furthermore, such IKAs are increasingly putting pressure on their downstream

value chain to be sustainable and responsible, particularly in terms of sourcing raw materials.

External pressure is additionally exercised by NGOs and the society at large on

environmental and human rights protection with regards to sustainable production and

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operations, which is considered to be strategically relevant from an image and reputation

point of view; and is, consequently, included as a corresponding performance driver

Figure 13. Customer perspective of PalletBiz

Environmental aspects Social aspects Direct Indirect

Em

issi

ons

Was

te

Mat

eria

l inp

ut a

nd

inte

nsity

Ene

rgy

inte

nsity

Noi

se a

nd v

ibra

tion

Was

te h

eat

Land

use

Inte

rnal

Alo

ng th

e va

lue

chai

n

Alo

ng th

e va

lue

chai

n

Com

mun

ity

Soci

etal

Stra

tegi

c co

re is

sues

Market share

Customer acquisition

Perf

orm

ance

dri

vers

Product and service attributes

Durable & quality products

Sustainably produced and traded products

Reusable and recyclable products

“One-call-for-all” solutions

Integration of circularity through 3Rs, buyback, and pooling

Resource efficiency

Sustainably sourced raw materials

Protection of environment and biodiversity

Customers

Market development

Unique offerings of product and service mix

Image and reputation

Environmentally friendly and socially responsible image

Customers NGO


Based on the framework provided by Figge et al. (2002b, p. 19), Figure 13 illustrates the

complete matrix on the customer perspective for PalletBiz. The selected indicators can

further be operationalized by utilizing the analytical framework of SDIs in Table 18 if

prompted. The relevant categories are “waste management”, “production optimization”,

“materials management”, “product efficiency”, “procurement and sourcing”,

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“biodiversity”, and “compliance” as environmental SDIs; “product efficiency”, “economic

performance”, and “market share” as economic SDIs; and “child labour”, “forced labour

and exploitation”, “compliance”, “customer health and safety”, “product safety and

quality”, and “customer privacy and satisfaction” as social SDIs.

Internal process perspective

Based on the clusters suggested by Figge et al. (2002b), three process categories have been

identified for the internal process perspective at PalletBiz: innovation process, production

process, and investment process. In the production process cluster three strategic core

elements have been derived from the higher-level targets in the financial and customer

perspectives as lagging indicators. The lagging indicator “product efficiency” refers to the

recyclability and reusability of packaging materials through buyback and pooling schemes,

as this unique composite of products and services drives the previously described customer

and financial perspectives, offering a “one-call-for-all” solution to the clients. This factor is

closely related to “production rates from waste”, and it is also identified as a strategically

relevant aspect for PalletBiz, charged with various environmental considerations related to

waste management. The production process as a whole is influenced by industrial

associations, such as ISO, EPAL, IPPC, or UIC, setting up product and quality standards

that must be complied with in case of interindustry collaboration schemes. The third lagging

indicator in the production process perspective is the “production cost”, as it directly affects

the targeted increase of G-PAT in the financial perspective. This indicator has no

environmental or social attribute, consequently, it is metricised by a conventional financial

indicator (Figge et al., 2002b). The lagging indicator in the investment process perspective

is “network and operation expansion and development”, reflecting on the strategically

relevant aspect of the company having to invest in its franchising business model to achieve

network growth both in terms of new and existing franchise operations. Management expects

the expansion and development to achieve significantly increased market shares (customer

perspective), which is to increase CAGR and ROE and, ultimately, the G-PAT (financial

perspective). Network expansion and developments are affecting the indirect stakeholder

groups of locals in the areas of operations, as well as the government. These groups represent

social claims of regional development and economic growth. The central performance

drivers in the internal process perspective of PalletBiz are the quality control of the

procurement and sourcing activities (compliance to be audited by third-party certification

schemes, such as ISO 14001, FSC, or PEFC), and the energy- and material-efficiency of the

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production processes. Based on the framework developed by Figge et al. (2002b, p. 21),

Figure 14 provides an overview of the complete matrix on the internal process perspective

for PalletBiz. The selected indicators can further be operationalized by utilizing the

analytical framework of SDIs in Table 18 if management wishes to focus in further on certain

aspects. The relevant categories are “waste management”, “materials management”,

“energy management”, “product efficiency”, “procurement and sourcing”, and

“compliance” as environmental SDIs; and “investments”, “local value generation and

market presence”, “purchasing and partnerships”, and “compliance” as economic SDIs.

Figure 14. Internal process perspective of PalletBiz


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This perspective delineates the organizational infrastructure required for the achievement of

the targets of the other perspectives, principally focusing on areas related to employees, such

as qualification or motivation, as well as general governance (Figge et al., 2002b). As

outlined in Table 21, the factors of employee retention and satisfaction have been used for

the formulation of the respective lagging indicators, as Figge et al. (2002b) note that “highly

motivated and satisfied employees are a key prerequisite to successfully implementing an

ambitious strategy” (p. 21). Consequently, both employee retention and satisfaction have

been identified as strategic core elements in the learning and growth perspective for

PalletBiz, accounting for lagging indicators in the respective matrix as displayed in Figure

15, which is based on the framework by Figge et al. (2002b, p. 22).

Figure 15. Learning and growth perspective of PalletBiz


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As an enabler of the identified lagging indicators, the performance drivers of structural and

organizational development, as well as work climate have been identified. Structural and

organizational development refers to processes and corporate governance related to human

resources in a sustainability context in general, while work environment is connected to

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health and safety concerns within the workplace. The selected indicators can further be

operationalized by utilizing the analytical framework of SDIs in Table 18 when needed. The

relevant categories are “health and safety”, “human resource development”, “diversity and

equal opportunity”, “employment”, “non-discrimination”, “freedom of association and

collective bargaining”, and “labour laws” as social SDIs.


As a final step it must be examined whether “strategically relevant environmental or social

aspects exist which significantly influence the success of the company’s strategy via other

mechanisms than the market system” (Figge et al., 2002b, p. 22). In case such aspects are

detected, an additional non-market perspective can be introduced to provide a societal frame

for market activities (Figge et al., 2002b).

With the consideration of the current corporate strategy of PalletBiz, aspects and issues of

strategic relevance that are not part of conventional market transactions were not detected or

identified. The environmental and social aspects that were deemed strategically relevant for

PalletBiz have been covered and included in the four previous perspectives; consequently,

in this paper it is suggested that the integration of an additional non-market perspective is

not needed for the studied business case. This suggestion applies to the corporate strategy in

its current form – should that be changed or expanded in the future, the reasoning for or

against the inclusion of the non-market perspective shall be revisited.

5.4. The Strategy Map of the Sustainability Balanced Scorecard In summary, Figge et al. (2002b) note it to be important to remember that all identified

aspects and indicators must be connected to the financial perspective in the scorecard, as

“the strategic core aspects and value drivers of the lower level perspectives in the cascade serve to

achieve the objectives set by the indicators in the upper level perspectives. (…) This serves to establish

the hierarchic cause-and-effect chains which link all strategically relevant aspects towards the

successful execution of the strategy” (p. 24).

Kaplan & Norton (2001) suggest that the results of the procedure of constructing a SBSC

can be illustrated by developing a strategy map, in which all identified aspects that have been

deemed relevant as a function of the three sustainability pillars are incorporated in a

hierarchical network. When the identification and arrangement of the strategically relevant

sustainability aspects is completed, specific indicators, targets, and measures must be

defined by management to “control and steer corporate performance towards long-term

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success and the achievement of strong corporate contributions of sustainability” (Figge et

al., 2002b, p. 25). Such potential means of operationalization of SDIs, targets, and measures

have already been developed in this research, an overview of which is found in Table 18.

Additionally, potentially relevant SDI categories have been recommended in the four

respective scorecard perspectives. The process of selection from the recommended SDIs and

the corresponding decisions are, however, up to top management, as only high-level

decision-makers at the case company know exactly how many of the proposed measures

they are willing to and capable of tracking under the umbrella of corporate sustainability

performance measurement.

Figure 16, based on the framework developed by Figge et al. (2002b, p. 25), illustrates the

strategy map of PalletBiz. To reach a radical increase in G-PAT of 1552%, the company

wishes to increase CAGR from 28% to 61%, as well as ROE from 18% to 32%. These

objectives are ought to be achieved by increased market share through a significantly higher

rate of customer acquisition, which is expected to be driven by a unique go-to-market model

and value proposition based on a consultative approach and “one-call-for-all” solutions for

targeted IKAs. As the core of its market strategy PalletBiz focuses on sourcing, producing,

and trading durable, quality, and sustainable products that integrate the principles of 3Rs, as

well as facilitate a transition towards circularity. This is to be done all while bounded by a

framework that provides products and services accompanied by consulting as a complete set

of unique offerings with regards to packaging and handling materials. The ultimate goal is,

consequently, to formulate specific solutions for specific client needs covering all steps from

cost optimization through product portfolio development to stock management under the

umbrella of responsible production and consumption as a “one-call-for-all”, primarily for

large IKAs. Besides the above-described market development objectives PalletBiz targets to

build up and ultimately to commercialize an environmentally friendly and socially

responsible image as well. To reach the desired targets, driving up product efficiency and

production rates from waste whilst downsizing production costs is one central objective of

the process perspective (which is simultaneously contributing to reaching the target ROE in

the financial perspective). The corresponding objective of optimizing production processes

shall be achieved through quality control of procurement and sourcing, as well as

significantly higher rates or energy and material efficiency. The quality control shall be

enforced via the acquisition of a comprehensive certification mix of all relevant industrial

certificates, including, but not limited to, ISO (9001, 14001, 45001), FSC, and PEFC for all

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franchise entities in the PalletBiz Group. Ensuring that the company works exclusively with

certified suppliers is a must as well. Such certificates would attain that PalletBiz and its

supply chain (including suppliers, harvesters, sawmills, and traders) are successfully

performing at third-party audits on a regular basis, as well as that they are a certified and

verified producer and trader of wooden materials; hence, are adhering to and are financially

committed to higher level environmental and social considerations. As mentioned above,

PalletBiz has identified a sustainable and responsible image as a core strategic element in

the customer perspective. This target will only be achieved if the company can prove that

both its in-house operations and its supply chain are working only with certified wood to

take a stance against illegal cuttings and deforestation. The other core objective in the

internal process perspective is upscaling network operation and development, as that is

regarded a key element for the extension of customer acquisition and increased market share;

as well as for the establishment of a sustainable corporate image through contributing to

regional developments and job creation via new (and existing) operations. In principle,

PalletBiz believes that a fundamental driving force with regards to a successful

implementation of the outlined strategy are motivated, qualified, and satisfied employees.

High levels of workforce retention and satisfaction shall be achieved by proper, attentive,

lawful, and fair human resource governance, as well as by an overall healthy and safe work

environment.

Ultimately, the identified factors in the four perspectives are interrelated with social claims

of various stakeholder groups, including suppliers, customers, industrial associations, and

NGOs in connection with the above-described aspects. Suppliers wish to uphold successful

and lasting business relations, for which they must be industrially certified in return.

Customers require the presence of legal and sustainable operations in order to contractually

engage with the company, as well as to maintain business relations. Local communities

expect the preservation and respect of their areas of living, as well as their indigenous rights,

thus, the business operations shall not give reason for any related concerns. Industrial

associations demand compliance with their issued quality standards, and NGOs force

PalletBiz to respect and comply with forest, environmental, and social regulations.

As outlined in the corporate sustainability strategy of PalletBiz (Appendix C1), the

company’s plans and agenda are deeply rooted in the 17 UN SDGs, out of which seven have

been chosen by top management with direct relevance to the operations of the enterprise.

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The selected SDGs are the following:

- Gender equality (SDG 5)

- Decent work and economic growth (SDG 8)

- Industry, innovation, and infrastructure (SDG 9)

- Reduced inequalities (SDG 10)

- Responsible consumption and production (SDG 12)

- Life on land (SDG 15)

- Partnership for the goals (SDG 17).

These selected SDGs have been incorporated into the strategy map to demonstrate which

specific goal is linked to which of the perspectives, as well as to show how a connection to

the respective elements of the perspectives can be established. The financial perspective is

connected to SDG 8 due to focusing primarily on economic growth measured in monetary

terms. The customer perspective is linked to SDGs 8, 10, 12, 15, and 17, as it simultaneously

considers the aspects of acquiring financial growth and expanded business coverage;

sustainability principles getting integrated into human resource and social engagement

policies; operational frameworks that promote sustainability in terms of production,

sourcing, and trade; the preservation of the environment and biodiversity in affected areas;

and regional and international collaborations and knowledge-sharing through business

relationships, respectively. The internal process perspective is connected to SDGs 8, 9, 12,

15, and 17, considering the aspects outlined in the customer perspective, with the addition

of SDG 9. This goal is particularly important in the context of PalletBiz and its ever-growing

franchise network, accounting for various types of already executed and planned investments

(such as regional co-investments, FDIs, funding, and grants) to establish a balanced set of

operational footprints that has affiliations both in developed and developing regions. The

learning and growth perspective is linked to SDGs 5, 8, 10, and 17. The promotion of gender

equality and equal pay is significant, especially in an industry that is currently highly male-

dominated. Consequently, major efforts must go into transforming the status quo through

investments in resources that facilitate the empowerment and higher rates of employment of

women within the company in a wide range of positions. SDG 10 complements the aspect

of gender equality through an overall inclusion process in terms of age, race, educational

background, and (dis)ability internally, while also considering external stakeholders within

local communities of affected areas. Under the corporate umbrella all seven of the selected

SDGs shall come together to form a strategic and action-based framework that helps define

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the next steps and measures while in alignment with the overarching corporate sustainability

strategy map and its outlined perspectives and embedded elements.

In summary, the strategy map of PalletBiz visualizes the SBSC as an integrative framework

of strategically relevant environmental, social and “conventional” aspects, success factors,

and drivers with relations to the market perspectives (Figge et al., 2002b). The formulation

process was done by incorporating environmental and social aspects of PalletBiz into a BSC

after they had been attributed with strategic relevance. Those of non-strategic relevance

(hygienic factors) were excluded from the SBSC, however, “a deduced scorecard for the

environmental and social management department as a shared service unit can be

formulated” as a next step towards a higher level of corporate sustainability within PalletBiz

(Figge et al., 2002b, p. 26).

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Figure 16. Strategy map of PalletBiz


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6. Discussion

6.1. Evaluation and Assessment In this research it was targeted to find answers to how SMEs can develop and apply a

strategic framework for corporate sustainability management and performance measurement

in the industrial packaging sector. The overall objective was to collect and generate data and

information via the utilization of an integrated research strategy comprising various research

methods.

As a first step, sustainability challenges and drivers were identified in the industrial

packaging sector through literature reviews and expert interviews. Exploring the challenges

and drivers facilitated setting up the research from a practical point of view, as the

identification of sustainability issues within the studied industry presupposed that reflective

measures and actions were needed as well, both from the industry as a whole and its

individual players. By mapping out the sustainability challenges perceived in the industry,

therefore, the potential formulation and application of the SBSC as a SPMS was validated,

considering that it had been priorly established via literature that the reflective actions would

need to be framed and developed in a structured and strategic way. Evidently, the SBSC is

a strategic value-based tool that can support corporate management in decision-making

processes. Consequently, a direct link was outlined between the perceived sustainability

challenges in the studied industry and the urgency for organized corporate agendas and

strategies with concrete and reflective actions, with the SBSC appointed as a potential

instrument that could bridge these considerations.

As a second step, SDIs were identified for the industrial packaging sector to analytically

frame and measure sustainability performance in corporations. This phase was carried out

through literature reviews, expert interviews, and sustainability report analysis in order to

compose a comprehensive and multifaceted information base comprising various aspects

and perspectives. This part of the study entailed theoretical and practical research as well via

the selected methods and resulted in an analytical framework of potential SDIs and varying

means of operationalization that could be later integrated into the SBSC as a SPMS in the

industrial packaging sector. The findings that were produced in this part of the research were

novel in a way that the generated analytical framework was based on multiple sources of

information. This allowed for developing a comprehensive set of SDIs containing both

generic aspects and performance measures that could be applicable to any industrial

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organization, as well as unique indicators that were reportedly specific only to the industrial

packaging industry. Following an assessment routine by Lambrechts et al. (2019), it can be

stated that the internal validity in this part of the research was ensured by basing the

identified SDIs and their potential means of operationalization in the developed analytical

framework on existing literature. Consequently, most SDIs and their operationalization were

derived from at least two sources – scientific literature and/or industrial experts, and/or SRs.

As for external validity (which regards to the generalizability of the results (Lambrechts et

al., 2019)), it was partially supported by studying and analysing SDIs and in-place SPMSs

in 12 SRs of real and verified companies in the packaging sector from various points of the

world. Nevertheless, external validity is restricted only to the domain of the (industrial)

packaging sector, considering that “organizations from different industries exhibit

differences in what material sustainability indicators are” (Lambrechts et al., 2019, p. 6).

As a third step, a SBSC was formulated and applied in the industrial packaging sector

through the conduction of a CSA. The utilization of the SBSC as a SPMS was a justified

mean to connect the dots between the previously identified sustainability challenges and the

need for sustainable strategic management in corporations, considering that the “SBSC is

used to translate a verbally formulated strategy into operational terms”, while providing a

“strong tool for an integrated and value-based sustainability management” (Figge et al.,

2002b, p. 27). As the SBSC can be interpreted as an instrument of SPMS, it provided an

appropriate and relevant conceptual framework into which the previously identified SDIs

could be loaded to create a proper structure for corporate sustainability performance

measurement. By employing the method of CSA, the SBSC could be formulated and applied

via a practice-based approach through a real business case. This enabled the researcher to

discuss the studied matters within an actual corporate setting through concrete strategies,

decisions, and agendas, thereby lifting the research from theoretical realms and transitioning

it towards real-life scenarios. Subsequently, this part of the research resulted in a SBSC that

was built around previously identified sustainability challenges within the industrial

packaging sector as a reflective strategic mechanism, while comprising a selected set of

suggested SDIs as well. The findings of the study are novel in a way that the SBSC was

formulated for a selected single organization in the industrial packaging sector, thus

containing unique traits specific to the business case – which is, reportedly, standard practice

with regards to SBSCs. However, the process of formulating and applying the SBSC was

explicitly elaborated along the steps as suggested by literature; therefore, this research can

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potentially be used by other SMEs in the industrial packaging sector as a benchmark to create

their own, business-specific SBSCs. The SBSC constructed in this study contains various

aspects that are specific to the industry as a whole; thus, it is justifiably an appropriate and

relevant steppingstone for other similar organizations to develop their own scorecards or

comparable SPMSs.

6.2. Recommendations The scope of this research comprised corporate sustainability, sustainable strategic

management, and SPMSs within the domain of the industrial packaging sector. As a result,

an analytical framework of potential SDIs, as well as a SBSC as a strategic instrument within

the body of SPMSs were developed in response to identified sustainability challenges and

drivers perceived in the industrial packaging sector.

Drawing on the findings and observations of this study, as well as on the research processes

and methods that preceded and ultimately led to the results, certain recommendations can be

formulated for the industrial packaging sector at large. These recommendations serve a

multi-tiered role; more specifically, they

a) help translate corporate sustainability and sustainable strategic management into

practical terms,

b) facilitate identifying measures that might contribute to rolling out sustainable

development on an industrial scale, and

c) map out good practices that should be taken into consideration by SMEs in the

industrial packaging sector in terms of strategic sustainability performance

management.

6.2.1. Processes to Upscale Corporate Sustainability in the Industrial Packaging Sector

The analysis of multi-source literature and research material, as well as the generation of

observations and findings have enabled the collection of a set of general processes and

measures that can potentially benefit the industrial packaging industry as a whole in terms

of integrating the principles of sustainability into corporate operations.

The participation in industrial certification schemes, standards, and associations (such as

ISO, FSC, PEFC, EPAL, UIC, IPPC, etc.) is highly recommended for any packaging

company. Organizations with such certificates and memberships are projected to commit to

sustainable development on a deeper and strategic level, while they are also attributed with

a corporate image by external stakeholders that signals engagements towards environmental

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protection and the bearing of social responsibilities without the negative connotation of

greenwashing. Such schemes and standards enhance sustainability performance

management on a continuous basis as a result of re-occurring external audits, while also

embracing corporations to integrate SPMSs into their own management systems, too. Even

though these industrial schemes can contribute greatly to upscaling corporate sustainability

by requesting performance reporting and compliance with certain standards, they are not

legally binding, and non-compliance does not lead to any consequence besides the loss of

the certificate in the worst case. Therefore, the industry as a whole must come together in

demanding better legislation from more sustainability-centred governmental bodies that not

only reward good behaviour in terms of corporate sustainability, but actually punish bad and

harmful behaviour and acts of non-compliance with regulations in environmental and social

domains.

The utilization and commercialization of the 3Rs is another noteworthy process to be

integrated in SMEs within the sector. The ultimate goal for any business is to remain

profitable, and the concept of sustainability can and should drive commercial objectives as

well. Introducing products, services, and business models under the umbrella of circularity

is very much needed, while it can also enhance interindustry collaborations through

recycling depots or pooling systems.

Sustainability both as a general principle and business venture must be incorporated into

managerial levels of organizations. After all, top managers are the ones allocating human

and financial resources to appointed areas, and they oversee managing and tracking

performance. It is in their interest to develop scorecards and performance measurement

systems that not only facilitate daily operations but enable strategical planning for the future

as well. Process optimization in general, as well as proper risk management and aversion

strategies are recommended measures in this regard, too.

Overall, the principle of responsible production and consumption should be the bounding

force in any organization, which can be broken down into further specific measures, such as

comprehensive supplier assessment to ensure exclusivity in terms of working with verified

sources only; or conducting impact assessments and life-cycle assessments to acquire a

better understanding of the overall effects of the value chain in a sustainability context.

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6.2.2. Good Practices

As outlined above, this section offers good practices regarding strategic sustainability

performance management as well. In terms of identifying and mapping out SDIs that can

later be integrated into a SBSC, the recommendations as follows could be considered.

According to Searcy et al. (2006), nine key steps should be followed in order to keep track

and guide the evolution of a SPMS that comprises SDIs: (1) confirm usefulness of indicators;

(2) determine level of assessment; (3) conduct assessment; (4) evaluate findings; (5)

communicate findings; (6) develop integration plan; (7) integrate findings; (8) monitor

system; and (9) review and improve (Searcy, 2012, p. 246). Figge et al. (2002b) estimate the

number of selected SDIs that is presumably still properly and adequately manageable and

trackable at 15-25 items. This research delineated a final portfolio of 10 environmental, 9

economic, and 14 social SDIs for the potential use in a SBSC, as showcased in Table 18.

Out of this total tally of 33 SDIs, 28 were recommended to be integrated into the SBSC of

the selected business case based on relevance and importance. As it is discussed in Section

6.3., it is possible that too many sustainability performance indicators were disclosed to track

and measure on a continuous basis; nevertheless it is also important to highlight that this

selection is only of suggestive or guiding nature, the final list of measurements must be

decided by management. It is, however, a useful practice about which SMEs shall know –

the decision-maker body of any organization must be supplied with relevant options and

tracks in order to make the most fitting choice that will yield in the most benefits for the

company.

As for formulating and applying the SBSC, SMEs must have a corporate strategy prepared,

however, it does not necessarily have to contain a sustainability-specific agenda. Some form

of a strategy is nevertheless required, as the SBSC should be based on and aligned to the

overarching corporate mission and vision. As a following step, the phases of formulation

outlined in Section 5.3. are highly recommended to use as guidance. This research has been

based on scientific and evidence-based literature, consequently, the design of the SBSC

follows a peer-reviewed approach as well. This is not to say that academic literature and

existing research material is always flawless, on the contrary – even peer-reviewed works

must be viewed and applied with caution. Regardless, academic literature and this research

as well can be utilized as a steppingstone for the better understanding of the theoretical

domain of sustainable strategic management in a corporate setting, based on which practical

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next steps can be extracted and determined to cater for the specific needs and agenda of a

specific organization.

6.3. Critical reflection It has been comprehensively illustrated in what aspects and extents this research

demonstrates merit and value throughout the paper. Nevertheless, a critical reflection on the

contents, methodology, and overall scope is indispensable – these are hereby outlined as

follows.

First of all, critical reflection must be exercised in terms of the selected theoretical and

conceptual framework, which overarchingly comprises sustainability performance

measurement and management within corporate domains. Azapagic & Perdan (2000)

explicitly summarize one of the most critical aspects of SPMSs that is applicable to this

research as well:

“The main purpose of the indicators of sustainable development is to provide information to decision-

makers on the overall level of sustainability of a system. (…). However, given the number of

indicators that need to be considered and the number of decision-makers or stakeholders that can

potentially be involved in the decision-making process, the problem of identifying the best options in

a given situation is not trivial, (…) and is known as multiobjective decision-making” (p. 254).

It has been implied at earlier points of this paper that the selected SDIs for the consideration

of a SBSC might be too many in volume and cover too broad of a scope. Even though the

developed analytical framework of SDIs was only meant to provide support and guidance

for eventual decision-makers to determine the final portfolio that would be later tracked and

measured, it is acknowledged that the framework might be overwhelming to work with in

terms of depth and extent. It is also recognized that such multiobjective decision-making

might require various stakeholders and other types of resources to progress towards

sustainability, which is not necessarily available at any organization. Furthermore,

considering that the framework of SDIs was developed and applied as part of a single-case

study, caution must be exercised in utilizing it within other contexts and domains. Evidence

has been disclosed to demonstrate that certain parts and aspects of the formulated SBSC

could potentially be applicable within the industrial packaging sector. However, if and when

used as a benchmark at another specific business case, the unique features and strategies of

the particular organization must be considered and incorporated into the scorecard as well.

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As an additional critique in the context of SPMS, the remarks by Searcy (2012) are

recognized to hold relevance to this research as well: “Beyond the design of a corporate

SPMS, two key challenges are ensuring that it is integrated into mainstream business

processes and that it is actually used as a part of corporate decision-making processes” (p.

244). This implies that even if a SBSC is formulated as a SPMS at any given company, how

and to what extent it is utilized, as well as to what extent the concept of sustainability is

actually enforced within business operations is completely dependent on the management.

This aspect is particularly noteworthy in this study, considering that the CSA employed a

real business case with direct connections to the researcher. It has been expressed by the case

company that the contributions of this research are of high relevance, and that corresponding

and reflective actions would be taken to transition towards the next level of corporate

sustainability. Nevertheless, the question remains whether and to what extent this study has

contributed to improved management of sustainability performance measurement both

within the studied company and the industrial packaging sector in quantifiable terms.

However, only time and constant monitoring of the actual actions and decisions will tell

whether this research has had any meaningful and long-lasting impact either directly or

indirectly.

Apart from reflecting on the overall research framework of the study, the conceptual research

design must be examined as well. Upon defining the scope and research questions, a key

assumption was made in terms of the SBSC being an instrument that is worth integrating

into corporate strategies and decision-making processes. Even though evidence was

delineated throughout the study to demonstrate the advantages of applying the SBSC as a

value-based tool in sustainable strategic management, it must be recognized that the

formulation and application of a SBSC via a case study was a pre-determined choice. The

researcher wished to use the SBSC already at the design phase of the research and then

provided academic proof of its benefits during the study, and not vice versa, which might

have opened some doors to bias, and can be, therefore, justifiably criticized if prompted.

Similar concerns can be raised with regards to the correlation between the central topic of

corporate sustainability in the industrial packaging sector and the selected research method

of CSA applied in the study. The scope of the research was determined because the

researcher already had an organization in mind for the case study, not vice versa. The

researcher had been employed at the case company for years before the study and thus had

established a close relationship with the organization, the result of which was the decision

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to develop the research on the company and its industry within the context of corporate

sustainability management and performance measurement. The SBSC was in fact a measure

in which top management at the case company expressed interest, enabling the researcher to

gather information and stakeholders from a real business scenario that was needed for the

implementation of the study. However, that was the extent of the organization’s involvement

in the research – all contents disclosed in the paper are the result of the researcher’s

individual work.

6.4. Limitations The critical reflections on the study outlined above indicate that the direct practical impact

and overall merits of the research cannot be tested or measured at this moment. Time, future

actions, decisions, and an actual practical implementation of the findings can, however,

potentially signal the generated value, as well as the extents of it. It must be noted, however,

that the distribution and rolling out of the research to other contexts is not determined in this

paper.

Principally it is recognized and acknowledged that the exercise around corporate SPMSs

should not be a one-time event or a static scheme (Searcy, 2012), but a continuous project

where sustainability experts and managers keep monitoring and improving the developed

framework in order to be as relevant to and reflective of the actual business operations as

possible. In practice, this means that “the continued relevance of the indicators must

periodically be confirmed, obsolete measures should be deleted, and new indicators should

be created to address changing requirements” (Searcy et al., 2006, p. 401). However, this

current research has no means of controlling the aftermath of the study, or to address the

entire life-cycle of the developed framework, thereby its long-term impacts might be seen as

controversial.

In terms of overall methodology, 10 participants were included in the expert interviews, and

12 SRs were assessed during the sustainability report analysis. While these sources provided

a comprehensive information base for the formulation of the results, the findings are pending

verification by larger expert and company samples.

6.5. Outlook and future research The scope of this research was narrowed specifically to the context of corporate

sustainability management and performance measurement within the domain of the

industrial packaging sector. As a potential instrument to enhance sustainable strategic

118

management in a selected company via the practical implementation of a SPMS, the SBSC

was selected.

With regards to the contents of this paper, the following topics could be further explored:

- The practical implementation of the formulated SBSC by metricising and tracking

the determined SDIs to translate the framework into actual numbers via the same

business case.

- The investigation of the long-term implications and impacts of the study.

- The practical implementation of a SPMS with a different strategic instrument than

the SBSC via a real business case in the industrial packaging sector.

- The investigation of corporate sustainability management and performance

measurement within the domain of a similarly understudied sector.

- The future of sustainable packaging in terms of strategic corporate sustainability.

119

7. Conclusion The research was developed within the scope of sustainable strategic management and

corporate SPMSs within the domain of the industrial packaging sector. Subsequently, the

process of integration and implementation of corporate sustainability was depicted via a real

business case with the overarching aim of finding answers to how SMEs can develop and

apply a strategic framework for corporate sustainability management and performance

measurement in the studied industry. The research entailed the investigation of means of

identifying the most relevant sustainability challenges and of developing reflective solutions

within packaging companies. As a result, an analytical framework of SDIs was constructed

that was specific to the industrial packaging sector. Furthermore, a SBSC was formulated

and applied to a real business case to demonstrate practical utilization of the strategic

management tool.

An integrated research framework and strategy was employed during the research,

comprising the methods of expert interviews, sustainability report analysis, and CSA. The

combined research methods produced the findings of perceived sustainability challenges in

the packaging industry, as well as mapped out reflective actions and measures which were

concurrent with the identified analytic portfolio of SDIs. Building on the subsequent results

of the research, a SBSC was formulated and applied by using a single-case study in the

industrial packaging sector. Drawing on the observations and findings of the research,

recommendations for the sector at large were disclosed to initiate momentum in a

sustainability context.

By exploring the outlined area of research, the author contributed to academic research with

regards to sustainable strategic management and performance measurement. Furthermore,

the researcher generated practical knowledge concerning the integration of corporate

sustainability in the industrial packaging sector via a practice-based approach that facilitated

achieving results that can potentially be replicated in some shape or form in other, real-life

business scenarios as well.

120

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133

Appendices

Appendix A. Supplementary Information Regarding Expert Interviews

Appendix A1. Interview Guide for Internal Participants

Introduction of the interview

1. Introduction of researcher and thesis topic. 2. Explanation of the purpose of the research. 3. Explanation of the purpose, structure, and length of the interview.

Background information and demographics

1. What is your date of birth? 2. What is your gender? 3. Where were you born? 4. What would you say the highest level of education is that you have completed?

Association with company

1. What is your job title and what is your field of expertise? 2. Where is your current location of work? 3. When did you start working at the company? 4. How would you describe your function and your main responsibilities?

General assessment of knowledge on sustainability

1. Can you connect some parts of your education to sustainability? 2. In what ways can you connect your past or current work experience to sustainability? 3. What do you think the general, public concerns regarding sustainable development are?

Personal perceptions and understandings of sustainability

1. How does sustainability materialize in your personal life? 2. In your own words, how would you define sustainable development? 3. Has anything caused you to change your views on sustainability in any way?

Sustainability in the industrial packaging sector

1. What aspects or factors in your opinion indicate if a business that operates in the packaging industry is sustainable?

2. What do you think makes a packaging company unsustainable? 3. What do you think the top reasons are for a packaging company to pursue sustainability

initiatives? 4. What do you think the common processes in the packaging industry are to ensure

companies are committed to sustainability? 5. What sustainability problems or challenges do you think the packaging industry creates? 6. What do you think the most critical sustainability concerns and drivers are within the

packaging industry? 7. Do you know of any sustainability performance indicators that are currently applied in

the packaging industry? 8. What do you think the most relevant environmental aspects are that critically influence

a packaging company’s success? 9. What do you think the most relevant social aspects are that critically influence a

packaging company’s success?

134

10. What do you think the most critical sustainability factors are that packaging companies would definitely need to measure and monitor?

11. Which sustainability indicators do you think are most relevant for the packaging industry in terms of environmental performance measurement?

12. Which sustainability indicators do you think are most relevant for the packaging industry in terms of social performance measurement?

13. Which sustainability indicators do you think are most relevant for the packaging industry in terms of economic performance measurement?

Sustainability in corporations and PalletBiz

1. What is the company’s current approach to sustainability? 2. How would you characterize the sustainability objectives of the company? 3. What sustainability aspects do you think your top management and owners focus on? 4. What sustainability aspects do you think your employees / fellow co-workers focus on? 5. What sustainability aspects do you think your external stakeholders, such as suppliers

and customers focus on? 6. What sustainability indicators would you personally like to have constantly measured

and monitored as a board member / manager / staff member? 7. Has your company ever faced pressure on sustainability from its stakeholders, such as

customers, clients or partners? 8. If the company wanted to innovate its business with regards to sustainability, what

aspects do you think it should consider? 9. Do you know of any sustainability measures your competitors are applying to their

operations? 10. Which of the standard operating procedures of the company do you think has the most

environmental impact? 11. Which of the standard operating procedures of the company do you think has the most

social impact?

Closing questions

1. From your perspective, what are the most critical sustainable development factors both the packaging industry and your company should immediately deal with?

2. Is there anything else you would like to mention that you think may be of importance?

Closing remarks

1. Explanation of what will happen with the collected data. 2. Participant is asked if they could be later contacted for further questions, if any. 3. Participant is asked if they would like to review the thesis before submission. 4. Participant is thanked for their participation.

135

Appendix A2. Interview Guide for External Participants

Introduction of the interview

1. Introduction of researcher and thesis topic. 2. Explanation of the purpose of the research. 3. Explanation of the purpose, structure, and length of the interview.

Background information

1. What is your job title and what is your field of expertise? 2. Where is your current location of work? 3. When did you start working at your company? 4. How would you describe your function and your main responsibilities?

General assessment of knowledge on sustainability

1. In what ways can you connect your past or current work experience to sustainability? 2. In what ways can you connect your expertise to sustainability? 3. What do you think the general, public concerns regarding sustainable development are?

Corporate sustainability in the industrial packaging sector

1. What aspects or factors in your opinion indicate if a business that operates in the packaging industry is sustainable?

2. What do you think makes a packaging company unsustainable? 3. What do you think the top reasons are for a packaging company to pursue sustainability

initiatives? 4. In your experience what are the most common corporate sustainability objectives in the

industrial packaging sector? 5. What do you think the key factors are to achieve a sustainable business model in the

packaging industry? 6. What do you think the common processes in the packaging industry are to ensure

companies are committed to sustainability? 7. What sustainability problems or challenges do you think the packaging industry creates? 8. What do you think the most critical sustainability concerns and drivers are within the

packaging industry? 9. Do you know of any sustainability performance indicators that are currently applied in

the packaging industry? 10. What do you think the most relevant environmental aspects are that critically influence

a packaging company’s success? 11. What do you think the most relevant social aspects are that critically influence a

packaging company’s success? 12. Which sustainability indicators do you think are most relevant for the packaging

industry in terms of environmental performance measurement? 13. Which sustainability indicators do you think are most relevant for the packaging

industry in terms of social performance measurement? 14. Which sustainability indicators do you think are most relevant for the packaging

industry in terms of economic performance measurement? 15. What sustainability aspects do you think top management and owners generally focus

on? 16. What sustainability aspects do you think employees and staff generally focus on? 17. What sustainability aspects do you think external stakeholders, such as suppliers and

customers generally focus on?

136

18. Do packaging companies commonly face pressure on sustainability from their stakeholders, such as customers, clients, or partners?

19. If a packaging company wanted to innovate its business with regards to sustainability, what aspects do you think it should consider?

20. Which of the standard operating procedures has commonly the most environmental impact in the packaging industry?

21. Which of the standard operating procedures has commonly the most social impact in the packaging industry?

Closing questions

1. From your perspective what do you think the most critical sustainability factors are that packaging companies would definitely need to measure and monitor?

2. Is there anything else you would like to mention that you think may be of importance?

Closing remarks

1. Explanation of what will happen with the collected data. 2. Participant is asked if they could be later contacted for further questions, if any. 3. Participant is asked if they would like to review the thesis before submission. 4. Participant is thanked for their participation.

137

Appendix A3. Aggregated Results of Indicators Obtained Through Expert Interviews Sustainability Indicator Operationalization

Environmental Waste management Rate of production from packaging waste Rate of packaging buyback, recycling and reusing Rate of waste reduction Amount of wooden / cardboard waste generated Amount of plastic waste generated Number of depots in network with repair / recycling services Production optimization Number of policies, standards, and/or certification schemes on production Production efficiency via output Production efficiency via machines Production efficiency via workers Capacity of sawmills Rate of stock optimization Materials management Resource efficiency Resource consumption Rate of sustainably sourced raw materials Rate of biodegradable materials Energy management Energy efficiency Energy consumption and rate of reduction Product efficiency Number of cycles in usage per product Participation in collection and pooling systems Rate of purpose fulfilment Procurement and sourcing Supplier assessment Number of policies, standards, and/or certification schemes on production Biodiversity and environment GHG emissions Re-harvested vegetation Compliance Legality of operations Number of audits via certification schemes

Economic Product efficiency Number of repairing and reusing a product per customer Economic performance Economic value generated and distributed Value / savings generated through repairing, reusing and reselling products Value generated through sustainable actions Value distributed locally Taxes paid locally Market share Clients won by sustainability agenda Investments Value invested in sustainable innovations Value invested in employees Value invested in society Value invested in environmental protection Value invested in network expansion Local value generation Local hiring Local purchasing Competition Prohibition of dumping prices, monopolies, and trusts Interindustry collaboration Purchasing and partnerships Value spent on sustainable sources / suppliers Protective policies Compliance Number of policies, standards, and/or certification schemes on sales

Social Local community Sponsorships, empowerment programs Education programs Financial contributions Non-financial contributions Protective policies Health and safety Working conditions Trainings Employees Financial security Rate of employee turnover Human resources allocated to sustainability Labour laws Freedom of association and bargaining Child labour Forced and illegal labour and exploitation Protective policies Human rights Diversity Non-discrimination and equality Female participation and leadership Human resource development Training programs Employee engagement and satisfaction Product safety and quality Fulfilment of product purpose Participation in quality standards Participation in product standards Customer satisfaction Fulfilment of product purpose Compliance Code of conduct Number of audits via certification schemes

138

Appendix B. Supplementary Information Regarding Sustainability Report

Analysis

Appendix B1. Indicators Identified Through Sustainability Report Analysis Table B1.1. Sustainable development indicators reported at ALPLA

Sustainability Indicator Areas of focus Operationalization Mentioned in

SR – reference Environmental

Materials Materials management, recycling, circular economy

- Materials used by weight or volume (total material consumption)

- Recycled input materials used (ratio of recycled materials for production)

p. 17-21

Energy Production efficiency, renewables in energy mix

- Energy consumption within the organization (total electrical energy consumption)

- Energy intensity

p. 14-17

Emissions CO2 and other GHG emissions, emission intensity - GHG emissions intensity p. 16-17 Environmental compliance

Adherence to environmental legislation and regulations

- Non-compliance with environmental laws and regulations p. 12

Economic


Market and innovation leadership, rate of (sustainable) economic growth, revenue generated by innovations

- Direct economic value generated and distributed p. 30, 32

Market presence Regional economic player (through growth in selected regions)

- Proportion of senior management hired from the local community p. 30, 32

Anti-competitive behaviour Adherence to antitrust laws

- Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

p. 12

Social


Employment Fair employment - New employee hires and employee turnover p. 11, 24

Health and safety Prevention of work accidents and illness, safe & hygienic labour conditions, strict observance of safety regulations based on OHSAS 18001 standard

- Types of injury and rates of injury, occupational diseases, lost days and absenteeism, number of work-related fatalities

p. 12, 25-26


Qualification programs & professional development, teaching centres

- Average hours of training per year per employee

- Programs for upgrading employee skills and transition assistance programs

p. 27


Breakdown of employees by gender, disabilities, region

- Diversity of governance bodies and employees p. 24

Human rights Non-discrimination

Prohibition of any form of discrimination and sexual harassment

- Incidents of discrimination and corrective actions taken p. 12

Child labour Prohibition of child labour - Operations and suppliers at significant risk for incidents of child labour p. 12

Society

Local communities

Provision of apprenticeships Financial anti-littering collaborations to combat plastic waste and pollution

- Operations with local community engagement, impact assessments, and development programs

p. 22, 28

Compliance

Adherence to business ethics (ETI Base Code) and legal compliance, and to Code of Conduct External scrutiny through independent audits (SMETA, EcoVadis)

- Non-compliance with laws and regulation in the social and economic area p. 12, 25


Customer health and safety Adherence to customer health and safety

- Incidents of non-compliance concerning the health and safety impacts of products and services

p. 30

Marketing and labelling Adherence to proper marketing and labelling customs

- Incidents of non-compliance concerning product and service information and labelling

- Incidents of non-compliance concerning marketing communications

p. 30

Customer privacy and satisfaction Data security

- Substantiated complaints regarding breaches of customer privacy and losses of customer data

p. 30

139

Table B1.2. Sustainable development indicators reported at BillerudKorsnäs

Sustainability Indicator Areas of focus Operationalization Mentioned in


Materials Production from renewable and bio-based materials, total material consumption, resource efficiency - Materials used by weight or volume p. 36-37, 40,

124

Energy Total energy consumption, share of renewables - Energy consumption within the organization - Energy intensity

p. 36, 40, 48, 124

Water Emissions to water, water usage - Water withdrawal by source - Water recycled and reused p. 48, 124

Biodiversity Biodiversity index

- Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

p. 42, 125

Emissions Total GHG emissions along the value chain

- GHG emissions - Energy indirect GHG emissions - Other indirect GHG emissions - GHG emissions intensity - Nitrogen oxides, sulphur oxides, and other

significant air emissions

p. 36, 48, 124-125

Waste and effluents

Enabling circular economy based on renewable and recycled raw materials, generated waste

- Water discharge by quality and destination - Waste by type and disposal method

p. 38, 40, 48, 58, 78, 124


Adherence to environmental policies, quality and environmental certifications based on ISO 9001 and ISO 14001

- Non-compliance with environmental laws and regulations

p. 48, 51, 78, 124


Demands for suppliers, planners and wood buyers through extensive supplier assessment and follow-ups, partnership with FSC or PEFC-certified forest owners

- New suppliers that were screened using environmental criteria p. 40, 42-44

Economic Economic performance

Revenue generated by innovations and product development, economic value generated

- Direct economic value generated and distributed p. 38, 125

Anti-corruption Adherence to anti-corruption regulations, zero tolerance to money laundering

- Confirmed incidents of corruption and actions taken p. 44, 49-51

Anti-competitive behaviour Adherence to competition laws - Legal actions for anti-competitive

behaviour, antitrust and monopoly practices p. 49, 51

Social


Health and safety

Safe work environment based on health & safety procedures, training on ensuring safe work environment, prevention of accidents and near-misses

- Workers representation in formal joint management-worker health and safety committees

- Types of injury and rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities

p. 39, 126


Adherence to Sustainable Leadership program, talent management program

- Percentage of employees receiving regular performance and career development reviews

p. 45, 126


Breakdown of employees by gender, gender diversity in management, region, age, position

- Diversity of governance bodies and employees

- Ratio of basic salary and remuneration of women to men

p. 45, 70-73, 126-127


Prohibition of any form of harassment, abuse, and discrimination

- Incidents of discrimination and corrective actions taken p. 44, 51


Adherence to freedom of association - Operations and suppliers in which the right

to freedom of association and collective bargaining may be at risk

p. 43-44, 51

Child labour Prohibition of child labour - Operations and suppliers at significant risk for incidents of child labour p. 43-44, 51

Forced and compulsory labour Prohibition of forced labour - Operations and suppliers at significant risk

for incidents of forced or compulsory labour p. 43-44, 51

Indigenous rights Prohibition of violating indigenous rights (incl. persons and land)

- Incidents of violations involving rights of indigenous peoples p. 49

Society

Local communities

Participation in research (Treesearch, Research Institutes of Sweden), collaborations for reaching climate targets Female empowerment for engineering professions and leadership Provision of traineeships Financial commitment to plastic-free oceans


- Operations with significant actual and potential negative impacts on local communities

p. 38-42, 47, 49, 78, 124-125

Supplier social assessment Social screening of suppliers

- New suppliers that were screened using social criteria (incl. labour practices, human rights)

p. 43-44

Compliance Adherence to local and national legislation, to Code of Conduct, to international sanctions on crimes against human rights from UN, EU, and OECD

- Non-compliance with laws and regulations in the social and economic area p. 49-51

140


Customer health and safety Adherence to health and safety of customers


p. 40, 51


Adherence to regulations on product information, labelling and marketing communication



p. 51

Customer privacy and satisfaction Customer surveys, data security

- Substantiated complaints concerning breaches of customer privacy and losses of customer data

p. 50-51

141

Table B1.3. Sustainable development indicators reported at DS Smith

Sustainability Indicator Area of focus Operationalization Mentioned in


Materials Production from recycled materials, total material consumption, circular economy

- Materials used by weight or volume - Recyclability of fibre packaging across the

industry - Materials managed by recycling vs materials

manufactured - Recycled (or chain of custody certified)

input materials used - Sites holding chain of custody certification

p. 13, 17

Energy Total energy consumption, energy efficiency - Energy consumption - Energy exported - Energy intensity

p. 21

Water Emissions to water, water consumption

- Water efficiency (percentage of paper mills performing at or below own benchmark)

- Water quality (number of non-conformances with consents to discharge)

- Water stress (percentage of water stressed sites with mitigation plans in place)

- Water consumption - Total water effluent - Discharge to water

p. 25

Biodiversity Sustainable forestry - Sites holding sustainable forest management certification p. 17

Emissions CO2 and GHG emissions - CO2 and GHG emissions p. 21 Waste and effluents

Enabling circular economy based on renewable, reusable, or recycled raw materials - Waste by type and disposal method p. 13, 27



- Non-compliance with environmental laws and regulations p. 21, 35


Compliance expected with own sustainability standards

- Percentage of critical and strategic suppliers that comply with own sustainability standards

- New suppliers that were screened using environmental criteria

p. 19

Economic

Market presence Diverse workforce - Proportion of senior management hired from the local community p. 33

Social


Health and safety Healthy and safe working conditions, prevention of accidents and near-misses

- Accident frequency rate (AFR) - Lost time accidents (LTAs) - Number of sites with zero LTAs

p. 29


Breakdown of employees by gender, gender diversity in management, region


- Gender pay gap p. 33, 39

Human rights Forced and compulsory labour

Prohibition of forced labour, adherence to anti-slavery and human trafficking policies

- Operations and suppliers at significant risk for incidents of forced or compulsory labour p. 35

Society

Local communities

Engagement in community programs, financial support & collaborations towards environmental protection and education


- Percentage of sites taking part in community activities

p. 31

Compliance Adherence to Code of Conduct, compliance with International Labour Organization, compliance with ethical business conduct

- Non-compliance with laws and regulation in the social and economic area p. 34, 39



Data security, compliance with Supplier Ethical Data Exchange


p. 40

142

Table B1.4. Sustainable development indicators reported at Graphic Packaging International



Materials Recycling & recovery of materials (paper and paperboard), wood-fibre reclaim

- Materials used by weight or volume - Recycled input materials used - Reclaimed products and their packaging

materials

p. 5, 30, 43

Energy Energy management, share of renewables in energy mix

- Energy consumption within the organization - Energy consumption outside of the

organization - Energy intensity - Reduction of energy consumption - Reductions in energy requirements of

products and services

p. 3, 5, 27, 44

Water Water conservation, water reuse

- Water withdrawal by source - Water sources significantly affected by

withdrawal of water - Water recycled and reused

p. 3, 5, 27-29, 45

Biodiversity Sustainable forestry, resource and conservation stewardship ethic, involvement in industrial associations


- Significant impacts of activities, products, and services on biodiversity

- Habitats protected or restored - IUCN Red List species and national

conservation list species with habitats in areas affected by operations

p. 3, 6, 21, 45

Emissions GHG emissions

- Direct GHG emissions - Energy indirect GHG emissions - Other indirect GHG emissions - GHG emissions intensity - Reduction of GHG emissions - Emissions of ozone depleting substances

(ODS) - Nitrogen oxides (NOX), sulphur oxides

(SOX), and other significant air emissions

p. 5, 24, 45-46

Waste and effluents Waste reduction & diversion

- Water discharge by quality and destination - Waste by type and disposal method - Significant spills - Transport of hazardous waste - Water bodies affected by water discharges

and/or runoff

p. 3, 6, 28, 31, 46



- Non-compliance with environmental laws and regulations p. 46


Requirements for suppliers as per own Supplier Sustainability Guideline


- Negative environmental impacts in the supply chain and actions taken

p. 19, 46

Economic

Market presence Promotion of supplier diversity - Proportion of suppliers from minority-,

veteran- and women-owned business enterprises

p. 19

Anti-corruption Prohibition of accepting improper payments to influence decision

- Confirmed incidents of corruption and actions taken p. 19

Social


Health and safety Safe working environment - Work-related incidents, injuries, and near-misses p. 6, 11


Breakdown of employees by gender, region, and remuneration type

- Diversity of governance bodies and employees p. 10, 12

Human rights Non-discrimination Promotion of inclusion - Incidents of discrimination and corrective

actions taken p. 12

Child labour Prevention of underage labour - Operations and suppliers at significant risk for incidents of child labour p. 19


Prevention of human trafficking and involuntary labour

- Operations and suppliers at significant risk for incidents of forced or compulsory labour p. 19

Society

Local communities

Community outreach and educational program on sustainable forestry and recycling, contributions to local food banks Provision of scholarships


p. 3, 14

Compliance Compliance with Social Compliance Sedex Mamber Ethical Trade Audit (SMETA)

- Non-compliance with laws and regulation in the social and economic area p. 6


Customer privacy and satisfaction Protection of confidential information


p. 19

143

Table B1.5. Sustainable development indicators reported at Intertape Polymer Group



Materials Resource efficiency, recycling - Percentage of reclaimed products and their

packaging materials for each product category

p. 2-3

Energy Energy performance management

- Amount of reductions in energy consumption achieved as a direct result of conservation and efficiency initiatives, and types of energy included in the reduction

p. 2

Social


Health and safety Safe operations

- Number and rate of work-related fatalities, types and rates of injury, lost days, and absenteeism

- Number and type of work-related illness

p. 2, 4

144

Table B1.6. Sustainable development indicators reported at IPACKCHEM



Materials Resource efficiency, reuse, and recycling pools


materials - Raw materials purchased that are recycled

materials - Resource efficiency

p. 12, 25-26, 31

Energy Energy management

- Energy consumption within the organization - Reduction of energy consumption - Production of renewable energy (solar,

wind, biomass) - Purchasing of renewable energy

p. 12, 19-21

Water Water management - Water withdrawal by source p. 12, 19-21

Biodiversity Commitment to biodiversity

- Operational sites owned, leased, managed in, or adjacent to, protected areas and areas if high biodiversity value outside protected areas

p. 22

Emissions GHG emissions along value chain - Reduction of GHG emissions p. 35 Waste and effluents Waste management - Waste by type and disposal method

- Transport of hazardous waste p. 19-21, 30-31

Environmental compliance Compliance with environmental law and conventions

- Monetary value of significant fines for non-compliance with laws and regulations

- ISO 14001, 45001, 9001 certified sites and countries

p. 16, 18, 31


Responsible sourcing - New suppliers that were screened using CSR criteria p. 12, 24

Economic


Financial stability, cash flow, profitability for investors

- Direct economic value generated and distributed

- Taxes paid locally p. 12, 32, 35

Procurement practices Responsible sourcing - Proportion of spending on local suppliers

(sales with regional deliveries) p. 12, 32

Anti-corruption Adherence to anti-trust laws, prohibition of bribery, corrupt business practices, and money laundering

- Operations assessed for risks related to corruption

- Communication and training about anti-corruption policies and procedures

- Compliance risk assessments performed - Managers trained in organization’s anti-

corruption policies and procedures - Employees having signed the Business

Ethics Programme - Incidents reported through the whistle-

blower procedure

p. 13-18

Anti-competitive behaviour Adherence to anti-competition laws


- Breaches of the Code of Ethics - Regulatory penalties related to business

ethics breaches

p. 18

Social


Employment Human capital management - New employee hires and employee turnover - Employees in management positions - Employees covered by social benefits

p. 27-29

Health and safety Healthy and safe work environment

- Plants with Health and Safety manager or health and safety committees

- Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

- Accident frequency rate - Lost time severity rate - Lost hours by safety accidents - Employees covered by a certified health and

safety management system - Lost time injury rate

p. 12, 27-29

Training and education Human capital and resource development



- Employees at risk with valid hazardous products training

p. 12, 27-29

Diversity and equal opportunity Promotion of diversity, breakdown of employees - Diversity of governance bodies and

employees p. 12, 27-29

145

Human rights Non-discrimination Respect of human rights, equal opportunities - Incidents of discrimination and corrective

actions taken p. 27-29


Provision of freedom of association - Operations and suppliers in which the right

to freedom of association and collective bargaining may be at risk

p. 27-29

Child labour Prohibition of child labour - Operations and suppliers at significant risk for incidents of child labour p. 13-18

Forced and compulsory labour Prohibition of slavery and human trafficking - Operations and suppliers at significant risk

for incidents of forced or compulsory labour p. 13-18

Human rights assessment Promotion of labour rights and human rights - Operations that have been subject to human

rights reviews or impact assessments p. 13-18

Society

Local communities Contributions to society


- Jobs generated

p. 12, 32

Public policy Political lobbying - Political contributions p. 13-18

Compliance Business ethics & compliance, corporate governance - Monetary value of significant fines for non-compliance with laws and regulations p. 12, 13, 18



Product/lifecycle management, sustainable innovation, product stewardship

- Assessment of the health and safety impacts of products and service categories

- Recall of products p. 12, 30-31

Marketing and labelling Intellectual property rights - Requirements for product and service

information and labelling p. 30-31

Customer privacy and satisfaction Data management and protection - Information security breaches p. 18

146

Table B1.7. Sustainable development indicators reported at Mondi Group



Materials Responsible procurement, constrained resources - Materials used by weight or volume - Recycled input materials used p. 94, 166

Energy Energy management - Energy consumption within the organization - Energy intensity p. 151, 166

Water Water management - Water withdrawal by source p. 78, 166

Biodiversity Promotion of biodiversity and ecosystems





p. 166

Emissions Emissions to air, climate change

- Direct GHG emissions - Energy indirect emissions - Other indirect emissions - GHG emissions intensity - Reduction of GHG emissions - Emissions of ozone-depleting substances

(ODS) - Nitrogen oxides (NOx) sulphur oxides SOx),

and other significant emissions

p. 72, 80-81, 152-154, 166

Waste and effluents

Effluent and waste quality, waste management, environmental impacts

- Water discharge by quality and destination - Waste by type and disposal method - Significant spills - Water bodies affected by water discharges

and/or runoff

p. 78-79, 82-83 153-154, 166-167

Environmental compliance Adherence to legal sanctions - Non-compliance with environmental laws

and regulations p. 38, 167


Supplier conduct, responsible procurement



p. 96, 167

Economic

Economic performance Value distribution, financial statements


- Financial implication and other risks and opportunities due to climate change

- Defined benefit plan obligations and other retirement plans

- Financial assistance received from government

p. 67, 69, 101, 113, 142, 166 -171, 182, 187, 207

Market presence Promotion of diversity and inclusion - Proportion of senior management hired from the local community p. 55, 166

Indirect economic impacts Community investments, stakeholder impacts

- Infrastructure investments and services supported

- Significant indirect economic impacts p. 101, 104, 166

Procurement practices Responsible procurement - Proportion of spending on local suppliers p. 94, 166

Anti-corruption Adherence to anti-corruption laws



- Confirmed incidents of corruption and actions taken

p. 38, 166

Anti-competitive behaviour Non-monetary sanctions and legal issues


p. 38, 166

Social


Employment Promotion of fairness, diversity, and inclusion - New employee hires and employee turnover p. 55, 167 Labour management relations

Adherence to restructuring and closures - Minimum notice periods regarding operational changes p. 59, 167

Health and safety Employee and contractor safety and health

- Occupational health and safety management system

- Hazard identification, risk assessment, and incident investigation

- Worker participation, consultation, and communication on occupational health and safety

- Worker training on occupational health and safety

- Promotion of worker health

p. 41-46, 167

147

- Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

- Workers covered by an occupational health and safety management system

- Work-related injuries


Skilled and committed workforce, human resource development




p. 51-52, 59, 167

Diversity and equal opportunity Promotion of diversity and inclusion - Diversity of governance bodies and

employees p. 55, 167

Human rights

Human rights assessment Employment and human rights

- Operations that have been subject to human right reviews or impact assessments

- Employee training on human rights policies or procedures

- Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

p. 57, 167

Society

Local communities Relationships with communities


p. 101, 167

Supplier social assessment Supplier conduct and responsible procurement

- New suppliers that were screened using social criteria

- Negative social impacts in the supply chain and actions taken

p. 96, 167

Compliance Adherence to legal sanctions - Non-compliance with laws and regulations in the social and economic area p. 38, 167


Customer health and safety Hygiene standards and product safety, compliance

- Assessment of the health and safety impacts of product and service categories


p. 117, 167

Marketing and labelling Compliance, product stewardship

- Requirements for product and service information and labelling



p. 117, 167

Customer privacy and satisfaction Compliance, product stewardship


p. 117, 167

148

Table B1.8. Sustainable development indicators reported at PCA



Materials Materials management, responsible procurement - Materials used by weight or volume - Recycled input materials used p. 18, 44

Energy Energy management


organization - Energy intensity

p. 19, 44

Water Water management, consumption, reuse - Water withdrawal by source p. 20, 45

Biodiversity Sustainable forestry, certification standards of SFI, PEFC, FSC adhered to

- Habitats protected or restored - Habitats in areas affected by operations p. 21, 45

Emissions GHG emissions and intensity

- Direct GHG emissions - Indirect GHG emissions - Other indirect GHG emissions - GHG emissions intensity - Reduction of GHG emissions - Nitrogen oxides (NOX), sulphur oxides

(SOX), and other significant air emissions

p. 22-23, 45

Waste and effluents Waste management, recycling - Water discharge by quality and destination

- Waste by type and disposal method p. 24-25, 45


Environmental stewardship, adherence to national, state, and local laws and regulations


Economic

Economic performance Financial controls and records policy


- Financial implications due to climate change - Benefits - Financial assistance

p. 40-41, 44


Responsible and sustainable procurement, supplier expectations - Proportion of spending on local suppliers p. 42, 44

Social


Employment Equal opportunity workplace - Employee hires and turnover - Benefits provided - Parental leave

p. 28, 45


Collective bargaining, unions - Minimum notice regarding operational changes p. 29, 45

Health and safety Safe and healthy work environment

- Workers representation - Types and rate of injury, lost days and time,

fatalities - Workers with high incidence or high risk of

disease related to occupation - Health and safety topics

p. 30, 45

Training and education Provision of continuous learning and development


- Programs for upgrading employee skills & transition assistance programs

- Percentage of employees receiving regular performance reviews

p. 31-32, 45


Provision of culture and environment of respect and inclusion

- Diversity of governance bodies and employees p. 32-33, 45

Society

Local communities

Maintenance of leading employer, taxpayer, and customer of local businesses status University recruiting & donations, charitable donations

- Operations with local community engagement p. 34, 45


Customer health and safety Responsible packaging, safety management standards

- Assessment of the health and safety impacts - Incidence of non-compliance concerning

health and safety p. 36-37, 45

149

Table B1.9. Sustainable development indicators reported at Segezha Group



Materials Ecologisation and modernisation of the manufacturing process, environmental impacts, innovation

- Materials used according to weight or volume p. 58-63, 158

Energy Ecologisation and modernisation of the manufacturing process, environmental impacts, economical use of resources

- Energy consumption within the organisation - Energy intensity p. 63-68 158

Biodiversity Environmental impacts, sustainable forest management




conservation list of species with habitats in areas affected by operations

p. 50-58., 159

Emissions Ecologisation and modernisation of the manufacturing process, environmental impacts, resource efficiency

- Direct GHG emissions p. 63-68, 159

Waste and effluents

Ecologisation and modernisation of the manufacturing process, environmental impacts, resource efficiency

- Waste by type and disposal method - Total number and volume of significant

spills p. 63-68, 159


Compliance with laws and regulations in ecological areas, ecological footprint

- Monetary value of significant fines and the total number of non-financial sanctions p. 42-50., 158

Economic Economic performance Results of economic activity - Direct economic value generated and

distributed p. 24-30, 157

Market presence Fair employment - Ratios of standard entry level wage by gender compared to local minimum wage p. 96-108, 160


Transparent and responsible procurement practices, involvement of local suppliers, - Proportion of spending on local suppliers p. 130-134, 161

Anti-corruption Adherence to anti-corruption regulations

- Total number and percentage of units that have been assessed for risks associated with corruption and identified significant risks


- Confirmed incidents of corruption and action taken

p. 134-140, 161


Transparent, responsible, and law-abiding procurement practices


p. 130-140, 161

Social


Employment Fair employment, personnel management

- Total number and percentage of newly hired employees, as well as employee turnover by age group, gender, and region

- Benefits provided to full-time employees that are not provided to temporary or part-time employees

p. 96-108, 160


Human resource management - Minimum notice periods regarding operational changes p. 96-108, 160

Health and safety Healthy and safe work environment, implementation of standards, labour protection

- Employees representation in formal joint management-worker health and safety committees

- Types of injury and rates o injury, occupational diseases, lost days, absentee rate, and number of work-related fatalities

- Employees with high injuries and high risk of morbidity associated with the type of their occupation

- Health and safety topics covered in formal agreements with trade unions

p. 68-80, 96-108, 160

Training and education Human resource development, employee programs - Programs for upgrading employee skills and

transition assistance programs p. 108-112, 160

Human rights

Society

Local communities Cooperation with local community


p. 82-88, 159

Compliance Compliance with laws and regulations in economic and social areas

- Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

p. 82-88, 158

150



Provision of customer health and safety, sustainable and ecological production, responsible consumption


p. 116-130, 161


Compliance with product liability, product labelling, consumer awareness

- Total number of incidents of non-compliance with regulatory requirements and voluntary codes relating to information and labelling on the properties of products and services by type of impact

- Types of information about the properties of the products and services required by procedures, and the percentage of significant products and services subject to such information requirements

p. 116-130, 158, 161

151

Table B1.10. Sustainable development indicators reported at Sisecam Group



Energy Combating climate change - Energy consumption within the organization - Energy intensity p. 39-40

Water Use of natural resources, water management - Water withdrawal by source - Water recycled and reused p. 39-40

Emissions Combating climate change

- Direct GHG emissions - Energy indirect GHG emissions - GHG emissions intensity - Reduction of GHG emissions

p. 39-40

Waste and effluents Use of natural resources, waste management - Water discharge by quality and destination

- Waste by type and disposal method p. 39-40

Economic

Market presence Talent management - Proportion of senior management hired from the local community p. 38, 40

Social


Employment Corporate diversity and inclusion, talent management - New employee hires and employee turnover - Parental leave p. 38, 40

Health and safety Healthy and safe work environment

- Types of injury and rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities

p- 38, 40

Training and education Talent management, professional development




p. 27, 38, 40

Diversity and equal opportunity Corporate diversity and inclusion - Diversity of governance bodies and

employees p. 36, 40

Society

Compliance Adherence to national and regional legislation in social and economic areas

- Non-compliance with laws and regulations in the social and economic area p. 40


Customer health and safety Product stewardship



p. 19, 40

Marketing and labelling Product stewardship



p. 19, 40

152

Table B1.11. Sustainable development indicators reported at Smurfit Kappa



Materials Renewable, recyclable, and biodegradable materials, resource efficiency


materials

p. 30, 72-73, 89

Energy Improved energy efficiency, bio-based energy


organization - Energy intensity - Reduction of energy consumption - Reductions in energy requirements of


p. 26-29, 62-65, 74-77, 80, 89

Water Responsible water stewardship

- Interactions with water as a shared resource - Management of water discharge-related

impacts - Water withdrawal - Water discharge - Water consumption

p. 21-22, 34-36, 74-77, 89

Biodiversity Promotion of maintaining a positive and sustainable balance of renewable raw materials, chain of custody certified sourcing and manufacturing


- Significant impact of activities, products, and services on biodiversity

- Habitats protected or restored - IUCB Red List species and national


p. 31, 89

Emissions Reduction of GHG emissions, climate change mitigation

- Direct GHG emissions - Energy indirect GHG emissions - Other indirect GHG emissions - GHG emissions intensity - Reduction of GHG emissions - Emissions of ozone-depleting substances - Nitrogen oxides (NOx), sulphur oxides

(SOx), and other significant air emissions

p. 6, 9, 27-29, 72-77, 89

Waste and effluents Circular economy, elimination of waste


and/or runoff

p. 74-77, 89

Environmental compliance Compliance with regulations and guidelines - Non-compliance with environmental laws

and regulations p. 66, 89


Sustainable sourcing, reducing risks in supply chain



p. 68-69, 83, 90

Economic

Economic performance Circular business model


- Financial implications and other risks and opportunities due to climate change



p. 4-5, 23-23, 52, 66-67, 88

Market presence Inclusiveness

- Ratios of standard entry-level wage by gender compared with local minimum wage

- Proportion of senior management hired from the local community

p. 46, 52, 88

Indirect economic impacts Innovation


- Significant indirect economic impacts p. 88

Procurement practices Responsible procurement, market share - Proportion of spending on local suppliers p. 68-69, 88

Anti-corruption Promotion of code of conduct and corporate policies




p. 66-67, 88

Anti-competitive behaviour Promotion of code of conduct and corporate policies - Legal actions for anti-competitive

behaviour, anti-trust and monopoly practices p. 66, 89

Social


Employment Fair compensation - New employee hires and employee turnover p. 46, 51-52, 82, 90

153

- Benefits provided to full-time employees that are not provided to temporary or part-time employees

- Parental leave Labour management relations

Employee experience - Minimum notice periods regarding operational changes p. 46, 90

Health and safety Healthy and safe working conditions, safety awareness

- Occupational health and safety management systems

- Hazard identification, risk assessment, and incident investigation

- Occupational health services - Worker participation, consultation, and

communication on occupational health and safety

- Worker training on occupational health and safety

- Promotion of worker health - Prevention and mitigation of occupational

health and safety impacts directly linked by business relationships

- Workers covered by an occupational health and safety management system

- Work-related injuries - Work-related ill health

p. 46-46, 54-55, 82, 90


People strategy, investment in employees, talent management




p. 45, 48, 51-52, 82, 90


Promotion of diversity and equal opportunities in terms of age, gender, sexual orientation, ethnic origin, disability, or nationality



p. 45, 50-51, 90


Promotion of respectful work environment, prohibition of discrimination

- Incidents of discrimination and corrective actions taken

p. 46, 50, 52, 66-67, 90


Respect for freedom of association and collective representation

- Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

p. 46, 66-69, 90

Child labour Prohibition of child labour - Operations and suppliers at significant risk for incidents of child labour

p. 46, 66, 68-69, 90


for incidents of forced or compulsory labour p. 46, 68-69, 90

Security practices Insurance of ethical behaviour - Security personnel trained in human rights policies or procedures p. 91

Indigenous rights Insurance of ethical behaviour - Incidents of violations involving rights of indigenous peoples p. 91


Respect for and promotion of human rights, corporate governance

- Operations that have been subject to human rights reviews of impact assessments



p. 46, 91

Society

Local communities Social investments, corporate citizenship

- Operations with local community engagement, impact assessments and development programs


p. 10-11, 56, 91

Supplier social assessment Responsible sourcing, reducing risks in supply chain



p. 62-63, 68-69, 83, 91

Public policy Influencing public policy for good - Political contributions p. 66-67

Compliance Compliance with regulations and guidelines - Non-compliance with laws and regulations in the social and economic area p. 66-67, 91


Customer health and safety Safe products and satisfied customers



p. 67, 91

Marketing and labelling Safe products and satisfied customers



p. 66-69, 91

154


Customer privacy and satisfaction Safe products and satisfied customers


p. 91

155

Table B1.12. Sustainable development indicators reported at Stora Enso



Materials Resource efficiency, value generation from waste and residuals, circular bioeconomy


materials

p. 9, 32-34, 36-37, 40

Energy Energy efficiency, energy consumption

- Energy consumption within the organization - Energy intensity - Reduction of energy consumption - Reductions in energy requirements of


p. 9, 33, 38-39

Water Responsible water use

- Water withdrawal by source - Water sources significantly affected by

withdrawal of water - Water recycled and reused

p. 9, 32, 35, 38

Biodiversity Sustainable forestry, protection of plantations, forests and through responsible land use


- Significant impact of activities, products, and services on biodiversity

- Habitats protected or restored - IUCB Red List species and national


p. 2, 9, 33, 49-54

Emissions Combatting global warming, low-carbon economy

- Direct GHG emissions - Energy indirect GHG emissions - Other indirect GHG emissions - GHG emissions intensity - Reduction of GHG emissions - Emissions of ozone-depleting substances - Nitrogen oxides (NOx), sulphur oxides

(SOx), and other significant air emissions

p. 2, 9, 33, 39, 42-48

Waste and effluents Minimising waste, circular bioeconomy


and/or runoff

p. 2, 32-34, 36


Compliant land and natural rights acquisition and management, elimination of environmental incidents



Responsible sourcing, supplier code of conduct



p. 2, 9, 60-63

Economic performance Circular business model, green funding


- Financial implications and other risks and opportunities due to climate change



p. 28, 65

Market presence Inclusiveness, business ethics

- Ratios of standard entry-level wage by gender compared with local minimum wage

- Proportion of senior management hired from the local community

p. 9, 20-23

Indirect economic impacts Innovation


- Significant indirect economic impacts p. 9


Responsible procurement, market share, business ethics - Proportion of spending on local suppliers p. 23

Anti-corruption Promotion of code of conduct and corporate policies




p. 9

Anti-competitive behaviour Promotion of code of conduct and corporate policies - Legal actions for anti-competitive

behaviour, anti-trust and monopoly practices p. 9, 29

Social


Employment Fair employment and working conditions

- New employee hires and employee turnover - Benefits provided to full-time employees

that are not provided to temporary or part-time employees

- Parental leave

p. 13, 19-21

156


Employee experience - Minimum notice periods regarding operational changes p. 21

Health and safety Healthy and safe working conditions, safety awareness, safety performance

- Workers representation in formal joint management-worker health and safety committees

- Types of injury and rates of injury, occupational diseases, lost days and absenteeism, number of work-related fatalities

- Health and safety topics covered in formal agreements with trade unions

p. 2, 9, 18-19

Training and education Talent management and training




p. 28


Diversity policy, employee distribution by country, age, and gender



p. 17-21


Promotion of respectful work environment, prohibition of discrimination and harassment

- Incidents of discrimination and corrective actions taken p. 13


Respect for freedom of association and collective representation

- Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

p. 13

Child labour Prohibition of child labour - Operations and suppliers at significant risk for incidents of child labour p. 13


for incidents of forced or compulsory labour p. 13

Security practices Insurance of ethical behaviour, safety trainings - Security personnel trained in human rights policies or procedures p. 18

Indigenous rights Insurance of ethical behaviour - Incidents of violations involving rights of indigenous peoples


Respect for and promotion of human rights, corporate governance

- Operations that have been subject to human rights reviews of impact assessments



p. 3, 9, 13

Society

Local communities

Community investments, value creation for society, CSR

- Operations with local community engagement, impact assessments and development programs


p. 3, 6-8, 22-23

Supplier social assessment Responsible sourcing, reducing risks in supply chain



p. 60-63

Public policy Influencing public policy for good - Political contributions

Compliance Compliance with regulations and guidelines, business ethics, in-place formal grievance mechanisms

- Non-compliance with laws and regulations in the social and economic area p. 27-30


Customer health and safety Product safety, product stewardship


p. 57-58

Marketing and labelling Product stewardship, responsible supplier - Incidents of non-compliance concerning

marketing communications p. 58-59

Customer privacy and satisfaction Data privacy policy


p. 27, 29

157

Appendix B2. Aggregated Overview of Indicators By Analysed Company

Pillar SDI ALPLA BillerudKorsnäs DS Smith

Graphic Packaging

International

Intertape Polymer Group

IPACKCHEM Mondi Group PCA Segezha

Group Sisecam Group

Smurfit Kappa

Stora Enso

Environmental Materials X X X X X X X X X X X Energy X X X X X X X X X X X X Water X X X X X X X X X Biodiversity X X X X X X X X X Emissions X X X X X X X X X X X Waste and effluents X X X X X X X X X X Environmental compliance X X X X X X X X X X Supplier environmental

assessment X X X X X X X

Economic Economic performance X X X X X X X X Market presence X X X X X X X X Indirect economic impacts X X X Procurement practices X X X X X X Anti-corruption X X X X X X X Anti-competitive behaviour X X X X X X X Tax Social

Employment & labour conditions Employment X X X X X X X X

Labour management relations X X X X X Health and safety X X X X X X X X X X X X Training and education X X X X X X X X X Diversity and equal opportunity X X X X X X X X X X

Human rights Non-discrimination X X X X X X Freedom of association and

collective bargaining X X X X

Child labour X X X X X X Forced and compulsory labour X X X X X X Security practices X X Indigenous rights X X X Human rights assessment X X X X

Society Local communities X X X X X X X X X X Supplier social assessment X X X X Public policy X X X Compliance X X X X X X X X X X

Product responsibility Customer health and safety X X X X X X X X X

Marketing and labelling X X X X X X X X Customer privacy and

satisfaction X X X X X X X X

158

Appendix B3. Aggregated Results of Indicators Obtained Through Sustainability Report Analysis

Sustainability Indicator Operationalization and description Environmental

Materials Material consumption (measured in tons (t)), and/or percentage of materials recycled

Energy Energy (electricity) consumption within the organization (measured in kilowatt-hours (kWh)), energy intensity, and/or practices concerning energy use reduction

Water Water withdrawn and water recycled / reused (measured in m3)

Biodiversity Number of operational sites connected to protected or highly biodiverse areas, and actions to protect and restore biodiversity in affected areas

Emissions CO2 (incl. GHG), NOx, SOx and PM emissions (measured in t), emission intensity, and/or practices concerning emissions reduction

Waste and effluents Categorization of waste, use of waste disposal systems, waste and effluents recycled (measured in t)

Environmental compliance Adherence to environmental laws and regulation, total number of non-compliance occurrences, and fines for non-compliance

Supplier environmental assessment New suppliers screened using environmental criteria, and monitoring the environmental performance and impact of suppliers

Economic Economic performance Direct economic value generated and distributed

Market presence Practices for local hiring and proportion of senior management hired from the local community

Indirect economic impacts Significant indirect impacts (e.g. investments)

Procurement practices Practices and proportion of spending on local suppliers

Anti-corruption Confirmed incidents of corruption and actions taken to ensure compliance with anti-corruption standards

Anti-competitive behaviour Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices, or in general against unfair competition

Social Employment & labour conditions

Employment New employee hires and employee turnover, employment compensations and social benefits

Labour management relations Relationship between employer and employee, fair employment

Health and safety Types and rates of injury, occupational diseases, lost days and absenteeism, number of work-related fatalities, and actions to improve occupational health and safety

Training and education Employees (e.g. hours per employee or percentage) that receive work-related training, education, programs and advancement and development opportunities

Diversity and equal opportunity Diversity of governance bodies and employees, gender pay gap (ratio of basic salary and remuneration of women to men), breakdown of employees (number and percentage of employees broken down by e.g. gender, region, age, etc.)

Human rights

Non-discrimination Adherence to anti-discrimination policies and total number of incidents of discrimination and corresponding corrective actions


Operations and suppliers identified in which the right to freedom of association and collective bargaining may be at risk

Child labour Adherence to regulations on prohibition of child labour, and operations and suppliers identified as at risk for child labour

Forced and compulsory labour Adherence to regulations on prohibition of unfree and slavery-like practices, and operations and suppliers identified as at risk for forced or compulsory labour

Security practices Operations identified as with significant risk and percentage of security personnel trained in human rights practices

Indigenous rights Incidents of violations involving rights of indigenous peoples and actions to ensure heritage protection

Human rights assessment Operations that have been subject to human rights reviews of impact assessments

Society

Local communities Operations with local community engagement and development programs, and total value of financial and other contributions to advance local community

Supplier social assessment New suppliers screened using social criteria, and monitoring the social performance and impact of suppliers

Public policy Presence of political financial contributions

Compliance Adherence to societal/socioeconomic laws and regulation, total number of non-compliance occurrences, and fines for non-compliance


Customer health and safety Incidents of non-compliance concerning the health and safety impacts of products and services throughout the life-cycle

Marketing and labelling Type of product and service information required by producers, incidents of non-compliance

Customer privacy and satisfaction Substantiated complaints concerning breaches of customer privacy and losses of customer data

159

Appendix C. Supplementary Information Regarding Case Study Analysis

Appendix C1. Corporate Sustainability Strategy of the PalletBiz Franchise Network

Mission

Recognizing that the development and integration of corporate sustainability strategies into the overarching business strategies and operations has become essential in order to remain competitive, as well as to be perceived as conscious and responsible by our stakeholders, PalletBiz is increasing commitments towards sustainable development that must be translated into actionable, measurable and monitorable steps.

Additionally, recognizing that a comprehensive corporate sustainability strategy must consider the three pillars of sustainable development – environmental, social, economic –, as well as their complexity and interrelatedness, PalletBiz is developing measures for taking actions that must be monitored as a function of all three dimensions, integrating them into the standard operating procedures (SOPs) of the organization as well.

Principally, sustainability as defined in the 17 UN SDGs is an integral part of the corporate sustainability strategy of PalletBiz – and shall be implemented throughout the PalletBiz Network. We have, therefore, selected those SDGs where we can actively contribute as a cooperation and a network; but by being active on those, we will passively contribute toward the “unselected” SDGs as well. For the selection, as well as operationalization of the most relevant SDGs we have employed the online tool of SDG Capture (Source: https://sdgcapture.niras.dk/) in order to identify the innovation and sustainability potentials within our company. The selected SDGs are the following:

- Gender equality (5) - Decent work and economic growth (8) - Industry, innovation, and infrastructure (9) - Reduced inequalities (10) - Responsible consumption and production (12) - Life on land (15) - Partnership for the goals (17)

The results of the analysis via the SDG Capture are attached to this document.

Vision

By 2030, the network PalletBiz as a whole is a recognized contributor to sustainability in the communities we operate.

We are known for being an equal opportunity employer promoting social and economic inclusion of all – irrespective of age, sex, disability, race, ethnicity, origin, religion, or economic status.

We provide decent work and development opportunities for our employees and partners and strive for continuous value-add, as well as operational and financial productivity.

While we strive for economic growth, we are achieving sustainable and efficient use of material resources, we participate in the protection of forest and other life forms on land, and we promote local, regional and interregional sharing of know-how and business opportunities.

160

We develop and distribute a system for the exchange of information between us and the local communities directly or indirectly affected by our operations, in order to impart knowledge, as well as to ensure transparency and accountability with regards to the environmental impacts of our industry and our own business.

The overall scope of our vision is reflected by the selected SDGs, as outlined in the mission. As a function of the selected SDGs, our points of vision and action are delineated in Table 1.

Vision and actions

5: Gender equality

- Proportion of women is increased in our Corporate and Regional Management Boards.

- Pay balance is ensured. - Investments in machinery and technology that facilitate the

empowerment and higher employment level of women are increased.

8: Decent work and economic

growth

- Investments in digitalization and automation are increased. - PalletBiz Way is expanded with LEAN principles. - Business network and coverage is expanded, including, but

not limited to greenfield depots and hubs, in order to support job creation.

- Compliance with PalletBiz Way – EHS policies are fully met.

- Code of Conduct is introduced and enforced with suppliers and subcontractors.

- Promotion of ISO 45001 is elevated. - Full transparency, legitimacy and responsible operations

are ensured through corporate governance.

9: Industry, innovation, and infrastructure

- Regional co-investments through Master Franchisees are ensured.

- FDIs, as well as funding and grants from domestic and regional governmental and financial institutions are induced.

10: Reduced inequalities

- Sustainability principles are integrated into HR policies. - Stakeholders and communities affected by our corporate

operations are considered and supported via the sustainability principles.

12: Responsible consumption and

production

- Sustainability strategies and policies are defined and implemented in all regions.

- Programs that promote sustainability, such as life cycle, pooling, and the principles of 3R are developed and implemented.

- Development and trade of more resource-constrained and fully reusable / recyclable products is achieved.

- Compliance with PalletBiz Way – Waste Management Policies is ensured.

- Acquisition of ISO 14001 certificates and implementation of their principles is achieved.

- Acquisition of PEFC and FSC certifications in all sawmills and factories is achieved.

161

- The sourcing of lumber in accordance with sustainability policies and principles is ensured, thereby limiting negative impacts on biodiversity.

- Collaboration with strictly responsible and sustainable partners throughout the supply chain (including suppliers, harvesters, sawmills, and traders) is ensured.

- Incorporation of cleaner production technologies through renewable and recycled resources is achieved.

- Emissions into air, water, and ground are measured, tracked, and reported, while targets to reduce such emissions are set and met.

17: Partnerships for the goals

- Regional and international cooperation, coordination and knowledge-sharing is enhanced.

Strategy

Our Vision will be achieved through diligent use and vigilant implementation of the PalletBiz Sustainability Balanced Scorecard - developed in cooperation with our employee: Master of Science from the University of Graz, Ms. Lilla Zombori.

References

This document has been developed based on a university group project of Ms. Lilla Zombori, containing direct quotes from and references to the below research paper:

Zombori, L. et al. (2020). ABCD strategy for PalletBiz. Report on long-term corporate sustainability strategy and implementation plan framed by FSSD and ABCD. Institute of System Sciences, Innovation and Sustainability Research.

Documents

APPLICATION OF A SUSTAINABILITY BALANCED SCORECARD IN …