How Logistics Firms Deal with and Report on CSR Expectations

Master’s  thesis  within  Business  Administration  

Author:              Mengni  Tong        P.N.860726-­‐2287  

                                         Toni  Moussa        P.N.861222-­‐1690  

Tutor:                    Paul  McGurr  

Jönköping      May  2012

 

ACKNOWLEDGEMENTS

We would like to thank our thesis tutor Professor Paul McGurr for giving us full

support during the whole writing period, especially for his inspiration, great

guidance, and suggestions. We would like to express our gratitude to Associate

Dr. Lucia Naldi and the seminar group who consulted us for certain problems,

and promoted our thesis work all the time.

We would like to thank the department of Logistics and Marketing for giving me

the fantastic opportunity to study a Master Degree in International Logistics &

Supply Chain Management, and showing great patience and support during our

lengthy journey towards graduation. All the professors and staff in the

department have been a real pleasure to work with during our time at JIBS!

Mengni & Toni

 

ABSTRACT

The concept of Corporate Social Responsibility (CSR) is not new; however, it has

started to gain more attention during the last fifteen years. During this period, logistics

activities were structured to maximize profitability of all firms in the supply chain by

including only economic costs while disregarding social and environmental costs. Since

logistics firms play a vital role in international trade, and since they are one of the main

types of firms that are facing pressure from various shareholders to deal with social and

environmental issues, it can be concluded that the performance of logistics enterprises

under CSR pressure is worth investigating.

Literature review has been performed by the authors to discuss previous research on the

environmental and social sustainability development, the concept of corporate social

responsibility, CSR reporting and different ways of reporting, the geographical

differences in Reporting CSR (Asia, Europe, and North America), CSR guidelines, and

finally the term of logistics social responsibility.

A sample of 50 logistics companies is selected from three regions: Asia, Europe, and

North America, which is presenting seven different logistics categories. We access to

separate CSR reports ranging from 2009 to 2011 and other disclosures on the firms’

websites in order to analyze their CSR reporting status and practices under CSR

pressures. Different reporting guidelines(e.g. GRI, GC, ISO 14001) and report types

(e.g. Corporate Social Responsibility Report; Sustainability Report ) were investigated

from the sample according to logistics categories and geography differences. Moreover,

the contents included in the separate CSR reports are analyzed from five factors: i)

 

Environment; ii) Society; iii) Shareholders; iv) Employees; v) Suppliers. Furthermore,

for CSR practices implemented by other logistics firms which do not prepare CSR

reports, four common dimensions are studied in the thesis: Environment, Employees,

Consumers and Communities.

In the end, suggestions about the way to improve the current practices of corporate

social responsibility reporting are provided. The paper also discusses the value of the

results both for the business field and the academic field.

KEYWORDS: Logistics firms, Cooperate social responsibility, Sustainability,

Environment, Reporting

 

TABLE of CONTENTS

1 Introduction……………………………………………………………..1

1.1 Background…………………………………………………………………..2

1.2 Problem Discussion………………………………………………………….9

1.3 Purpose and Research Questions…………………………………………...10

2 Literature Reviews…………………………………………………….12

2.1 Environmental and Social Sustainability Development…………………….12

2.2 Corporate Social Responsibility …………………………………………....13

2.3 Corporate Social Responsibility Reporting…………………………………16

2.4 Logistics Social Responsibility……………………………………………...24

3 Methodology……………………………………………………………26

3.1 Data Collection……………………………………………………………...26

3.2 Choice of Companies………………………………………………………..28

3.3 Analysis Perspective………………………………………………………...29

3.4 Limitations…………………………………………………………………..31

3.5 Validity and Reliability……………………………………………………...31

4 Data Analysis…………………………………………………………..32

4.1 Report Analysis……………………………………………………………..32

4.1.1 General Report Comparison……………………………………………33

4.1.2 Characteristics of Issued Reports……………………………………….35

4.1.3 Reporting Standards and Report Type Comparison……………………45

4.1.4 Internal Versus External Organizations………………………………...48

 

4.1.5 Contents Descriptions…………………………………………………51

4.2 CSR Practices of Unreported Logistics Firms……………………………..59

4.2.1 Related to the Nature Environment……………………………………63

4.2.2 Related to Employees……………………………………………….....64

4.2.3 Related to Consumers………………………………………………….65

4.2.4 Related to Communities………………………………………………..66

5 Conclusion……………………………………………………………...67

5.1 Suggestions for Reporting Improvement……………………………………69

5.2 Discussion…………………………………………………………………...69

References………………………………………………………………..71

Appendix 1: Elements of Corporate Social Responsibility……………..75 Appendix 2: List of Sample Logistics Firms……………….…………....76 Appendix 3: List of Logistics Firms’ CSR Links………………………..77

 

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1 INTRODUCTION The introductory chapter presents a background of Corporate Social Responsibility

within logistics field. It begins with the initiative to this specific thesis; and the purpose

and questions of the research are also explained.

Logistics activities include the transport, storage, and handling of products as they move

from raw material, to goods in process, and finally to finished goods ready to be moved

to the final point of sale for consumption. Despite its high contribution to the economic

development, it is only in the last fifty years that logistics started to be regarded as a

major determinant of business performance and a main field of academic study. During

this period, logistics activities were structured to maximize the profitability of all firms in

the supply chain. However, this calculation of profitability included only economic costs

while ignoring social and environmental costs. For the last fifteen years, public and

governmental concern about social and environmental impacts of logistics firms has

increased, as has the pressure to reduce these impacts (McKinnon, 2010).

The following section presents the background of the topic in interest. It outlines the

social and environmental impacts resulting from logistics operations, a definition of

Corporate Social Responsibility (CSR), the development of CSR, the growth of CSR

reporting, and the development of the Triple Bottom Line Theory. These will be followed

by a discussion of the problem at hand, which will lead to the purpose of this paper and

the main research questions. The introduction chapter will be wrapped up with the outline

of the thesis.

 

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1.1 Background

Logistics Impacts

Concerning environmental impacts of logistics firms, distribution activities of goods

cause harm to the air quality, generate noise, cause accidents, and contribute to global

warming (McKinnon, 2010). Freight transport accounts globally for almost 8 percent of

CO2 emissions while warehousing and material handling contribute a 2-3 percent to this

total. The energy consumed by freight transport is increasing at a faster rate than the

energy used for cars and busses (Ribeiro & Kobayashi, 2007). Although governments are

working on cutting down CO2 emissions from their national economies, shipping alone

could account for up to 50 percent of the total CO2 emissions by 2050 (Committee on

Climate Change, 2008).

On the other hand, the social impacts of logistics firms according to Carter and Jennings

(2002) are associated with three main activities which are purchasing, transportation, and

warehousing. The social impacts of purchasing management include purchasing from

minority suppliers; and collaborating with suppliers who use sweatshop labor, child

labor, offer low “living wage”, and operate in unsafe locations. The social impacts of

transportation activities can include the non-use of minority carriers, hiring and

promoting unequally, long operating schedules for drivers, and payment of inadequate

wage. The social impacts of warehousing management consist of hiring and promoting

unequally, dealing weakly with family issues such as helping employees find child care,

offering poor training programs to employees that teach them how to use equipments

 

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safely, and not providing necessary equipment to workers such as gloves, hardhats, and

hard-toed shoes.

Definition of Corporate Social Responsibility

Corporate Social Responsibility is a concept whereby companies integrate social and

environmental concerns in their business operations and in their interaction with their

stakeholders on a voluntary basis. Being socially responsible means not only fulfilling

legal expectations, but also going beyond compliance and investing “more” into human

capital, the environment and the relations with stakeholders” (Commission of European

Communities, 2001, p.6).

Development of CSR

The concept of corporate social responsibility is not new. Formal writings on CSR have

started in the second half of the twentieth century. In the 1950s, the concept was SR

(social responsibility) instead of CSR (corporate social responsibility) because of the

absence of modern corporations (Carroll, 1999). In 1953, Bowen started writing about SR

after realizing that activities and decisions making in large businesses affect the lives of

citizens, and that managers (businessmen back then) should be responsible for the

consequences of their actions. Bowen defined SR as “the obligations of businessmen to

pursue those policies, to make those decisions, or to follow those lines of action which

are desirable in terms of the objectives and values of our society.” Research on CSR

continued to grow gradually between 1950s and 1990s. In 1994, Carroll conducted a

 

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survey with fifty academic leaders concerning social topics where the question was

“What topics do you see as most important for research in the social issues?” CSP

(corporate social performance) was rated third out of twelve issues; business ethics was

first and international social issues was second.

Moving to the twenty-first century, Carter and Jennings (2004) indicated that CSR is not

limited only to business ethics, but it rather extends to include community, philanthropy,

safety, workplace diversity, human rights, and the environment.

Since the nature of business relations is changing from national to multinational due to

integrated supply chains, the concept of CSR is also transforming. Not only do

companies have to be socially and environmentally responsible on the national level, but

also in relation with their global partners such as suppliers, intermediaries, and third party

logistics. The pressure exercised on these multinational firms comes from various

stakeholders such as customers, employees, unions, shareholders, government, NGOs,

and media who’s concern about social and environmental conditions in off-shore

production sites is increasing (Maloni & Brown, 2006). This concern has largely resulted

from multimedia communication that continuously shows irresponsible practices such as

violation of union rights, use of child labor, unsafe work conditions, pollution, and

discrimination. Famous examples that have been followed by media are Nike, Gap, H&M,

and Wal-Mart (Frost & Burnett, 2007).

 

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Today, many of the multinational corporations are trying to decrease stakeholders’

pressures by ensuring that their suppliers comply with social and environmental standards.

This is achieved by using various codes of conducts (Andersen & Skjoett-Larsen, 2009).

A code of conduct is a document stating a number of social and environmental standards

and principles that a firm’s supplier are expected to fulfill (Mamic, 2005).

Development of CSR Reporting (also called Sustainability Reporting and Corporate Social Disclosure)

According to Reynolds & Yuthas (2007), the notion of CSR reporting arises from an

interpretation of a social theory under which firms owes obligation to society. These

obligations include reporting the social and environmental impacts resulting from their

operations.

Buhr (2007) claimed that voluntary environmental and social reporting has existed for

many decades. Yet, the public disclosure of information about the social and

environmental impacts of companies’ operations has become popular practice since the

mid-1990s. Since that period of time, information about social and environmental impact

has been commonly disclosed within the annual financial reports.

As CSR reporting became increasingly popular and broad, some leading companies in the

reporting markets started separating their social and environmental disclosures by

publishing a stand-alone report untied from annual financial statements. This method has

become more common in late 1990s; however there is no one single standard for CSR

 

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reporting. Today, multinational companies from different sectors and industries follow

certain standards for social and environmental reporting (Adams & Frost, 2004).

Leading examples of reporting standards are:

• “EMAS (European, particularly German environmental management and

audit).

• ISO 14001 (Internationally recognized environmental management

certification).

• SA 8000 (Social Accountability International labor standards).

• AA1000 (International accountability assurance reporting standard).

• Copenhagen Charter (International Standard involving stakeholder

communications).

• GRI (Global Reporting Initiative) 2000 (International sustainability report)”.

(Reynolds & Yuthas, 2007, p.50) Some of the above mentioned guidelines will be

explained in the Literature Review section.

As an argument on where CSR reporting is heading, Buhr (2007) notes that mandatory

CSR reporting remains limited. He added that sufficient knowledge about this concept is

not reached yet, and concluded that the reporting process must help in changing

management strategies and practices.

The Triple Bottom Line Theory (TBL)

 

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To further understand the concept of CSR reporting, one can refer to the “triple bottom

line reporting” which dominated in CSR reporting between late 1990s and middle 2000s

(Deegan & Unerman, 2011).

Elkington (1998) defined the TBL theory as providing information not only about the

economic performance of a firm, but also environmental and social performance. The

main global company that was behind the popularity of “triple bottom line reporting” was

Shell who released a TBL report in the 1990s.

The TBL concept has for the last few years become increasingly popular in both

government and non-government organizations. Its main proposal is that corporations’

success must be measured by their economic, social, and environmental performance.

Success cannot be achieved in the long term if corporation fail to meet their obligations

towards their various stakeholders. Therefore, TBL supporters believe that the

corporations’ social and environmental performance must be measured, calculated,

audited, and reported just like economic performance so that the obligations to

communities, employees, customers, and suppliers are fulfilled. Referring to the notion of

modern management that says “if you cannot measure it, you cannot manage it,” ethical

business practices (social and environmental) must be measured by tools to insure

corporations’ transparency to managers and other stakeholders (Norman & MacDonald,

2004).

 

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Norman and MacDonald (2004) also claimed that in the awakening of the twenty-first

century, the TBL term spread in a fast pace. By 2004, Google has returned around 52,000

web pages that mention the concept. Organizations such as Global Reporting Initiative

(which will be explained more in details in the literature review) and AccountAbility

have promoted the theory in corporations around the globe, and many of the corporations

turned their interest into it. Big firms such as AT&T, Dow Chemical, Shell, and British

Telecom have implemented the TBL terminology in their reports as have smaller firms.

Furthermore, most of the big accounting firms added to their services measurements,

reporting, and auditing of the additional two bottom lines. Finally, a large segment of the

investment industry is today evaluating companies based on their social and

environmental performance.

Companies can significantly improve their business performance and logistics activities

by collaborating efficiently with suppliers, shippers, distributors and customers. Leading

U.S. logistics firms have improved their environmental performance by reducing the

waste of maintenance, enhancing inventory management practices, lowering the cost due

to scrap and material losses, decreasing expenses of training and material handling,

converting wastes to by-products, reducing the use of hazardous materials through more

accurate materials tracking and reporting systems, lessening the use of solvents and

paints, and finally recovering valuable materials through take back programs

(Environmental Protection Agency, 2000).

 

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Ford recognizes that the manufacturing and shipping processes cause harm to the

environment. Therefore, the company has begun shipping their car parts in recyclable

plastic containers focusing on Triple Bottom Line. The first goal was to be

environmentally sustainable by avoiding tree consumption while providing larger

containers able to carry more parts. This has led to reduction in total shipments which in

turn helped decrease greenhouse emissions from ships, trains, and trucks carrying Ford

parts. Finally, the containers get recycled to be later used for producing plastic car parts

such as mudguards for F-150 trucks. The second goal was to be socially responsible by

the use of the new designed plastic containers. The new design has eased the carrying and

opening processes for plant workers. The third aim was to reduce costs. Since Ford

started using the plastic containers, shipping costs were lowered by 25 percent (Markley

& Davis, 2007).

1.2 Problem Discussion

The traditional financial accounting theory which is mainly regulated by corporations

laws, stock exchange requirements, and accounting standards focuses almost entirely on

financial accounting of economic performance. Despite the increased concerns about

environmental and social problems resulting from multinational corporations, there is a

deficiency in regulatory requirements relating to the public disclosure of information

concerning the social and environmental performance of firms. Such disclosures are

voluntary; yet a growing number of companies are today providing public disclosures of

 

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social and ecological impacts of their operations. These disclosures are called “CSR

reporting” since they include environmental and social accounting in addition to

traditional financial accounting (Deegan & Unerman, 2011). Corporate Social

Responsibility Reporting is also referred to Sustainability Reporting.

According to Carter and Jennings (2002), the main three logistics activities are

purchasing, transportation, and warehousing. The Social Responsibility of these three

activities fall into six wide categories (found in reporting guidelines) which include the

environment; ethics; working conditions and human rights; diversity; safety; and

philanthropy and community involvement. These six categories are studied in the CSR

literature. Yet unfortunately, they have been investigated separately disregarding their

inter-relationship. Quoting Carter and Jennings (2002, p.149): “Do logistics managers

view these seemingly related groups of activities as falling under a larger, umbrella

construct of social responsibility?”. The Commission of European Communities defined

CSR in 2001 as “a concept whereby companies integrate social and environmental

concerns in their business operations and in their interaction with their stakeholders on a

voluntary basis”. Based on this definition, we can ask here again: How and why do

logistics managers deal with CSR and CSR reporting since it is not required by statute?

1.3 Purpose and Research Questions

 

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Harrison and Van Hoek (2011) argued that social attention has been turned to logistics

recently because of the enormous potential damage that it can cause to the environment.

They added that taking into consideration the renewable raw material and transportation

modes that minimize the emission of carbon dioxide is important when taking logistics

decisions.

Since logistics firms play a vital role in world trade by providing value-added services

that affect products prices, and since they are one of the main types of firms that are

facing pressures to deal with social and environmental issues, we concluded that the

performance of logistics enterprises under corporate social responsibility pressure is

worth investigating. By analyzing fifty different logistics firms from three main areas

(Asia, Europe, and North America) and seven major categories (Shipping, Freight

Forwarders, Third Party Logistics, multiple modals of logistics, truck leasing, express

service, and packaging), we will address the following question: Do logistics firms

report about their CSR? If so, how do they report it? Finally, based on the results of our

study, we will be able to answer the following question: What can be suggested in order

to improve CSR reporting?

To sum up, our paper will provide knowledge about the current trend of numerous

multinational logistics firms’ performance under the pressure of Corporate Social

Responsibility, and try to figure out how reporting practices in logistics firms vary, and

what guidelines are followed the most.

 

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The rest of the paper is organized as follows: Section 2 presents the theoretical

framework, explaining the previous research of corporate social responsibility issues in

logistics industry. An illustration of methodology with data collection is introduced in

section 3. It also specifies the criteria for choice of sample logistics companies. Section 4

contains the analysis procedures from two information channels: separate CSR reports

and CSR disclosure on the firms’ websites and the results of our analysis. Section 6, the

final section concludes the paper, which also raises up several suggestions for CSR

reporting as well as discussing the value of the research.

2 Literature Review

This following chapter contains the historical theories regarding on CSR. First, it starts

by the development of the CSR phenomenon and the concept of CSR is clarified as to

increase the readers’ understanding of CSR meanings. Next, the geographical differences

in reporting CSR are clarified. Then, the theoretical CSR reporting guidelines are

reviewed particularly related to our thesis. Finally, the relevant theories connecting CSR

with logistics are discussed and later used in the empirical analysis section.

2.1 Environmental and Social Sustainability Development

Since the 1970s, there have been numerous discussions in several international forums

about the environmental and human race impacts of the continuous development of

economic activities. This has pressed the General Assembly of the United Nations to

 

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place “sustainability” as a major issue on the agenda of governments and businesses

around the globe. In 1987, a report under the title “Our Common Future” was presented

by the World Commission of Environment and Development and was called “The

Brudtland Report.” The aim of the report was to create a global agenda to alter the

constant unsustainable pressures on the global environment. It was acknowledged that

organizations must change the way they conduct their business and must question their

traditional goals and principles. Following the 1987 Brundtland Report was the 1992

Earth Summit that was held in Rio de Janeiro, which placed the sustainable development

issue as a main concern of international politics and business. Its main outcome was

Agenda 21 which was an action plan for the twenty-first century that placed sustainability

as the center of global development. In the same year, the European Union released a

document under the title “Towards Sustainability” as part of its Fifth Action Programme.

It was suggested in this programme that the accounting profession should include costing

systems which internalize many environmental costs since traditional accounting ignores

social and environmental costs and benefits. In 2002, a follow-up to the Rio de Janeiro

Earth Summit was held in Johannesburg where a set of guidelines for the procedure of

reporting social and environmental impact resulting from organization’s activities was

launched (Deegan & Unerman, 2011).

2.2 Corporate Social Responsibility

 

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Ness (2005) states that CSR is the duty implied on a firm to behave responsibly and

sustainably, and to be accountable to its stakeholders. In order to manage social and

environmental impacts, firms must assess their impacts responsibly.

The author discussed the social philanthropy of the 18th and 19th century when workers’

housing, healthcare, and nourishment were provided in order for them to work efficiently.

Societal concern was a self-interest issue back then because of the need to comply with

the dominant moral codes. For example, in 1802, the United Kingdom created the

Apprentices Act of Health and Morals. The focus on environmental concerns grew in the

1960s, 1970s, and 1980s after realizing that firms and governments were unresponsive.

With the growth of corporations and simultaneously the expansion of supply chains,

environmental issues became coupled with social concerns. To illustrate, Nike labor

malpractice has lead to the creation of the Fair Labor Association, the monitoring of

manufacturing in less developed countries, and a more extensive public reporting

amongst global suppliers. Ness showed how CSR can be practiced by small, medium, and

global firms (Ness, 2005):

• Behave ethically according to societal norms, and treat others as you would wish to be treated.

• Discover, assess, manage and improve economic, environmental and societal risks and opportunities as an integral part of your business strategy.

• Relate your reward structure to behaviors that promote and integrate CSR into business practice.

• Make your actions transparently to all of your stakeholders

• Tell it like it is

 

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Werther and Chandler (2010) said that CSR covers the relationship between corporations

and the societies with which they interact. Societies include all stakeholders such as

customers, employees, suppliers, shareholders, communities, and the environment. After

identifying its stakeholders, every firm can prioritize its strategy according to

stakeholders’ needs so it maintains its societal legitimacy.

According to Wherther and Chandler (2010), CSR is important because companies’

operations are largely influenced by it. Consumers want to buy products and services

from firms they trust, suppliers desire to collaborate with reliable partners, employees

desire to work for companies they admire, investors like to support socially and

environmentally responsible companies, and non-government organizations desire to

work in partnership with firms looking for solutions. By balancing stakeholders’ demands

with their conflicting interests, firms can maximize their profits and remain competitive.

The authors added that the escalating importance of CSR in the twenty-first century is

related to four trends which are the increased affluence of stakeholders, the growing

concern of ecological sustainability, globalization that imposes firms to operate with

various nations and cultures, and the free flow of information spread by global media.

A study of practicing CSR in global supply chains was conducted by Andersen and

Skjoett-Larsen in 2009. They chose IKEA since it has been dealing with social and

environmental issues for a long time, and since it is one of the many multinational

corporations that have increased their outsourced manufacturing activities to developing

countries. The main idea was that companies are not only responsible about their social

 

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and environmental performance, but also about their suppliers’ performance. The authors

concluded that CSR must be embedded in all business departments including

international subsidiaries and offshore supply chain partners. To do so, “knowledge

enhancing mechanisms” should be implemented internally and externally so that both

employees and suppliers can maintain the knowledge about the company’s performance

under its code of conduct. Another way is keeping an eye on employees and auditing the

suppliers to ensure that they are behaving in a socially and environmentally responsible

manner.

2.3 Corporate Social Responsibility Reporting

Although there is a lack of regulation in most countries and therefore the CSR reporting

process is voluntary, many organizations choose to publish information about their social

and environmental performance. There are various theories that help explain this

voluntary reporting. Deegan and Unerman (2011) discussed the following theories:

One of the theories is Legitimacy Theory which implies that there is a social contract

between organizations and the communities within which they operate. Therefore,

organizations must be accountable for their operations since part of their license is given

by society. This means that voluntary disclosure of societal and environmental issues add

“legitimacy” to the social organization.

Another theory is Stakeholder Theory under which firms must satisfy powerful

stakeholders who have the greatest influence on the firms’ profitability. Thus,

 

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corporations must provide an account of their activities to all stakeholders that are

affected by their activities. Since stakeholders include not only shareholders but also

social organizations, CSR reporting is expected to maintain stakeholders’ satisfaction.

A third theory is the Institutional Theory which assumes that companies must report their

activities because of the pressure exercised from other companies who have previously

reported their activities. This prevents losing the approval from stakeholders such as

consumers, suppliers, and communities who are only interested in dealing with

companies that publish their CSR reporting.

The next theory is the Positive Accounting Theory which predicts that managers would

disclose social and environmental information only if it benefits them. Managers who

choose to disclose information do so to show their understanding of CSR regardless of

their interest in CSR reporting.

The authors also discussed Reputation Risk Management under which managers

voluntarily report CSR so that they maintain the value and reputation of their firm among

its influential stakeholders. CSR reporting becomes a necessity in this case in order to

remain competitive and gain trust from major stakeholders who may require at any time

the disclosure of public information about social and environmental impacts of a firm.

Hopwood, Unerman, and Fries (2010) have conducted surveys with business

organizations and came up with the following reasons to explain firms’ engagement in

sustainability and sustainability reporting:

 

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• To maintain customers who are concerned with social and environmental issues.

• To gain competitive advantage through products innovation.

• To attract and retain skilled employees who are concerned about sustainability.

• To increase efficiency by reducing the use of energy.

• To maintain the license that allows them to operate (Legitimacy theory).

• To attract investors looking for organizations operating sustainably.

• To keep the good reputation and brand image of the business.

Different Ways of Reporting Corporate Social Responsibility

Traditionally, companies disclose information about their CSR activities in their annual

financial report which included only financial reporting. These reports are directed to

analysts and shareholders. However, some companies disclose information about their

social and environmental performance within their annual financial report which is

directed not only to shareholders, but also to the remaining stakeholders who have

concerns about sustainability issues. Some companies separate their annual financial

report from their CSR report by publishing a fully integrated CSR report. Some

companies include social reporting in their environmental report. Some companies do not

include social aspects in their environment report. The style of reporting also varies

where some firms design their report to target their stakeholders; some firms designs it

according to sections of their businesses; and some others use reporting guidelines such

as Global Reporting Initiative (Line, Hawley, & Krut, 2002).

 

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Geographical Differences in Reporting CSR

A survey was conducted 2004 to assess policies on corporate social responsibility in

Europe, Asia, and North America based on twenty CSR elements which are listed in

appendix 1. These elements are based on international conventions, codes of conduct, and

industry best practices. The total sample was 240 firms from Asia and Europe, and 450

firms from North North America. The countries were the UK, Germany, France, Spain,

Norway, Italy, Hong Kong, Singapore, Japan, Korea, Malaysia, Thailand, Mexico,

Canada, and the United States (Welford, 2005).

The results of reporting on internal aspects on CSR showed that Asian firms had the least

reporting on all six elements. This is because of the less common practice in Asia

concerning normal working hours, maximum overtime, and fair wages structures. In

other words, working long hours and earning low wages are two characteristics of Asian

companies. Also, there is no guarantee in Asian firms for freedom of association,

promoting employees development, and providing vocational education. On the other

hand, the survey showed that the difference between European and North North

American CSR reporting is small. North North American figures are slightly lower

because of the inclusion of Mexico in the survey (Welford, 2005).

Concerning the results of external aspects, there were no big differences overall between

the respondents form all three geographical areas. In fact, Asian firms have shown higher

percentages of reporting on three elements (labor standards in developing countries,

 

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inspection of suppliers, and code of ethics) since they have experienced issues regarding

ethics, bribery, and corruption (Welford, 2005).

Finally, examining the results of reporting on accountability and citizenship, it can be

noticeably concluded that European and North North American firms have more policies

in all elements except the element of “policies and procedures for engaging a wide range

of stakeholders in two-way dialogue” where North North American firms have the least

policies (Welford, 2005).

Corporate Social Responsibility Reporting Guidelines

There is a lack of comparable reporting which may create confusion. In other words,

there is no standard for CSR reporting. Yet, there are various guidelines that have been

developed by different groups who proposed modals or frameworks for reporting and

auditing (Reynolds and Yuthas, 2007). Citing some of the most commonly used

guidelines:

Eco-Management and Audit Scheme (EMAS)

According to Iraldo, Testa, and Frey (2009), the EMAS regulation is a European Union

scheme implemented by the European Commission since 1993. Its aim is to implement

an Environmental Management System (EMS) in any firm. The authors have conducted a

study (using a sample of 70 firms adopting EMAS and 31 firms not adopting EMAS) to

investigate whether or not an EMS implemented within EMAS can affect environmental

and economic performance. They concluded that EMSs did not reach maturity yet, but

 

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they are implemented more efficiently by EMAS-registered firms. They added that EMS

helps organization enhance their environmental performance and achieve competitive

advantage through higher innovation capabilities.

Firms implementing EMAS must focus on the following guidelines:

1) Sustainable consumption and production.

2) Climate change and energy.

3) Protecting our natural resources and enhancing the environment.

4) Creating sustainable communities.

5) Keeping the council and local community focused on environmental limits.

(Stroud District Council, 2012).

International Organization of Standardization (ISO 14001)

ISO 14001 was developed by the International Organization of Standardization.

Urbonavicius (2005) defines ISO as a managerial tool that helps firms upgrade their

internal functions. He added that ISO generates change in management procedures, cost

savings, quality improvement, operation efficiency, profitability, international

partnerships, and competitive advantage. The guidelines of ISO 14001 are defined as

follows (ISO 14001, 2004)

i) General Requirements;

ii) Environmental Policy;

iii) Planning: Environmental aspects, Legal and other requirements, Objectives,

targets and programs;

 

22    

iv) Implementation and Operation: Resources, roles, responsibility and authority,

Competence, training and awareness, Communication, Documentation,

Control of documents, Operational control, Emergency preparedness and

response;

v) Checking: Monitoring and measurement, Evaluation of compliance,

Nonconformity, corrective action and preventive action, Control of records,

Internal audit;

vi) Management review.

Council on Economic Priorities Accreditation Agency Social Accountability Standard

(SA 8000)

SA 8000 is a set of international workplace and human rights standards that was

developed by the Social Accountability International. It was introduced to deal with

emerging global social issues such as child labor, human rights, discrimination, and

compensation since U.S. and European firms have been outsourcing many of their

activities to less developed countries. SA 8000 helps firms improve their reputation,

differentiate their products, and gain competitive advantage (Miles & Munilla, 2004).

Companies implementing SA 8000 must adopt the following guidelines: Child labor,

forced and compulsory labor, health and safety, freedom of association and right to

collective bargaining, discrimination, disciplinary practices, working hours,

remuneration, and management systems (SA 8000 Standard, 2008).

Global Reporting Initiative (GRI)

 

23    

GRI was established in 1997 by numerous of organizations belonging to the Coalition for

Environmentally Responsible Economies (CERES) who aimed to develop global

guidelines supporting the reporting of economic, environmental, and social performance

for any corporations (Global Reporting Initiative, 2002). Hedberg and Malmborg (2003)

have studied the implementation of GRI in some Swedish companies and concluded that

communication has enhanced between different departments with the use of GRI. They

added that communication facilitates information sharing within the firm and with

stakeholders, which in turn leads to transparency and control over the Triple Bottom

Line.

Firms complying with GRI must focus on three guidelines which are social, economic,

and environmental. The social part is broken down further by labor, human rights,

society, and product responsibility sub-categories (Global Reporting Initiative, 2002).

The United Nation Global Compact (GC)

The Global Compact is a set that was developed by the United Nations. It is intended to

increase the benefits of global economic development through voluntary corporate

reporting. The GC focuses on human rights, labor rights, environmental concerns, and

corruption. It has a particular application in Africa since it helps reducing poverty. GC

also encourages companies to develop and join local and regional networks that support

them in identifying opportunities on regional level (Williams, 2008).

 

24    

Firms implementing the GC must follow ten principles grouped into four guidelines

which are human rights, labor, environment, and anti-corruption (United Nations Global

Compact, 2012).

2.4. Logistics Social Responsibility

According to Carter and Jennings (2002), the social responsibility of logistics firms

examines three main processes which are purchasing, transportation, and warehousing.

These three main processes fall under six broad categories that include the environment;

ethics; safety; working conditions and human rights; diversity; and philanthropy and

community involvement.

Purchasing Social Responsibility is “the inclusion in purchasing decisions of the social

issues advocated by organizational stakeholders.” (Maignan, Hillerbrand, and McAlister,

2002, p. 642). This means that stakeholders are individuals who bring attention to firms

about their social and environmental impacts resulting from purchasing activities.

According to Carter and Jennings (2002), the environmental activities of purchasing

processes include purchasing recyclable and reusable packaging in addition to working

on reducing the quantity of packaging material purchased. Firms must also insure that

their supply chain partners’ operations are environmentally friendly, and that their

product can be reused or recycled. The ethical part of purchasing activities involve

avoiding lying to or misleading suppliers’ representatives, blaming suppliers for mistakes

 

25    

made by purchasers, and sharing information about suppliers with competitors.

Philanthropy and community activities may include supporting local suppliers to further

develop, and auctioning or donating gifts to firms from foreign suppliers. Diversity

encourages purchasing from minority suppliers or women-owned businesses while

human rights issues emphasize on ensuring that suppliers provide fair working conditions

and pay reasonable wages to their employees. Finally, safety issues are concerned about

ensuring safe working conditions, especially when moving incoming purchased material.

According to Deakin (2001, p.6), Sustainable Transportation can be defined as

“transportation that meets mobility needs while also preserving and enhancing human

and ecosystem health, economic progress, and social justice now and for the future.”

Firms aiming for sustainable transportation must achieve all three objectives

simultaneously and in a fair way while taking into consideration access as well as

mobility in the process. According to Carter and Jennings (2002), transportation

managers can be environmentally sustainable by ensuring that vehicles are properly

maintained in order to increase fuel efficiency and reduce leaks, transporting hazardous

material appropriately, and participating in reverse transport of products for reuse and

recycling purposes. Managers must also consider human rights by ensuring that drivers

are not working for long periods of time and earning low wages. Safety issues involve the

hours of service requirements, driver qualifications, and maintenance so that vehicles are

operated safely. Finally, avoiding the receipt or offering of bribes is the center of ethical

issues while selecting minority-owned carriers helps ensure diversity.

 

26    

Warehouse managers have to deal with environmental issues such as packaging and

labeling of hazardous materials in addition to reverse logistics activities associated with

reuse and recycling. Philanthropic and community activities include the donation of

excess or obsolete inventory to philanthropies. Safety issues related to warehousing

activities involve training employees to safely operate forklifts and providing them with

safety tools such as hardhats and goggles, whilst ethical issues are centered on preventing

employees from steeling small materials. Diversity and human right issues in

warehousing management are generic and can be applied to most functional areas within

a warehouse (Carter & Jennings, 2002).

3 METHODOLOGY

This section describes the chosen method in details for the empirical work. Furthermore,

the perspective from which we carried out our study is presented here as the methods of

data collection, analysis framework, and other relevant factors need to be considered

when conducting a research of this kind.

3.1 Data Collection

The goal of this paper is to explain logistics firms’ performance with regards to corporate

social responsibility pressures. To realize such a goal, we focus on the firms’ reporting

disclosure in CSR field as well as other resources published on their official website; for

instance, the firms’ newsletters, blogs and booklets, whose results will be analyzed

deeply in the following chapter. The sample includes 50 logistics companies across the

 

27    

world. Since this is an explanatory, in order to get an acknowledge of current trends in

CSR reporting by logistics firms, the sample size was less important compared to the

characteristics and performances of these companies implementing environmental,

ethical, social, and sustainable responsibilities since different CSR levels of the company

needed to be represented. The sample selection is purposed oriented, so the authors are

able to adjust the chosen companies in order to reach the intended objective and to

answer the research questions (Saunders, Lewis, & Thornhill, 2007). Then we download

the CSR reports in the latest year from some firms’ website, one piece for each firm,

while others do not publish the reports. The year of publication ranges from 2009 to

2011, meaning that we study the most current report. When CSR was not included in the

annual report or separate CSR report, the website was required to determine whether CSR

reporting was found there or not.

The data collected in the paper is used for in-depth qualitative analysis, which we will be

presented in Chapter 4. In-depth analysis is valuable to fulfill the intended purpose

because it generates answers to the questions raised in our research. As Marshall and

Rossman (2006) say, a qualitative case study allows a focus in depth and in detail of a

specific topic. Meanwhile, the quantitative approach is used partly based on the needs of

addressing these questions. As another traditional management research method, the

quantitative approach focuses on numbers and figures for one to interpret. To some

extent, it would eliminate the drawbacks of the qualitative approach. This paper aims to

give answers to the research questions after analyzing these data in both of qualitative

and quantitative ways.

 

28    

3.2 Choice of Companies

Our sample for investigation is 50 logistics firms. The sample is purpose-based; we are

trying to find different criteria. The first criteria when selecting the appropriate company

is to fulfill the definition of logistics. In our study, a broad definition offered by the

Council of Supply Chain Management Professionals is accepted that is “Logistics is that

part of supply chain process that plans, implements, and controls the efficient effective

flow and storage of goods, services, and related information from point of origin to point

of consumption in order to meet consumer requirements” (Langley, Coyle, & Bardi,

2008, p.35). Different types of logistics firms are selected representing seven main

categories are freight forwarding, multiple modals of logistics, shipping, the third party

logistics (3PL), truck leasing, express service, and packaging companies (the last two are

classified as “others” in pie chart 3.1). Pie chart 3.1 presents different percentages of each

logistics category, of which freight forwarding firms plays a main role, taking over 32%

of the whole sample. And multiple logistics modals (24%) whilst shipping (20%) follow

next.

Shipping  20%  

Freight  forwarding    

32%  3PL  8%  

MulQple-­‐modal  24%  

Truck  leasing    8%  

Others  8%  

A  Classifica*on  of  Sample  firms  

 

29    

Chart 3.1 A classification of sample firms: each color represents each type of logistics

firms.

Secondly, we take the geographical distribution into consideration. The 50 logistics

companies are located three large regions in the world: Asia, Europe, and North America.

19 logistics companies are chosen from Europe; 15 are Asian logistics companies and 16

are North American logistics companies. Most provide logistics services globally, while a

few only limit their service to the domestic market. Therefore, the sample contains the

three most flourishing markets, reflecting the global economic trends.

We did not differentiate on company size as we decide to look at major well-known

logistics firms which are usually large across the three large economic development

regions. Additionally, we focus on publicly-traded companies during the collecting

procedure since generally the public companies have suffered more social responsibility

pressures, and would be more willing to expose their activities of CSR issues online.

Thus we hope that half of the logistics firms would report their CSR matters based on the

report accessibility of the listed companies. Finally, the accomplished database fits this

expectation to prove the significance of the public companies.

3.3 Analysis Perspective

The process to analysis is done as following: the first step is looking at the firms’ annual

reports in CSR reporting, and then turning to look for separate CSR reports, finally

 

30    

checking other disclosures on the firms’ websites if none found. The main resource for

analysis roots in CSR reports from logistics firms. To analyze the companies’ reports, we

adopt an inductive-deductive approach. Initially, we separately read these reports to

identify corporate social responsibility emphasis involved in the selected companies’

report. In some cases, we had to review both if one firm published two kinds of CSR

reports. Illustrating Kuehne & Nagel, they published the sustainability report and the

environmental report in 2010. With regard to the analysis part, the literature review

section is worth remembering. More importantly, different reporting standards for the

CSR theme will provide a clearer guideline. We should compare the report’s contents

with its in-use standard. Then a series of important CSR focus are listed by using words

adopted by the firms’ reports. Thus, the different guidelines of reporting standards and

the main contents of CSR reporting will be explored in the analysis part. On the other

hand, other information about CSR performances is derived for the unreported companies

from other recourses on their websites. Both qualitative and quantitative information is

gathered by the two authors. Successively, we both review the reports and other public

information again in order to verify the completeness of our list so that these emphases

are also compared. Consistency is the first and foremost principle for such a list. No

consistency indicator is used to compare on the list. When the description of certain

content is different, we adjust the primary texts as to reach an agreement. However, it is

difficult to cover all the CSR issues of logistics firms in the study. In fact, the companies

could not implement all the CSR practices.

 

31    

The following analysis chapter will enable us to address the main questions: If and How

logistics firm report their CSR? To what extent logistics without reports carry out CSR.

In addition, we hopefully provide further suggestions for reporting practice to these

companies after analyzing current ones.

3.4 Limitations

For the purpose of clarification and further research use, it is necessary to set some

limitation for our research. First, our investigation is logistics firms, which is different

from firms with logistics or supply chain departments. Therefore, the latter would be

another subject even though we study through the CSR field. More importantly, the data

source in this paper is narrowed, which is helpful for in-depth analysis. All the data is

retrieved from the sample firms’ websites rather than external channels, such as Internet

and social media. However, it may cause misleading. Companies tend to public positive

information in order to establish better social image. At the same time, the lack of some

information may make us unable to cover the CSR issue of the chosen firm in a full

context. Besides, time is another limitation for our paper since we only use one year

report for each firm and highlight CSR information disclose of other firms in the current

year. Then the paper is not able to trace the firm’s CSR footprints in a period of years.

However, it leaves blanks behind it for research in the future.

3.5 Validity and Reliability

 

32    

There are two important principles in our study-validity and reliability. Validity

guarantees that the obtained information is reliable and correct (Patel & Davidsson,

1994). Easterby-Smith, Thorpe, and Lowe (2002) define reliability as how the same

approach would acquire consistent results. When one studies thoroughly with

conceptualization, the data collection, data interpretation, and data analysis validity and

reliability should be arranged with either a quantitative or qualitative method (Merriam,

1998).

In this perspective, we believe the information reported by these logistics companies, and

we would not check to verify what they have reported. Therefore, all the data becomes

more valid and unbiased which helps enhance the trustworthiness of this thesis, and

moreover enables more positive results.

4 DATA ANALYSIS

The analysis has been made through the empirical information gathered with the help of

pervious literature studies to identify CSR practices logistics firms have performed,

which is connected to the purpose of the thesis. This section also serves as a base from

which we make our conclusions.

4.1 Report Analysis

 

33    

All CSR reports in various forms are one main resource for data analysis. This part will

enable to present how logistics firms implement CSR based on these reports in the

following way; first the reports are compared in some dimensions in regards with the

selection of logistics firms, then a discussion of different CSR reporting standards will be

carried out and also whether internal departments belong to logistics firms or external

professional accounting organizations are responsible for reporting CSR issues will be

solved. Finally, the core substance describing various CSR activities by these logistics

firms will emerge. After the whole analysis, we authors hope to give out some

suggestions for improving reports in the conclusion section.

4.1.1 General Report Comparison

We found out that 23 logistics firms have reported CSR, thus the portion is close to half.

This means that these reports as information resource are sufficient for our research.

Thus, we believe the outcomes of our study are representative, instructional, and worthy

to put into practice.

Table 4.1 (on the next page) gives out a map of our sample firms’ differences according

to five indicators: Logistics categories, Region, Report or not, Standard, and Report type.

 

34    

Table 4.1 Classification of selected logistics firms by analysis dimension

Analysis dimensions Numbers of firms Percentage

Logistics Categories Freight-forwarding 16 32%

Multiple-modal 13 26% Shipping 10 20% 3PL 4 8% Express service 3 6% Truck leasing 3 6% Packaging 1 2%

Region Asia 15 30%

Europe 19 38% North North America 16 32%

Report Or Not Report 23 46%

Non-report 27 54%

Standard* GRI 6 26.1%

ISO14001 1 4.3% Multi-standard 8 34.8% Self-determined standard 8 34.8%

Report Type* Environmental report/brochure 2 8.7%

Corporate social responsibility report 8 34.8% Sustainability (development) report 9 39.2% Social and environmental report 1 4.3% A chapter in the annual report 2 8.7% Sustainability & citizenship report 1 4.3%

*The number of companies within the two dimensions is 23(not 50).

Under the term of ‘Logistics Categories’, the table illustrates how many companies are

picked up for each category. It also explains clearly the ratios of companies from each

region. Then highlighting the last two analysis dimensions from the CSR reporting

 

35    

perceptive, all the 23 reports by logistics firms does not have the same standard, and four

types of standards are adopted of which both the multiple-standard and the self-

determined standard are the most common methods for reporting CSR issues. That means

logistics firms either use several verified standards formulated by social organizations or

the government, or they define CSR reporting guidelines by themselves on the basis of

their own corporate social activities. Furthermore, GRI is popular with the logistics firms

in the single reporting form, and only one firm applies ISO 14001 standard. Even though

all firms address the same subject-CSR, each firm may pose different emphasis, which

leads to different report names. The 23 reports are sorted into six varieties of reports in

the form of names. Nine pieces of corporate social responsibility reports and eight

Sustainability reports are prominent, while only one firm publishes a Sustainability and

Citizenship report or Social and Environmental report. Meanwhile, two logistics firms

only focus on the environmental aspect named as the environmental report/brochure. The

remaining two firms contain CSR reports as one chapter in their annual reports.

4.1.2 Characteristics of Issued Reports

The aim here is to check if the guidelines followed by each report are consistent with the

equivalent reporting standard. The cornerstone of reporting framework on CSR in

accordance with each standard is the provided guidelines.

The Global Reporting Initiative (GRI)

 

36    

The newest version of GRI Sustainability Reporting Guidelines is G 3.1 which is adopted

in six reports by the logistics firms. It was released in 2006 and can be downloaded from

GRI’s website. The guidelines are divided into two parts. Part 1 is Reporting Principles

and Guidance that features guidance on how to report. Part 2 features guidance on what

should be reported in the form of Disclosures on Management Approach and

Performance Indicators. Over viewing the two parts again, the first part contains the

following information: i) Principles to define report content: Materiality, Stakeholder

Inclusiveness, Sustainability Context, and Completeness; ii) Principles to define report

quality: Balance, Comparability, Accuracy, Timeliness, Reliability, and Clarity; iii)

Guidance on how to set the Report Boundary. And the second part has three aspects:

Strategy and Profile, Management Approach, and Performance Indicators (Global

Reporting Initiative, 2012).

The six selected logistics firms have applied the above G3.1 guidelines. We authors

examine one report by one. It is apparent to see that all the reports do comply with these

guidelines; however, some differences have existed. Most reports are organized in the

way as GRI standard has formulated showing the basis role of reporting framework.

Also, five in six companies explain GRI guidelines elaborately while one company only

mentions a few words inside its report. Besides, one reporting phenomenon is logistics

firms prefer to set ‘table of contents’ mainly depending on part 2 and the corporate social

responsibility report from CSX Corporation is just the example. More importantly, four

logistics firms have made an impressive work on applying GRI guidelines into reporting.

Each of the four reports put a specialized summary named as ‘GRI Content Index’ at the

 

37    

end of report to point out the corresponding page where each branch of the guidelines is

described in order to make readers easily position their interests.

The International Organization for Standardization (ISO 14001)

In the research, one logistics firm of the analysis sample-Yang Ming Marine Transport

Corporation uses ISO 14001 out of the whole 14000 series. It was modified in 2004 and

small and medium-sized enterprises (SMEs) can also benefit from this international

standard and points to some resources, such as an environmental management system

(EMS). From the guidelines angle, ISO 14001:2004 has 6 categories (see page 20). On

the other hand, the G3 guidelines are constructed to be applicable to the ISO 14001

standard.

As Taiwan-oriented logistics firm, Yangming Marine published the Environmental

Performance Report in 2010 using ISO 14001 standard because this standard “specifies

requirements for an environmental management system to enable an organization to

develop and implement a policy and objectives which take into account legal

requirements and other requirements to which the organization subscribes, and

information about significant environmental aspects” (ISO 14001, 2004). It proves that

the standard is appropriate for this firm. Yangming Marine has covered almost all the

ISO -14001 guidelines in its report including the general requirements, environmental

policy, EMS, the overview of environmental programs last year, and new environmental

 

38    

activities plan in the next year to other aspects of environmental activities. Yet, they did

not mention too many details.

Multiple-standard

This is a more complex situation when logistics firms adopt more than one standard for

reporting, and it is defined as ‘multiple-standard’ in the paper. Six out of the eight

logistics firms come from Asia, including three Chinese firms and three Japanese firms,

meanwhile two exception-DSV and The A.P. Moller - Maersk Group are registered in

Europe, whose reports have been prepared in accordance with both of GRI and GC

guidelines. Also, logistics firms in Asia adopt more standards than those in Europe in our

findings. Table 4.2 (on the next page) provides an overview of logistics companies with

corresponding standards under the ‘multiple standard’ model.

 

39    

Table 4.2 Companies with multiple standards

Company Name Multiple standards*

The A.P. Moller - Maersk

Group GRI, GC

COSCO GC, SASAC, GRI, ISO26000,CEC

Nippon Express Environmental Reporting Guidelines 2007, GRI

Nippon Yusen(NYK line) Environmental Reporting Guidance 2007, GRI,

ISO26000

DSV GRI, GC

Sinotrans SASAC, GC, GRI

China International Marine

Containers GRI, CEC, CFIE

K Line GRI, Environmental Reporting Guidance 2007,

Environmental Accounting Guideline 2005

*The abbreviation of SASAC, CEC &CFIE refers to the following text in the section.

Chart 4.1 demonstrates different proportions about how many companies use two, three,

or five reporting standards. 62.5% companies put three or five different standards into use

and the one firm-China Ocean Shipping Company (COSCO) even used five various

standards in the 2010 report; thus they prepared a sustainability report with total of 329

pages.

 

40    

Chart 4.1 Number of companies with multi-standard

Apart from several international reporting standards (i.e. GRI, GC) described before,

there are six new types of standards included in these ‘multiple-standard’ CSR reports by

the logistics firms:

1) ISO 26000: the standard was released by the same organization-ISO as ISO 14001.

ISO 26000:2010 is “intended to encourage them to go beyond legal compliance,

recognizing that compliance with law is a fundamental duty of any organization and an

essential part of their social responsibility. It is intended to promote common

understanding in the field of social responsibility and to complement other instruments

and initiatives for social responsibility, not to replace them” (ISO 26000, 2010). The

guidance on social responsibility is structured like (1) Organizational governance; (2)

Human rights; (3) Labor practices; (4) The environment; (5) Fair operating practices; (6)

Consumer issues; (7) Community involvement and development; (8)The relationship of

an organization's characteristics to social responsibility; (9)Understanding the social

12.5%(1)  

50%(4)  

37.5%(3)  

Number  of  companies  with  mul*-­‐standards  5  standards   3  standards   2  standards  

 

41    

responsibility of an organization; (10)Practices for integrating social responsibility

throughout an organization; (11)Communication on social responsibility; (12)Enhancing

credibility regarding social responsibility; (13) Reviewing and improving an

organization's actions and practices related to social responsibility; (14)Voluntary

initiatives for social responsibility.

2) Guiding Opinions on Performance of Social Responsibility (China): It is extracted

from Central Enterprises and Central Enterprise Comprehensive Risk Management

Guidelines issued by the State-Owned Assets Supervision and Administration of

Commission of the State Council (SASAC). And the guidelines refer to international

standards such as ISO26000 Guidance on Social Responsibility and GRI 3.1 Guidelines.

Two Chinese logistics companies actively participated in the compilation of SASAC‘s

guidelines for social responsibilities of enterprises under the central government.

According 2010 COSCO sustainability report, the guidelines require that an enterprise

must voluntarily abide by relevant laws and regulations, social norms and business ethics;

while in the pursuit of economic efficiency, it should also shoulder the responsibility for

shareholders including employees, consumers, suppliers, communities, and the natural

environment to achieve comprehensive and coordinated sustainability between the

enterprise, the society, and the environment.

3) China Corporate Social Responsibility Standards and Best Practices:This is

recommended by the Sustainable Development Business Committee of China Enterprise

 

42    

Confederation (CEC). One Chinese shipping giant-COSCO complies with the guidelines

regarding economy, environment, safety and anti-corruption.

4) Social Responsibility Guidelines for China's Industrial Enterprises and Industrial

Associations: It is released by the China Federation of Industrial Economics (CFIE). The

general guidelines cover eight aspects of corporate governance, business performance,

environmental protection, energy savings, production safety, care of employees,

stakeholders' interest, as well as social community involvement.

5) Environmental Reporting Guidance 2007(Japan): The guidance is formulated by

Japanese Ministry of the Environment. It summarizes the preferred directions and

contents, based on the current domestic and international trends of environmental

reporting. Totally it has five chapters. Chapter 1 refers to plan an environmental reporting

publication. Chapter 2 and 3 describe the key components for environmental reporting.

Chapter 4 represents status of social initiatives and Chapter 5 describes upcoming issues

involved in the report (Environmental reporting guidelines, 2007).

6) Environmental Accounting Guideline 2005(Japan): It is also published by Japanese

Ministry of the Environment. It ‘aims at achieving sustainable development, maintaining

a favorable relationship with the community, and pursuing effective and efficient

environmental conservation activities. This guideline for accounting procedures allow a

 

43    

company to identify the cost of environmental conservation during the normal course of

business, identify benefit gained from such activities, provide the best possible means of

quantitative measurement (in monetary value or physical units) and support the

communication of its results’ (Environmental accounting guideline, 2005).

Compared with common-used standards (e.g. GRI, GC) for CSR reporting, the biggest

difference is that these well-known standards are accepted and adopted in the global

context while the above new standards are limited in the national level with one

exception of ISO 26000. The fact is directly influenced by the country situations. In this

respect, Chinese or Japanese logistics firms should apply these standards implemented by

their national government or department. In contrast of a single standard heading CSR

reports, we notice that the reports seem complex but comprehensive applying multiple

standards in different guidelines from each type cross together rather than addressing one

by one standard separately, so it is hard to split each standard out. More contents in

accordance with these guidelines are explained in the entire report compared with the

first two single standards. We think it is necessary for logistics firms to construct how the

release of CSR matters before starting reporting if they decide to adopt multiple

standards.

None of firms in our research sample utilizes EMAS or SA 8000 for reporting CSR

subject. It seems that logistics firms have changed their CSR reporting standards as time

passed by. There are some reasons explaining either EMAS or SA 8000 is not a good

 

44    

choice for logistics firms. EMAS is a management-oriented scheme, while logistics firms

tend to be technology-oriented. Moreover, EMAS mainly refers to environmental

management system and does not take into account different emission standards that have

to be achieved in different countries, thus it cannot respond well to logistics firms in full

context of CSR expectations, as the Germany industry criticized (Franke, 1995). In

addition, EMAS will be implemented more efficiently for EMAS-registered firms

because of immaturity; thus, logistics firms shall keep a balance between costs and

benefits when choosing EMAS. For SA8000, the main defect for logistics firms exists in

the limitation of standardizing human rights and workplace; however, CSR range of

logistics firms has been explored more widely.

Self-determined

Speaking to ‘Self-determined’ standards, they are relatively free styles compared to the

other three kinds of standards. The type is quite different between each company since

the logistics companies determine the guidelines of CSR reporting totally on their own

rather than consulting existing common standards. As a result, the guidelines appear

vague and difficult to identify while they keep developing. One feature for some logistics

firms is that the reporting guidelines consult stock exchange listing expectations.

Canadian Pacific’s corporate governance and standards “are consistent with those set

forth in the New York Stock Exchange (NYSE) expectations, the TSX Corporate

Governance Guidelines and the Canadian Securities Administrators’ National Policy 58-

201 titled Corporate Governance Guidelines’’(Canadian Pacific Corporate Social

 

45    

Responsibility Report, 2009). Take another example-Ryder; the company defines the

guidelines under NYSE listing expectations. Moreover, there is another feature showing

that some logistics firms do not use the guidelines set by the social or environmental

organizations despite joining the memberships. Like Deutsche Lufthansa AG, the report

doesn’t follow the guidelines of the UN Global Compact (GC) although the principles are

copied in the report. However, the biggest similarity is that reporting principles,

shareholders and employees’ commitment, CSR performances, and the environment

recognition are involved in the guidelines.

4.1.3 Reporting Standard and Report Type Comparisons

We are going to divide 23 different logistics firms which separately published CSR

reports again into seven logistics categories and three geographical regions based on two

dimensions: standard and report type, as shown by table 4.1a (on the page below). Table

4.1a is derived from table 4.1; explaining differences in reporting standards and report

types of logistics firms demined in various logistics modals across Asia, Europe, and

North America.

 

46    

Table 4.1a Classification of logistics firms with separated CSR reports by analysis

dimensions

Analysis  dimensions   Standard             Report  type*          

    GRI   ISO  14001   Multiple   Self-­‐determined   CSR     S   E   S&E   AC   S&C  

Logistics  Categories        

               Freight-­‐forwarding   4  

 3   4   3   5   1  

 1   1  

Multiple-­‐modal      

3   1   3   1          Shipping   1   1   3   1   2   2   1   1  

   Express  service        

1          

1    Truck  leasing                 1       1                  

         

               Region    

         

           Asia   1   1   6   2   4   3   2   1      Europe   1  

 3   3   2   4  

   1  

 North  American   3           3   2   2           1   1  

*The abbreviations of different report types are consistent as follows: CSR- Corporate social responsibility report; S- Sustainability (development) report; E-Environmental report/brochure; S&E-Social and environmental report; AC-A chapter in the annual report; S&C-Sustainability & citizenship report.

**All numbers mean the number of selected logistics firms and the blanks in the table mean zero.

In table 4.1a, we choose two dimensions from table 4.1 for in-depth analysis of 23

logistics firms which have prepared CSR reports. The first analysis dimension is logistics

categories. Eleven freight-forwarding companies have published separate CSR reports

where GRI and self-determined standards are mostly used by four of them, and the

leaving three companies use multiple standards. These reports are named by different

terms of which five pieces of CSR reports are known as ‘Sustainability reports’ and three

other pieces are known as ‘Corporate social responsibility report’, also leaving one

Environmental report, one chapter in the annual report and one Sustainability &

 

47    

Citizenship report. Six shipping companies prepare separate CSR reports, applying all

four types of reporting standards. Half of the shipping companies prefer multiple

standards. Moreover, four report types are used by these shipping companies, including

Corporate social responsibility report, Sustainability (development) report,

Environmental report/brochure, and Social and environmental report. Four multiple-

modal logistics companies also reported separately and three in four adopt multiple

standards. Three pieces of reports from multiple-modal logistics companies are named as

CSR report and the other one is sustainability report. Moreover, there are one express

service company and one truck leasing company preparing separate CSR reports with

same self-determined standard, accordingly, having been named one chapter in the

annual report of the express service company and one sustainability report for truck

leasing company. The second analysis dimension is region. In general, ten Asian logistics

companies, seven European logistics companies, and six North American logistics

companies prepare CSR reports. Asian companies adopt four different reporting

standards and name four CSR reports, three sustainability reports, two environmental

reports, and one social and environmental report. None of European logistics companies

adopt ISO 14001 standard for reporting and four in seven are sustainability reports. As

for North America, these companies would like either GRI or self-determined standards

for guiding their reports, and CSR and sustainability reports are still popular types for

their reports. To sum up, not all logistics categories are published CSR reports and the

top three types of logistics firms are freight-forwarding, shipping, and multiple-modal

logistics companies. In addition, logistics firms from three regions have prepared CSR

 

48    

reports, but in the different report forms regardless of the reporting standards or report

names.

Some reasons may account for these differences about reporting standards and report

types in various logistics categories across various regions which are analyzed before.

First of all, the social policies in different countries require these firms to select the

appropriate guidelines and types for reporting. More Specifically, European Union

administration office emphasizes full context of CSR and sustainability; thus, most

European logistics firms prefer CSR and Sustainability types. As for reporting guidelines,

Asian logistics firms adopt more standards or define standards by themselves because the

laws and rules related to CSR issues are not set up comprehensively, making their

reporting immature. At the corporate governance glance, companies want to reduce

reporting costs, so they prefer existing popular standards and types for their CSR reports

as to save times and money.  

4.1.4 Internal VS External Organizations

The part is going to give an answer to the question: who is authorized to report CSR for

the chosen logistics company? One important new trend related to this problem is that the

third-party assessment organizations have joined CSR reporting field for corporate

governance. Two types of reporting organizations are classified used in the study: one is

internal organizations, representing any divisions or individual inside the company who

 

49    

dealing with CSR reporting issues; the other is external organizations which the third

party independent out of the company organizations and hired by the company.

22 logistics firms report their CSR issues by themselves and one firm hires external

accounting agency to prepare its CSR report. Ten of 22 logistics firms have a separate

CSR division or group who prepare the report while the other 12 firms don’t have a

separate CSR division, but the board of directors does handle the CSR reporting

responsibility. In addition, the one exception is Cathay Pacific (CP) who chooses PWC to

handle the reporting matter. CP chooses PWC because the latter has formed a set of

reporting criteria and procedure in the CSR field as well as earning good experience.

Furthermore, CP believes PWC would complete the CSR report on a more objective and

unbiased position. It is a great opportunity for CP to learn reporting experience from the

professional auditing company. Meanwhile, CP could save own resources (including

employees) and save time that can be spent on main business operations. According to

CP’s Sustainable Developing Report (2010), PWC has been engaged by the directors of

the company to perform an independent limited assurance engagement in respect of their

Greenhouse Gas Emissions Data and selective quantitative and qualitative data (‘the

Data’) for the year ended 31 December 2010 as set out in the Company’s Sustainable

Development Report. And the accounting agency has performed the following

procedures:

• Making enquiries with relevant management of the Company

 

50    

• Understanding and evaluating the design of key processes for managing and

reporting the Data

• Testing, on a selective basis, the preparation and collation of the Data prepared by

management of the Company

• Examination on a test basis of documentary evidence (both management and third

party) in respect of the Data

• Undertaking analytical procedures of the Data

This reporting method has a few advantages. First, the agency is independent and avoids

the interference from the company itself. The company may embellish the CSR report for

the sake of shareholders and investors. Thus, the use of independent accounting agency

increases the transparency and reliability. Moreover, the external agencies usually follow

strict auditing standards for reporting CSR as to ensure profession and liability. However,

it leads to extra auditing fees for the company.

Though Table 4.1b, it is clear to see the number of each type of logistics firms across

three regions which choose internal organizations or external organizations to prepare

their CSR reports. Ten freight forwarding companies set up a separate CSR division or

group within the companies’ organization structure to formulate such a report and one

freight forwarding firm authorizes an accounting company to the same matter; totally,

47.8% of the firms have prepared the CSR reports. Shipping firms take the second

position, and six of 23 use internal organizations. Also, there are four multiple-modal

logistics firms which prefer that internal divisions formulate their CSR reports, summing

up 17.4%. One express service firm and one truck leasing company have own employees

 

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working on CSR reporting tasks. From geographical perspective, 10 Asian logistics firm

have prepared the CSR reports and nine of them have specialized departments to prepare

the reports. Seven logistics companies come from Europe, over 30% of all 23 reported

firms. The other six logistics firms are registered in North American.

Table 4.1b Classification of firms by analysis dimensions based on two types of

reporting organizations

Analysis  dimensions   Number  of  companies   Percentage  Internal  Organization          Logistics  Categories  

   Freight  forwarding   10   43.5%  Multiple-­‐modal   4   17.4%  

Shipping   6   26.2%  Express  service   1   4.3%  Truck  leasing   1   4.3%  

     Region        Asia   9   39.1%  

Europe   7   30.4%  North  American   6   26.2%  

     External  Organization          Logistics  Categories  

   Freight  forwarding   1   4.3%  Region  

   Asia   1   4.3%  

4.1.5 Contents Descriptions

In order to trace logistics firms’ CSR dynamics deeply, we will analyze the common

contents being used in different reports since contents differ from a report to another,

regardless of the various reporting standards or names. Going through 23 pieces of

 

52    

reports again, we are able to select five contents shared with the CSR reports by all the

logistics firms: i) Environment; ii) Society; iii) Shareholders; iv) Employees; v)

Suppliers. Through these contents, the logistics companies press to present what they

actually do for CSR or “sustainability.”

Environment

The environment is the foremost matter for most logistics firms. In our research, all 23

selected firms disclosed environmental policies and activities; as a result, some firms

have named the Environmental reports for CSR issues. However, they have different

emphasis of the environment because they come from different logistics modals.

Specifically shipping companies focus on ocean protection and water reduction; the

environmental activities of freight-forwarding companies focus on air and road; and

multiple-modal logistics companies work on more diversified environmental aspects1.

Generally speaking, their policies focused on reducing a company’s overall impact on the

global environment in terms of climate change, energy efficiency, waste reduction, and

recycling to realize environmentally friendly logistics and green supply chain. These

logistics companies have engaged in various programs related to the major focus areas of

environment policy, such as measuring and controlling pollution emissions, establishing

environmental management system (EMS), and increasing the environmental

training/education for shareholders, employees, and consumers.

                                                                                                                         1  Based on the classification of sample firms (chart 3.1), none of 3PL, express service, packaging nor truck

 

53    

The ‘K’ Line Group is a leading shipping line company and a good example for EMS.

They have built EMS based on ISO 14000 and operated it to identify and minimize the

environmental impact constantly. The environmental policies set out in the EMS serves

as the guidelines for determining the basic policies and setting specific targets for the

appropriate operations of the environmental activities. Another international freight

forwarding corporation-CSX has implemented a comprehensive Environmental

Management System to turn environmental principles into action. The system serves as

the cornerstone for the company’s successful management of all environmental programs

and performance, which is explained as:

• Allows for a clear standard that meets all applicable regulatory and company

requirements

• Standardizes and guides the company’s environmental actions

• Provides a consistent framework against which all practices across the company are

performed and verified

• Guides facility upgrades and expansions so that they have minimal effects on the

environment

Greenhouse Gas (GHG) emission management is worth mentioning for logistics firms.

CO2 is one key element of GHG. Since industrialization in the 1870s the increase in the

use of fossil fuels has brought a sharp rise in CO2 density causing the earth’s temperature

to rise. The issue of climate change is a growing problem and logistics firms need to

tackle it. Many logistics firms are working on measuring and decreasing CO2 emission

 

54    

continuously. For example, Hanjin Shipping Corporation has set a goal to reduce CO2

emissions resulting from vessel operations by 15% from 2008 levels by 2015. In line with

this goal, they initiated a company-wide energy management system for the

comprehensive monitoring and controlling of energy use at terminals and office buildings

and vessels. Also, Hanjin is the first shipping company in the world to develop and

provide the Supply Chain Carbon Calculator (SCCC) to global customers through its

Website in 2009. SCCC calculates CO2 emissions from the transportation of a container

from its departure point to its destination according to the weight of the cargo. Nippon

Express compares the CO2 emission reduction due to modal shift from their three

transport modes-rail, trucks, and domestic shipping in CSR report. The fact is CO2

emissions per unit distance and weights are lower than those of trucks. In domestic

marine transport, Nippon Express is implementing various low fuel consumption

initiatives to reduce CO2 emissions.

Society

Among the 23 logistics companies having separate CSR disclosure, 18 of them mention

their initiatives and performances on building social relations adopting different forms,

such as social contribution, community relations, social commitment, social value, and so

forth. The major goals are quite similar as they all mention the importance of being a

responsible and good corporate citizen to the communities / the society they serve. CSX

states its citizenship mission that:

Through grass-roots volunteerism and focused corporate giving, CSX is committed

 

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to strengthening the bond between the company and the citizens of the towns in

which CSX employees live and work.

The major activities each logistics firm has engaged in can be categorized into four

factors: corporate donation/giving, community service, employee volunteerism, and

labor harmony. In 2010, Union Pacific Company donated $14 million in community

giving and supported 676 nonprofit organizations. Combining those efforts with

corporate support and employee matching gifts, Union Pacific helped more than 2,500

nonprofit organizations. The employees at Union Pacific Corporation contribute their

time, talents, and generous financial contributions to provide opportunities for children

and families in thousands of communities across their network. The company has built

partnership with many schools, training centers, and social organizations. Deutsche

Lufthansa AG group aims at providing comprehensive humanitarian emergency aid in the

aftermath of natural disasters for many years. In regard to labor harmony, China

International Marine Containers (CIMC) group commits ‘People to construct the future

of CIMC’ so they ensure no child labor is used and create many opportunities for

employee benefits and improvements for an internally harmonious society.

Shareholders

Our study indicates that discussion about shareholders is included in logistics companies

CSR reports. 14 out of 23 logistics companies have explained shareholders issues in their

 

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CSR reports, which aggregate 61%. There are two directions for this issue regarding of

corporate social responsibility. One is to improve the transparency of CSR issues as to

match shareholders’ interests and expectations. As Metro Group notes, transparent

stakeholder communication is a precondition for rendering our commitment to

sustainability publicly visible. The other factor is to strengthen shareholder engagement

in the company’s socially responsible events. Maersk engages with stakeholders to be

transparent and accountable for its actions to manage key sustainability issues and risks

actively and to pursue opportunities for collaboration which can benefit both business and

society. Canadian National (CN) Railway has been engaged with their stakeholders for

decades. The communication channels are annual and quarterly meetings, as well as

group and one-on-one investor meetings. They also complete investor questionnaires

geared towards various sustainability topics, including the Carbon Disclosure Project and

the Dow Jones Sustainability Index. In 2010, they advanced the partnership with key

stakeholders in the supply chain through groundbreaking collaborative service

agreements. To be peasant, many CN shareholders consider environment, social, and

governance factors in making investment decisions.

Employees

This term of content refers to caring about employees’ work conditions, health, and

safety according to the logistics firms’ reports. In these reports, some logistics companies

combined all these sectors for reporting. Others separated them or covered one certain

sector. They recognize the importance of employees as firm success and tend to provide a

 

57    

safe work environment and develop employees’ potential due to the characteristics of the

logistics industry; accordingly different human resource development programs are run in

the companies. Hanjin Shipping has operated job-based personnel management system to

meet global standards that enhance the efficiency and productivity of its employees and

conducted an annual Employee Satisfaction Index (ESI) survey to monitor employee

satisfaction and collect feedback. Also PanLink, a web-based human resources

management system, combines tools and processes that allow both management and

employees to realize the true benefit of Panalpina’s performance and talent management

practices.

Furthermore, safety responsibility becomes the core employee policy in most logistics

firms since such a kind of job, especially basic operators (i.e. drivers) who have high risk

and danger. There are a few examples extracted from the research sample to explain the

fact. In COSCO group, the safety committees include the ships’ safety health, technical

guidance, and employees’ health check. The main tasks and responsibilities are

implementing national production, safety laws and administrative regulations, studying

major measures of safety production works, coordinating and resolving major issues in

safety production, guiding safety production work, and offering instructive suggestions

on the universal and tendentious issues that occurred in safety production. The NYK

Line regards safe ship operation is the foundation for all their business activities, creating

a suit of safety promotion system from plan, do, act to final check by NAV9000 (a

rigorous self- imposed safe ship management system). In addition, Emergency Response

Network (ERN) is introduced to prepare for accidents and incidents when they happen.

 

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Ryder also focuses on safety sustained by multiple safety programs and initiative because

safety is an underlying value and goal of the company. The Ryder safety organization

develops safety communications and training programs, conducts research on new safety-

related technology, manages the implementation of these technologies, and provides the

operations with standardized safety dashboards and trend data, which also applies to their

consumers. It is notable that their drug and alcohol policy applies to all employees,

including contract and supplier personnel while performing any work for Ryder.

Therefore, the U.S. OSHA Recordable Injury Frequency Rate2 for both of Ryder’s supply

chain solutions and dedicated contract carriage is controlled below 5%.

Suppliers

Suppliers are the important partners when logistics companies are carrying out corporate

social responsibilities. All 23 reports indicate that the logistics companies cooperate with

their suppliers in CSR activities since they expect the implementation of CSR philosophy

not only within their own companies, but also within partner companies. Moreover,

suppliers become another driver for these socially responsible practices replying on their

own abilities and resources. In order to fully respond to the diverse requests of Nippon

Express’s valued customers and society in general, the company aims to fulfill their

responsibilities as principal contractor, build trusting relationships as a partner, and work

                                                                                                                         2  OSHA Recordable Injury Rates for the U.S. Transportation and Warehouse Industry Segment can be found on the ���Bureau of Labor Statistics website at http://bls.gov/iag/tgs/iag48-49.htm#fatalities_injuries_and_illnesses.

 

 

59    

to expand both of own and their partners’ businesses. Accordingly, they have developed

the External Performance Evaluation Standards, an agreement comprising 16 standards,

which potential suppliers must fulfill in order to enter a contract for delivery operations.

As part of such efforts, the company holds the Nippon Express Group CSR Council once

a year where their suppliers present and discuss CSR issues with the company. China

International Marine Containers (CIMC) points out that the content of company social

value shall be shared with suppliers as one strategic objective. Environmental protection,

production safety, and employees’ occupational health have been included into regular

assessment of suppliers, which has enhanced suppliers’ awareness of corporate social

responsibility and promoted them to take further measures for optimization and

improvement. Take casting for example, all suppliers have passed the secondary use of

ZFS (Zero Field Split), which has greatly reduced the emission of waste sand and

promoted the improvement of the overall environmental protection of the industry.

Maersk also works together with suppliers to reduce the emissions of CO2 as well as SOx,

NOx and particulate matter, such as paint suppliers, engine manufacturers, and equipment

suppliers. Therefore, the whole supply chain is expected to acknowledge the significant

ecological and social impact for logistics firms.

4.2 CSR Practices of Unreported logistics firms

In the sample, 27 logistics companies choose not to publish their separate CSR reports;

however, it does not mean that they are not concerned about CSR matters. Instead, 22 out

of 27 logistics companies disclose their attitudes or performances on the official websites

 

60    

when facing CSR expectations  through a specialized section on the website, official blogs,

newsletters, or other electronic booklets. Generally speaking, visitors have access to

understand the firm’s CSR visions, to learn different technology and mechanisms related

to CSR missions used by each department, to trace CSR events, and to know donations

numbers through these channels. The common spotlight is gearing their business

activities in a sustainable, environmental, and socially responsible vision. And it is the

big difference that some firms expose their CSR involvement in a full context whose

contents equals to the published CSR reports but without certain reporting standards.

Furthermore, we find that most companies actively participate in environment protection

programs, corporate giving, charity events or such a kind. Unfortunately, the other 5

firms do not have evident information about CSR, for which some reasons may account.

Maybe the companies are still at start-up stage and not strong enough to afford social

responsibilities. Another reason could be uncover on the website beyond our research

information range.

These firms’ practices in CSR are the equivalent of those with separate reports; however,

no separate CSR reports are prepared. The logistics firms keep practicing CSR ideas as

well as optimizing logistics/advanced supply chain solutions through various CSR

activities. The section is going to analyze these practices in four dimensions:

Environment; Employees; Consumers; Community.

Prior to analyze the actions, table 4.1c gives a map of comparisons of CSR information

 

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disclosure on two indicators-logistics categories and region, the same as table 4.1a and

4.1b. It is to be pointed out that five logistics firms with none CSR information on their

websites contain two multiple-modal logistics companies, one 3PL Company, one

packaging company, and one truck leasing company. Also, both of two in five come from

Asia and North America, leaving one European logistics company. The four factors-

environments, employees, consumers and communities are frequently announced on

these logistics companies’ websites; however, each category of logistics firms has

different publication highlights. On the whole, nineteen logistics companies put eyes on

the nature environmental issues, fifteen logistics firms care about employees’ benefits,

such as safety, health and career development. Meanwhile, over eleven (half of 22)

logistics companies publish how to improve consumer satisfactory and community

development on the websites. Firstly, freight-forwarding, multiple-modal and shipping

companies pay attention to all the four factors with one expectation that shipping

companies do not mention any information related to communities. And compared with

consumers and communities, these three patterns of logistics companies focus more on

environment and employees, which is proved by the large numbers of the three patterns

in table 4.1c. In addition, 3PL and express service companies publish CSR information

covering all the four factors on their website, but none of the factors is quite outstanding.

One trucking leasing company is a special case because it does not care about employees.

When looking at the region indicator, the number of logistics firms covering each of the

four contents is also quite different. Specifically, Asian logistics companies are keen on

the first three factors-environments, employees, and consumers; however, communities

are neglected. Logistics firms from Europe and North America do not have special

 

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focuses, and they keep close eyes on all the four factors.

Table 4.1c Classification of logistics firms without separated CSR reports by

analysis dimensions

Analysis  dimensions   CSR  disclosure  on  the  website       No  CSR  disclosures       Environment   Employees   Consumers   Communities      Logistics  Categories  

           

Freight-­‐forwarding   5   5   1   4   0  Multiple-­‐modal   5   5   3   4   2  

Shipping   4   2   2   0   0  3PL   2   1   2   1   1  

Express  service   2   2   2   2   0  Packaging  

       1  

Truck  leasing     1   0   1   1   1      

           

Region            

   Asia   3   3   3   1   2  

Europe   10   7   5   6   1  North  American   6   5   3   5   2  

*All the numbers mean the number of selected firms.

These changes in disclosure contents based on logistics categories and regions

differences are caused by some reasons. Some logistics firms cannot afford to act on the

overall field of CSR; instead, they turn to the most important factor as the firms view,

like the environment. For example, shipping companies among the selected companies

with CSR disclosures on the websites do not mention communities because their main

business are based on oceans while freight-forwarding companies are closely connected

to inland(i.e. communities). Additionally, there are no obvious differences in three

regions since different types of logistics firms are selected from each region rather than

only one logistics category and the three regions care about the four sectors-environment,

 

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employees, consumers, and communities. Therefore, the characteristics of logistics

categories decide different focuses of CSR information disclosure shown in the table 4.1c.

4.2.1. Related to the Natural Environment

In accordance with logistics firms with separate CSR reports, other firms without

separate CSR reports regard the nature environment as the principal attention and take

efficient measures to protect the environment in order to be a socially responsible

corporation.

• Ensuring the suppliers and transportation processes are environmentally sound

• Reducing pollution to the sea, air, and land

• Using resources more efficiently and reducing fuel usage

• Establishing strict, real-time emission control/measurement systems

• Joining international environment protection (green) organizations

• Enhancing sustainable logistics operations

The logistics companies have considered environment goals as one corporate strategic

vision. Currently, they are running business in an environmentally innovative way as to

lead in the transportation industry. The above five practices are commonly used by our

sample companies. They start from own main activity-transportation to their suppliers

 

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selection, making sure both are environmentally friendly. Reducing climate impact is an

essential step to which different various pollution emissions would contribute while

calculating key air indicators. For example, Evergreen Line have placed SOx emission

control, NOx emission control, ballast management, sewage management, garbage

management, oil pollution prevention, and leakage prevention of refrigerant, additionally,

installing state-of-the-art computer-based a weather routing system developed by a

professional weather consultant on their vessels to optimize their voyage plan in a timely

manner and reduce CO2 emission. Moreover, logistics firms have benefits from

reasonable resources use and fuel reduction. External environment protection

organizations also help these logistics firms respond to social responsibilities with

cooperation with other members in the same group such as SmartWay program in U.S.

4.2.2 Related to Employees

Employees are the integral part of cooperation in the process of taking CSR initiatives.

There are lists of important corporate actions related employees from the logistics firms:

• Ensuring vehicles and employees' operations follow strict safety standards

• Maintaining a safe and healthy work environment

• Organizing trainings and career development programs for employees

• Encouraging employee volunteerism

• Caring employee’s health

 

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Safety and health are two vital principles for employees in the term of CSR. Logistics

firms have emphasized employees working under a safe and healthy environment with

relevant measures. Generally, they have established strict safety and health standards

which employees must comply with. In addition, employees are needed to join corporate

CSR events, and they have been trained to understand CSR objectives and clarify their

individual roles.

4.2.3 Related to Consumers

The ultimate goal for logistics firms is to provide their consumers with excellent logistics

products or services, but it could not easily make it without consumers’ aids because the

philosophy of CSR commitments requires multiple parties’ synergetic effects, and

certainly, consumers are included. From the 22 logistics firms, we find out the following

three practices on CSR referring to consumers:

• Providing consumers with safe, better products and logistics services

• Helping consumers optimize loads and freight

• Working together with consumers in sustainable development solutions

Thus, the consumer value has been maximized by logistics firms through continuous

improvement across the supply chain with consumers’ work as well as the firms.

 

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4.2.4. Related to Communities

All the logistics firms have recognized that respect and support for the communities are

important to their ongoing success. Some firms remark “Make a difference in the

community,” such as APL, C.H.Robinson. That will in turn help create vibrant, growing

markets. As a responsible citizen in the community, the companies reach out:

• Communicating with communities

• Holding charitable giving

• Playing actively in local development activities

Communication is a good channel to strengthen the relationship between logistics firms

and the communities. Then the firms would become members of the communities in

order to support them better. Moreover, they are actively structuring local infrastructures

such as schools and roads in addition to creating a well-structured market for investment.

The main difference is that small logistics firms focus on the local communities while

other international large logistics enlarge their CSR footprints to other countries. Another

apparent practice is donation to charity. The records of each donation have been

published on their websites.

 

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5 CONCLUSION

This final chapter will present our conclusions based on the most important information

we have discussed in the analysis, as well as providing suggestions for reporting

improvement on CSR.

The ambition of this paper was to reveal CSR performances of logistics firms. To achieve

the goal, we chose 50 logistics firms as our analysis sample from three economic regions:

Asia, Europe, and North America based on a series of criteria and two channels to

information accessibility have been adopted, i.e. both are strived from the official

websites of the logistics firms. One is annual reports or separate CSR theme reports

downloaded directly from the websites, and the other refers to other visible information

published on the websites, mostly under the term ‘CSR’, ‘Sustainability’ or

‘Environment’. In particular, we analyzed the specialized CSR reports of the sample of

23 logistics companies which separately reported. Then based on the report analysis and

online information summaries, the paper is able to illustrate a framework of how the

logistics firms have implemented their CSR concepts.

The main findings can be concluded in the following fashion:

• CSR reporting in corporate accountability is voluntary, and the selected logistics

companies adopt at least one standard among the social or environmental ones at the

international level, e.g. GRI, GC, ISO 14001.ect.

• All logistics firms using GRI standard nearly follow GRI guidelines.

 

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• Different types of CSR reports disclose CSR activities of logistics firms in five

categories: i) Environment; ii) Society; iii) Shareholders; iv) Employees; v) Suppliers,

and each factor has different emphasis.

• Not all logistics categories published CSR reports and the top three types of logistics

firms are freight-forwarding, shipping, multiple-modal logistics companies. And CSR

report and Sustainability are two popular report types.

• Logistics companies from Asia, Europe, and North America apply all four different

reporting standards, that means from the geographical angel, these firms don’t have

preferences on the standards.

• Most logistics firms tend to report CSR matters on their own even though professional

accounting agents are more capable since they want to reflect their own CSR situations

more accurately and cater to the needs of wide shareholders better. Meanwhile, the third-

party assurance organizations are invited to confirm and rate the reports.

• CSR practices by logistics companies didn’t prepare the separate reports are identified

and classified into four dimensions: i) Environment; ii) Employees; iii) Consumers; iv)

Communities, demonstrating CSR activities are viewed as an integration of social,

ethical, and environmental concerns in business operations.

• Among the logistics firms without separate CSR reports, freight-forwarding and

multiple-modal logistics companies pay more attention on environment protection and

 

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employee care. Meanwhile, compared with European and North American logistics

firms, Asian logistics don’t bring enough attentions on building up a harmonious

community.

5.1 Suggestions for Reporting Improvement

Regarding current reporting status, we want to put forward a few suggestions as to

improve the quality of CSR reports. First, Companies shall separate CSR reports from

annual reports as an individual non-financial auditing method, which will benefit for

corporate governance. From reporting contents perspective, companies should contain

both environmental and social impacts as well as separating them from the economic

performance of the business rather than as integral to it. In addition, companies should

be encouraged to adopt the national CSR standards and laws where companies are

registered when they draft such a kind of reports. The widespread voluntary adoptions of

various reporting guidance allows decision makers interested in social responsibilities to

evaluate corporations using such the information in the context of a perceived social

contract. Finally, we suggest that third parties should be involved in the process of

compiling the reports and verifying after finishing greatly enhance transparency and

reliability.

5.2 Discussion

 

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The results of the study here are relevant not only for academicians but also logistics

managers. The classification of CSR activities is theoretically based on the literature and

empirically based on our sample analysis. Moreover, the attempt to identify various CSR

performances used by logistics firms can be useful to firms in other industry when

implementing their CSR ideas. The research is a valuable attempt to dig into CSR

reporting status and CSR performances operated by logistics firms across the large three

economic regions. Logistics firms, as a newly industry, have stirred up the deep thinking

of CSR by many logistics managers while not only earning profits. The explanation on

various CSR reporting standards and report types will become good references when

logistics firms start to formulate separate CSR reports. We believe our analysis and

results would help them to pick up the appropriate standard, report type and relevant

auditing agent. As other logistics firms didn’t prepare the separate reports, the CSR

activities related to different factors which are implemented by most logistics firms are

quite inductive to other logistics firms as well as firms in other industries. Various firms

will learn operational experience on CSR philosophy from these sample logistics firms,

thus how to be a socially responsible corporation will be an easier business problem for

many companies. In addition, we also hope other research can benefit from our study.

The sample of logistics firms can be extended and more selection criteria can be added to

choose suitable logistics firms, such as company size. Because the study does not classify

different company size levels, which can be probably defined by the profits or the

number of employees that rely on the purpose of other researches. Furthermore, we hope

to apply the study into other industries, and also other information channels beyond the

firms’ websites are expected to use.

 

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APPENDIX 1: Elements of Corporate Social Responsibility (Welford, 2005)

 

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APPENDIX 2: List of Sample Logistics Firms

No Name  of  Companies Region Logistics  Categories Report  Type1 Evergreen  Marine  Corp Asia Shipping 02 Yang  Ming  Marine  Transport  Corp Asia Shipping Environment  Performance  Report  3 The  A.P.  Moller  -­‐  Maersk  Group Europe Freight  forwarding Sustainability  report4 Hanjin  Shipping Asia Shipping Sustainability  report5 COSCO   Asia Shipping Sustainability  report6 China  Shipping  Container  Lines Asia Shipping Corporate  Social  responsibility  report7 TNT  Express North  American Express  services   Annual  report  chapter8 United  Parcel  Service North  American Express  services   Enviromental  Brochure9 Nippon  Express Asia Freight  forwarding Corporate  Social  responsibility  report10 DB  SCHENKER Europe Multiple-­‐modal 011 Union  Pacific  Corp North  American Freight  forwarding Sustainability  &  citizenship  report12 Exel North  American Freight  forwarding 013 Yamato  Transport Asia Express  services   014 SNCF Europe Freight  forwarding 015 Kuehne  &  Nagel Europe Freight  forwarding Sustainability  report16 Canadian  Pacific North  American Freight  forwarding Corporate  Social  responsibility  report17 APL(NOL) Asia Shipping 018 Geodis  Wilson Europe Freight  forwarding 019 C.H.  Robinson  Worldwide,  Inc North  American 3PL 020 Network  Global  Logistics North  American 3PL 021 CEVA  Logistics Europe 3PL 022 Expeditors North  American Freight  forwarding 023 JB  Hunt North  American Freight  forwarding 024 D.Logistics  AG Europe Packaging 025 CSX  Corp North  American Freight  forwarding Corporate  Social  responsibility  report26 Panalpina Europe Freight  forwarding Annual  report  chapter27 Ryder North  American Truck  leasing Corporate  sustainability  report28 Hapag  Lloyd   Europe Shipping 029 Canadian  National  Railway North  American Freight  forwarding Sustainability  report30 Nippon  Yusen(NYK  line) Asia Shipping Corporate  Social  responsibility  report31 DSV Europe Freight  forwarding Corporate  Social  responsibility  report32 Penske  Truck  leasing  Corp. North  American Truck  leasing 033 CMA  CGM Europe Shipping 034 Schneider  National North  American Truck  leasing 035 Wincanton Europe Multiple-­‐modal 036 Ziegler Europe Multiple-­‐modal 037 Sinotrans Asia Multiple-­‐modal Corporate  Social  responsibility  report38 China  International  Marine  Containers Asia Multiple-­‐modal Corporate  Social  responsibility  report39 Logwin Europe Multiple-­‐modal 040 Cathay  Pacific Asia Freight  forwarding Sustainable  Development  Report41 Deutsche  Lufthansa  AG Europe Freight  forwarding Sustainability  report42 BLG  Logistics Europe Multiple-­‐modal 043 FM  logistics Europe Multiple-­‐modal 044 GEFCO Europe Multiple-­‐modal 045 Metro  Group Europe Multiple-­‐modal Sustainability  report46 Coyote   North  American Truck  leasing 047 DSC  Logistics North  American 3PL 048 Tolam  Logistics Aisa Multiple-­‐modal 049 KroChina Aisa Multiple-­‐modal 050 K  Line Asia Shipping Social  and  environmental  report

 

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APPENDIX 3: List of Logistics Firms’ CSR Links

Name  of  Companies   CSR  Links  Evergreen  Marine  Corp   http://www.evergreen-line.com/enviro Yang  Ming  Marine  Transport  Corp  

http://www.yangming.tw/csr/01csr.html

The  A.P.  Moller  -­‐  Maersk  Group  

http://www.maersk.com/Sustainability/SocialResponsibility/Pages/SocialResponsibility.aspx

Hanjin  Shipping   http://www.hanjin.com/hanjin/CUP_HOM_1950.do?sessLocale=en

COSCO     http://www.cosco.com/en/safety_environment/policy.jsp?leftnav=/3/1

China  Shipping  Container  Lines  

http://www.cscl.com.cn/english/society.asp?id=4

TNT  Express   http://www.tnt.com/corporate/en/site/home/about_us/corporate_responsibility.html

United  Parcel  Service  UPS--http://pressroom.ups.com/About+UPS/Awards/Social+Responsibility

Nippon  Express   http://www.nipponexpress.com/hq/csr DB  SCHENKER   http://www.dbschenker.com/ho-en/sustainability

Union  Pacific  Corp   http://www.uprr.com/aboutup/sustainability/index.shtml

Exel   http://www.exel.com/exel/exel_industry_services.jsp?ID=81

Yamato  Transport   http://www.yamato-hd.co.jp/english/csr/index.html SNCF   http://www.sncf.com/en_EN/flash/#/CH0006/BR1267/

Kuehne  &  Nagel  http://www.kn-portal.com/about_us/corporate_social_responsibility/sustainability/

Canadian  Pacific   http://www.cpr.ca/en/in-your-community/corporate-social-responsibility

APL(NOL)   http://www.apl.com/environment/ Geodis  Wilson   http://www.geodiswilson.com/en/Sustainability/ C.H.  Robinson  Worldwide,  Inc  

http://www.chrobinson.com/en/us/About-Us/Corporate-Responsibility/

Network  Global  Logistics   No

CEVA  Logistics  http://www.cevalogistics.com/en-US/whyceva/howwerunthings/Pages/EnvironmentalResponsibility.aspx

Expeditors   http://www.expeditors.com/sustainability/social-responsibility/index.asp

JB  Hunt   http://www.jbhunt.com/responsibility/sustainability/

D.Logistics  AG   No

CSX  Corp   http://www.csx.com/index.cfm/responsibility/corporate-profile-and-responsibility-report/

Panalpina   http://www.panalpina.com/www/global/en/home/AboutPanalpina/sustainable-action/SocialComm.html

 

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Ryder   http://www.ryder.com/aboutus_corpgov_corpresprpt.shtml

Hapag  Lloyd     http://www.hapag-lloyd.com/en/about_us/environment_overview.html

Canadian  National  Railway   http://www.cn.ca/en/corporate-citizenship.htm Nippon  Yusen  (NYK  line)   http://www.nyk.com/english/csr

DSV  http://www.dsv.com/irj/servlet/prt/portal/prtroot/ExternalWebGui.IntegratedInternet?content=/documents/DSV_DFDS%20Transport/Integrated%20Internet/External%20Web%20Site%20Repository/COM/ENG#  

Penske  Truck  leasing  Corp.   http://www.penskelogistics.com/company/info.html CMA  CGM   http://www.cma-cgm.com/Environment/Default.aspx

Schneider  National   http://www.schneider.com/About_Schneider/Schneider_Foundation/index.htm

Wincanton   http://www.wincanton.co.uk/how-we-work/

Ziegler   http://www.ziegler-nederland.nl/en/company-profile/csr

Sinotrans   http://www.sinotrans-csc.com/col/col236/index.html China  International  Marine  Containers   http://www.cimc.com/en/about/csrreport/

Logwin   http://www.logwin-logistics.com/company/social-responsibility.html

Cathay  Pacific   http://www.cathaypacific.com/cpa/en_INTL/aboutus/sd/sdreport

Deutsche  Lufthansa  AG   http://verantwortung.lufthansa.com/en/social-responsibility.html

BLG  Logistics   http://www.blg.de/en/blg-logistics/unternehmen/engagement/

FM  logistics   http://www.fmlogistic.com/fmlogistic/index.php/en/global-warming

GEFCO  

http://www.gefco.net/en/group/sustainable-development/respect-for-human-beings-and-environment/navigation/environmental-indicators/?0=

Metro  Group   http://www.metrogroup.de/internet/site/metrogroup/node/9331/Len/index.html

Coyote     No DSC  Logistics   http://www.dsclogistics.com/sustainability.php Tolam  Logistics   No KroChina   No K  Line   http://www.kline.co.jp/csr/csr_e.html

*No means there is no visible CSR information found in the company’s website.