Aligning a corporate sustainability performance measurement system with the Sustainable

186 Pages·2017·2.81 MB·English

Aligning a corporate sustainability
performance measurement system with
the Sustainable Development Goals
A case study at a global automotive supplier
Master’sthesisinQualityandOperationsManagement andManagementandEconomics
of Innovation
MARK KREMER
WOUT BIESHEUVEL
Department of Technology Management and Economics
CHALMERS UNIVERSITY OF TECHNOLOGY
Gothenburg, Sweden 2017
Report No. E2017:038

Master’s thesis E2017:038
Aligning a corporate sustainability
performance measurement system with the
Sustainable Development Goals
A case study at a global automotive supplier
MARK KREMER
WOUT BIESHEUVEL
Department of Technology Management and Economics
Chalmers University of Technology
Gothenburg, Sweden 2017
Aligning a corporate sustainability performance measurement system with the Sus-
tainable Development Goals
A case study at a global automotive supplier
MARK KREMER
WOUT BIESHEUVEL
© MARK KREMER AND WOUT BIESHEUVEL, 2017.
Supervisor: Thomas S.
Examiner: Kamilla Kohn Rådberg, Department of Technology Management and
Economics
Master’s Thesis E2017:038
Department of Technology Management and Economics
Chalmers University of Technology
SE-412 96 Gothenburg
Telephone [phone]
Typeset in LATEX
Printed by Reproservice
Gothenburg, Sweden 2017
iv
Abstract
In September 2015, the UN countries vowed to achieve the Sustainable Development
Goals (SDGs) by the year 2030. During the development of the SDGs, the critical
role of business in sustainable development was highlighted. In response, companies
have started e�orts to explore what the SDGs mean for their business and how they
can engage with the goals. In order to understand their impact on the SDGs, com-
panies must adapt their sustainability performance measurement systems (SPMSs).
This thesis aims to contribute towards understanding how companies, and more
specifically the case company, can align their SPMS with the SDGs and what bar-
riers should be overcome in the process.
An extensive review of literature has lead to the identification of six key require-
ments that an SPMS needs to fulfill in order to align with the SDGs. These six key
requirements formed the foundation for an assessment of the current SPMS of the
case company. A gap analysis was performed to identify gaps in the current SPMS
in regards of the SDGs, and twelve semi-structured interviews were conducted with
a wide range of employees, which provided the main input for the SPMS assessment.
This has resulted in the identification of thirty barriers that obstruct the case com-
pany from aligning with the SDGs. The main outcomes of the research were verified
through observations at a strategy workshop.
This study shows the complexity of integrating sustainability in the general op-
erations of a business. Many areas of impact are not within control of the firm, and
even if they are, the complexity of the di�erent entities in the organisation and their
synchronization makes the process of aligning with the SDGs di�cult. The results
of this study can be used by the case company as an aid in the process of focussing
their e�orts towards creating a more e�ective sustainability organisation. In the
general context, the results can be used as a starting point for further investigation
about how businesses can engage with the SDGs.
Keywords: Sustainability Performance Measurement System, SPMS, Sustainable
Development Goals, SDGs, Performance Measurement System, PMS, Sustainable
Development, Corporate Sustainability
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Acknowledgements
The work laying in front of you is the product of a semester of work and marks
the end of our university careers. Several people have contributed to this thesis,
to whom we are truly grateful. You have made this period of our lives incredibly
rewarding and enjoyable.
Thereareseveralpeoplewewanttothankinparticular. WewanttothankChristoph
H. for giving us the opportunity to do our master thesis at the case company. We
highly appreciate it and enjoyed every moment of it. A really big thank you goes
out to Thomas S., our company supervisor, for being very open and supportive, for
providing us full access to information and people in the organisation, for giving us
thefreedomtodesignourthesisthewaywewantedandforinvolvingusinyourwork
in addition to our master thesis. You have made past five months so much easier
and more enjoyable for us. Furthermore, we want to state our gratitude towards
the people who participated in this study, in particular the interview participants,
for investing their time and openly sharing their perspectives. We would like to
thank our Chalmers supervisor and examiner Kamilla Kohn Rådberg for guiding
us through the research process and providing valuable feedback on our work. In
addition, we thank our friends in Frankfurt for welcoming us with open arms and
our friends that came to visit us for making our time here even more enjoyable.
Last but not least, we would like to thank our friends and families at home and in
Sweden for their support, not only during this last semester, but throughout our
entire studies. You get all the credit you deserve.
Mark Kremer, Gothenburg, June 2017
Wout Biesheuvel, Gothenburg, June 2017
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Contents
List of Figures xiii
List of Tables xv
List of Abbreviations xvii
1 Introduction 1
1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Problem Description and Research Questions . . . . . . . . . . . . . . 3
1.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3.1 Relevance for the case company . . . . . . . . . . . . . . . . . 4
1.3.2 Relevance for Academia . . . . . . . . . . . . . . . . . . . . . 4
1.4 Scope and Delimitation . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Thesis Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 Theory 7
2.1 Sustainable development . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.1 Critique on sustainable development . . . . . . . . . . . . . . 8
2.1.2 Bringing sustainable development further . . . . . . . . . . . . 8
2.1.3 The Sustainable Development Goals . . . . . . . . . . . . . . 9
2.2 The role of business in sustainable development . . . . . . . . . . . . 10
2.2.1 The business case of sustainability . . . . . . . . . . . . . . . . 11
2.3 Sustainability in practice . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3.1 The triple bottom line . . . . . . . . . . . . . . . . . . . . . . 13
2.3.2 Global Reporting Initiative . . . . . . . . . . . . . . . . . . . . 13
2.3.3 5 stages of sustainability in business strategy . . . . . . . . . . 14
2.3.4 5 stages of sustainability implementation . . . . . . . . . . . . 15
2.4 Sustainability Performance Measurement
Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4.1 Historical development of performance measurement field . . . 16
2.4.2 Defining Performance Measurement Systems . . . . . . . . . . 18
2.4.3 Scope and system boundaries of a PMS . . . . . . . . . . . . . 20
2.4.4 Defining Sustainability Performance Measurement Systems . . 20
2.4.5 Features and processes of an SPMS . . . . . . . . . . . . . . . 21
2.4.6 SPMS in its context . . . . . . . . . . . . . . . . . . . . . . . 23
2.4.7 Roles of an SPMS . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.4.8 Life-cycle of an SPMS . . . . . . . . . . . . . . . . . . . . . . 25
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Contents
2.5 SPMS Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.5.1 Procedural framework for assessing an SPMS . . . . . . . . . 28
2.5.2 Assessment criteria for SPMS . . . . . . . . . . . . . . . . . . 32
2.5.3 Barriers to updating an SPMS . . . . . . . . . . . . . . . . . . 38
2.6 Synthesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3 Methods 43
3.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.2 Theoretical framework . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.3 Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.4 Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.4.1 Archival Documents Review . . . . . . . . . . . . . . . . . . . 46
3.4.2 Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.4.3 Observations in meetings and conversations . . . . . . . . . . 47
3.5 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.6 Trustworthiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.7 Ethical Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4 Description of the Case Study 51
4.1 The Case Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.2 The Environmental Organisation . . . . . . . . . . . . . . . . . . . . 51
4.3 The Reporting Process . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.4 The CSR Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.5 The Environmental Strategy: Roadmap 2020 . . . . . . . . . . . . . . 53
4.6 Environmental Strategy 2030 . . . . . . . . . . . . . . . . . . . . . . 54
5 Emperical Findings 55
5.1 Archival document review . . . . . . . . . . . . . . . . . . . . . . . . 55
5.1.1 The case company’s current measurement framework . . . . . 55
5.1.2 The Sustainable Development Goals . . . . . . . . . . . . . . 56
5.1.3 SDG guides and directives . . . . . . . . . . . . . . . . . . . . 59
5.2 Interviews and observations . . . . . . . . . . . . . . . . . . . . . . . 64
5.2.1 Introduction interviewees . . . . . . . . . . . . . . . . . . . . . 64
5.2.2 Interview Data . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6 Analysis & Discussion 89
6.1 Howdoesthecasecompany’scurrentsustainabilityperformancemea-
surementsystemoverlapwiththeSustainableDevelopmentGoalsand
what are the gaps? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.1.1 SDG 6 - Clean water and sanitation . . . . . . . . . . . . . . . 90
6.1.2 SDG 7 - A�ordable and clear energy . . . . . . . . . . . . . . 91
6.1.3 SDG 12 - Responsible consumption and production . . . . . . 91
6.1.4 SDG 13 - Climate action . . . . . . . . . . . . . . . . . . . . . 94
6.1.5 SDG 14 - Life below water . . . . . . . . . . . . . . . . . . . . 95
6.1.6 SDG 15 - Life on land . . . . . . . . . . . . . . . . . . . . . . 95
6.1.7 Value Chain Perspective . . . . . . . . . . . . . . . . . . . . . 96
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