Corporate Social Responsibility and Sustainable Development in the Paper Industry

2013
Anders G. Hansen
Christoffer Hass
Mátyás Hulik
David Maes
Hayley Sondergaard
Mariann Sajtos
2013
Anders G. Hansen
Christoffer Hass
Mátyás Hulik
David Maes
Hayley Sondergaard
Mariann Sajtos

Corporate Social Responsibility and Sustainable Development in the paper industry

Corporate Social Responsibility and Sustainable Development in the paper industry

Corporate Social Responsibility and Sustainable Development in the paper industry

Name and address of the authors * Anders Garlev Hansen (PB3) ___________________________
Øsdalvej 27, DK-7000 FA * Christoffer Hass (PB4) ___________________________
Lerhusene 14, 5330 Munkebo * Mátyás Hulik ___________________________ Violvej 3/11., 6000 Kolding * David Maes (PB4) ___________________________ Jernbanegade 50, 6000 Kolding * Hayley Søndergaard (PB4) ___________________________
Alpetoppen 21, 6000 Kolding * Mariann Sajtos (PB4) ___________________________
Lasbygade 23, 1th, 6000 Kolding

Subject Elective, Self-study group project
Study programme Bachelor of International Sales and Marketing Management
Name of the school IBA International Business Academy
Skamlingvejen 32. 6000 Kolding
Date to hand in the project 24th May 2013 – 12.00
Project supervisor Lars Jespersen
Character count 25,266 (including space)

-------------------------------------------------
Table of content

Cover page……………………………………………………………………………………..0
Title page……………………………………………………………………………………….1
Table of content………………………………………………………………………………..2
Abstract………………………………………………………………………………………….3
Methodology……………………………………………………………………………………4
Problem proposal………………………………………………………………………………5
Definition of CSR………………………………………………………………………………6
Defining Sustainable Development…………………………………………………………..7
Difference between CSR and Sustainable Development………………………………….9
Paper industry in general and facts………………………………………………………….11
Paper recycling in Europe…………………………………………………………………….12
The trade of recycled paper…………………………………………………………………..12
The Evolution of Paper industry……………………………………………………………...14
Sustainability and CSR in the paper industry……………………………………………….16
Conclusion: What are the effects and outlook for the future? ……………………………17
Bibliography………………………………………………………………………………........18

-------------------------------------------------
Abstract

We decided to work with a really interesting topic; corporate social responsibility and sustainable development. We found this issue relevant for present companies and it is a pressing matter from the side of the government, media and social activists. We wanted to find the difference and the importance of CSR and SD in aspect of the paper industry. Since e-readers and other tablet based electronic devices have appeared on the market logically paper would have been pushed back, but we found controversial results after the first look. But then we realized that even though the industry shrinks due to recycled paper the consumption grows, which is a really interesting result.
We went through extensive number of books, titles including: ‘Sustainable Development; Linking economy, society, and environment’ by Tracey Strange & Anne Bayley and ‘When Principles Pay – Corporate social responsibility and the bottom line’ by Geoffrey Heals. Also we researched and analysed secondary data found on the internet including articles, web-pages, and company press releases.

We came to a conclusion that while corporate social responsibility promotes the right moves in the industry and shows the right face through the media, sustainable development is more important as it can be seen in actions, it is planning forward while increasing responsibility in the whole value chain. The paper industry has to promote that it is green and it is competitive with the electronic devices, but it has to be more and more sustainable to survive.

-------------------------------------------------
Methodology

Our research project based on corporate social responsibility, and sustainable development. These topics can be found in numerous media. We used books and internet as most of our data collections. Since we did not research something new we found primary data collection irrelevant.
The project is based on social constructivism, project oriented and only secondary data have been used, which to a certain extent limits the generalizability of the findings.
All of the sources marked in the section bibliography and all of them have been marked reliable.
Our research portfolio includes in wide extend all the material used for the synopsis.

Methodology plan and guidelines The assembly of data from a variety of sources may be part of the process of research, without interpretation it is not research. * Data are collected systematically * Data are interpreted systematically * There is a clear purpose: to find things out * ‘Systematic’ suggests that research is based on logical relationship and not just beliefs. * Management research like other social sciences is description, explanation and prediction

-------------------------------------------------
Problem proposal

Our group decided to research a really ‘hot’ topic nowadays. All the green movements affect our everyday life and we get pushed not just by the government but individuals are making conscious purchase and dispose decisions. Studies show that people do want to contribute in saving our planet; most of them have little options to make a difference. It is why we wanted to know if corporations as the most important players in our society do make good decisions for our planet or they just want to reach their shareholders expectations and earn as much profit as possible (even if this means to expose our natural resources) Therefore our main questions through our research and synopsis: * What do Corporate Social Responsibility (CSR) and Sustainable Development mean? (definition and explanation) * Where are the similarities and differences between CSR and Sustainable Development? Then we decided to look closer into one specific industry which has interesting and contradicting figures, the paper industry.
CSR and Sustainable development in the paper industry * Paper industry in general and facts * What affect does the electronic revolutions has on paper industry * Competition on the paper industry In business today, the phrase “sustainable development” and CSR are often being used. By answering the above questions, we hope to further investigate what these concepts are and how they affect companies today. Also we would like to find out what kind of changes would turn the paper industry into being sustainable

-------------------------------------------------
Definition of CSR

The core and essence of each and every corporation is to make profit. As without profit none of them operates functionally and cannot reach the stakeholders expectations. And all of those individuals who invested into a business would like to have something in return, therefore maximizing the profit even by exploiting the surrounding resources or manpower is the ultimate goal for the managers.

Since the middle 20th century when mass-production, planned obsolescence and modern consumerist society have been framed powers on the other end have been formulating. People realized that corporations utilize resources, produce huge amount of waste and make people work in unacceptable conditions. Civil societies are one of the non-market forces that push corporations into minimize their environmental impact and to support the minorities. The other two forces are the legal system and the regulatory framework.
Surprisingly enough, civil societies are the most powerful force in turning companies socially responsible as individuals indeed the ones without whom support the company would not earn money. When people raise their voice and vote with their money a company due to avoid a bad PR situation has to make changes. In a legitimate business situation the business benefits from its environment and the environment benefits from the business. Therefore the company has to show support towards the environment and the society in order to continue grow.

In conclusion, corporate social responsibility is a self-regulatory mechanism built in the company’s business model. It is the corporation’s compliance to work in respect of law, international norms and ethical standards. Idealistically companies should not stop here they should go beyond regulations and work on the way to environmental and social harmony as the biggest harm happens on their level of production.

-------------------------------------------------
Defining Sustainable Development Sustainable development is “developing in a way that benefits the widest possible range of sectors, across borders and even generations”(Strange & Bayley, 2008, p. 24). There are three elements that need to be taken into consideration to ensure that changes are sustainable and long term beneficial.
They are: * Society * Economy * Environment How can these three be related to sustainable development? The link between them can be seen through the changes and developments in each area. For example “social well-being and economic well-being feed off each other and the whole game depends on a healthy biosphere in which to exist”(Strange & Bayley, 2008, p. 27). When looking at the above statement, it shows that the three elements, or pillars are quite interlinked. When looking at changes to further help the environment, the economy will be affected due to the fact that most changes would need to be funded. This could influence the society through the need of adapting and funding these changes. In other words, there will be trade-offs for any development in the three pillars. Overall, sustainable development needs to meet the “needs of the future without compromising the ability of future generations to meet their own needs”, which was noted by Norwegian Prime Minister, Gro H. Brundtland in 1980 (Porter & Kramer, 2006, s. 81). Another point of view on sustainable development is taken by Brice Lalonde, “To me, it refers to how the economy should enable us to live better lives while improving our environment and our societies, from now on and within a globalised world”(Lalonde, 2007). This was Mr Lalonde’s response to the question “So, how does the new chair (of the OECD) define sustainable development?”(Lalonde, 2007). From his point of view, we can see that he has married the idea of the economy together with future developments in the environment. At the same time, one can assume that these developments cannot be undertaken while the economy is suffering. Another aspect that he has introduced to the subject is globalisation. When looking at globalisation in the contents of sustainable development, there are a few challenges. One of which that has been pointed out is that “we are nearing the point where connection is not the exception but the rule”(Strange & Bayley, 2008, p. 40). While the world is getting smaller thanks to technology and advancements in the transport sector, the expectations on social globalisation are starting to be felt in the developing countries.

-------------------------------------------------
Difference between CSR and Sustainable Development

CSR and Sustainability are interrelated and many use it interchangeably as well. However, I find it useful to distinguish between CSR and Sustainability in a business context.

For businesses, it is useful to think about CSR in the context of the vision/mission of the business. What are the responsibilities of the business, why does it exist, and how it will go about meeting those responsibilities and goals.
What has been noted is that CSR has been used not only by companies for marketing benefits, but it has also been used by activists to place pressure on corporations either on where they buy their raw material or what effects they have on the surrounding community (Porter & Kramer, 2006). While this can result in a company to move towards sustainable development, it is not likely to be integrated into the company as a long-term plan to begin with. While it can be said that sustainable development and CSR both share three elements, they are used with different intent (Soyka, 2012). One of the main differences is that CSR can be viewed as an obligation of a company, where sustainable development is not (Soyka, 2012). However, studies on CSR and consumer behaviour have shown inconclusive results. In saying that, when activist or a group of people place a company in the spotlight on a certain subject or practice, said company can be affected in the long term by having a bad reputation and the best way of correcting this is through CSR (Porter & Kramer, 2006).

It is useful to think about Sustainability is the context how the business will operate, especially with a focus on the natural resources it consumes both directly (e.g., coal) and indirectly (e.g., electricity). How will the business be operated in way that allows it to make a profit today while not compromising the ability of future generation to meet their own needs. This has been summarised by Soyka who defined sustainable development through providing “theoretical and practical sentimental improvement framework that can be fully justified and maintained during both good and challenging economical times” (Soyka, 2012).
Most of the time, CSR and sustainable development are both put in a positive light; there are negative sides as well. Some companies might use the media and CSR to put themselves in a better position in the market. They might show they are responsible socially, while this is not in fact accurate. The same can be said for sustainable development when the phrase has been used to the extent that it becomes meaningless (Porter & Kramer, 2006, p. 83).

-------------------------------------------------
Paper industry in general and facts

Market definition
Here we would like to measure a country or region’s total use of paper and paperboard. This also includes for example news printing, paper for packaging, household and sanitary paper and other kinds of papers. When we are able to calculate all that, we get an idea on the volume of consumption of paper or paperboard in metric tons.
Market Information
Market value * The Western European paper & paperboard market grew by 1.1% in 2011 to reach a value of $69,053.8 million.
Market value forecast
In 2016, the Western European paper & paperboard market is forecast to have a value of $74,587.3 million, an increase of 8% since 2011.
Market volume
The Western European paper & paperboard market shrank by 0.5% in 2011 to reach a volume of 77.2 million metric tonnes.
Market volume forecast
In 2016, the Western European paper & paperboard market is forecast to have a volume of 83.7 million metric tonnes, an increase of 8.4% since 2011.
Geography segmentation
The United Kingdom accounts for 18.5% of the Western European paper & paperboard market value.
Market rivalry
High exit costs and similarity between market players contribute to the high level of rivalry that characterizes this market
-------------------------------------------------
Paper recycling in Europe

“New figures suggest that Europe 's paper recycling rate has increased by nearly 10 % every five years since 2000, peaking at 70.4 % in 2011. The figures, released by the paper recycling industry, show that the recycling rate was up from 68.7% in 2010, which was well above the voluntary 66 % target for that year. The sector has now pledged to recycle at least 70 % of the paper and board products consumed right across Europe by 2015.”

-------------------------------------------------
The trade of recycled paper

Paper for recycling is a global commodity which is traded internationally according to supply and demand. The net trade of paper for recycling was 8.4 million tonnes in 2010, mainly due to exports by Asian buyers, particularly China. In 2010, China imported 24.4 million tonnes of paper for recycling, mainly from Europe and North America.The paper recycling chain in the EU can face problems because of exports of unprocessed waste paper by organisations which are not part of the recycling sector and by non-European trading companies installed in the EU.
Further increase of exports needs to be readdressed to ensure a safe, environmentally-friendly and reliable access to raw material for the existing and new recycling capacity in Europe and to maintain the competitiveness of the European paper recycling chain.
The Commission Communication on Raw Materials highlights the importance of the enforcement of the Waste Shipment Regulation and further actions to ensure environmentally-sound management in recycling facilities. All parties support this statement and commit to continue increasing the collection of paper for recycling and to maintain the collected volumes at high levels in Europe for further recycling.
The increase in the collection of paper must be higher than the increase in the net trade of paper for recycling.

In the past, recycled papers often cost considerably more than virgin papers. Today, many grades such as text and cover (often used for letterhead, brochures and publications) and some coated papers are cost-competitive with virgin papers or even cost less. Copier and offset papers still tend to cost somewhat more, but the price differentials are smaller than ever, usually only a few percent.
When there are cost differences, they are primarily caused by many recycled papers being made on smaller paper machines than virgin papers (creating a difference in economies of scale), by virgin paper mills dropping their prices because of vagaries in the market, and by imbalances caused by a newly capitalized and still-developing recycling system vs. a well-established and industrially integrated tree-pulping production system. Additionally, recycled paper incorporates all its costs into the product, including providing an alternative to disposal, and is not rewarded for its significantly lower energy and water use. Virgin paper costs, on the other hand, are masked by generous government timber, energy and water subsidies and do not incorporate responsibility or costs for the product 's eventual disposal.

-------------------------------------------------
The Evolution of Paper industry

Here we want to find out if the digital evolution had an impact on the sales volume of paper.
Consumption of paper and paperboard products has experienced significant decline in Europe in 2007. The market is expected to maintain low but positive growth from 2012 through to the end of the forecast period in 2016. This is attributable primarily to the aftermath of the financial crisis in the European Union at the end of the decade. The poor economy motivated many companies to perform a close analysis of their paper use and inspired the adoption of innovative and more efficient systems. These new systems will remain in place into the economic recovery and likely have a lasting impact on printing and writing paper consumption. In addition, the shift in the patterns of consumption of news and other media from print to digital formats is also apparently having an irreversible effect in some paper sectors such as newsprint. Total global consumption of paper is still rising, reaching 371 million tonnes in 2009. But the European consumption in Million metric tonnes faced a decrease since 2007.

Year | Million metric tonnes | Growth (%) | 2007 | 83,5 | | 2008 | 81,8 | -2% | 2009 | 74,4 | -9% | 2010 | 77,6 | 4,20% | 2011 | 77,2 | -0,50% |

The paper industry has become increasingly ‘green’ over the past few years, with many new initiatives in order to increase the amount of recycled paper (up to 70% in Europe) and reduce the usage of non-recyclable materials in the production of paper. And the materials are as much as possible disposed of in a way that it does not end up in landfill. In Europe the amount of water that is returned to its original source is at 94%, and where relevant, plants donate boiler ashes to local farmers to use as fertilizer.
According to the Danish Environment Protection Agency, Denmark has seen high growth in the collection of waste paper and cardboard from 1996 to 2009. While the report does not speculate further on the source of the paper, it does suggest that ‘green packaging’ and increased online sales (delivered by package delivery) causes people to accumulate more paper-based packaging than before. The difference between online shopping and ‘regular’ shopping is outlined below: Company A sells computers through their brick-and-mortar store, they are delivered in individual cardboard boxes on wooden pallets at their door, which are then put on shelves for customers to bring home. Company B sells computers through their online store, they are delivered in individual cardboard boxes on wooden pallets at their warehouse. Here they are held until a customer orders them. When prepared for shipment, the computers are put into another cardboard box, with paper-based stuffing to further protect the product inside from damage during shipping and/or fill out the empty space in the standard-sized cardboard boxes used for shipping. Company B is using paper-based solutions because this is greener than using plastic bags or bubble wrap

-------------------------------------------------
Sustainability and CSR in the paper industry

As the technological revolution is gaining more and more space, and serves as a form of disruptive innovation for many industries, certain aspects of these affected industries have to be modified, and thought of differently.
That’s exactly what’s going on in the paper industry. Even though the production of graphic paper is currently a somewhat stagnant market, a lot of other parts of the industry are suffering the pioneer aspects of our modern age’s technological presence. One of the rapidly declining victim is the newsprint and writing industry, which saw a whopping 23% decline since 2007 and is forecasting yet another year on the same exact track, due to people increasingly seeking out the internet or television as their primary source of being kept updated.
Another substitute for the use of paper came with the emergence of hand driers in most facilities that consider themselves modernized. As for contributions the growing use of paper, one of the main answers lies in packaging. Nowadays most packaged food and e-commerce related purchases are delivered in paper based packaging which contributes big time to the immense shift. The use of paper and board has seen an increase of 23 million tonnes since 2007, which is an overall 18% growth annually. All this could be attributed to the fact that there are few alternatives for such purposes. Right behind there’s the tissue industry forecasting a 4,5% growth for a total of 6 million tonnes, and a 22% increase in the last 6 years. Another large contributor to the excessive use of paper are junk mail.
In the U.S. only, is around a 100 million pieces a year, which contributes to 20% of all mail in the world.
44% of all junk mail delivered in the United States arrives at the landfills unopened.

-------------------------------------------------

-------------------------------------------------
Conclusion: What are the effects and outlook for the future?

The impact that’s made on the environment by the production of paper is astonishing.
The paper industry is the third most energy intensive and fourth largest emitter of greenhouse gases, while 16% of the world’s solid waste is made up of paper.
This is clearly not sustainable. So what can be done?
As a major game changer, recycling has emerged in the 21st century as possible answer and a sustainable solution particularly in North America and Europe.
65% of these region’s paper is recovered, and recycled.
However, this affects the output of products on the consumer market, and paper manufacturers use desperate action by trying to make their products difficult-to-process to recycling as much as they can. Nevertheless the growing importance of mineral fillers instead of wood pulp, and progressive sophistication in recycling technology paired with favouritism for ecological and economic reasons to use recycled paper, all point in the same direction of keeping this cost saving solution a strong driving point in upcoming years.

-------------------------------------------------
Bibliography

Porter, M. E., & Kramer, M. R. (2006, December). Strategy & Society The Link Between Competitive Advantage and Corporate Social Responsibility . harvard business review .
Soyka, P. A. (2012). Creating A Sustainable Organization. USA: Pearson Education, Inc.
CEPI. (2010). European Pulp and Paper Industry . Preliminary Statistics 2010 .
Farlex, Inc. (n.d.). The Free Dictionary. Retrieved 2013 13-May from http://www.thefreedictionary.com
Lalonde, B. (2007, May). Sustainable facts. Chair of the Round Table on Sustainable Development. (AB, Interviewer) OECD Observer No. 261.
Paglia, T. (2012). ForestEthics. Retrieved 2013 19-May from http://forestethics.org/
Strange, T., & Bayley, A. (2008). Sustainable Develpment, linking economy, society, environment. OECD: OECDpublishing.
Luther, J. (2000). White Paper on Electronic Journal Usage Statistics . Washington : Council on Library and Information Resources .
Peloza, J., Loock, M., Cerruti, J., & Muyot, M. (2012). Sustainability: HOW STAKEHOLDER PERCEPTIONS DIFFER FROM CORPORATE REALITY (Vol. 55). Berkeley: University Of California.
Laszlo, C., & Cooperrider, D. L. (2010). CREATING SUSTAINABLE VALUE: A STRENGTH-BASED WHOLE SYSTEM APPROACH . Emerald Group Publishing Limited .
Heal, Geoffery (2010). When Principles Pay – Corporate social responsibility and the bottom line.

http://www.csrquest.net/ http://www.un-documents.net/wced-ocf.htm www.saltlondon.com/blog/2012/10/differences csrperspective.com/uncategorized/sustainability-is-overrated-part-2 http://www.epa.gov/osw/conserve/materials/paper/basics/papermaking.htm http://www.thedailygreen.com/environmental-news/latest/7447 http://www2.mst.dk/udgiv/publikationer/2011/10/978-87-92779-44-1/978-87-92779-44-1.pdf http://customcontentonline.com/sections/130114_Paper.pdf http://ies.lbl.gov/iespubs/41843.pdf http://www.cepi-sustainability.eu/product-safety risiinfo.com foresthetics.org prweb.com

--------------------------------------------
[ 1 ]. Source: OREP; European Commission

Bibliography: Porter, M. E., & Kramer, M. R. (2006, December). Strategy & Society The Link Between Competitive Advantage and Corporate Social Responsibility . harvard business review . Soyka, P. A. (2012). Creating A Sustainable Organization. USA: Pearson Education, Inc. CEPI. (2010). European Pulp and Paper Industry . Preliminary Statistics 2010 . Paglia, T. (2012). ForestEthics. Retrieved 2013 19-May from http://forestethics.org/ Strange, T., & Bayley, A Luther, J. (2000). White Paper on Electronic Journal Usage Statistics . Washington : Council on Library and Information Resources . Peloza, J., Loock, M., Cerruti, J., & Muyot, M. (2012). Sustainability: HOW STAKEHOLDER PERCEPTIONS DIFFER FROM CORPORATE REALITY (Vol. 55). Berkeley: University Of California. Laszlo, C., & Cooperrider, D. L. (2010). CREATING SUSTAINABLE VALUE: A STRENGTH-BASED WHOLE SYSTEM APPROACH . Emerald Group Publishing Limited . Heal, Geoffery (2010). When Principles Pay – Corporate social responsibility and the bottom line.