MN7409 Operations Management - University of Leicester

Assessment - Business Report

Case Study: A call for Sustainable Operations Management

Sustainability is a major issue for every business operating in today's market. One thing that has become clear during the debate over how to respond to sustainability is that prioritising profit over the environment or ignoring the social consequences is not only morally unacceptable, but also increasingly difficult to address. Big corporations are under pressure to take real emissions-cutting measures or face the wrath of protesters, investors, and even shareholders.

Different initiatives and frameworks have been developed to tackle this issue such as the Sustainable Development Goals (SDGs) of the United Nations (UN), Paris Agreement, and the most recent COP26 conference. At COP26, Mark Carney, the former Governor of the Bank of England, spearheaded the Glasgow Financial Alliance for Net Zero (GFANZ) initiative as part of the UN Net-Zero Banking Alliance. There are presently 450 members, with a total asset value of $130 trillion (£95 trillion). This accounts for almost 40% of all global assets.

Many organisations have committed to reducing their greenhouse gas and climate change contributions to zero by 2050 through a combination of action and accountability, with signatory banks setting an intermediate goal for 2030 or sooner, based on strong, science-based principles. This necessitates the creation of a "new kind of corporation", one that is motivated by purpose and impact and actively addresses social and environmental issues as part of its core business and operations.

When discussing the concept of sustainability, the three pillars of sustainable usually come into play, which are social, environmental, and economic. Operations Managers must be aware of the outcomes of each of these pillars, including how their production facility or work will affect these factors. Effective operations management will put in place actions to meet these sustainability concerns.

Assignment question

Your boss (the firm's CEO) has just returned from the COP26 conference and is concerned about your company's ability to ignore social and environmental risks. They (he/she) have also noted that the advantages of investing in socially and ecologically responsible businesses are becoming increasingly apparent and appealing.

Your boss has requested that all heads of departments produce a report on the problem of sustainability for your company. As the Operations Manager, your job is to think about important aspects of operations management in this report, such as Process Design, Planning and Control, Resource Planning and Management, and the Supply Chain, and come up with a strategy for how your company will adhere to sustainability ideals.

There have been references to bad examples of this issue, such as leading petrochemical corporations ExxonMobil and Chevron, which faced shareholder revolts after failing to demonstrate strategies to reduce emissions, and Shell, which lost a citizen-led case in the Dutch courts and was ordered to expand its plans to reduce emissions levels. On the other hand, companies like Rothy's, Bank of America, Etsy, AstraZeneca, and Ben & Jerry's have been commended for their sustainability efforts.