Sustainable practises : customs clearing organisations

The overarching gameplan for customs clearing organizations is that they

voluntarily integrate environmental and social policies in their business model. The

correct profile for a Customs clearing firm is an installed governance structure in

support of financial performance, accounts for the environmental and social impact

of the company, a long-term approach towards maximizing inter-temporal profits, an

active stakeholder management process, and more developed measurement and

reporting systems

Sustainability Practises synopsis

 assign responsibility to the board of directors for sustainability

form a separate board committee for sustainability.

make executive compensation a function of environmental, social, and external
perception (e.g., customer satisfaction) metrics.
establish a formal stakeholder engagement process
risks and opportunities are identified,
the scope of the engagement
managers are trained in stakeholder engagement,
• key stakeholders are identified,
• the engagement process are reported both internally and
externally,
• feedback from stakeholders is given to the board of
• directors.more long-term oriented:
• they have an investor base with a larger proportion of long-term
oriented investors a communicate more long-term information
in their conference calls with sell-side analysts.
• effective strategy execution by management,
• effective monitoring of this execution by the board,
• o measure information related to key stakeholders such as
employees, customers2, and suppliers — and
• increase the credibility of these measures by using auditing
procedures.
 • Measure disclose more nonfinancial (e.g., environmental, social,
and governance) data.
Organisational policies

Examples of policies related to the environment include whether the company has a

policy to reduce emissions, uses environmental criteria in selecting members of its

supply chain, and whether the company seeks to improve its energy or water

efficiency.

Policies related to employees this whether the company has a policy for diversity

and equal opportunity, work-life balance, health and safety improvement, and

favoring internal promotion.

Policies related to community include corporate citizenship commitments, business

ethics, and human rights criteria.

Policies related to products and customers include product and services quality,

product risk, and customer health and safety.

Corporate Governance

The responsibilities of the board of directors and the incentives provided to top

management are two fundamental attributes of the corporate governance system.

Boards of directors perform a monitoring and advising role and ensure that

management is making decisions in a way that is consistent with organizational

objectives. Top management compensation systems align managerial incentives

with the goals of the organization by linking executive compensation to key

performance indicators that are used for measuring corporate performance showed

that the use of nonfinancial metrics in annual bonus contracts is consistent with an

organizations that consider environmental and social objectives as core issues for

their strategy and operations, the board of directors is more likely to have direct
responsibility over such issues; it is also more likely that top management

compensation will be a function of sustainability metrics in addition to other

traditional financial performance metrics.

The responsibilities and duties of a sustainability committee include both assisting

the management with strategy formulation and reviewing periodically sustainability

performance. For example, the principal functions of the sustainability committee

assisting management in the formulation and implementation of policies, principles,

and practices to foster the sustainable growth of the company on a global basis and

to respond to evolving public sentiment and government regulation in the area of

GHG emissions and fuel economy and CO2 regulation. Other functions include

assisting management in setting strategy, establishing goals, and integrating

sustainability into daily business activities, reviewing new and innovative

technologies that will permit the company to achieve sustainable growth, reviewing

partnerships and relationships that support the company’s sustainable growth, and

reviewing the communication and marketing strategies relating to sustainable

growth.

Change Driven

Business can play a leadership role in changes, with change driven through market

innovation being easiest for our society to understand. The challenge is to develop

sustainable business that is compatible with the current economic reality. s have all

identified supply chains as strategic differentiators, using them to forecast and plan

future products and services by building trusting relationships through collaboration.

As supply chains evolve from linear supplier–customer links to dynamic networking

organizations, all members become involved in defining the processes and

contributing to the value of the finished product or service. Innovative business

models and products must work financially, or it will not matter how good they are

ecologically or socially.

Stakeholder Engagement

The modern approach to environmental governance also has many new

mechanisms available for engaging different stakeholders. To achieve the

substantial transformation of economic activity and innovation required for

environmental sustainability, the full spectrum of economic actors— public, private

and not-for-profit—must collaborate, taking advantage of today’s data availability and

technology to analyze and share it on a greater scale than ever before.

Development and change aimed at the target audience are more likely to result in

the environment (or sustainability) being considered from the beginning of the

process (Steger, 1996).Much of the influence on sustainability comes from outside

the firm. Many in the fund management community probably think that sustainable

development has little relevance to their decision making – but what about the

energy company that is ignoring the rising tide of pollution legislation,

Socially responsible investment is a growing trend and there are a large number of

rating organizations that assess and screen companies to provide information on

their operations. These rating organizations scrutinize factors like environmental

impacts and solutions, sustainability issues, management and external focus – and
companies will need to consider the strategic responses in these areas (Reputation

and governance of a company and its supply chain are also key issues corporate

reputation and has since attracted more unwanted attention over its

a distinct corporate governance model that focuses on a wider range of stakeholders

as part of their corporate strategy and business model, we predict that such firms are

also more likely to adopt a greater range of stakeholder engagement practices. This

is because engagement is necessary for understanding these stakeholders’ needs

and expectations in order to make decisions about how best to address them

(Freeman, 1984; Freeman et al., 2007). With regards to stakeholder management,

prior literature has suggested and empirically shown that it is directly linked to

superior financial performance by enabling firms to develop intangible assets in the

form of strong long-term relationships, which can become sources of competitive

advantage (e.g., Hillman and Keim, 2001). In other words, superior stakeholder

engagement is fundamentally based on the firm’s ability to establish such

relationships with key stakeholders over time. Similarly, it has been argued that

when a corporation is able to credibly commit to contracting with its stakeholders on

the basis of mutual trust and cooperation and a longer-term horizon – as opposed to

contracting in an attempt to curb opportunistic behavior – then the corporation ―will

experience reduced agency costs, transactions costs, and costs associated with

team production‖ (Jones, 1995; Foo, 2007; Cheng et al., 2011). We argue therefore,

that firms that have embedded the elements of mutual trust and cooperation and the

building of long-term relationships with key stakeholders through the incorporation of

social and environmental issues in their strategy and business model will be better

positioned to pursue these more efficient forms of contracting (Jones, 1995). On the

other hand, firms that have not integrated social and environmental issues are more
likely to contract on the basis of curbing opportunistic behavior and this will impede

their ability to adopt a broad range of stakeholder engagement practices.

 better understanding of the differences in the stakeholder engagement

 train their local managers in stakeholder management

 perform their due diligence by undertaking an examination of costs,

opportunities, and risks (

 firms are more likely to identify issues and stakeholders that are important for

their long-term success

 ensure that all stakeholders raise their concerns

 develop with their stakeholders a common understanding of the issues

relevant to the underlying issue at hand

 mutually agree upon a grievance mechanism with the stakeholders involved

 agree on the targets of the engagement process pursue a mutual agreement

on the type of engagement with their stakeholders

 provide feedback from their stakeholders directly to the board or other key

departments within the corporation

 make the results of the engagement process available to the stakeholders

involved (

 broader public

 firms appear to be more proactive,

 more transparent, and

 more accountable in the way they

 engage with their stakeholders.

Sustainability firms they are more focused on understanding the needs of their

stakeholders, making investments in managing these relationships, and reporting

internally and externally on the quality of their stakeholder relationships.

Time Horizon

. In assessing the impact of stakeholder engagement, previous literature has argued

that the effective management of stakeholder relationships can generate persistence

of superior financial performance over the longer-term, or in the faster recovery of

This occurs because building good stakeholder relations as part of a corporation’s

strategy, takes time to materialize, is idiosyncratic to each corporation, and depends

on its history; such relationships are based on mutual respect, trust, and cooperation

and take time to develop. In other words, effective stakeholder engagement

necessitates the adoption of a longer-term time horizon.literature on ―short-

termism‖ (e.g., Laverty, 1996) has shown that executive compensation incentives

that are based on short-term metrics may push managers towards making decisions

that deliver short-term performance at the expense of long-term value creation.

Consequently, a short-term focus on creating value may result in a failure to make

the necessary strategic investments to ensure future profitability. Importantly, such a

short-term approach to decision-making often implies a negative externality being

imposed on various other key stakeholders. In other words, short-termism is

incompatible with extensive stakeholder engagement and a focus on stakeholder

relationships. It is also true then that the pathologies of short-termism are less likely

to be suffered by corporations with a clear focus and commitment to multiple

stakeholders. Given the documented commitment of High Sustainability firms to

stakeholder engagement therefore, we further predict that they are more likely to

adopt such a longer-term approach, and that this approach will also be reflected in

the type of investors that are attracted to such corporations

Corporate Performance : measurement and assurance

High Sustainability group might underperform because they experience high labor

costs by providing excessive benefits to their employees, forego valuable business

opportunities that do not fit their values and norms, and denying to pay bribes to gain

business in corrupt countries where bribe payments are the norm.

On the other hand, firms in the High Sustainabilit might outperform the control firms

because they are able to attract better human capital, establish more reliable supply

chains, avoid conflicts and costly controversies with nearby communities (i.e.,

maintain their license to operate), and engage in more product and process

innovations in order to be competitive under the constraints that the integration of

social and environmental issues places on the organization. For example, Philips

has translated its environmental commitments to product innovation around energy-

efficient light bulbs and developing solar-power lighting in sub-Saharan Africa.

Importantly, none of these studies has measured financial performance over long

periods of time to allow for superior sustainability performance to impact either

positively or negatively on financial performance.

. This finding suggests that companies can adopt environmentally and socially

responsible policies without sacrificing shareholder wealth creation. In fact, the

opposite appears to be true Indeed the integration of such issues into a company’s

business model and strategy may be a source of competitive advantage for a

company in the long-run. A more engaged workforce, a more secure license to

operate, a more loyal and satisfied customer base, better relationships with

stakeholders, greater transparency, a more collaborative community, and a better

ability to innovate may all be contributing factors to this potentially persistent superior

performance in the long-term.

Performance measurement is essential for management to determine how well it is

executing on its strategy and to make any necessary corrections (Kaplan and

Norton, 2008). The quality, comparability, and credibility of information are enhanced

by internal and external audit procedures that verify the accuracy of this information

or the extent to which practices are being followed, we would expect the

Sustainability firms to place significantly more emphasis on measuring and

monitoring performance, auditing performance measures, adherence to standards,

and reporting on performance. report on their performance as it relates to these

three stakeholder groups.

In contrast to Customers, there are some significant differences between the two

groups of firms in terms of Suppliers. In particular, we examine the standards used to

select and manage relationshipswith Suppliers, which can determine the quality of

the relationship they have with the firm. These standards fall into either

environmental or social issues, or a combination of the two. In terms of

environmental issues, significantly more High Sustainability firms use environmental

monitoring systems in the certification/audit/verification process

The reliability and credibility of performance measurement is enhanced when it is

subject to some form of objective, third-party audit or assurance. The purpose of an

audit is to ensure that the appropriate measurement standards have been applied

and that the internal control and measurement systems producing information
according to these standards, are robust. Companies can also perform internal

audits whereby a separate department is responsible for verifying the numbers

produced by another department. With rare exceptions, an external or internal audit

or assurance opinion is not required for reported nonfinancial information on a

company’s environmental and social performance. However, given the greater

importance that accord to nonfinancial metrics (e.g., linking executive compensation

to such metrics), we predict a greater use of assurance by

There are a number of reasons for why assurance procedures are so uncommon.

Technologies for measuring and auditing nonfinancial information are still in their

infancy and remain at a relatively primitive state of development compared to

financial information (Simnett, Vantraelen, and Chua, 2009). This is not surprising

given that external reporting of such information only started about 10 years ago, has

only received a significant level of interest in the past five years, and even today only

a small percentage of companies are reporting this information. One of the most

important and difficult to overcome barriers to auditing nonfinancial information

includes the lack of an agreed-upon set of measurement standards. This in turn,

makes it very difficult to create auditing standards. Another barrier is the lack of

sophisticated information technology systems for measuring nonfinancial

performance, especially compared to the sophisticated and robust systems

developed for financial reporting. Three other barriers are important to note. First,

traditional audit firms are in the early stages of developing the capabilities to audit

nonfinancial information. This, combined with the lack of standards and IT systems,

creates the second barrier, which is a concern that performing this function will

increase their legal risk beyond the amount they already face for performing financial

audits. Third, firms which do have capabilities for auditing nonfinancial information,
such as engineering firms for environmental information and human resource supply

chain consultants for social information, lack the global scale and full range of

capabilities that would be required to serve a large corporation that wants a single

group to perform this audit. While a large number of boutique firms could be hired to

do this, the aggregate transaction and coordination costs would be high.

Disclosure

Another important element is the extent to which a company is willing to be

transparent in its external reporting about its environmental and social impact.

Reporting on such nonfinancial performance measures to the board is an essential

element of corporate governance so that the board can form an opinion about

whether management is executing the strategy of the organization well. Moreover,

external reporting of performance improves managerial accountability to

shareholders and other stakeholders. Therefore, we expect High Sustainability firms

to be more transparent and to exhibit a better balance between financial and

nonfinancial information in their external reporting.

balanced scorecard (Kaplan and Norton, 1996), except for financial keywords, as

nonfinancial. about nonfinancial aspects of the business such as employees,

customers, suppliers, and products.

Triple Bottom Line

Environmental indicators

indicators in the field of environment were divided into two segments. In the first

segment, the company evaluates its environmental policy, in the second one we
show the consequences of the company's operations on the environment and

measures to improve the situation.

Indicator of the success of environmental standards use indicates whether the

company uses standards that ensure that the environmental policy is implemented.

Indicator shows how committed is the company to planning, implementing and

measuring in the environmental field according to performance standards such as

ISO14000 or the corresponding second international standard in logistics activities

[9].

Indicator of energy consumption reduction indicates how a committed company

implements the environmental policy because reducing energy consumption per unit

of product or service means the implementation of lean logistics as energy-efficient

assets are used and reduces unnecessary activities.

Recycling indicator shows the company's concern for waste materials. This indicator

shows how the company anticipates and implements the waste recycling policy and

measures the extent of recycling in logistics activities.

Indicator of environmental incidents shows that the company is aware of the

problems of ecological incidents that may arise due to various causes from the spill

of dangerous substances to the careless attitude towards the transport or storage of

dangerous goods, and the like. With this indicator we show that the company records

the state of ecological incidents and wants to reduce it with the measures envisaged.

Indicator of measuring and reporting on environmental operations shows an active

approach to continuous monitoring of its operation by measuring the environmental

impact and reporting on its operation.

Indicator of reducing emissions In addition to the legal requirements for measuring

discharges, especially in transport, it shows how the company controls the

environmental burden in its entire operation from waste management, inland

transport, warehousing processes, operation of buildings and the use of renewable

sources.

Indicator of the reduction of pollution and water consumption shows the company's

attitude to the main source of life and a healthy environment since logistics besides

the air also greatly burdens water resources.

.Indicators of Society

Indicators in the field of company's social performance (see Tab. 1) show how the

company is managed by personnel who perform logistic services, because in

transport and storage people are the key factor for the successful implementation of

logistics processes. Indicators are divided into two groups, namely indicators that

check the company's social policy and a set of indicators that indicate the

implementation of activities to improve the social situation.

Indicator of employee social security highlights the improvement of

employees’ social security, the sustainability of employment, increase

in wages, benefits for employees, achieving or exceeding the ILO standards, thus

showing the social security policy for their employees. Indicator of logistical

production safety points to improving security in logistics by implementing the

company's security policy, which commands measurement and continuous

improvement.
Indicator of working conditions improvement shows the concern of the company to

ensure that employees are not under too much stress, have time to eat and rest,

have a proper working time allocation, and the like.

Indicator of work environment quality improving is an indicator that shows how the

company implements a policy of improving the working environment, so that

employees have an ergonomically regulated work place, are not exposed to adverse

effects, are responsible for setting up successful work teams and the like.

Indicator of the increase in preventive measures shows the company's actions due to

the requirements of the security policy, to prevent in advance not only injuries but

also stress and other burdens that negatively affect the welfare of workers.

Indicator of accidents reduction in the use of work tools reports how security policy is

performing.

Indicator of education draws attention to the increase of education per employee, as

the condition for successful work is education of employees by continuous education

due to rapidly changing technology and the introduction of new information solutions.

Indicators of Economy

Indicators in the field of economic performance (see Table 1) of the company

present the economic policy indicators of companies that show the overall economic

performance of the company, as if the company operates successfully, it can provide

the necessary means for more sustainable operation in the field of logistics. With

these indicators we, in addition to financial performance of the company, also

emphasized the importance of green and lean business and fair business behavior.
The second group of economic indicators shows the measurement of savings due to

sustainability prac.

Indicator of market share shows how the company is successful in winning the

logistics market. By expanding its business, the company displays market

performance, healthy growth, and an increase in the scope of its operations.

Indicator of income and profitability is an important indicator of an increase in net

revenue in the logistics segment, making it easier to finance a more sustainable

company policy [

Indicator of code of conduct shows company's credibility and commitment to fair

business practices in business transactions.

The indicator shows that the company respects the code of conduct and perceives

inappropriate business policy. By detecting and measuring business incidents, we

show that the company is committed to honest business, as the entire operation of

the company can be jeopardized.

Indicator of ensuring green production shows an increase in resources in order to

provide a greener production in the logistics field. It shows the budget intended for

investment in sustainable improvements, as investments make it easier to achieve

desired goals. We are citing the example of reducing energy consumption through

the replacement of energy products, choosing more energy-efficient consumers,

investing in alternative sources.

Indicator of cost reduction due to lean logistics shows improving the quality,

productivity, efficiency and implementation of logistics processes with the active

participation of all employees. Indicator shows whether the company uses these
principles in a continuous improvement cycle and measures the cost reduction due

to the implementation of lean logistics.

Indicator of cost reduction per SKU unit is a generally acknowledged indicator for the

economically efficient implementation of logistics processes and measures the costs

for a single logistic unit

Indicator of improving the economic efficiency of transport

Introduction of more economical and technologically-equipped means of transport,

better efficiency in carrying out transport, route optimization, and loading methods

bring economically measurable effects.

Indicator of reduction energy, wastewater and waste costs

Firms by practice lean logistics and invests in the provision of green production

expects to reduce costs for consumed energy, to reduce waste water and all other

waste.

LM requires to manage multiple Key Performance Indicators (KPIs) from three pillars
(economic, environmental, and social pillars) of sustainability. Table 1 presents an
exemplary set of KPIs for sustainable logistics management.

Table 1 reveals that a company which would like to improve its sustainability
performance first has to assess environmental and social externalities of its opera
tions, assuming that the economic KPIs are already known. This assessment would
allow company to identify the main environmental and social KPIs for SLM. Once the
KPIs are defined, the final challenge is to achieve a more sustainable balance
between economic, environmental, and social KPIs.

Table 1 Exemplary set of Key Performance Indicators for sustainable logistics

management

pillar Economic Environmental Social

Key performance Total logistics cost incurred Price control and Equal opportunities
indicators Variance of the total logistics
monitoring
Gender
cost
Import/export permits
Health and safety at
On-time delivery
Foreign currency work place
Late delivery
funding
Employee training and
Missed sales
Material Issues Raised development
Order cycle time (lead time) or Stakeholder
Whistle blowing
Transport carriers utilized Concern

Charity
Output growth Regulatory compliance

Labor productivity Price control and

monitoring

Import/export permits

Foreign currency
funding

Import substitution

Lobbying government

Annual general
meeting

Statutory returns

M has to manage a broad set of KPIs from economic, environmental,

and social pillars of sustainability, as shown in Table 1. Obviously, there exist trade-
offs among these indicators. Then, the challenge for logistics decision-makers is to
incorporate these dimensions into the decision-making process. Focusing only on
profit while A growing area of concern is the issue related to sustainability, where
firms face constant pressure by various stakeholders to pursue not only economic
gains, but also to address social and environmental considerations at both
organizational and supply chain levels