8. AU Optronics
8.7. Employee Relations
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certification from the EPA, becoming the first business building to pass certification of a 3-stage process involving quantification, reduction and exchange. Overall AUO has been able to reduce carbon emissions from 93KG CO2 in 2008 to 54KG CO2 as of 2013.
Figure 11. GHG Emissions 2008 - 2013
Source: AUO Sustainability Report 2013
8.7. Employee Relations
Employees of AUO receive great opportunities for self-growth and solid benefits package helping to retain top talent and therefore be more sustainable with reducing employee turnover.
Employees of AUO have all of the following. Compensation benefits: parental leave options, pension scheme, employee rights, and freedom of association. Human rights: Elimination of child labor and forced labor from suppliers as well as a great healthcare plan, education and professional training.
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9. Sustainability Conclusion and Summary
Bruntland report first published in 1987 defines sustainability as: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” For business reducing costs is the most obvious and easily accessible for companies looking to profitability and sustainability. This is achievable by using less resources, raw materials and energy to make processes more efficient. Sustainability provides differentiation against competitors improving brand image and trust with customers.
Companies can improve their accounting methods to better reflect sustainability by measuring and tracking not only their financial activity but also tracking their social and environmental impact though reporting methods such as Activity-Based Costing ABC, Life Cycle Costing LCC and Life Cycle Assessment LCA. These methods provide impact assessment of products, production and distribution from start to finish for a company. The Global Report Initiative GRI provides specific sector and industry guidance for reporting services for small and large companies. GRI reporting has high quality standard for implementing Sustainability reporting.
Putting a price on waste is one way for governments and companies to use economics to create incentives that can be more sustainable for the planet and society. Analyzing Carbon Footprint impact by using the Marrakech process can help develop greener business models. Externalities and their positive and negative effects also greatly impact society. Reducing these negative externalities can be achieved using Market Based Instruments MBI’s. MBI’s address the market failure of 'environmental externalities' either by incorporating the external cost of production or consumption activities through taxes or charges on processes and products.
Entrepreneurship and sustainability are also important for any new SME and startup company especially those focused on social and environmental ventures. SMEs have greater flexibility and speed allowing them to integrate sustainability into business plans more efficiently. One of the most prominent opportunities for SMEs to become more sustainable is through selling a sustainable product or service. Companies such as D- light design who provide off- grid solar energy products targeting rural and urban poor or a company like Sanergy, based in Africa,
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whose sustainable business model generates revenue through a waste collection service. Both are clear examples of sustainable products and services.
CK Prahalad believes that entrepreneurs, large MNC firms, civil society and local governments can combine to create economic and social transformation. He cites the use of Unilever Corporation Subsidiary HLL (Hindustan Lever Limited). HLL willingness to perform product adaption and distribution in India is a good example of sustainability by reducing costs and improving efficiency while also profiting from the bottom of the pyramid. (BOP).
Sustainability in Marketing can build your brand value and build increased trust with consumers.
A sustainable marketing strategy creates long-term impact by educating consumers on product disposal to reduce life cycle effects. A sustainable product should provide environmental, social and economic benefits over its full life cycle. Trends in sustainable marketing consist of the following: taking existing products and making them greener=eco-design. Increasing consumer awareness of sustainable products perceived value to both consumer and the environment. Finally not confining green products to one area in store but instead place products next to less green alternatives. Marketers can also communicate sustainable values using eco-labels. Eco-labels tell consumers about certain environmental or social standards that the company values. Example such as LEED building codes, Taiwan Green mark for household products and Forest Stewardship Council (FSC) for timber sales are a few examples of eco labels that provide sustainable advantage to their products.
World Business Council Sustainable Development (WBCSD) is a major resource for business corporations that want to be aligned with sustainability. Members comprise over 60-CEO lead businesses and are required to promote eco-efficiency, innovation and corporate social responsibility. The Taiwan BCSD has well known companies such as Taiwan 7 Eleven, China and Steel Co., Chunghwa Telecom, China Airlines, Taiwan High Speed Rail, ACER computers, TECO and AUO among many others. Taiwan BCSD consistently works on addressing eco-efficiency, CSR, Carbon Disclosure Projects, consulting for corporate sustainability strategy, and capacity building in Taiwan.
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AU Optronics (AUO) is Taiwanese manufacture of LCD and PV technologies that was formed in December 2001. AUO is striving to be one of the best sustainable corporations in Taiwan.
Current projects that AUO is working on is a 25% reduction of Green House Gases (GHG) by 2015 as well as implementation of zero waste water emission at Touyuan site with zero emission expansion planned for future locations worldwide. AUO is working to incorporate sustainability into the company strategy by producing quality products that reduce energy consumption and still satisfy customer needs. Large goals of reducing toxic materials in products and improving energy efficiency are ideal examples of sustainability at work in Taiwanese corporation. AUO Sustainability Report addresses topics like stakeholder priorities from social, economic and environmental aspects as well as topics like climate change, CSR and employee relations. Overall AUO is not only working on Sustainability but also increasing total net revenue, total assets and total equity to stockholders from 2012-2014. (See Appendix B)
In closing Sustainability in Business is about limiting our use of natural resources and improving our efficiency in production, distribution and Life cycle assessment of products and services while still providing for customer needs, wants and demands. By aligning a company mission and vision with sustainable principles you can incorporate direct tools to measure and track your effect of people planet and profits. Sustainable reporting of social, economic and environmental impact allows a company to improve on its bottom line while also improving the planet and their relationship with their clients.
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10. Appendix
Financials : Sustainable companies: IKEA and Taiwan AUO Optronics.
Source: Annual Report IKEA 2013 and AUO Annual Report 2014.
1. Appendix A IKEA Income & Balance Sheet 2012-2013
Consolidated Income Statement September 1st 2012-August 31, 2013.
Million of Euros 2013 2012
Revenue 28,506 27,628
Cost of Sales 15,786 15,723
Gross Profit 12,720 11,905
Operating Cost 8,709 8,423
Operating income 4,011 3,482
Total Financial Income 81 427
Income Before Tax 4,092 3,909
Tax 775 695
Minority Interest -15 -12
Net Income 3,302 3,202
IKEA Total Revenues 2003 & 2013
2003 2013
Total Revenues 11.4 28.5
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Consolidated Balance Sheet Assets & Liabilities 2012-2013
Million of Euros 2013 2,012
Plant Property Equipment 17,036 17,264
Fixed Assets 2,493 2,672
Total Fixed Assets 19,529 19,936
Inventory 4,257 4,664
Receivables 2,193 2,270
Cash 16,000 17,878
Total Current Assets 22,450 24,812
Total Assets 41,979 44,748
Group Equity 29202 29072
Long Term Liabilities 1898 2523
Non current Liabilities 1567 1625
Total non current liabilities 3465 4148
Short term liabilities 4763 6814
Payables 4549 4714
Total current liabilities 9312 11528
Total equity and Liabilities 41979 44748
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4. Appendix B : AUO Optronics Income and Balance Sheet 2012-2014
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