Sustainability Reporting And Business Ethics

Part 1

Introduction

Marks & Spencer also referred to as M&S is a retail company from the United Kingdom that has set its prices to capture the mass market and offers own-label goods under Food, Clothing & Home, Bank & Services segments. The company puts a special focus on high quality and while ordering the products they make sure to do it with concern over wastage. M&S in 2023 managed to cut the operational carbon emissions by 27% and secured 84% of electricity purchasing from renewable energy, which proves the brand’s strategy of sustainability and high quality. M&S aims to provide customers with extraordinary benefits and, at the same time keeps itself strategically ahead of competitors by being ethical and innovative in Product differentiation.

M&S’s Social Practices

Marks & Spencer (M&S) Plc has been identified to be at the forefront of social responsibility practices, especially on pay policy and diversity. The company’s adherence to these practices can also be noted through the exhaustive social responsibility policies and the clear disclosure of such, seeking to foster change in the employees, suppliers, and communities.

Fair Pay &Worker Welfare

M&S has been applauded for measures that it has taken to prevent discrimination by implementing an equal pay policy across its operations. This way the company promises to use funds for remunerating all its workers at least the living wage which is higher than the UK’s national minimum wage. In this context, M&S has made a commitment as well as following a series of planned strategies to ensure the welfare of its employees and ensure they are satisfied with their working conditions hence reducing their turnover. In 2023, M&S had ethical audits over 2000 to check staff’s adherence to the code of ethics, showing that the company was a leader when it comes to worker welfare (M&S, 2023a).

Diversity And Equality

M&S’s people strategy also includes that the company strives to establish a diverse and inclusive environment. Working employed measures on gender mainstreaming which show a 60:40 ratio of female employees to male employees and 40% female senior employees by 2023 (M&S, 2023a) (see, Appendix 1). The organisation has goals of diversity throughout the company and it shares reports on improvements in the area. The company’s activities in this area are reinforced by its engagement in outside tasks, which include 30% Club, designed to improve gender diversity on the board of directors and in the executive offices.

Comparison With Competitors

It is when M&S is compared to other rivals such as John Lewis that the firm’s social practices compare well, for instance, on issues to do with fair pay and gender diversity. However, where M&S may be able to learn from John Lewis is in the greater degree of openness with regards to the worker participation it has offered, and where M&S is said to be lagging (Voss et al., 2019). Nevertheless, as has been identified in the analysis, there are issues that M&S needs to address, such as supply chain management and diversity reportage. By doing so, M&S would be in a better place to adapt to the challenges indicated above and thus become a better retailer that supports social responsibility.

Criticism And Main Areas Of Improvement

M&S, like many other retailers, has received criticisms pertaining to some social issues. One of the concerns is the working conditions of employees within its supply chain especially for companies operating in developing nations (Nyame-Asiamah and Ghulam, 2019). Although M&S has worked progressively in auditing and rectifying the circumstances, it is still a challenge to address all the workers implying that more effort is still required to ensure that all the workers are paid fairly and offered good working conditions per the company’s policy including those in sub-contracted factories (Nyame-Asiamah and Ghulam, 2019). The retail industry in particular has been accused and criticized for adopting complex supply chains, where unscrupulous practices could be sometimes missed or mitigated.

M&S’s Environmental Practices

Marks and Spencer (M&S) has transformed its performance on environmental factors within a short period in that it has performed a noteworthy improvement on the emission of carbon, uttermost sparing of water and constant use of power from renewable origin. The goal to become a net zero carbon emissions company by 2040 is at the heart of the company’s sustainability direction.

According to M&S’s official website, in 2023 the company achieved a 27% decrease in operational carbon emissions compared to the reference year 2017 (M&S, 2023a). This has primarily been made possible through the adoption of energy efficiency measures, procurement of renewable power and use of low-carbon technologies. M&S’s goal consists of achieving zero net carbon emissions for their operations by 2025, with a 48% reduction achieved in 2023 while 33% of energy should come from renewables by 2020. This has already been met in 2023 with 71% of the energy sourced from renewables (M&S, 2023a) (see, Appendix 2). Water management is yet another area that the M&S company concentrates on. The firm has put in place several mechanisms to conserve water both in the direct operations and throughout the supply chain with cuts in water usage in the high-risk areas by 15%. In supplier relationships and Water, M&S works with suppliers to try and enhance water quality and accessibility in the areas where the company sources the water. M&S has made a lot of progress with the objective of increasing renewable energy usage. The company has set a policy of using only renewable electricity by the year 2025, although in 2023. It has only used 84% of renewable electricity (see, Appendix 2). This commitment is in line with budgeted strategies to decrease the extent of carbon emissions and encourage environmentally friendly energy solutions in the retail segment.

Comparison With Competitors

Establishing a comparison between Marks and Spencer and Tesco company, there are similarities and differences in their environmental performance. Tesco has also planned to reduce carbon and has made great goals that it should be a net zero company by the year 2050. At the same time, Tesco has already decreased carbon emissions by 61% considering the results of 2015, thus it has an even more stringent reduction than M&S (Tesco Plc, 2022). In comparison to Tesco, M&S is using only 90% of renewable electricity even though they committed to reach 100% in the near future. The two providers have both invested a considerable amount in WSP but Tesco’s measures have been able to help it use 20% less water than M&S which has been able to use 15% water less than before (Tesco Plc, 2022).

Criticism And Main Areas Of Improvement

A primary area of concern is the use of indirect emissions or Scope 3 emissions which make up 94% of their total emissions (M&S, 2023b). These emissions are from the company’s value chain on the way products are manufactured and acquired. Redressing these emissions needs a much stronger supplier engagement and a much higher bar in terms of sustainability standards. Furthermore, there are complaints concerning the whole retail industry and its role in the formation of plastic waste. M&S has done well in retracting the use of plastic packaging though a large amount of plastic packaging is still produced. In 2023 75% of the packaging used by M&S is recyclable (M&S, 2023a). Overall, M&S has shown good activity in embracing environmental issues through emission reduction of carbon, water conservation as well as increased production of renewable energy. Nevertheless, there is some work to be done and progress that should be made for example in regard to Scope 3 emissions and overall plastic usage. Hence, for M&S, which prides itself in sustainable solutions, it remains possible to advance on the environmental practices if only it will also come up with new partnerships with other stakeholders.

M&S’s Governance Practices

The Corporate Governance Structure of Marks and Spencer (M&S) The Marks and Spencer group has a sound corporate governance system that embraces organizational ethical standards, and accountability. In this respect, the governance structures of the company are to aim at the company’s responsible and sustainable management to address the shareholders’ and other stakeholders’ needs.

Governance Structure

The most important Governance body at M&S is the main Board of Directors, and it is charged with the responsibility of charting the corporate direction as well as supervising the implementation processes while at the same time making certain that the corporation complies with the best practices in corporate governance (M&S, 2024). The Board is further assisted by sub-committees seen in any well-functioning organization such as; the Audit Committee, the Nomination Committee and the Remuneration Committee which these committees are charged with certain social oversight responsibilities (M&S, 2024). For instance, the Audit Committee is tasked with the important role of overseeing the accuracy of the company’s financial statements, the efficiency of its internal control system together with compliance with the best practices in managing risks. M&S also has an Environmental, Social, and Governance (ESG) Committee tasked to manage the company’s sustainability programs so that this may level with its scheme (M&S, 2024). This particular committee is very instrumental in overseeing the achievement of the company with regard to the set sustainability agenda as well as ensuring that the company is responsive to the stakeholders’ demands.

Comparison With Competitors

Interestingly, M&S also has some similarities as well as differences in its governance practices as compared to Tesco, its competitor. In addition, it has sound governance structures such as the Board of Directors and other committees, which have charge over different affairs of the business. Nonetheless, it is necessary to state that Tesco has been more engaged in proactive communication with its stakeholders especially when it comes to the company’s initiatives related to food waste or sustainable sourcing of products (Voss et al., 2019). At Tesco, the Corporate Responsibility Committee, which needs to report to the Board on aspects relating to corporate responsibility at least quarterly, is present in the Board discussion that this committee is currently in existence in Tesco.

Criticism And Main Areas Of Improvement

There are areas that M&S has been accused of, for instance in the area of corporate governance, particularly with regard to the remuneration of executives. Some of the issues that have raised concerns include the relationship between executives’ remunerations and the firm’s performance as well as strategic directions. Some scholars opine that the compensation policy is often perceived and structured in an unfair manner, especially when comparing the remunerations that are paid to the top executives of the company against its current financial performance. This is especially prevalent in increasing executive remunerations in the retail industry since this is a sensitive area in relation to the increasing shareholders and public concern.

The second drawback of the company’s governance practices is connected with its supply chain. There is progress in improving ethical trade and fair treatment of workers, though there were cases in which the company’s suppliers were found to violate basic labour rights. This raises the issue of how to sustain effective scrutiny of a complex supply chain network and guarantee that all the suppliers work according to the company’s ethical principles.

M&S’s Corporate Social Responsibility (CSR) Practices

M&S has been acclaimed for its most extensive and well-implemented CSR policies which are an integration of organizational culture. The company use its Plan A which is basically the guide to its corporate responsibility programs on social responsibility, environmental and socially responsible policies in its operational systems and networks.

Some of the CSR activities practised by M&S include: Sustainable sourcing and procurement, ethical trade, and community support. The company has achieved several important steps in the last years in negatively responding to the concerns of products’ responsible sourcing. For example, M&S ensures 100 per cent sourcing of responsibly sourced cotton through its membership in the Better Cotton Initiative and other such sustainable cotton platforms. Moreover, they have set an 80% threshold for procurement of their wood and papers from certified sustainable sources further aiming to make it 100% by the year 2025 (Murthy, Barry and Ellis, 2021) (see, Appendix 3). Definitely, such efforts help create fair trade as well as contribute to a sustainable environment.

Another ethical cause that M&S is concerned with is workers’ treatment and or lack of exploitation of workers. The company further checks its ethical standards through ethical audits with the view of checking its degrees of compliance. Thus, in the given year, M&S carried out more than 2,000 ethical audits to ensure proper compliance with ethics (Marks & Spencer, 2023). Additionally, the employees have been trained with over 100,000 hours in training and development in 2023 Availability of training for the employees has been enhanced.

It also focuses on your community in its initiatives as was the case with M&S. The following measures have been put in place by the firm in an attempt to ensure that the overall health and welfare of the employees, suppliers and communities are well-catered for; In 2023 M&S delivered more than over. Food redistribution programs that it supports help distribute 5 million meals to vulnerable groups of people. The Family Matters campaign just launched at the same time this year is aimed at helping and empowering families and boosting mental health and well-being (Mark and Spencer, 2022).

Comparison With Competitors

To better understand M&S’s CSR it is useful to compare it to another retailer operating in the same industry, for this purpose a competitor Tesco is used. Finally, the firm has made substantial pledges on CSR, especially on procurement and social responsibilities. Tesco’s Community Food Connection program, for instance, has been donating millions of meals to charities and community groups (Tesco Plc, 2022). Nevertheless, Tesco has recently been accused of unfriendly treatment of workers especially those in its supply chain implying that the company still has a long way to go in the fight against exploitation of workers.

Criticisms And Areas Of Improvement

M&S is under pressure to address indirect Scope 3 emissions mainly because it contributes to a huge percentage of it. Reducing these emissions needs enhanced supplier engagement, coupled with efficiency in sustainability standards. The retail industry is also blamed for the promotion of plastic use especially in the manufacturing of carry-home Packs. Even though 75% of M&S’s packaging was recyclable in 2023, the company still uses plastic in large quantities.

M&S’s Sustainability Practices

Marks and Spencer (M&S) have under Plan established an ambitious sustainability plan, which focuses on environmental, social and governance factors. The purpose of sustainability management in the company is to meet international Standards like ISSB, and the Global Reporting Initiative or GRI.

It should be noted that M&S has already set the goal to eliminate carbon emissions in its value chain by 2040. The operational carbon emission of the company was in 2023 which was 27% lower than the baseline of 2017 (M&S, 2023a). This progress has been realized through improvement in energy efficiency, and purchasing of renewable energy as well as enhancement of utilization of low-carbon technologies. For their operations M&S has the target of using 100% renewable electricity by 2025, with a progress of 84% in 2023 (M&S, 2023a). These efforts are in compliance with the issued guidelines of the ISSB and GRI, where an organization needs to focus on its reduction of greenhouse gases and its increase of renewable energy sources’ utilization (GRI, n.d.).

There are other areas where sustainability is as crucial to M&S as well, water stewardship is one of them. High-risk areas have seen a water usage reduction of 15% through the promotion of water-saving practices in the supply chain of the company. Another sustainability issue that M&S addresses with the suppliers is sustainable water management with the foreseeable goals of water quality and availability in the principal sourcing areas. This strategy is in accordance with the GRI standards that call for moderation and efficient use of water in organisations.

Part 2

Requirement (a) – Decisions when an individual discovers that he/she is working in a company with many ethical issues

In Marcus Milne’s case, the decision to stay within a company that has many ethical dilemmas is taken based on the following factors. When an individual realizes that they are working for an organization that has many ethical issues, then the right step to take is to determine if he or she should continue working for that organization. Several ethical issues have been found by Marcus at Mordeca Inc. and they include: The company was involved in preying on vulnerable persons and employees of Mordeca Inc. were involved in some questionable activities. Again, there is the prospect of career advancement, but Marcus’s lack of ease with these practices could mean that continuing with the firm could detriment his ethical calibre. As such, the clinicians will find themselves torn between the gains of their practice or profession on the one hand and their principles on the other. For Marcus, to remain in Mordeca Inc. could potentially lead him to condone those unethical actions, or lack of them, which would compromise his ethical beliefs as well as his profession.

About the dilemma of whether Marcus should report the violations observed to the authorities, it is necessary to assess the seriousness and the consequences of the ethical problems revealed. In the case where the unethical practices that are being displayed by Mordeca Inc. contravene legal or regulatory requirements, then Marcus can think of reporting it to the relevant law enforcement agencies or regulatory agencies. That course of action would not only help to deal with the ethical concerns but also save his reputation by acting against misconduct. However, Marcus has to consider the consequences – these are the consequences that can be worse than the crime; retelling from colleagues may contribute to Marcus’s dismissal, threats, or even physical attacks. It is a courageous act to report concerns but this can only be done with proper appreciation of some of these risks and resources.

Finally, I noticed that Marcus’s ethical position is indeed under threat of being eroded Latin. This scenario depicts an ethical dilemma because his conscience is in conflict when dealing with unethical business practices, as much as he has to work and act professionally. This conflicting perception of reality is the reason people should consider the morality of choosing a career. If Marcus decides to stay at Mordeca Inc., then he is likely to erode his ethical position within the company thus his self-esteem and credibility will be compromised in the long run. On the other hand, resigning from the company or dealing with the problems may strengthen his moral stance and remain ethical at the same price for risking his job.

Requirement (b) – Discuss if Marcus should continue to work at Mordeca Inc.

In deciding whether Marcus should stay or seek other opportunities at Mordeca Inc., the ethical situations and the actual circumstances have to be examined. The choice to continue working for the company is based on a proportion of promotional possibilities and individual ethical principles. Marcus is concerned with the various forms of malpractice taken by the company which include extension of substandard loans to clients and also targeting the needy. Should he stay at that company, he may find that he will have to neglect his beliefs and principles to meet the job requirements and will have to sacrifice his professional ethics which can later affect his job satisfaction and overall reputation in the long run. On the other hand, leaving the company might give him another opportunity to make his career accountable to his ethical principles, but of course, there are risks of unpredicted financial insecurity and job scarcity in his town. Consequently, Marcus has to think whether success in the career ladder is worth the moral price for him and those in abusive jobs to pay.

Thus, practically, for the above-stated problems, Marcus can do the following things. First, he should perform a survey of other employment options available at his current place of residence or other areas within which he may be willing to work in case he decides to resign from Mordeca Inc. This process involves updating one’s resume, job hunting, and applying for positions that are in his or her worth walk. Moreover, Marcus should probably try utilizing some intracompany grievance process, that is, talking with his direct manager, for example, or another manager within the company. However, if these are not possible, he might visit the career coach or advisor to get the proper steps to undertake in accordance with what he wants. Marcus should also consider the repercussions of his decision in terms of effects on his personal and professional life to come up with the decision to either stay or leave.

If Marcus is a member of any professional body, this would help him find assistance in tackling his ethical issues in Mordeca Inc. as professional bodies regularly provide guidelines that professionals are supposed to adhere to as well as reporting channels for use if an organization is involved in unethical practices. This is knowledge Marcus could utilize to study how to resolve his matter while conforming to the professional code of ethics. Besides, the professional body may provide networking opportunities as well as access to other ways for Marcus to pursue other careers should he decide to leave Mordeca Inc. In his operations, being a member of the professional body will improve his ability to do the right thing as well as make sound ethical decisions especially when facing numerous and difficult decisions.

Requirement (c) – Mordeca changing and creating an ethical organisation

Mission or Values Statements

For Mordeca Inc. to become an ethical organization it has to adopt and provide a mission or values statement that focuses on ethics and the society. This statement should show the organisation’s willingness to maintain ethical and righteous business relations along with being clear with all the individuals involved. By linking the company’s mission and ethics, Mordeca can develop the standards inside the organization to outline the basic principles for decision-making and actions.

Code of Ethics

Adopting a code of ethics to lay down standards on how employees should behave at Mordeca Inc. is necessary as stated above the code of ethics should incorporate issues such as Lending practices and customer treatment Financial/ethical practices. This should be available within the organization and needs to be updated frequently to reflect the needs of the employees in the organization. Such a code of ethics will enhance the formulation of code standards to enable the provision of ethical solutions to tested ethical issues.

Reporting/Advice Channels

Developing sound listening and communication channels is paramount for enabling the employees to report matters of ethical violations without any repercussions. Hotlines and ombudspersons should be introduced in Mordeca Inc. as ways to report the violation of the code of conduct or to seek advice. These must be well explained to all staff, and they should be in a position to understand how to access them, and that their grievances will be addressed appropriately.

Risk Analysis and Management

It is therefore important that Mordeca Inc. integrate ethical considerations in the risk analysis and management systems. It entails preventing and minimizing what may be considered ethical issues in a certain organization for instance malicious practice in extending credits or discrimination. It should also be noted, that regular audits and assessments must be done to adhere the company to the established ethical requirements and to prevent improper actions from happening in the future.

Ethics Education and Training

The management of Mordeca Inc. should ensure that an ethics program is fostered to encourage ethical behaviours among all the employees in the company. This training should include the company’s code of ethics, legal compliance standards, and other issues related to ethical behaviour. Modernization of the training and constant reminding of the ethical standards will assist Mordeca in an endeavour to lead the employees toward making the right decisions and sticking to high ethical standards.

Stakeholder Consultation, Dialogue, and Partnership Programs

Addressing the stakeholders through consultation, dialogue, and partnership requires the development of partnership programs to build a trusting relationship with the community and ensure that it meets the standards set by the community and the ethical standards of the society. Stakeholders must be encouraged to report any observed wrongdoing in the Company. In regards to the Mordeca company, such an approach of open communication and partnership will contribute to the improvement of its image and, therefore, the company’s more ethical operations.

Conclusion

Mordeca Inc. needs to have measures in place to deal with HR managers’ deceitful behaviour toward clients if it wants to become a morally-minded company. These consist of establishing a precise goal, creating a code of ethics for professionals, and establishing strict reporting requirements. To facilitate transformation, moral and regulatory training for staff members, stakeholder discussions, and the incorporation of ethical issues into risk management are vital. By putting these principles into practice, Mordeca Inc. may resolve moral dilemmas, establish a trustworthy workplace, and modify its operations to adhere to moral and legal obligations.

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Appendices

Appendix 1: MARK AND SPENCER INCLUSION AND DIVERSITY REPORT

Appendix 2: MARK AND SPENCER NET ZERO EMISSION REPORT

Appendix 3: MARK AND SPENCER WASTE REDUCTION REPORT