Assessment Two: Review Of A Company’s Social Performance

Assessment Two: Review of a Company’s Social Performance

In your assignment, you are to review the behaviours, actions, and communications of one of the following companies of your choice: Walt Disney Company, Keppel Corporation, HSBC, or LVMH Moët Hennessy Louis Vuitton SE. You should examine and critique one or two aspects of the company’s social performance related to society’s expectations of how the company should operate, such as environment, equality, employment, community development, health, or human rights. Highlight both achievements and areas needing improvement. You may focus on one aspect and explore both positive and negative behaviors or look at two aspects, emphasizing one positive and one negative point for depth. Discuss the impact and implications of the company’s actions on society and stakeholders. Provide your conclusions about the company’s societal performance based on your analysis.

Sample Paper For Above instruction

The role of corporate social responsibility (CSR) has become increasingly pivotal as societal expectations evolve around how multinational companies should conduct their operations ethically and sustainably. This analysis will critique the social performance of LVMH Moët Hennessy Louis Vuitton SE, focusing on their environmental practices and employment ethics, providing an in-depth assessment of their achievements and shortcomings, and the subsequent impact on stakeholders and society at large.

Introduction

LVMH, a global leader in luxury goods, commands a significant influence on fashion, cosmetics, and alcohol markets worldwide. Given its prominence and reach, the company's social performance significantly affects a broad spectrum of stakeholders including employees, suppliers, consumers, and communities. As luxury brands are often scrutinized for their environmental footprints and labor practices, evaluating LVMH’s performance provides insights into how well it aligns with societal expectations of corporate responsibility.

Environmental Practices: Achievements and Challenges

In the context of environmental sustainability, LVMH has made notable strides by implementing measures such as reducing carbon emissions, waste management, and resource conservation. Their 'LVMH Initiatives for Sustainable Development' reports highlight commitments to sourcing sustainable materials and increasing energy efficiency in their manufacturing processes (LVMH, 2022). For example, the company has invested in renewable energy projects and committed to achieving carbon neutrality by 2050, aligning with global climate objectives (UN Global Compact, 2021).

However, despite these initiatives, challenges remain. Critics point out that the luxury sector’s reliance on exotic materials like animal skins and rare woods contributes significantly to environmental degradation. According to an investigative report by Greenpeace (2019), some LVMH brands still source materials linked to deforestation and habitat destruction. The opacity in their supply chains complicates efforts to verify the sustainability claims, highlighting a gap between their commitments and implementation.

Employment Practices: Positive Aspects and Areas for Improvement

LVMH has established codes of conduct aimed at fostering ethical employment practices among its suppliers and subsidiaries. They have adopted strict labor standards, including prohibitions against child labor and forced labor, and promote fair wages and safe working environments (LVMH, 2021). Their partnership with the Fair Labor Association signifies a commitment to ongoing monitoring and improvement.

Nevertheless, there are reports and investigations indicating violations within certain supply chains. A 2020 exposé revealed instances of underpaid artisans and factory workers in countries such as Vietnam and China, where workload pressures and low wages persisted (Human Rights Watch, 2020). The company's limited transparency regarding its supply chain complicates accountability. While LVMH’s public statements demonstrate a commitment to ethical employment, the lack of rigorous external audits in some regions suggests room for genuine improvement.

Impact and Implications on Society and Stakeholders

The environmental and employment practices of LVMH significantly influence a range of stakeholders. Environmentally, while the company’s initiatives to reduce carbon footprint align with societal demands for climate responsibility, ongoing sourcing issues undermine its credibility and can contribute to ecological harm, affecting local communities and biodiversity. Ethically, violations in labor rights undermine stakeholder trust, damage brand reputation, and may lead to consumer boycotts (Kotler & Keller, 2016). Furthermore, supplier workers in developing countries bear the brunt of the company’s supply chain decisions, often facing poor working conditions and low wages, which perpetuates cycles of poverty and social inequality (ILO, 2020).

These contradictions between policy and practice create a complex scenario. The societal expectation is that LVMH should lead by example, ensure transparency, and enforce responsible sourcing and employment standards. Failing to do so risks broader societal backlash and regulatory scrutiny, which could threaten their long-term sustainability.

Conclusion

In conclusion, LVMH demonstrates a mixed record regarding its social performance. The company has made evident progress through environmental initiatives and ethical employment policies, reflecting an understanding of societal expectations towards sustainability and human rights. However, substantial gaps remain, especially regarding supply chain transparency and enforcement of labor standards. Stakeholders demand greater accountability and proactive transparency, which the company must adopt to enhance its social license to operate. If LVMH commits to rigorous external audits, transparent reporting, and sourcing practices aligned with global sustainability standards, it can strengthen its reputation and set a benchmark within the luxury industry for responsible corporate behavior.

References

• Greenpeace. (2019). 'Luxury Brands and Deforestation.' Greenpeace International.
• Human Rights Watch. (2020). 'Labor Violations in Global Supply Chains.' HRW Reports.
• Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
• ILO. (2020). 'Global Supply Chain and Labor Rights.' International Labour Organization.
• LVMH. (2021). Sustainable Development Report. LVMH.
• LVMH. (2022). 'Sustainability Initiatives.' LVMH Corporate Website.
• UN Global Compact. (2021). 'LVMH Sustainability Commitments.' United Nations Global Compact.