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Measuring sustainability: an industry case study of Maersk Line

30 Jan

The Chartered Institute of Public Relations (CIPR) and PRIME Research launched a national student fellowship award in May 2011. The participants had to submit a paper on a measurement and evaluation topic and the theme was sustainablity. My paper was amongst the three finalists and it offers an interesting and different perspective of CSR and measurement:

“He who would learn to fly one day must first learn to walk and run and climb and dance; one cannot fly into flying”
                                                                             NIETZSCHE
This quote perfectly describes the long journey that the public relations industry has started in terms of developing its measurement and evaluation framework. After more than a decade of learning and improving, the public relations industry is ready to embrace these new changes which allow every public relations practitioner to “fly”, i.e. to demonstrate their success through their ability to influence change and meet objectives. That quote may also be valid for every public relations professional: one must always upgrade their knowledge and skills to remain competitive and useful for their organisations or clients. In other words, customer satisfaction starts with improved quality. Stakeholders are adding Corporate Social Sustainability to the mix of their expectations for good services. As a result, measuring public relations’ impact on businesses has never been of such importance.  It is interesting to see how one particular sector has responded to the challenge. For the maritime industry in particular, these new trends of measurement means that their PR has entered new waters. Even though most of the concepts of Corporate Social Responsibility have been spreading through businesses in all sectors, some of the conglomerates in container shipping, like Maersk Line, are already far ahead in their proactive approach compared to other industries which is an interesting field to explore.
Back in 1994, the International Public Relations Association predicted the gradual priority of outcomes over outputs, but it took until 2010 to secure the introduction of a new measurement framework, i.e. the Barcelona Principles (INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994; INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994a). The Barcelona Principles marked both the death of the AVEs and the start of a new era in measuring public relation’s impact on businesses. Here we can ask: can we measure everything? Can the Valid Metrics Matrix be applied everywhere? The new toolkit still does not provide all the answers but it is the backbone for showing the real value that public relations can bring to business quality. This paper attempts to argue that definitive research needs to be done to prove to businesses that the new measurement and evaluation guidelines could and should be applied everywhere, even to industries with specific requirements like container shipping.
Measuring sustainability
Most businesses still view quality in terms of customer satisfaction and container shipping is no exception. This is the technical aspect of public relations – whether there are no errors, no mechanical breakdowns or no customer complains (as seen in INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994). These aspects are doubtlessly very important, especially for high risk industries like the maritime business. What about the managerial aspects of quality? Both service and process require quality. Service delivery is of course of greatest importance, however, process plays a vital role in delivering high quality services. Therefore, some marine companies, like Maersk Line, have realized the essential role of performance in achieving their goals. According to Fraser Seitel, a former vice president for public relations for the Chase Manhattan Bank (as seen in INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994), the underlying concept in all definitions of public relation is the word performance. In other words, performance becomes a communicative concept which in turns makes public relations the key to managing an excellent reputation. But what does excellent reputation mean? How do we know it is well managed?
The key to understanding corporate reputation has become the measuring of the relationships it is based on, especially with the rise of Corporate Social Responsibility. In recent years, organisations have become concern about it, implementing it into their long – term strategies. This rise of sustainability to the top of management agenda is happening at a time when stakeholders’ demands for greater reliability, transparency and lower costs are already exerting pressure on business operational models. As a result, their demand for proof of ethical behaviour has changed the perception about organisations. Now businesses are seen more as strategic innovation partners rather than mere service/product providers. Subsequently, the levels of communication channels surrounding sustainability has increased and altered the way businesses manage relationships with their various stakeholders. It resulted in the increase of the importance of these relationships. Therefore, building, managing and measuring them is fundamental to an organisation’s success. Moreover, for some organisations understanding how to measure has become a part of the sole focus of their strategies: if relationships can be measured then they can be improved, and so could communication effectiveness and overall performance (PAINE 2011).
These sustainability trends have an impact of a wide variety of industries, including maritime business. Recent studies (HADDOCK – FRASER and TOURELLE 2010; FISK 2010; CLIFTON and AMRAN 2011) emphasise on the importance of end users in environmental sustainability reporting and point out that, depending on their position in the supply chain, companies that are closer to end users tend to be more proactive because they are more “visible” to this particular stakeholder group. As mentioned above, container shipping industry is less visible to consumers and therefore it is not massively targeted by activist groups. Therefore, it could be argued that most of carriers avoid having to measure their performance and  tend to adopt basic Corporate Social Responsibility models rather than proactive, societal ones (PEACH 1987, as seen in TENCH and YEOMANS 2009).
Despite being the most environmentally – friendly transport mode for bulk cargo (container shipping is still a modest contributor to global C02 emissions – 2.7% in 2007; 3, 3 % in 2009 (INTERNATIONAL MARITIME ORGANIZATION, 2010; INTERNATIONL MARITIME ORGANIZATION 2009)), the industry is now about to face new social and environmental regulations and stakeholder expectation that have forced changes at all levels of the sector. According to a report on sustainability trends in the container shipping industry (PRUZAN – JORGENSEN and FARRAG 2010), in the upcoming years market, stakeholder, customer, and regulatory pressures related to sustainability will drive significant changes in the way international container shipping lines operate and do business. Such environmentally motivated regulations have already become the most important cost – driver, as governments and corporations raise their bar of expectations. All of these micro-level changes will be compounded by four wider societal mega-trends: hyper-transparency, regulated carbon and resource constraints, rise of rights and local governance, and socio-economic shifts (PRUZAN – JORGENSEN and FARRAG 2010).
So, the answer is that the PR function can take a lead, encouraging businesses such as container shipping to join the transparency revolution. Considering that the industry transports about 60 percent of the value of global seaborne trade and represents a heavy social and environmental footprint, these trends will have a far – reaching impact in a variety of other sectors (WORLD SHIPPING COUNCIL 2011).
 Maersk Line seems to realise the importance of these trends to both remain competitive on the market, where big customers are already greening their supply chains (as seen in LEACH 2010), and to adjust to the new economic climate. For example, it produced its first Annual Report in 2009, introduced the CO2 Dial Program for its customers and has been developing the so called Responsible Procurement Program for its own suppliers (for detailed information see Appendix One Research Report: Being ethical in an unethical industry: a case study of Maersk Line).
We see our customers putting more and more emphasis on environmental issues and now they started looking at transportation as well. We can choose to do nothing and risk losing out business but we can also respond. But we want also to help this trend grow, we want to drive that demand and create solutions…The decision to communicate much proactively is a great opportunity to take the lead and win by doing so”
        Maersk Line Head of Climate and Sustainability*
Maersk Line manages successfully to combine corporate continuity and sustainable trends. It has already set a solid foundation for measuring performance in order to develop a greener and more transparent company. Even though the carrier is a pioneer in measuring its ethical performance in a rather unethical industry, it still has areas to improve. It could be argued that Maersk Line tends to focus on the technical aspects of public relations, i.e. its carbon and C02 footprints or its supplier performance (see 5. Appendix One Research Report: Being ethical in an unethical industry: a case study of Maersk Line). However, the launch of the first global standard for PR measurement – the Barcelona Principles allows a careful analysis and measurement of the managerial impact of quality to sustain a collective reputation management. In other words, the new framework would further improve Maersk Line’s evaluation indicators because it would enable the company to measure the results of its efforts in terms of building and sustaining relationships; in terms of improving its communication channels. The complex and changing nature of relationships between an organisation and its public not only requires measurement and evaluation of the outputs (i.e. the technical aspect of public relations) but also of outcomes to provide competitive insights. It could be argued therefore that the Barcelona Principles and the Valid Metrics Matrix could be a useful platform for measuring Maersk Line’s performance: a combination between the carrier’s efforts to showcase ethical behaviour by reporting its environmental footprint and its quality of managing relationships in and outside the organisation (see 6. Appendix Two: Valid Metrics Matrix applied on Maersk Line).
*The researched carried out a face-to-face interview with Maersk Line’s Head of Climate and Sustainability
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Posted by on January 30, 2012 in CSR, CSR in container shipping

 

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