Report: Sustainability Practices of Maersk from a System Thinking View

This report provides a comprehensive analysis of Maersk's sustainability practices, focusing on a system thinking perspective. It begins with an introduction to sustainability, emphasizing its importance in the business environment, particularly for a company like Maersk operating in the transportation and logistics sector. The report then delves into the implications of sustainability for the organization, highlighting both positive and negative impacts, and stresses the significance of the triple bottom line (profit, people, planet). A key section describes the challenges Maersk faces, including emissions, human rights issues, and the impact on ocean health. The analysis further employs a rich picture to illustrate the interrelationships between these challenges, demonstrating their interconnectedness. The report concludes with an action plan and recommendations for Maersk to improve its sustainability efforts and address the identified challenges. The report is written in response to an assignment brief that requires students to analyze sustainability practices and challenges within their area of responsibility. The report is well-referenced and addresses key concepts from system thinking and corporate sustainability.

Sustainability practice
from
System Thinking Perspective
Contents

1
Introduction...........................................................................................................................................2
Sustainability from System Thinking Perspective.................................................................................2
Implications for Organization................................................................................................................3
Description of Challenges.....................................................................................................................4
Interrelationships...................................................................................................................................5
Identification of Key Stakeholder..........................................................................................................7
Action Plan............................................................................................................................................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................10
Introduction
The purpose of this report is to enlighten the reader regarding the information about the
concept of sustainability in the business environment. Sustainability refers to the ability of the

2
organization to maintain certain level of environmental activities so as to protect the nature.
Sustainability implies to the process of keeping environment stable and constant through the
activities (Lam and Lai, 2015). Sustainability has become an important aspect for the people
because the profitable actions of people are depleting the stability of the environment. The
environment has started to degrade due to human activities due to which the need for
sustainability arises to protect the nature and the preserve it for the future as well. The below
mentioned report highlight details about the sustainability activities of the company Maersk
that is a subsidiary company of AP MOLLER GROUP present in the external international
environment. The company is present in the Conglomerate industry and was found in the year
1904 in Denmark. The company successfully operates its business functions in more than 130
countries with strength of 88000 employees worldwide. Further, the sustainability activities
of the Maersk are discussed in the report with respect to the country Kenya. More details
about the paper are discussed below:
Sustainability from System Thinking Perspective
System thinking refers to the approach of integrating the systems and process in such a way
that they act differently and provide benefits to the external environment. The system
thinking process brings out the holistic manner of thinking approach in the business
environment. The system thinking approach focuses on the way in which the business can
align different parts and resources differently so as to achieve satisfaction in the target
market. This type of approach contrast with the traditional analysis process as it involves
differential use of resources to attain productivity and growth as well (Lubin and Esty, 2010).
System thinking approach in sustainability makes use of all the available information and
resource so as to achieve satisfaction in the market. This approach can help the business is
focusing on diverse aspects at a time and introducing sustainability in environment along
with profitability for the business as well. According to this type of approach, the system
behaviour results in success because of balancing process and inclusion of all the resources of
the company. The reinforce process under this case leads to increase in the system
components. The system thinking process also checks the reinforce process with the
balancing process so as to maintain the adequate flow of work in the environment. This type
of activity tends to maintain equilibrium in the system of the organization. The system
thinking process also focuses on the feedback given by the stakeholders of the business and
introduces such actions to satisfy their interest level as well. The practice of system thinking

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in sustainability examines the links between several elements and creates interactions
between them in such a way that whole new system is formed in the business environment
(Vartiak, 2016). This type of process in sustainability encourages the exploration of inter-
relationship, several perspectives and boundaries to work on. The process of system thinking
is particularly useful in analysing the complex situations and work on them to achieve the
objectives in the target market. This process evaluates the fact that one actor cannot prevent
the problem of sustainability; instead more than one perspective is required to change the
problem. Further, it should also be noted that the complex system present with the company
or the environment keeps on evolving so the system thinking process is oriented towards the
organization and social learning (Kithiia, 2015). So, it can be said that this process of
management helps the business in adopting several new skills and techniques so as to
eliminate the problem of sustainability in the environment. The system thinking process helps
the business in resolving the complex and messy situation and understanding them
systematically as well. This process helps in looking at the big picture by identifying multiple
leverage points that can be addressed in initiating constructive change in the environment
(Homayoun, Al-Thani and Homayoun, 2016). Looking at sustainability from system thinking
perspective, it should be noted that sustainability is an issue that needs to be measured on a
regular basis. With the changing environment, people have developed ways to make use of
the environment to increase their profitability resulting to which environment has started to
degrade with a higher pace. The system thinking process will help the organization in finding
innovative ways eliminate the process and achieving success by satisfying all the
stakeholders of company.
Implications for Organization
The fact should be noted that sustainability affects the business in both positive as well as
negative ways. Sustainability practices help the business to focus on environment and nature
so as to organize activities to support it. While on the other hand, sustainability functions if
not conducted properly can make the company to pay heavy charges to government as well.
Sustainability helps the business to focus on all the aspects available in the environment
effectively work on them to achieve success as well. Business sustainability ensures the long
term growth and profitability of the business (Pawlik, Gaffron and Drewes, 2012). However,
nowadays, it has become difficult for the organization to ensure sustainability activities in the
environment. The companies have started reducing their sustainability activities due to which

4
they are facing difficulty to achieve long term growth as well. The implication of
sustainability is that the stakeholders get dissatisfied if the business does not initiate such
activities in the environment. Every business should make use of triple bottom line to
increase their corporate sustainability effect in the business environment. According to this
type of framework, the business should focus on three P’s so as to achieve success in the
environment. Profit, People and Planet are the three P’s on which every business should focus
to achieve success in the environment (Lee and Vachon, 2016). Talking about the company
Maersk, it should be noted that as the organization is based in the industry that is related to
transportation, gas exploration, logistics, freight etc. The company need to strictly focus on
their activities so that they do not produce negative effect on the environment. The tanker,
offshoring and shipping activities include the use of natural resources, thus the business need
to monitor such activities so as to achieve the objective in the target market. These activities
of the company can lay negative impact on the environment that can dissatisfy the interest of
stakeholder as well. Dissatisfied stakeholders of Maersk can reduce the effectiveness of the
company to grow in the business environment. Thus, it should be noted that corporate
sustainability could lay negative as well as positive impact on the business environment.
Description of Challenges
The company Maersk focuses on three dimensions of materiality that are responsibility,
shared value and risk. In the material risk aspect, the company faces various sustainability
issues that affect their growth in the business environment. Emission of CO2, SOx and NOx
in the external environment makes it difficult for the organization to maintain the
environmental sustainability regulatory standards (Maersk, 2019). The shipping, freight, gas
exploration activities of the company contributes in the problem of global warming. The
objective of the company Maersk in the external environment is to contribute in eliminating
the greenhouse gases effect however, the company is performing opposite actions in the
business environment. The activities of the company are emitting greenhouse gases
vigorously due to which the problem of the overall environment is increasing in Kenya.
Climate change problem is occurring in the environment because Maersk along with several
other organizations are aggressively performing business functions that are depleting the state
of nature (Maersk, 2019).
Secondly, it should be noted that the company was recently facing human rights issues in the
internal organization. The company was initially providing more work to the employees than

5
the limit due to which the management started breaching the rights in the environment.
Further, being present in such aggressive industry, the employees of the company suffer from
several accidents in the business that physically harms them (Narula, 2014). Accidents
happen in all the organizations but the high degree or replication of the accident should be
considered as the company Maersk face repetition of accidents with their employees in the
business environment. The fact is true that the accidents never intentional but they do happen
because of the negligence of the top level management of the company. The accidents are
faced by the organization that are life changing and even fatal for the employees (Maersk,
2019). It is the duty of the management of the company to consider the leadership
accountability and reduce the high potential and hazardous activities. The high potential
events hold the capacity to harm the employees, so the management of Maersk need to focus
specifically on occurrence of such events. Further, it should be noted that the company need
to ensure the medical claim of the employees so that in case of an emergency when they face
any accident then they do not attract the monetary problem as well. It is important to the
organization to effectively initiate medical claim and insurance of the employees so that they
do not suffer with monetary issues after the accident. The activities of the company lay
negative impact on the climate change as well (Buddress, 2013). The shipping activities of
the company also affect the ocean health and make it difficult for aquatic animal to survive.
The ocean water is becoming unfit for the livelihood of aquatic animal to survive. Thus, it
should be noted that the company is facing a hard time in resolving their sustainability issue
in the business environment. It is important for the company to consider all these
environmental issues before progressing with any other business objective.
Interrelationships
Rich picture refers to the pictorial representation of the social system of the environment.
This picture helps the organization and stakeholders in understanding the problem and
introduces all the relevant stakeholders with the problem (Skovgaard, 2018). The rich picture
is drawn using various techniques and diverse situations as well. The technique that will be
used for drawing the below mentioned rich picture will be the drawing with hands.
Rich Picture for sustainability related challenges faced by Maersk

6
Figure 1: Source by Author
As it can be seen that there are several internal and external sustainability related challenges
that is faced by Maersk. Analyses this rich picture shows that all the challenges that are faced
by the company are somehow interrelated and are putting impact on the resources and
business objectives of the company. It is making it difficult for them to improve the situation
related to sustainability.
The emission of gases such as carbon dioxide and other types of nitrogen and sulphur rich
gases which are toxic in nature is a big challenge for the company. These gases are generated
through two ways first by the operations of the company and at the same time in the
exploration of gases. The emission of gases is also resulting in the global warming and
climate change related issues. These climate change and global warming related issues are
also generated due to the activities related to shipping and freights (Leleux and Van der
Kaaij, 2019). It is these shipping and freight related activities that are leading to pollution

7
under water. This is because the underwater pollution is creating issues such as killing of the
aquatic life. A large numbers of ships and transportation activities are killing fishes and other
animals. This global warming inside the water is a huge challenge as it cannot be managed
without proper efforts and are often undermined as it does have direct impact on the lives of
the people living on the land. The gas exploration is leading to the emission of gases as well
as other pollutants which also results in the global warming and climate change.
There are some of the internal problems that are having impact on the sustainability related
challenges. Out of which the major one is the increasing accidents at the workplace. Due to
this a large numbers of people are dying and large numbers of people are facing fatal injuries
which will have direct impact on the operations of the firm (Showstack, 2013). This is
because company has to pay a large sum of compensation to the people that are getting
injured or are getting killed.
The overall analysis of the rich picture suggests the fact that most of the challenges that are
faced by Maersk are long term and has a greater impact on the way an organisation is
growing. For instance most of its operations are leading to climate change and global
warming which is a global problem and requires attention immediately or otherwise it can
negatively have impact on the development of the company (Lee and Vachon, 2016). The
rich picture also shows that it is not that by changing few operations of the company they will
be able to counter the challenges faced by the Maersk. Hence it is critical that this cited firm
changes the overall scenario of the company and hence lead to improvement of the situation.
Identification of Key Stakeholder
The challenge related to sustainability that is faced by the Maersk is very much critical and
they not only have impact on the firm’s or its profits or business but it also has impact on the
stakeholders attached with the firm. It is also having impact on the people who are not even
the stakeholders of the company. In this situation, it is also critical to analyse the key
stakeholders that are getting impacted by the operations of the company. This is because they
will have significant role in the management of the operations which could lead to ensuring
long term sustainability of the firm (Tang and Gekara, 2018).
Government: One of the biggest stakeholders that get affected by the sustainability related
challenges by the company is government. This is because both local and state government of
Kenya is responsible for managing the environment. The engagement of government in

8
dealing with the situation of the company is necessary as the government policies and
regulations related to environment will act as a path using which the firm the firm will be
able to manage the situations they are in. The internal policies of the company will be
designed on the basis of the government regulations only (Lirn, Lin and Shang, 2014).
International regulatory bodies on oceanic pollution have suggested many parameters that a
shipping and freight firms needs to maintain for reducing the pollution. They have a need that
companies like Maersk support the government so as to control the situation. They have
higher power over the situation as if the company continues to do mistakes then they can
penalise the company.
People and employees: There are large numbers of people and employees that are getting
impacted because of the global warming and climate change. The emission of the carbon
dioxide and other gases are killing people as it is creating respiratory diseases. Employees
can work in improving the situation by implementing the policies made by the company in an
effective manner. Along with this employees that are skilled can give ideas on the things that
can be changed in the operations of the company which can lead to reduction in the
sustainability related challenges (Lund-Thomsen, Poulsen and Ackrill, 2016). People can
contribute as well in this regards by sending their ideas to enhance the situation in the
locality. Their need is that they should get training and advanced technologies that can
improve their efficiency so as to reduce the overall waste generated by the company. They
have lesser powers.
Management: Most important role in this regards is played by the management of the
Maersk at different levels. This is because they are the original decision makers and they play
a critical role in the management of operations. The decisions that will be made by them will
have significant impact on the sustainability index of the company. They need to add more
advanced technologies in this regards so as to reduce the greenhouse emission due to
operations of the firm (Lam, 2015). A waste management plan needs to be designed by the
management that can ensure that greenhouse emissions can be controlled. Their need is the
support from other stakeholders and the power they enjoy is higher as they are the actual
policy makers of the company.

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Action Plan
The action plan for this proposed change is illustrated below.
Proposed
change or
actions
Resources
needed
Start date End date Results to
acheive
Evaluation of
challenges
Documents
having data that
has been made
from different
operations
within the firm.
1 August 2019 1 September
2019
Finding out all
possible waste
generating
sources.
Adopting green
supply chain
(Maersk, 2019).
Advanced
technologies
such as data
management
system along
with data
analytics.
1 October 2019 There must be
reduction in the
path covered by
the company by
choosing
optimised path.
Waste
management
system such as
system for
filtering the
gases (BSR,
2011).
Technology
such as waste
filtering
mechanism
1 October 2019 Reduction in the
greenhouse
gases by 30-
40%.
Providing safety
instruments and
improving safety
regulations.
Tools such as
safety helmet
and safety belts.
1 November
2019
The reduction in
the numbers of
injuries and
deaths by 50-
60%

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Conclusion
From the above based report it can be concluded that Maersk is facing many kinds of
sustainability challenges. In this regards it is crucial that this firm adopts the system thinking
approach so as to bring sustainability in their operations. This is because system thinking
approach focuses on the way in which the business can align different parts and resources
differently so as to achieve sustainability goals that they have made for themselves.
Sustainability has a critical role in the success of the company as failure to meet the
sustainability objectives leads a company to pay heavy money to the government. The
challenges that are faced by the company which is creating sustainability related challenges
are emission of gases, global warming and climate related challenges. The rich picture
suggests that it is getting generated due to emission of gases from their operations as well as
due to exploration of gases. There is also enhancement in the accidents. Employees,
government and management are the three stakeholders that can improve the situation.

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References
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Buddress, L., 2013. Managing supply chain sustainability and risk: Keys to success. Strategic
Management, 18(2), pp.3-16.
Homayoun, S., Al-Thani, F.F. and Homayoun, S., 2016. A Sustainability Accounting: Case
Study on Exploration, Production and Midstream Activities at Maersk Oil. International
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Journal of Business & Management, 3(12), p.68.
Lam, J.S.L. and Lai, K.H., 2015. Developing environmental sustainability by ANP-QFD
approach: the case of shipping operations. Journal of Cleaner Production, 105, pp.275-284.
Lam, J.S.L., 2015. Designing a sustainable maritime supply chain: A hybrid QFD–ANP
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81.
Lee, K.H. and Vachon, S., 2016. Integrated Supply Network and Business Sustainability.
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