ACC311 - Sustainability Report: Luxottica Group's Performance Analysis

This report provides a comprehensive analysis of the Luxottica Group's strategic and sustainable accounting practices. The report begins with an executive summary and table of contents, followed by an introduction outlining the importance of sustainable accounting. The main body explores the firm's environmental impact, focusing on energy consumption, carbon emissions, and waste generation. It also examines the company's social impact, including its relationships with suppliers, economic contributions to stakeholders, and safety performance. The report then critiques the company's current sustainability objectives and performance indicators, suggesting ways to enhance them. Key findings reveal that while Luxottica Group is making strides toward sustainability, there is room for improvement, particularly in energy management, strategic planning, and safety culture implementation. The report concludes with recommendations for the company to improve its sustainability efforts, followed by a list of references.

ACC311 - Strategic and
Sustainable Accounting

EXECUTIVE SUMMARY
This report presents about the strategic and sustainable accounting of the Luxottica
Group, which is the world’s largest eyewear company. The purpose of this report is to
identify the impact of the organization the environment and the society as a whole and its
commitment towards sustainable approach all across its products and services and the value
chain. The problem was analysed based on the online research and sustainability report
presented by the organization. Based on the findings, it can be concluded that the company
has attained its desired sustainability objective.

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................4
MAIN BODY.............................................................................................................................4
Impact of firm over the environment.....................................................................................4
Impact of firm on the society.................................................................................................4
Organization’s current sustainability objectives and performance indicators.......................5
CONCLUSION..........................................................................................................................6
RECOMMENDATION.............................................................................................................6
REFERENCES...........................................................................................................................7

INTRODUCTION
Accounting plays an important role in the management decision making process and
mostly in providing information on strategic management activity.it also put emphasis on the
social and environmental accounting in order to provide support to the sustainability
strategies. Sustainable accounting refers to the systems and processes for creating
sustainability information with the objective of bringing transparency and accountability. The
purpose of this report is to identify the key sustainability impact of Luxottica Group over the
environment and the society and also includes evaluating the sustainability of the
performance indicators of the company. The secondary research method has been used which
includes books, journals, research reports etc
MAIN BODY
Impact of firm over the environment
The key impact of the business operation of Luxottica Group on the environment are
stated below.
 The energy consumption from non-renewable sources of energy is the major factor to
be considered. The total consumption of non-renewable sources of energy by the
company in 2018 is 383.7 million kWh and renewable sources of energy is 5.4 million
kWh (De Villiers & Maroun, 2017). This energy consumption is having a major
impact on the environment which is sued in the manufacturing facilities of the
company in Italy, china, Brazil and US.
 The increase in the carbon emission by the manufacturing facility and logistics hubs
of the company has caused a major impact on the environment (Niesten and et.al,
2017). It came out to be 160,872 tons in the year 2018 which shows an increase of 5%
in comparison to previous year but the direct emission has dropped by 1%.
 There has been an increase in the total amount of waste generated by Luxottica Group
activities, that is, an increase of 13.8% from the previous year. This is mainly because
of the non-hazardous waste identified in the Luxottica’s facilities in Dongguan.
Impact of firm on the society
 The Luxottica group is known for guaranteeing high quality product and services. It
works with around 2000 suppliers are the important link in its supply chain which
represents 50% of the purchases (Nikolaou & Tsalis, 2018). It has put linking on the

priority list and is working with numerous local suppliers. This has helped in
maintaining a proper relation with its suppliers.
 In 2018, the economic value generated by the company came to around €8947.2
million out of which €7988.6 million has been distributed to its stakeholders both
internal and external and the remaining amount has been retained for its growth and
development (Non-financial statement. 2018). This contribution signifies the its
concern for the well being of its employees and the economic and social progress of
the community.
 Despite the positive impact it has over the society, there is one thing that is negatively
affecting the society which is the safety level in the organization. In 2018, the
accident rates have increased in comparison other previous year which is mostly on
account of collisions and falls. The number of accidents increased to 32,567 in 2018
from 27,190 in 2017. This incident has a huge impact on the value chain of the
business as well.
Organization’s current sustainability objectives and performance indicators
The current sustainability objective of the Luxottica Group is “To see the beauty of
life”. The company has always considered it as a part of its DNA and the business.
approaches. This vision can be found out on the code of ethics established by it which
outlines the principles and the values that inspired the company in doing business in an
ethical and responsible manner (Kumar & Rajan, 2017). The environment is the most
important factor in Luxottica’s vision of sustainability. The company has made long term
commitment and is working on it but at the slow pace as it can eb seen that the company is
using more non-renewable sources of energy and is releasing large amount of CO2 gases in
the surroundings. The company has made huge investment for the well-being of the
environment. This has resulted into reduction in electricity consumption in China and Italy.
The Luxottica Group is effective in taking care of its stakeholders by providing them equal
opportunity for growth and also distributing the profits of the company among them. But in
contrast, the company is not able to implement safety culture in its organization which has led
to number of accidents.
Ways for improving the objectives and enhancing the performance indicators
 The company should look for the better ways for managing its sustainability goals.

 It should put focus more on identifying the innovative and effective ways to
determine and evaluate the performance of the business.
 It should set the targets on the short term basis as an indicator for monitoring its
performance.
 It should work on comparing its performance with the other competitors in the same
industry with respect to processes and systems used by it and its implication or its
performance.
CONCLUSION
It can be summarized from the above that Luxottica Group has been working on its
sustainability management with the objective of making the life better. the key environmental
effect caused by the organization in terms of carbon emission, waste management, energy
consumption has been evaluated and also the impact it has over the society which includes its
stakeholders. The critical evaluation of the company’s sustainability objective and the current
performance indicator reveals that the in some way company is moving towards sustainability
but on a slow pace. Thus, it can be said that the aim and objective of the report is achieved.
RECOMMENDATION
 The company should come up with the effective energy management system for
reducing the energy consumption which will result into reduction in the energy cost.
Therefore, it should increase the utilization of renewable sources of energy.
 Also, Luxottica Group should effectively make plan and strategy to achieve its
sustainability objective as soon as possible.
 The company needs to make changes in its objective and then identify the key issues
that it may face while attaining the set objectives based on which strategies for the
same is evaluated which will result into enhancing its performance.

REFERENCES
Books and Journals
De Villiers, C., & Maroun, W. (Eds.). (2017). Sustainability accounting and integrated
reporting. Routledge.
Kumar, V., & Rajan, B. (2017). What’s in it for me? The creation and destruction of value for
firms from stakeholders. Journal of Creating Value. 3(2). 142-156.
Niesten, E. and et.al . (2017). Sustainable collaboration: The impact of governance and
institutions on sustainable performance. Journal of cleaner production. 155. 1-6.
Nikolaou, I. E., & Tsalis, T. (2018). A framework to evaluate eco-and social-labels for
designing a sustainability consumption label to measure strong sustainability impact of
firms/products. Journal of Cleaner Production. 182. 105-113.
Online
Non-financial statement. 2018. [Online]. Available Through:<
http://www.luxottica.com/sites/luxottica.com/files/dnf_eng_0.pdf >.