Business model and competitive position

Maximum 384 words – minimum 350 words PER question.
If one of your questions requires more writing, discuss with the group about your situation and we will come to a conclusion.

Your final report should be no more than 20 pages (excluding cover page, TOC and references)

Formatting: Times New Roman, 12 pt. font, single line spacing, 1 margins
Use APA rules for citations
Refer to the rubric for further expectations
No presentation is required for this assignment
Due date:

COMPANY NAME : SUEZ GROUP
Approach answering questions from a holistic perspective and focus on specific examples as needed (ex: their european operations or american, etc.).

The list of questions:
Section Questions
1. Business model & competitive position

Salma How would you describe the companys business model?
How strong do you rate the companys competitive position?
What trends affect the companys business model and competitive position?
2. Value drivers (Part 1)

/Dhruvik Sales growth: What seems to be a normal sales growth for the company? And what are the drivers of sales growth? (DHRUVIK)
Margins: What seems to be a normal profit margin (EBIT or EBITDA) for the company? And what are the drivers of that margin? ( DHRUVIK)
Capital: How capital intensive is the company? What do you think is the firm’s cost of capital? What is the firm’s return on invested capital (ROIC)?(DHRUVIK)
Please sketch how you see the companys value drivers going forward (like in Figure 6.1 and 6.2 of chapter 6 in Schoenmaker and Schramade (2019)).( DHRUVIK)
3. Sustainability

Valeria/Grace… Purpose: What is the company’s mission / purpose / raison d’tre? In what way does the company create value for society? How does it get paid for that value creation? (Valeria)
Stakeholders: What are the company’s main stakeholders? Please fill out the stakeholder impact tool ((like in Table 5.2 and 5.3 of chapter 5 in Schoenmaker and Schramade (2019)). (Valeria)
Externalities & impact: Does the company generate serious externalities? Are they positive or negative? How do you assess the chances of these externalities to be internalised? Thresholds: How does the company perform versus the planetary boundaries? (valeria)
SDGs: Which of the SDGs (if any) does the company help achieve? Which negative SDG exposures (if any) does the company have? (Grace)
Impact: To what extent can the companys impact be measured? Does the company report on its impact? How can its impact reporting be improved? (Grace)
Material issues: What are the most material ESG factors? What issues are most critical to the success of the company’s business model? Please fill out the matrix (like in Table 6 of the Royal Philips case study), discussing for each of these most material ESG factors (1) how the company performs on it; (2) whether the company derives a competitive (dis)advantage from it; (3) how they might affect the value drivers (Grace)
Sustainability reporting: How do you assess the companys non-financial reporting? Does the company (claim to) do Integrated Reporting (<IR>)? To what extent do you see the seven principles of <IR> reflected in the companys reporting? ( Grace /Valeria)
4. Strategy

Nithin/Dhiljith How would you describe the strategy of the company? (Nithin)
To what extent does that strategy take into account the company’s most material ESG issues? Please link to your answer in the sustainability section. (Nithin)
Is the strategy consistent with the company’s purpose? (Nithin)
What does look like? What are the best KPIs for it? (Dhiljith)
What does management compensation look like? To what extent does management have long-term incentives? And are those incentives aligned with ?(Dhiljith)
How does the company communicate its long-term value creation with shareholders and stakeholders?(Dhiljith)
5. Value drivers (Part 2)

Dimple/Dhruvik Given all of the above questions & their answers, how do you rate the effect of material sustainability issues on the value drivers going forward? Per value driver, please indicate whether you see a positive, negative or neutral effect
How would this affect your valuation of the company?
6. Investment conclusions

Ibrahim How well is the company prepared, in your opinion, for the transition to a more sustainable economic model?
How attractive do you find the company as an investment?
What did you find most surprising when answering the above questions?
If you were to engage with the firm, what topics would you address?

PRESENTATION PAGE
TABLE OF CONTENT
QUESTIONS

8. Purpose: What is the company’s mission / purpose / raison d’tre? In what way does the company create value for society? How does it get paid for that value creation? (Valeria)

Suez Group is a French company dedicated to providing solutions in the drinking water industry, wastewater treatment, and the collection and valuation of waste. The purpose is to allow all people to have access to essential environmental services; this company directs its functions to supply high-quality water, adapted to any use and to guarantee the protection of this resource as a common good, in addition to decontaminating land and giving correct treatment to waste, whether it is dangerous or not (SUEZ GROUP, 2021).

This company organizes its activities around various issues, such as the protection of the coasts, the supply of water in areas without access, the distribution of water from alternative sources, the management of the industrial impact, and the decontamination of soils. Suez considers itself a committed partner that helps communities, industries, and the general public manage the parties involved to meet the common goal of making an environmental transition a reality, developing the circular economy, and fostering innovation to face future challenges (SUEZ GROUP, 2021).

The company creates value for society since, by example, it contributes to community an urgency in the creation of environmental awareness, taking into account that phenomena such as population growth, climate change, and social and environmental inequalities cause human beings to be directly exposed to an environmental emergency that could affect the entire world. This group’s premise is to help people constantly improve their quality of life by protecting their health and contribute to the development of populations by giving them a chance to develop economically through the preservation of the elements that, in their opinion, are essential in the environment, these are: water, soil, and air (SUEZ GROUP, 2021).

This creation of company value for society is paid for with the respect, gratitude, and collaboration of the local companies involved in the entire operating process of the company, which facilitates its successful functionality, provides it with competitiveness. in the market, thus generating a success factor for the company and guaranteeing its long-term presence in the market (SUEZ GROUP, 2021).

9. Stakeholders: What are the company’s main stakeholders? Please fill out the stakeholder impact tool ((like in Table 5.2 and 5.3 of chapter 5 in Schoenmaker and Schramade (2019)). (Valeria)

Government Clients Communities involved Employees Environment Shareholders
Positive Impact Hydraulic source monitoring Improvement in your environmental management system Economic development Continuous training and work with a fixed salary Water treatment before returning to the water source Competitiveness and a good image that guarantees the long-term survival of the company
Negative Impact Population health Process costs Reduction in water quality Exposure to toxic elements Natural resource manipulation Risk and operating costs
Short-term goals Meet demands of the population Reduction of operating costs Diversify the use of the resource to carry out productive activities Preserve your economic stability Reuse and reuse Maximize financial return
Long term goals Protect the interests of their governed Increase your income Economic and social development Personal and economic development Resource valuation Increase in the value of your shares

10.Externalities & impact: Does the company generate serious externalities? Are they positive or negative? How do you assess the chances of these externalities to be internalised? Thresholds: How does the company perform versus the planetary boundaries? (valeria)

The externalities generated by the Suez group have a high impact on both society and the environment. Most of them have positive impacts. They manage water and solid waste that companies generate with their functioning before returning them to nature in the least invasive way possible (SUEZ GROUP, 2016).

One of the methods to internalize externalities is by establishing environmental restrictions based on the ecological quality standards present in the current legislation of the territory in which they are operating. In addition, they use market instruments aimed at this purpose, such as increasing the cost of the remediation service according to the degree of treatment that must be carried out.
Another method used is to integrate externalities as a decision criterion; this implies giving externalities the same weight that is given to cost or data reliability within a decision process; this is an effective method because it is a quick way to internalize the externality and that is also previously planned so it does not require any modification in the processes once it is already in operation (SUEZ GROUP, 2016).

Regarding the company’s performance against planetary boundaries, it can be deduced that it is a company that works conscientiously aligned with this reality; for this reason, it presented a 2017-2021 roadmap, prepared based on a detailed consultation procedure internal and external. This analysis of materiality prioritized the issues that need to be involved in their commitments to global development. This tool contributes to a sustainable environment model by promoting and managing transformation by presenting 17 commitments quantified through time measures that include action plans for their fulfillment. They are also directly aimed at contributing to achieving the sustainable development goals set by the UN (SUEZ GROUP, 2016).

11.SDGs: Which of the SDGs (if any) does the company help achieve? Which negative SDG exposures (if any) does the company have? (Grace)

12. Impact: To what extent can the companys impact be measured? Does the company report on its impact? How can its impact reporting be improved? (Grace)

13.Material issues: What are the most material ESG factors? What issues are most critical to the success of the company’s business model? Please fill out the matrix (like in Table 6 of the Royal Philips case study), discussing for each of these most material ESG factors (1) how the company performs on it; (2) whether the company derives a competitive (dis)advantage from it; (3) how they might affect the value drivers (Grace)

14.Sustainability reporting: How do you assess the companys non-financial reporting? Does the company (claim to) do Integrated Reporting (<IR>)? To what extent do you see the seven principles of <IR> reflected in the companys reporting? ( Grace /Valeria)

References

SUEZ GROUP (2021). What we do – SUEZ Group. Suez.com. Retrieved 29 November 2021, from https://www.suez.com/en/our-offering/success-stories/our-references.

SUEZ GROUP (2016). Our 2017 – 2021 road map – SUEZ Group. Suez.com. Retrieved 29 November 2021, from https://www.suez.are/a-committed-group/our-2017-2021-road-map.