Case study: How Kernel creates economic value for its stakeholders
Kernel is a diversified agricultural business in Ukraine, the largest exporter of agricultural products from the Black Sea region and the world’s largest exporter of sunflower oil. As a diversified agro-industrial business in Ukraine with leading positions across all business segments, Kernel generates a significant direct economic impact on its stakeholders, in areas of all its operations.
This case study is based on the FY2021 Annual Report by Kernel, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Kernel creates sustainable economic value for all its stakeholders Tweet This!, by purchasing goods from suppliers, paying dividends to shareholders, wages and benefits to employees and income taxes to the public sector, and through community investments. In order to create economic value for its stakeholders Kernel took action to:
- create economic value for employees
- create economic value for shareholders
- create economic value for the public sector
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Kernel has identified;
- How Kernel proceeded with stakeholder engagement, and
- What actions were taken by Kernel to create economic value for its stakeholders
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What are the material issues the company has identified?
In its FY2021 Annual Report Kernel identified a range of material issues, such as anti-corruption, water and effluents, diversity and equal opportunity, emissions, environmental compliance. Among these, creating economic value for its stakeholders stands out as a key material issue for Kernel.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Kernel engages with:
To identify and prioritise material topics Kernel engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Employees | · Kernel reports · Website · Hotline · Social networks · Direct engagement · External media · Corporate newspaper · Intranet · Events |
| Management
| · Kernel reports · Website · Social networks · Direct engagement · External media · Corporate newspaper · Intranet · Events |
| Shareholders
| · Kernel reports · Website · Direct engagement · Events |
| Debt providers and rating agencies
| · Kernel reports · Website · Direct engagement · Events |
| Suppliers (incl. 3rd party farmers)
| · Website · Hotline · Social networks · Direct engagement · Events |
| Customers | · Website · Hotline · Social networks · Direct engagement |
| National media
| · Website · Direct engagement |
| Local media
| · Website · Direct engagement · Corporate newspaper |
| Local communities
| · Website · Hotline · Direct engagement · External media · Corporate newspaper · Events |
| Local officials
| · Website · Direct engagement · External media · Corporate newspaper · Events |
| Regulatory authorities
| · Kernel reports · Website · Direct engagement |
| Environmental NGOs
| · Kernel reports · Direct engagement |
What actions were taken by Kernel to create economic value for its stakeholders?
In its FY2021 Annual Report Kernel reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In FY2021, Kernel paid US$ 214 million for employee wages and benefits.
- Creating economic value for shareholders
- In FY2021, Kernel paid US$ 35 million in dividends to shareholders.
- Creating economic value for the public sector
- In FY2021, Kernel paid US$ 32 million in income taxes.
- Creating economic value for communities
- In FY2021, Kernel spent US$ 4 million in community investments.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Kernel, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.kernel.ua/wp-content/uploads/2021/10/FY2021_Kernel_Annual_Report.pdf – page=42
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