Preparing ESG performance reports (also called sustainability reports) (Additional PDFs will be provided)

Most of the world’s largest companies prepare ESG performance reports voluntarily (also called sustainability reports) for their external stakeholders. From an internal reporting perspective, the balanced scorecard provides a useful framework for organizing ESG performance measures. Accountants are ideally suited to provide expertise in this process due to their understanding of the business process, data infrastructure and controls, and reporting framework.

This project involves the analysis of the attached Chipotle Executive Summary of its 2022 Sustainability Report. Accordingly, for this project, you are asked to read the Chipotle 2022 Sustainability Report Executive Summary and gain an understanding of the measures included in this summary.

Part I (10 points):Creating a Balanced Scorecard is driven by measures to achieve a company’s goals and strategy. Page 2 of the Sustainability Report includes a letter from Chipotle’s chairman and CEO. What is the primary goal of Chipotle? (Your response should be a maximum of 1/2 page.)

Part II (70 points):Complete the Attached Balanced Scorecard Questionnaire as follows: Column A lists a few Environmental, social, and governance (ESG) Measures

Column B – For each measurein Column A, determine to which Balanced Scorecard Category(i.e., Learning and Growth, Internal Business Practices, Customer, or Financial) it most closely relates, and fill in Column B with the appropriate category for each measure (row).

Column C – For each measure in Column A, determine whether Chipotle usesthis measure (answer yes or no) or uses a measure that is highly similar (answer highly similar).

Column D – For each measure in column A, that you answered highly similar, briefly explain how the measure used by Chipotle provides an appropriate measureof performance. For example, if the ESG measure is too broad. Cite a specific example from the Chipotle report.

Column E – For each measure in Column A, provide the page numberin the Sustainability Report where you found the measure if you answered yes or highly similar – leave blank if you answered no.

Column F – For each measure in Column A that you answered highly similar, indicate whether the measure is likely determined by the companyor by an external source.

Column G – When applicable, describe Chipotle’s progress relative to the goal of a particular measure, i.e., whether Chipotle achievedits goal.

Part III (20 points): Creating a Balanced Scorecard is driven by measures to achieve a company’s strategy. Therefore, performance measures in a Balanced Scorecard should be a series of “if-then” relationships; that is, if the Learning and Growth measures are achieved, then Internal Business process measures should be achieved; if Internal Business Process measures are achieved, then Customer measures should be achieved; if Customer measures are achieved, then financial measures should be achieved, and the company is succeeding with its strategy. If any of the “if-then” relationships fail, corrective actions are warranted by the management. Based on your analysis in Part I, do you think that the measures you identified in the company’s ESG report are sufficient to support the achievement of the company’s strategy? (Your response should be a maximum of 1/2 page.)

Environmental, social, and
governance (ESG) Measure
Average Water Consumed per unit
produced
Pounds of Organic products
purchased
Average fuel cost per sales dollar
Create an inclusive work
Environment
Percent of customers that strongly
aree with your statement
Percent of Cultural Diversity in
Employees
Number of Product Warranty claims
Promote local food Systems
Dollars invested in Data Security
Total Tax dollars Saved via
environmental Tax
Help the Community by Donating
Meals
Percent of investors who agree
whether timely transparent
information is provided
CEO Compensation/ Average
employeee compensation
Timely Promotion of Employees
No of customers who agree
whether company is ethical
Percent of Employee Satisfaction
Maintained
Number of certified diverse
suppliers
Promote Corporate Giving
Total cost of quality/ sales
Maintain optimal Landfill Diversion
Rate
Balanced Scorecard
Category
Chipotle uses this
measure (yes, no,
or very similar)
Number of Leed Certified Facilities
Percent Reduction in waste
Number of Engineers trained in eco
concious product design
Help in Disaster Relief Funding
Provide Support to the Community
Number of suppliers having verified
child labor law compliance
Number of board receiving ESG
training
Maintain Average Wage rate
Percent of Female employees and
Male employees
Number of Ethical violation, training
Hours
Awarded employee with Bonous
Disclosure of Political Spending
transparency
Promote participation in Employee
Resource Groups
Provide Tution reinbursment
Programs
Number of Green bonds and
Sustainable Finance
Reduction in Harmful Green House
Gas
Percentage od sustainability
awareness training penetration
Achieve Target Corporate Equity
Index
Employment of Racial andEthnic
Minorities
Assist Young Farmers Financially
Progress
Internal
Chipotle report
relative
If yes or very similar, cite at
or
page reference if
to the
least one example from
External
yes or very
goal if
Chipotle’s report
Data
similar
applicabl
Source
e