Sustainability Reporting in the 21st Century - Essay Example

Australian organizations must adopt sustainability reporting in the 21st century ID No. Unit Code and Name Lecturer’s Name Assignment # Due DateAustralian organizations must adopt sustainability reporting in the 21st century According to the United Nations World Commission on Environment and Development in 1987 sustainability is defined as a way of meeting the requirements of the present without compromising the capacity of future generations to meet their own needs (Unerman, Bebbington and O’Dwyer, 2007). It led to the concept of organizations understanding their role in the environment and their responsibility, not just to the shareholders but all the stakeholders that can be affected by their actions. All over the world organizations are trying to realize their responsibilities and are reporting the actions they are taking regarding them, to the various stakeholders. Sustainability reporting in Australia is voluntary, meaning that the organizations are not bound by law to report it in their financial statements. So, the purpose of this essay is to emphasize on the fact that Australian companies should adapt sustainability reporting in the present century and to establish why and how the organizations should meet the requirements of sustainability reporting and how will it be profitable to them. Sustainability reporting involves the display of a company’s economic, social and environmental performance and its impacts through the company’s annual reports. There are various reasons as to why a company should report its performance. Sustainability reporting helps in establishing a stronger trust relationship with the stakeholders. The stakeholders view the company as being honest about their actions and performance, thus it strengthens the image of an organization as being sincere and considerate towards the environment it operates in. The key towards establishing strong relations is not to report the good part only but the discrepancies as well; it leads the stakeholders like employees to trust their employers and execute hard work to enhance the performance of the company (Blackburn, 2007). Such actions give the sense of legitimate reporting of corporate activities. This ensures acceptance by the key stakeholders of the company especially towards the management decisions and activities that may be sometimes seen as of compromising nature (Schaltegger, Bennett and Burritt, 2006). By incorporating sustainability reporting into the strategic designing of an organization, a company can link all its operations to achieve those goals that are expected of it. Various operational benefits can also be derived through implementing sustainability reporting. The various costs that are incurred because of the irresponsible use of materials and energy can be saved. It will not only lead to cost control but will also be good for the companys image. Integrating the sustainability reporting components into the strategy of the company will lead to maintaining the image of its brand thus maintaining a competitive edge (White, 2009). For the purpose of implementing sustainability reporting in the organization’s strategies and operations the sustainability guidelines provided by GRI should be consulted. The Global Reporting Initiative (GRI) and its June 2000 Sustainability guidelines set out to improve the quality and usefulness of the data that is reported by the organizations regarding their social economical and environmental performance. Its main goal is to signify the importance of sustainability reporting so that it should be considered as important as financial reporting. These guidelines played a very important role in establishing a better communication line between the organizations and their stakeholders (Willis, 2003). Sustainability reporting is voluntary in Australia, meaning that it is not compulsory for all the organizations. The basic reasons why Australian companies do not comply with sustainability reporting are the additional costs that need to be incurred if mandatory reporting is imposed and avoiding the development of a ‘compliance mentality’, as the companies in Australia change their practices along with the changes in regulations. Though it is not compulsory still it is believed that following sustainability reporting is always in the best interests of the organizations (Commonwealth of Australia, 2010). Australian construction sector is a very booming industry. The main factor that contributes to a better financial performance of the companies in this sector is their trust relationship with their customers. If they do not trust the structures that are built for them obviously there will be no sales. They will not feel secure about moving into an establishment whose developer is regarded as someone who compromises on quality for cost benefits. The customers need to believe that their investments are not wasted. For that purpose they need to trust the quality of the work. Considering two construction companies in Australia, it will be observed how they have adopted sustainability reporting to develop that trust and reputation with their consumers. The companies under consideration are Construction Control Ltd and Devine. Construction Control Ltd has designed its operations as to provide greater satisfaction to its customers while preserving the energy and the natural environment. For that purpose they constantly review the products that they utilise during the construction of various facilities, so that these products can have the lowest possible impact on the environment and the structures have a long life cycle as well. They have employed qualified professionals who monitor the energy efficiency requirements of the structures to avoid wastage and negative impact on the environment. Devine is focused on the energy control issues and works closely with GreenSmart to achieve its target of acquiring 5 star energy rating. The establishments that Devine designs incorporate realistic environmental practices. The key elements that they incorporate into their strategy and product designs cover the areas of energy, water and efficient resources management, waste minimization, storm water management and landscaping. Their recent project at Wyndham Vale was also awarded the Land Management Award at the 2010 AILA Victoria Awards. They believe that the communities should not only be attractive but should also be synchronised with their natural environment. In conclusion, it is established that sustainability reporting strengthens the image of the company that leads to better brand image, increased competitive advantage and eventually better financial performance. Australia is a country with lots of opportunities which are developing rapidly. For organizations that deal in construction, or transportation or non-profit operations, it is vital for the company to maintain an image that can develop trust among them and their consumers. The best way to achieve that is through adapting sustainability reporting. So in order to establish a strong foothold in the market and the environment that these companies operate in, it’s better in their own interests if they comply. Bibliography Unerman, J., Bebbington, J., & ODwyer, B. (2007).Sustainability accounting and accountability. London, Routledge. Blackburn, W. R. (2007). The sustainability handbook [the complete management guide to achieving social, economic and environmental responsibility]. London, Earthscan. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=201650. Schaltegger, S., Bennett, M., & Burritt, R. (2006).Sustainability accounting and reporting. Dordrecht, Springer. http://dx.doi.org/10.1007/978-1-4020-4974-3. White, G. B. (2009). Sustainability reporting managing for wealth and corporate health. [New York, N.Y.] (222 East 46th Street, New York, NY 10017), Business Expert Press. http://site.ebrary.com/id/10364216. Willis, A. (2003). The Role of the Global Reporting Initiatives Sustainability Reporting Guidelines in the Social Screening of Investments. Journal of Business Ethics. 43, 233-237 Commonwealth of Australia 2010, ‘Sustainability reporting’, Available at: .[Accessed at: 22-Jan-2011] Construction Control Ltd, Available at: [accessed at: 22-Jan-2012] Devine, Available at :< http://devine.com.au/why-devine/sustainability.aspx> [accessed at: 22-Jan-2012] Read More