Evaluation of the Current Sustainability Reporting Practice at Westpac Group - Case Study Example

Evaluation of the current sustainability reporting practice at Westpac Group Introduction Sustainability reporting is one of the most important practices for organisations currently (Wilburn & Wilburn 2016, p. 77). Many organisations have fully embraced the practice of reporting their activities, performance and plans in the form of corporate sustainability reports (Hussen 2014, p. 341). The essence of this shift in corporate reporting practice is that companies consider corporate sustainability reporting as a practice that enables them to provide adequate information about their activities to their stakeholders (Jones 2010, p. 4). Moreover, firms regard corporate reports as effective tools of evaluating their sustainable practices and determining how sustainable they are likely to be in the future (Cohen 2013, p. 29). Thus, corporate sustainability reports are likely to remain important documents that companies release to their stakeholders. It is important to note that the practice of reporting the sustainability practices of companies has been undergoing changes in the recent past. It has been observed that the practice of corporate sustainability reporting is still new and that companies are grappling which changes in the format and content related to the reports (Szekely & vom Brocke 2017, p. 2). Moreover, as many companies realise the competitive advantage that they can get from properly reporting their performance related to sustainability practices, the need to present reports that are accurate and compelling to the audience becomes apparent (Eccles, Ioannou & Serafin 2011, p. 2; Eidonskog 2014, p. 410). One of the most important changes regarding corporate sustainability reporting that has occurred in the recent past relates to the relationship between company practices and the environment. Concern about the environment has become a major issue for companies and other institutions in the world because of the negative environmental impacts on the world population (Global Reporting Initiative (GRI) 2017, p. 10). Thus, it is noted that companies, under the GRI, are adopting the practice of outlining how they perform regarding the issue of conserving the natural environment (Szekely & vom Brocke 2017, p. 2). Also, it is observed that companies are taking the issue of environmental concern seriously by outlining how their practices affect the environment (Murphy, 2015, p. 7). The focus nowadays is that companies indicate the impact of their supply chain on important environmental matters such as the emission of greenhouse gases (Brockett & Rezaee 2015, p. 10). Additionally, companies show how they intend to reduce their negative impact on the environment within specified time frames (GRI 2017, p. 11). Another important issue that companies are now concerned with in their corporate sustainability reports relates to human rights. From the perspective of companies, the issue of human rights relates to how companies treat their employees, customers and even the population that forms the societies to which the companies belong (GRI 2008, p. 4). Moreover, the importance of human rights as an issue that companies are concerned with in their corporate sustainability reports arises from the way international organisations have identified it (Leipziger 2015, p. 11). For example, the United Nations, as part of its series of global sustainability goals, identified human rights as one of the key issues that determine the extent to which the global development efforts are sustainable (GRI 2017, p. 12). Thus, companies seek to adhere to well-established guidelines by showing the efforts that they are doing to tackle problems such as inequality among their employees as part of their efforts at achieving equitable and just societies. Evaluation of sustainability reporting practice Westpac Group has been releasing annual sustainability performance reports for several years now. To determine the extent to which the company has embraced new trends in sustainability performance reporting, it is necessary to evaluate the annual sustainability performance reports released by the company over the last few years. The Westpac annual sustainability performance report for 2014 was based on three areas that the management of the company considered important in shaping the sustainability efforts of the company. The three issues were summarised as follows: growth, strength and returns (Westpac 2014, p. 8). The essence of this three-pronged strategy was that by focusing on carefully building its returns and businesses, the group could manage to grow sustainably over the short- and long-terms (Westpac 2014, p. 9). Moreover, the report outlined the sustainability-related targets that the company had achieved by the end of the year. For example, the report emphasised that the company had focused on embracing diversity and, as a result, had increased the percentage of women in leadership positions from 42% in the previous year to 44% (Westpac 2014, p. 8). Also, the report outlined other achievements of the company in relation to the three focus areas of building strong businesses, achieving high returns and growing sustainably. The 2014 report on sustainability performance of Westpac Group also listed severalpriority areas. It was indicated that the company was poised to focus on embracing societal changes and revising its operations to ensure that it reduces its carbon footprint (Westpac 2014, p. 10). The 2015 sustainability performance report of the Westpac Group was based on the areas of environmental and social sustainability that had been highlighted in the 2014 sustainability performance report of the company. However, in the 2015 report, a detailed analysis of the performance of the company regarding these and many other areas of sustainability was presented. For example, regarding the issue of embracing social change, it was reported that the company had achieved several objectives. As regards environmental conservation efforts, it was indicated that the company had made significant progress (Westpac 2015, p. 9). The report indicated that the company had set aside $6 billion for investing in companies that develop clean energy solutions (Westpac 2015, p. 11). It was also indicated in the report that the company had successfully reduced its overall environmental footprint by achieving its set targets related to electricity consumption and other practices that have a direct impact on the physical environment (Westpac 2015, p. 11). Moreover, it was indicated that the company intended to fast-track its other targets related to environmental conservation (Westpac 2015, p. 12). Some of the targets included increasing the capital that the company invests in energy solutions programmes and developing green buildings and working environments. Apart from environmental issues, the 2015 report listed the achievements of the company regarding the issue of embracing social change. The focus of the company, as indicated in the report, was on making Westpac a company that is responsive to the needs of its employees, customers and the society in general (Westpac 2015, p. 11). To achieve this aim, which was based on the strategic priorities that had been identified in the 2014 report, the company invested in increasing the level of awareness regarding inclusion among its workforce, empowering minority groups in its workforce, and addressing other societal needs (Westpac 2015, p. 10). Thus, in 2015, Westpac focused on a broad range of issues related to conserving the environment and responding to societal changes. The 2016 report on the sustainability performance of Westpac is more detailed than the others for the previous years. However, it is important to note that the report is still based on the three areas of concern identified in the earlier reports: building strong businesses, addressing societal needs and conserving the environment. In the report, a detailed analysis of the performance of the company in relation to these three priority areas is presented. For example, it is reported that the company managed to increase the percentage of Indigenous Australians in its workforce by 4% by the end of the year (Westpac 2015, p. 11). Also, it is reported that the company achieved its target of increasing the level of flexibility for its employees for the year (Westpac 2015, p. 16). As well, it is noted that the company exceeded its environment-related objectives of availing funds for investing in clean energy solutions and launching unique services to help its customers to effectively adapt to environmental challenges (Westpac 2015, p. 4). Conclusion and recommendations From the foregoing, Westpac has focused on three areas in its annual sustainability performance reports: building its businesses, addressing social issues and helping to conserve the environment. These three areas have been prioritised in the company’s sustainability reporting for the last few years. Moreover, the company has focused on identifying key issues of concern, outlining what it perceives to be its achievements, and identifying new targets. This approach has informed the approach to reporting sustainability performance that Westpac has been using for the past few years. Westpac has also been adapting to the changing environment of the practice of reporting corporate sustainability performance. For example, there has been a distinctive change in the reports of the company over the years in the form of increased attention to addressing environmental and societal challenges. In its 2016 report, the company focused on reporting what it achieved over the year regarding its goals of addressing environmental challenges and embracing social changes in the way it treats its customers and employees. Thus, it appears that this focus was informed by the need to prioritise the information needs of customers, government institutions and other stakeholders over those of the company’s shareholders. Westpac should maintain this approach of addressing its social and environmental programmes in its annual sustainability performance reports. This is because using this approach is in line with current recommendations on how companies should report their sustainability performance. Moreover, this approach helps to address the needs of all the stakeholders of the company. References Brockett, A & Rezaee, Z 2015, Corporate sustainability: integrating performance and sustainability, Cengage, Mason. Cohen, E 2013, Sustainability reporting for SMEs: competitive advantage through transparency, Do Sustainability, New York. Eccles, RG, Ioannou, I & Sarofim, G 2011, ‘The impact of corporate sustainability on organizational processes and performance,’ viewed 28 August 2017, . 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