Australias Largest Salmon Farmer - Assignment Example

Accounting for Sustainability Management Name: Tutor: Subject: Date: Introduction This paper is based on the case study of Tassal which is Australia’s largest salmon farmer. Tassal is located as Tasmania, and recently, the organization decided to expand its operations to Macquarie Harbour, a large harbor which is adjacent to the Tasmanian Wilderness World Heritage Area. Tassal is also planning to move its operations to a new marine farm in Okehampton Bay. However, due to these expansions, the organization is facing controversy issues related to sustainability with the local Tasmanian community. The main concern that the community is raising is about its environmental impacts. The purpose of this assignment is to examine Tassal’s sustainability framework and practices, and whether it should adopt them. 1. What is sustainability? Is the notion of sustainability relevant to business and accounting? Justify your answer. Sustainability and environmental awareness are the most significant topics when it comes to business. Sustainability can be simply defined as a state of balance for ecology. It refers to the ability of natural systems to function and produce everything that we need without compromising the ability of future generations. In other words, sustainability is concerned with how human beings might live in harmony with the natural world. Sustainability covers natural resources, social, and economic resources. These three make the three pillars of sustainability (Kuhlman, 2010). Environmental sustainability deals with ecological integrity or environmental balance where the rate of consumption of natural resources must be equal to the rate they replenish themselves. Economic sustainability on the other hand requires all human communities in the world to access resources that will help them meet their needs. Social sustainability means that human communities are able to access adequate resources in order to meet their universal human rights and necessities (Duić, 2015) The concept of sustainability is relevant to businesses, and most of them are making strategic decisions on the type and extent of their corporate sustainability frameworks. Therefore, sustainability is one of essential components of the corporate policies. Sustainability has different meaning depending on the context of the business. About environment, business defines sustainability as a way of ensuring that resources are conserved, and the ecosystem is not harmed. Regarding employment practices, sustainability is ensuring that employees are adequately compensated and given benefits to maintain their families and contribute to the community. In the context of business practices, sustainability ensures that corporate policies will not harm the long-term well-being and reputation of the organization (Duić, 2015). There are some social expectations on business operations about sustainability. The society expects businesses to cause less harm to the environment as well as promoting social health and governance in an ethical manner. For this reason, businesses have corporate social responsibility (CSR) which addresses these issues. CSR organizations have ethical behaviors that contribute to sustainable development for both health and welfare of the society; considers the expectations of the stakeholders; complies with the relevant laws; and is integrated throughout the organization’s practices (Korschun, 2014). CSR is considered as a response to the business failures that are caused by rapid growth and powers of the modern business world. However, today businesses are facing several challenges regarding CSR. Businesses are facing dilemmas since rapid mass urbanization aimed at raising standards of living poses threats to the environmental health (Epstein, 2014). The notion of sustainability is also significant to accounting. This is because accounting is a social practice which is developed to meet social demands. Accountants also use sustainability data to present their reports and details. Accounting is a powerful tool that can be used to show the reality of business when performed well. According to Gray (1996), there are four types of sustainability accounts: corporate reporting, the general discourse of the business, academic articulation of the company’s sustainability, and initiatives designed to improve corporate sustainability. Sustainability accounts also enable a company to achieve short-term results, and it also creates a dominant view. 2. Is the notion of sustainability relevant to the aquaculture industry in which Tassal operates? Justify your answer. The notion of sustainability is relevant to the aquaculture industry in which Tassal operates. Sustainability organizations such as Greenpeace advocate for clean and healthy oceans for future generation. For this reason, they are seeking to improve the standards of international seafood trade (Havice, 2015). Tassal deal with the production of salmon which is one of the seafood and therefore sustainability is very important. Aquaculture is considered as an alternative solution to overfishing by making a substantial contribution to food supplies in different parts of the world where food is needed. There is a growing role that seafood play for human nutrition and alleviation of poverty. Research shows that modern aquaculture practices promote the unsustainable production of fish for high-value markets. The quick development and expansion of rigorous aquaculture of species such as salmon and shrimp have resulted in extensive degradation of the environment. In addition to this, coastal fishing and farming communities are also displaced. As per (Havice, 2015), unsustainable aquaculture has negative impacts on food supplies and food security especially in developing coastal communities. This is because aquaculture blocks access to common land that was initially used by local people for fishing and cleaning. Aquaculture also replaces traditional ocean and sea fishing thus denying the local communities traditional seafood which was initially collected from the ground. Unsustainable aquaculture compromises food security in some ways. One of them is that extraction of marine species such as salmon from the ocean including the future stock has negative implications on food security. Another one is that fishmeal used for production in aquaculture ponds are usually food for local communities. Organic wastes released to oceans from processing plants promote the growth of harmful algae. Coastal ecosystems are also destroyed in the process of establishing aquaculture farms. As a result, resources such as fresh water are depleted. Australia’s Department of Fisheries established an ecosystem based framework (Ecologically Sustainable Development, ESD) for aquaculture farming. The framework provides a set of guidelines for coordinating activities and ensuring that there is due diligence. The guidelines outlined by ESD framework are expected to be applied to different sectors of aquaculture in Australia. Aquaculture ESD framework help organizations identify all relevant environmental, social, economic, and governance issues. The framework also helps organizations such as Tassal to document efficient and effective management policies. Aquaculture can be said to be sustainable if the feeds used in aquaculture farms are collected from sustainable agriculture. 3. What are the specific sustainability issues that Tassal is facing? Justify your answer. The specific sustainability issues that Tassal Company is facing include food labeling, certification, and environmental conditions (Australian Food News, 2017). About fish meals, the company is facing issues related food labeling. Tassal labeling is questioned because it does not list the ingredients of animal and fish feeds according to Food Standards Australia and New Zealand (FSANZ). The main concern is on one ingredient (astaxanthin) which is said to be a minor additive in Tassal’s fish feed formulation. Despite this ingredient, Tassal’s feed is approved as safe for both humans and fish. Another issue that Tassal is facing is related to certification of fish meal formulation. A report shows that Tassal’s fish feed formulation contains porcine blood meal and yet it is certified by Halal or Kosher. Despite this raised concern, Tassal claims that it is transparent with all certification bodies and that it complies with all requirements of the certification bodies and that its certifications are valid. Another certification issue deals with Aquaculture Stewardship Council (ASC) certification. The main issue on this is that Tassal lacks complete ASC certification. Tassal argues that it pays a private auditor to perform auditing functions related on ASC certification, but it is yet to receive the certification. According to World Wildlife Fund WWF-Australia, Tasmania’s salmon industry makes a significant negative impact on the environment. Tassal operates under WWF Australian branch environmental credentials. However, this relationship between WWF and Tassal was questioned by ABC. Tassal was urged to improve its environmental impacts. The Tasmanian government is criticized for the poor job regarding regulation of the salmon industry. They argue that certification should reflect good practices by companies. ASC’s audit established that Tassal failed to comply with certification requirements especially those related to cleaning of the environment. ASC findings show a lack of compliance with Marine Farming License Conditions, community involvement, listing ecosystem function, and legal compliance. Tassal’s Macquarie Harbor salmon-farming leases require cleaning. Reports indicate that there is spread of beggiatoa mats and this indicates the impacts of fish farming on the environment. This issue subjects Tassal to the risk of losing its sustainability certification. 4. If sustainability is relevant to Tassal, how might Tassal embrace sustainability in its operations? Justify your recommendations Just like any company on aquaculture industry, sustainability is relevant to Tassal. Sustainable aquaculture will enable improve its production and consumption. There are different approaches that Tassal can use to embrace sustainability in its operations. One of the approaches is that Tassal needs to attend global food forums to learn how it is going to be sustainable in all areas including environment, fish, the health of the people, and other risks. This will enable the company to verify that its practices are sustainable. Tassal should also practice environmental sustainability in order to prevent disruptions to the ecosystem, loss of biodiversity, and pollution impact. Tassal should prioritize on maintaining and improving environmental practices as one of their sustainability strategy. The company should make significant investments in environmental initiatives for current and future generations. This strategy will be attained through identifying and assessing environmental risks and mitigate environmental impacts that arise from production, services, and operations. Tassal also needs to set goals and objectives aimed at promoting environmental conservation. The company can also review their policies to ensure that they continually improve environmental sustainability. Tassal can also communicate environmental initiatives to the community through their websites and sustainability programs. Tassal also needs to embrace sustainability through its aquaculture feeds, especially fishmeal and fish oil use. Initially, Tassal was using synthetic astaxanthin in their salmon farming. The company can improve its feed formula by using naturally derived astaxanthin. Tassal rival Huon acquaculture was also embracing the natural feeds, and Tassal must acquire them. Although synthetic astaxanthin is fully safe, use of natural pigment is more attractive to consumers, and this will act as a competitive advantage to the company. Sustainability is also achieved through community engagement. Tassal can encourage the community to participate in environmental sustainability and educate them on the importance of environmental protection. Tassal can also improve its corporate social responsibility as a way of promoting sustainability. Corporate social responsibility (CSR) contributes to sustainable development for both health and welfare of the society; considers the expectations of the stakeholders; complies with the relevant laws; and is integrated throughout the organization’s practices. Regarding the issue of compliance, Tassal needs to ensure that there are no compliance complaints from certifying bodies. One of the questions is on the relationship between WWF-Australia and Tassal. To deal with this issue, Tassal must disclose its payments to WWF partnership. This will improve their transparency. Conclusion Aquaculture is predicted to be the main source of seafood in 2030 as the demand continues to grow. For the practice to be sustainable, it must be environmental, socially, and economically sustainable (Salib, 2015). Some practices that improve sustainable aquaculture include effective effluent management, water conservation, efficient fishmeal and fish oil usage, and reducing harm to the biodiversity. There is an emerging and increasing trend of controversy about Tassal’s sustainability frameworks from the broader community of Tasmania and Australia. Since sustainability is relevant to the aquaculture industry, Tassal should also embrace sustainability in order to boost production of salmon for human nutrition and to alleviate poverty. The main sustainability issue is related to environmental problems which have increased significantly. Tassal’s Macquarie harbor requires cleaning because it is polluted by beggiatoa mats used in aquaculture. Sustainable aquaculture is beneficial to Tassal because it ensures continuing human resource development and capacity building. Tassal also needs to work on transparency when preparing their sustainability results. Working with WWF-Australia will enable the company to acquire full certification by ASC. References Australian Food News, 2017. Tassal sustainability issues. Retrieved August 9, 2017 from: http://www.ausfoodnews.com.au/2016/10/26/tassal-addresses-sustainability-issues.html Duić, N., Urbaniec, K. and Huisingh, D., 2015. Components and structures of the pillars of sustainability. Journal of Cleaner Production, 88, pp.1-12. Epstein, M. J., & Buhovac, A. R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers. Gray, R, Owen, D & Adams, C 1996, Accounting and Accountability: Changes and Challenges in Corporate Social and Environmental Reporting, Prentice Hall, London. Havice, E. and Iles, A., 2015. Shaping the aquaculture sustainability assemblage: Revealing the rule-making behind the rules. Geoforum, 58, pp.27-37. Korschun, D., Bhattacharya, C. B., & Swain, S. D. (2014). Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), 20-37. Kuhlman, T. and Farrington, J., 2010. What is sustainability?. Sustainability, 2(11), pp.3436-3448. Salib, J., Sun, D., Wu, J., Wen, X., & Huang, C. C. (2015). Corporate Social Responsibility Read More