Vluntry Dislsurs in ustrlin rrt Str - Case Study Example

RЕРОRT WRITING ОN ‘VОLUNTАRY DISСLОSURЕS IN АUSTRАLIАN СОRРОRАTЕ SЕСTОR This report discusses the social, economic andenvironmental reporting that is followed by AGL Energy and BHP Billiton. It then critically evaluates them to find out if they are consistent with the GRI guidelines requirements for the stakeholders’ satisfaction so that transparency and accountability is ensured. Further, it identifies the weaknesses and strengths of their reporting, the major differences as well as the recommendation on how voluntary reporting and disclosure gaps can be minimized. Introduction Corporate Social responsibility is defined as a concept through which environmental and social concerns of business are integrated in their operations as well as interactions with their stakeholders. It is normally done on voluntary basis (European Commission, 2001). CSR obligates the business to follow lines of action, make decisions or pursue policies that are consistent to the objectives and values of the society. Companies are therefore required to act in a manner that is more socially responsible in their daily business activities or transactions and dealings. Even though it is still voluntary, companies should try to embrace it so that they can have a positive public image in the eyes of their stakeholders so that they can penetrate the market and have high market share (Idowu & Leal, 2008). Brief discussion of the companies BHP Billiton This is Anglo-Australian multinational Company that was created in 2001 through a merger between the Anglo–Dutch Billiton plc and the Australian Broken Hill Proprietary Company Limited (BHP) and has its headquarter in Melbourne, Australia. The merger resulted to a dual-based company because the two companies are registered and listed in two countries, for instance, BHP Billiton Plc is registered in the UK and has a primary listing on the London Stock Exchange. On the other hand, BHP Billiton Limited is registered in Australia and is listed (primary listing) on the Australian Securities Exchange. The BHP Billiton is a metals, mining and petroleum company and is therefore found in the metals and mining industry. 2013 revenues indicated that BHP Billiton is the largest mining company in the world. In 2011, market capitalization indicated that the company was the third largest company in the world. BHP Billiton is a socially responsible company which is committed to environment, safety, health, and the communities that it operate and hence tries to operate sustainably. AGL Energy The Australian Gas Light Company was created in 1937 with An Act for Lighting with Gas the Town of Sydney". In 2006, AGL Energy was founded from the Australian Light company and is headquartered in North Sydney, Sydney, Australia. It falls in the Energy industry and deals with the generation, retailing and distribution of electricity and natural gas. It is the largest Australian private operator and owner of renewable energy assets. The company seeks to further expand their current position by developing and exploring a low emission suite as well as developing renewable energy generation opportunities. It has major investments in wind and hydro and also has ongoing developments in the key renewable areas such as landfill gas, solar, bagasse and biomass. Being the leading integrated renewable energy company in Australia; it is taking actions towards the creation of a sustainable energy future for their customers, communities and investors. Disclosures of environmental, economic and social disclosures BHP Billiton It its report, the company carries out activities that are socially responsible by making sure that their main focus areas such as people, governance, environment and society are well addressed. In terms of governance the company carries out its operations with high degree of integrity and transparency. The company operates with a belief that conducts that is ethical and consistent results to superior business results. The company’s board operates in a manner that is consistent to its business strategies and core values of integrity and transparency. The company established a sustainability committee the helps the company in the oversight of safety, environment, health and community. In addition, the management operates with high degree of accountability. It also upholds ethical business practices by following its code of business conduct. Its commitment to transparency is shown by its anti-corruption section in the code of business conduct which prohibits corruption and bribery in its business dealings. The company also has a product stewardship program that enables it to work closely with its stakeholders in product life cycles hence high degree of transparency. In addition, it transparently report its taxes through their membership with ICMM hence support the Extractive Industries Transparency Initiative, EITI. People The company has a large workforce which is their main central factor to their success. They are therefore dedicated to their health and safety as well those of the broader communities in which they operate. They strive to create an occupational illness or injury free working environment. The main critical success factor in long term is the ability to employ and develop motivated and talented workforce by ensuring that they are treated fairly and with respect so that they can maximize their potential. They take care of this by managing their safety risk by employing technology that reduces risks associated with surface mining. They also manage aviation risks, health risks, occupational exposures and all kinds of illnesses to ensure that the well being of their stakeholders is protected. In addition, the company has wellbeing initiatives that helps the people to be fit and for life and work. They also engage in activities that develop people for instance, they foster mutually beneficial relationships. Environment With regards to environment, the company has employed initiatives that minimizes environmental impacts in their operations and hence contributes to environmental benefits that are lasting. Their environmental management approach deals with robust identification, control and assessment of material risks across all the phases of their business. Their main aim is to minimize or avoid their impacts on the environment while at the same time contributing to environmental benefits that are lasting in regions in which they operate. They implements opportunities that minimizes resource use and avoid contamination or pollution where they can, however, where they cannot, they implement compensatory actions so that these residual impacts are addressed. This is achieved best by engaging stakeholders and then taking into consideration their knowledge and perspectives in their decision making. Their 2013 report showed their commitment to managing climatic change by reducing greenhouse gas emission; they are also enhancing biodiversity and improving management of natural resource by managing land rehabilitation and access through conservation methods and finally the report outlines their efforts to manage their impacts on water especially on the Augustus River. They are also committed to mineral resource waste management. Society The company has developed partnerships which support sustainable developments. They ensure that the society’s concerns and views are incorporated in their decision making process so that mutually beneficial outcomes are achieved. Their operations establish culturally appropriate platforms so that dialogue is encouraged to closely work with stakeholders in developing strategies concerning their aspirations and concerns. These partnerships enhance economic benefits to their host communities, deliver lasting benefits and alleviate poverty as well. They also closely work with their host governments and other organizations so that transparency can be improved and they don’t engage in political activities. Since their activities may impact human rights, they are actively committed to respecting human rights especially those of their contractors, employees as well as their host communities. Further, the company respects cultural heritage, recognizes traditional values and rights of indigenous peoples. AGL Energy AGL on the hand engages in numerous socially responsible activities in its daily business activities. Environment AGL has a high commitment to achieve excellence in managing the environment as well as in their performance. Since most of their operations are in direct contact and impact to the environment, the company tries `to incorporate safety, health and environmental management systems. Based on their ISO 14001 Environmental Management System standards, the company has established a framework of policies, requirements, environmental standards and compliance guides which enables them to continuously improve safety, health and environmental performance and even facilitating pro-active management of the environmental risks. Their environmental management approach is guided by their Environmental Principles. This helps them to minimize environmental impact and reduce risk. In addition, they manage water by advocating responsible and prudent water usage. Economic Under economic part the company tries to enhance the quality of its earnings so that they can deliver a reasonable return to their shareholders through continuously adhering to disciplined investment process, diversifying their streams of earnings, and sound risk management. The company outlines two basic areas in their report in order to achieve this. This includes sustainable growth and ongoing profitability. The company achieves ongoing profitability through the use of sustainable procurement, efficiency in retail business, and by optimizing upstream gas and electricity generation portfolios. Sustainable growth is achieved by managing economic risks and by employing disciplined approach to growth. Social The company focuses on customer experience and customers in hardship so that they can drive shareholder value and long term growth. The company offers energy efficiency services and renewable energy products and also assists their vulnerable customers in bill payment and energy consumption management. The company has developed partnerships which support sustainable developments. They ensure that the society’s concerns and views are incorporated in their decision making process so that mutually beneficial outcomes are achieved. Their operations establish culturally appropriate platforms so that dialogue is encouraged to closely work with stakeholders in developing strategies concerning their aspirations and concerns. These partnerships enhance economic benefits to their host communities, deliver lasting benefits and alleviate poverty as well. They also closely work with their host governments and other organizations so that transparency can be improved and they don’t engage in political activities. Since their activities may impact human rights, they are actively committed to respecting human rights especially those of their contractors, employees as well as their host communities. Further, the company respects cultural heritage, recognizes traditional values and rights of indigenous peoples (Jones, 2012). Analysis According to the G4 guidelines, both the companies prepares their reports in line with the requirements, however, AGL has no report on ant-corruption. That of BHP Billiton has been prepared in accordance mining and metals sector supplement while that of AGL is in accordance with the energy sector supplement. Both the companies should ensure that all the guidelines are followed so that their stakeholders are satisfied thereby ensuring transparency and accountability (Schaltegger et al, 2006). Strengths i) Keeps tracks of sustainable performance hence high degree of accountability ii) Provides reputational benefits especially if reporting is honest iii) It drives performance improvement iv) It spells out how the company deals with challenges they face Weaknesses i) Huge organizational effort and commitment is required in the compilation process ii) Some companies do not completely comply with guidelines especially anti-corruption and ethical practices. The BHP Billiton has more compliance with the GRI disclosures than the AGL Energy. It complies with more than half of the guidelines. To ensure increased high stakeholders satisfaction both the companies should ensure that all the guidelines are complied with so that they can benefit from positive public image (Wieriks, 2013). References Brockett, A. M., & Rezaee, Z. (2012). Corporate sustainability: Integrating performance and reporting. Hoboken, N.J: Wiley. Brockett, A. M., & Rezaee, Z. (2012). Corporate sustainability: Integrating performance and reporting. Hoboken, N.J: Wiley. Busco, C., Frigo, M. L., Riccaboni, A., & Quattrone, P. (2013). Integrated Reporting: Concepts and Cases that Redefine Corporate Accountability. (When values meet value.) Cham: Imprint: Springer. Idowu, S. O., & Leal, F. W. (2008). Global Practices of Corporate Social Responsibility. Berlin: Springer Berlin. Jones, S. (2012). Contemporary Issues in Sustainability Accounting, Assurance and Reporting. Bradford: Emerald Group Pub. Schaltegger, S., Bennett, M., & Burritt, R. (2006). Sustainability accounting and reporting. Dordrecht: Springer. Wieriks, R. H. Y. (2013). The landscape of sustainability assurance: Towards further shaping the assurance approach. Rotterdam: Erasmus Universiteit. AGL Energy sustainability report: http://www.agl.com.au/~/media/AGL/About%20AGL/Documents/Media%20Center/What%20We%20Stand%20For/2013/AGL051_Sustainability%20Report_2013_LR.pdf BHP Billiton sustainability report: http://www.bhpbilliton.com/home/aboutus/sustainability/reports/Documents/2013/BHPBillitonSustainabilityReport2013.pdf Read More