Australian Organizations Adopt Sustainability Reporting - Case Study Example

Australian Organisations Must Adopt Sustainability Reporting In The 21 Century Introduction Sustainability reporting involves those companies and organisations who reveal their corporate responsibility initiatives. They prefer doing so by evaluating and publicly reporting on their social and environmental performances and influences. The sustainability reports of the companies can be easily obtained from the annual reports, a separate sustainability report or an environmental or social impact report (Commonwealth of Australia, 2010). Most of the organisations consider sustainability reporting as a significant part of their performance evaluation. However, the companies do not need to follow any standard reporting frameworks. Each industry faces varied external issues which are considered as significant to its operations (Hubbard, 2011). It can be stated that the companies are pressurised to disclose the non-financial information because of several market mechanism. These market drivers are found in numerous ethical, social as well as environmental investment funds that have given rise to sustainability reporting (Vormedal & Ruud, 2009). The concept of sustainability reporting has been into existence since a long period of time; however, it is since the 1970s and 1980s that this reporting is given more priority (Ortas & Moneva, 2011). Discussion There are many reasons behind the companies’ disclosing sustainability reporting. They intend to persuade the non-stakeholders regarding the impacts of the performance of the company and strategies applied by it to stimulate the performance. The objective of sustainability reporting is to inform the shareholders regarding the fact that how well the company is handling with non-financial as well as financial risks. It also permits the company to recognize the areas of potential risks and evaluate its performance. Most of the companies prefer mandatory reporting since it sets up methods and structures for comprehending influences and risks which were not stated previously by the other organisations. It also offers institutional investors with the capability to avail the information on non-financial risks which further permits them to have better knowledge regarding the overall firm. Transparency and accountability to the stakeholders is promoted when companies tend to disclose sustainability reporting (Kolk, 2004). According to the views of Kolk, the main reasons behind sustainability reporting are to increase a company’s capability to keep track of the developments against particular targets. It tends to help in the proper implementation of the environmental strategy. It is proper sustainability reporting that creates awareness regarding the environmental issues in the organisation. Most of the companies try to focus more upon the sustainability reporting since it offers them with reputational benefits, increased efficiency, stimulated business growth opportunities and increased morale of the staffs (Kolk, 2004). Since the companies’ operate in the social environment of their stakeholder, it becomes impossible for them, to act in isolation of their social environment. The main objective behind the existence of a company is determined by numerous stakeholders who tend to pursue various ecological, economic and social objectives and also require information which is directly related to their goals. Therefore, the sustainability reporting is not only to manage the ecological, economic and social effects of the company’s activities but also to offer stakeholders with the pertinent information related to sustainability related issues and the ways in which the companies tend to manage them (Herzig & Schaltegger, 2006). Sustainability reporting is a well-established process which facilitates the companies to communicate their performances, objectives and policies so that they can manage the impacts of their operations (Scott & Jackson, 2002). Global Reporting Initiative (GRI) identifies that there are five steps that can be taken by any organisation in implementing a sustainability reporting method. They are: prepare, connect, define, monitor and communication (Geraghty, 2010). It can be stated that with the help of the sustainability reporting practices, companies can obtain the scope to open up new markets and thus enhance the reputation of the company. The planning and implementation of the sustainability report takes into consideration five main steps. They are setting the vision of the company, staffing the efforts, creating metrics to evaluate progress, implementing strategic initiatives and communicating the results to all stakeholders. It is significant to comprehend the steps in detail. Most of the companies initiate the journey by evaluating sustainability frameworks. It is worthy of mentioning the fact that the companies need to focus upon intersection between the company’s strength along with the opportunities that have been presented by enhanced customer demand for the purpose of sustainability. After having set the vision, it is significant to identify the personnel required to accomplish the tasks. In most of the organisations there are sustainability taskforces who are responsible to take care of the efforts. The taskforce includes people from different departments of the company who have varied levels of expertise. Their duty is to collect the information related to current environmental impacts of their organisation. It is this information that will assist the companies to develop strategic initiatives. While planning for sustainability, it is quite significant to evaluate the environmental impacts. The companies do this with the help of numerous sustainability accounting tools so that they can evaluate reductions in greenhouse gases, recycling, energy use and water use. Once the companies have established vision, chosen the staffs and undertaken numerous measurements, the next logical step is to choose particular initiatives for execution. It is quite significant for the sustainability planning to create plans which are vital for businesses competitive position and internal strengths. Finally, it is crucial to communicate regarding the sustainability efforts to the internal as well as external stakeholders. The main objective of the sustainability reporting is to clearly demonstrate the commitments of the organisations and therefore it is because of this reasons most of the companies’ publish yearly sustainable reports (Galayda & et. al., 2010). The two organisations that have undertaken sustainability reporting initiatives in Australia are Veolia Transdev and Westfield Group. Veolia Transdev is one of the pioneers among public transport companies. There are approximately 3000 employees who work with the company on different transport services in Australia as well as New Zealand. It has been noted that for the company, sustainability is quite significant. For this company, sustainability generally refers to meeting the requirements of the stakeholders in the present times and thereby shielding, endorsing and increasing the requirements of future generations (Veolia Transdev, 2011). On the other hand, Westfield Group is one of the biggest retail property groups in the world in terms of equity market capitalisation. The company operates all over the world which is internally administered, ‘vertically integrated shopping centre group’ that takes into consideration the ownership, design, funds and assets management, construction along with leasing and marketing. There are nearly 4000 staffs of the company working all over the world (Westfield, 2012). It has been noted that since decades the company has tried to focus upon the sustainability efforts and has tried to make sustainability part and parcel of its daily operations. The company aims at operating the business successfully and thus make use of energy in a wise manner, generate less waste and focus on redeveloping of the shopping centres making the optimum use of the technology and novel design methods so that its impact upon the environment can be minimised (Westfield, 2012). Since there is no common format or no common rules for calculating or disclosing any components of information in the sustainability reports, therefore this study will simply focus upon if the issues and components were addressed at a generalised level rather than be concerned regarding any detail of any particular element or area (Hubbard, 2011). It can be analysed that the Westfield’s sustainability report has been prepared according to Global Reporting Initiative G3.1 Framework. However, on the other hand, Veolia Transdev’s sustainability report has not been prepared according to GRI framework. The corporate strategy has been adequately and clearly stated in Veolia Transdev’s sustainability reporting. It states that “its sustainability strategy is natural extension of our Customer Promise and allows them to embed social, environmental and economic considerations into the way they do business” (Veolia Transdev, 2012). The sustainability strategy of Westfield Group has also been stated precisely. Its sustainability strategy is to operate the business in an effective manner, make use of energy more widely, generate less waste and thus create shopping centres that make the use of most of the technology as well as new design techniques so that its impact on the environment can be minimised. Westfield Group has adequately addressed materiality. Its sustainability report states that the company involved itself with the internal stakeholder so that it can identify the material issues and the sustainability topics that the company considers to be significant. Although Veolia Transdev has not discussed the materiality issues under separate headings in its sustainability reports like Westfield Group, it does not mean that it does not pay attention towards the disclosure of material issues. Veolia Transdev also addresses the needs of most of its stakeholders (Veolia Transdev, 2012). Governance can be considered as one of the significant aspects of the sustainability which has been best covered by both the companies’ sustainability reports. Economic indicators of performance that is expected from the sustainability report framework has also been precisely presented in the report of both the companies. Both the companies have provided significant financial information (Westfield, 2011). Conclusion Therefore, it can be concluded that both the companies, i.e. Veolia Transdev and Westfield Group have reported of environmental performance. The companies have reported reduction in the resource use since they have realised their responsibilities towards the environment. It is worthy of stating the fact that both the companies have paid attention towards the social measures i.e. employees. Both the companies have realised the fact that employees are one of the key elements of any business model and hence attention needs to be paid towards their satisfaction (Hubbard, 2011). References Commonwealth of Australia, 2010. Sustainability Reporting. Issues and Arguments. [Online] Available at: http://www.aph.gov.au/library/pubs/climatechange/responses/economic/sustainability.htm [Accessed January 19, 2012]. Geraghty, L., 2010. “Sustainability Reporting Measure to Manage, Manage to Change”, Global Reporting Initiative. Galayda, J. & et. al., 2010. Corporate Sustainability Management: Best Practices. White Paper. [Online] Available at: http://www.greenbuildconsult.com/pdfs/corporate-sustainability.pdf [Accessed January 19, 2012]. Herzig, C. & Schaltegger, S., 2006. “Corporate Sustainability Reporting: An Overview”, Sustainability Accounting and Reporting. Hubbard, G., 2011. “The Quality of the Sustainability Reports of large International Companies: An Analysis”, International Journal of Management. Vol: 28, Iss: 3, pp: 827-848. Kolk, A., 2004. “A Decade Of Sustainability Reporting: Developments and Significance”, Int. J. Environment and Sustainable Development. Vol: 3, No: 1, pp: 51-64. Ortas, E. & Moneva, J. M., 2011. “Origins And Development Of Sustainability Reporting: Analysis Of The Latin American Context”, Revista Journal. Vol: 5, Iss: 2, pp: 16-37. Scott, P. & Jackson, R., 2002. “Environmental, Social and Sustainability Reporting on the Web: Best Practices”, International Journal of Corporate Sustainability. Vol: 9, Iss: 2, pp: 194-203. Veolia Transdev, 2011. About us. Sustainability. [Online] Available at: http://www.veoliatransdev.com.au/sustainability/our-approach/index.html [Accessed January 19, 2012]. Vormedal, I. & Ruud, A., 2009. “Sustainability Reporting in Norway – an Assessmentof Performance in the Context of Legal Demands and Socio-Political Drivers”, Business Strategy and the Environment. Vol: 8, pp: 207-222. Veolia Transdev, 2012. Sustainability. Our Approach. [Online] Available at: http://www.veoliatransdev.com.au/sustainability/our-approach/index.html [Accessed January 19, 2012]. Westfield, 2011. Sustainability Report. About This Report. [Online] Available at: http://westfield2011.sustainability-report.com.au/about-report [Accessed January 19, 2012]. Westfield, 2012. Sustainability. About Us. [Online] Available at: http://westfield.ice4.interactiveinvestor.com.au/westfield1101/index.php?option=com_content&view=article&id=70:sustainability&catid=77&Itemid=470&showall=1&limitstart= [Accessed January 19, 2012]. Read More