Sustainability Reporting in Accounting

Question: Discuss about the . Answer: Introduction In the era of twenty-first centuries, the definition of business is not bound in sales and revenues. Now a day, businesses all over the world is considering the effects of their business on environment, human resources and communities. They are concerned to maintain the sustainability in their business. Businesses all over the world are publishing their sustainability report that provides information about their steps to revive the environmental, social and economic issues through sustainability approaches (Bebbington, Unerman and O'Dwyer, 2014). The aim of the report is to analyze and evaluate the sustainability reporting of one of the Australian Stock Exchange listed companies. For the purpose of the report, Wesfarmers Limited is considered as the company is well known for their sustainability reporting system. Wesfarmers is one of the largest conglomerates in Australia, founded in the year of 1914. Their various businesses include coles, home improvements, departmental stores, che micals, energy, fertilizers and many others (About Wesfarmers, 2016). Sustainability at Wesfarmers Wesfarmers is well known for their sustainability approaches. It is the commitment of the organization to create values for shareholders, employees and communities. One of the ways to create value to Wesfarmers is to manage the impact of their business on the environment and community. There are some companies that use Wesfarmers as their benchmark for sustainable development. Wesfarmers has acknowledged the growing issue of climate change like the increase in weather volatility, frequent weather conditions, high level of temperature and others. On the other hand, there are others human resource issues like gender inequality at the workplace and others. The sustainability approach of Wesfarmers is based on these issues. The sustainability report of Wesfarmers is the summary of their sustainability strategies and actions. The sustainability report of Wesfarmers is prepares according to the rules and regulation Global Reporting initiatives (GRI). All the sustainability actions of the o rganization is done as per the guidelines of GRI principles. As per the FRI principles, there are four major dimensions of the sustainability report of Wesfarmers; they are materiality, completeness, sustainability context and stakeholders inclusiveness. Wesfarmers uses to address ten widely accepted principles of the United Nation Global Compact (UNGC). The sustainability program of Wesfarmers is known as Wesfarmers supports the Sustainable Development Goals (SDGs). There are certain goals of the sustainability program of Wesfarmers. They are to end poverty; to fight inequality and injustice at the workplace and to make strategies for responding the climate change issue by the year of 2030 (Our sustainability reporting, 2016). Materiality Issues One of the most important aspects of the sustainability report of Wesfarmers is to address the various materiality issues in the organization. Some major materiality issues have addressed in the materiality report of Wesfarmers. The first materiality issue is to maintain a safe workplace. The Second issue is to give great career opportunities to the employees of the organization (Moscardo et al., 2013). The third materiality issue is to create a inclusive work environment where there will be gender diversity along with the inclusion of Aboriginals and Torres Strait Islander people in the workforce. Fourth issue is to maintain a respectful relationship with the suppliers. Fifth issue is to source the products in a responsible manner. To contribute to the well-being of community is the sixth material issue. Providing safe products to the customers is the seventh material issue. Eighth materiality issues of Wesfarmers are to reduce the emission intensity in order to fight the issue of c limate change. Ninth material issue is to reduce the portion of wastage of water and other materials. The tenth and last materiality issue is to maintain robust corporate governance policies in the whole organization. These material issues are addressed in the sustainability report of Wesfarmers (Australia, 2012). Sustainability Principles There are five major principles the sustainability reporting of Wesfarmers. They are People, Sourcing, Community, Environment and Governance. All the aspects are discussed under. People: It is the major focus of Wesfarmers to provider ultimate safety to the employees of the organization. Wesfarmers uses various strategies like safety leadership, strategies targeting risk reduction and improving physical as well as mental health to implement safety. On the other hand, the company is determined to create a diversified workplace that will include people of all gender, age, race, cultural background, religion and others (Safety, 2016). Sourcing: It is the aim of Wesfarmers to maintain a healthy relationship with their suppliers. The company has been successful to maintain a good relationship with their more 15,000 suppliers and Wesfarmers has paid $45,525 million to the suppliers. The ethical sourcing policy of Wesfarmers implies that the company wants to source the materials of business in an ethical way (Suppliers, 2016). Community: In the year of 2016, Wesfarmers has contributed more than $57.8 million to the welfare of different communities of Australia. On the other hand, Wesfarmers has given $53.8 million as donation. The company has done the welfare of communities by providing foods, clothing, jobs and others (Community contributions, 2016). Environment: One of the most important dimensions of Wesfarmerss sustainability program is to fight the issue of climate change. For this purpose, Wesfarmers has adopted strategies to control the emission intensity from their business operation. Wesfarmers has been able to maintain the emission of green house gases from the production operation with the assistance of improved technology. On the other hand, Wesfarmers has taken strategies to reduce the wastage of water and other resources from their business operation (Climate change resilience, 2016). Governance: The Company has been successful to implement strict corporate governance policies in order to maintain the sustainability in the organization. Sustainability Achievement in 2016 In the year of 2016, Wesfarmers has achieved many sustainability milestones. The injury frequency rate in 2016 is 33.4 that are 15.2% lower than last year. The company has identified more than 3,300 indigenous employees. The inclusion of 3,200 factories in the audit program has brought transparency in the supply chain. Wesfarmers has contributed a total of $110 million for the well-being of communities. The company has been successful to reduce the greenhouse emission by 2% in this year. The workforce of Wesfarmers contains 55% of women employees and this is a great achievement to reduce gender inequality. These are the major sustainability achievements in 2016 (Sloan, 2016). Stakeholders Analysis It is the sustainability vision of Wesfarmers to add value to their various stakeholders with the help their sustainability activities. One of the effective policies of the company is that they use to communicate with their stakeholders on a regular basis and they invite the precious feedbacks from them. Wesfarmers has different stakeholders that include employees of the organization, customers, shareholders, suppliers of the company, the government, non-governmental organizations, media and community (Kenny, 2013). Wesfarmers has implemented some major sustainability policies for all of their stakeholders. As per the report of 2016, Wesfarmers has employed around 220,000 employees; the company has created many career opportunities for these employees. Wesfarmers has created many channels so that the customers can contact with the company and can provide their valuable feedback. One of the major stakeholders of the company is the shareholders. The well directed sustainability strateg ies of Wesfarmers have been successful to attract the attention of the shareholders. Wesfarmers various sustainability initiatives like ethical sourcing, suppliers relationship, climate change strategies and others have helped the company to gain more investments from the investors. On the other hand, the sustainability initiatives of Wesfarmers have helped the organization to earn praise from the government. Wesfarmers has received many awards from the government for their sustainability reporting. All the sustainability activities of Wesfarmers have helped the organization financially as it helped to improve the financial position of the company (Rowe et al., 2014). Conclusion: The objective of the report is to analyze and evaluate the various aspects of sustainability reporting of Wesfarmers. It has been seen in the study that there are some major aspects of the sustainability reporting of Wesfarmers. As per the above report, the vision of Wesfarmers is to continuously add value to their various stakeholders like shareholders, employees, customers and others. Sustainability reporting is one of the means to add value to the stakeholders. It has been seen that Wesfarmers uses to follow the GRI principles and frameworks to prepare their sustainability reports. The five major dimensions of sustainability reporting of Wesfarmers are people, sourcing, community, environment and government. All these sustainability activities of Wesfarmers have helped the company to invite more investments from the shareholders. On the other hand, the various sustainability strategies of Wesfarmers to implement health and safety for their various stakeholders have assisted the or ganization to create a good band image of the company. The sustainability activities of Wesfarmers are already perfect. However, there are still some scopes to improve. It is suggested that Wesfarmers should focus more on the improvement of the relationship with the suppliers. It is recommended that there should be more transparency in the supply chain of the organization. Another recommendation is that Wesfarmers should promote mental health among the employees. References Australia, A.C.C.A., 2012. The state of sustainability report assurance in the ASX 100. 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