Analysis of Australia and New Zealand Sustainability

Analysis of Australia and New Zealand Sustainability In the recent years, following increasing societal urges for responsible practices, involvement of the community, accountability, demand for more transparency, better working standards, contained GHGs emissions, and multiple other environmental and social elements (Ioannis Ioannou and George Serafeim, 2014, p.1) has given rise to a growing demand from stakeholders for corporate organisations to produce sustainable reports. Sustainable reporting as stated in the GRI 101: foundation is an organizations practice of reporting publicly on its economic, environmental, and/or social impacts, and hence its contributions positive or negative towards the goal of sustainable development (2016, p. 3). This report aims at evaluating various sustainability reporting tools and assess their impacts within the Australian context. Sustainability framework can be described as a set of guidelines put together to assist organisations producing a sustainability report with emphasis on a businesss material aspects, while focusing on the selection of the boundaries of the report. Above all, the framework highlights transparent reporting writing formats by providing technically-reviewed content and disclosure requirements (A GRI report is, 2017). These frameworks usually instigate a synoptic awareness risks and environmental impacts as well as opportunities/innovations. They additionally push for transparency regarding management strategies and quantifiable actions. They are astute about targeting areas that will have consequential impacts that ultimately translate to value for stakeholders (Some 227 members, 2016) For the purpose of this essay, the 2016 sustainability report of The Australian and New Zealand Banking Group has been studied. The report has been generated with the aid of various sustainability frameworks, however there are three major frameworks which are being considered namely DJSI (Dow Jones Sustainability Index), CDP (Carbon Disclosure Project) and GRI (Global Reporting Initiative). The DJSI is a widely used sustainability framework which has some of the most advanced ESG index solutions put at the disposal to the asset management industry through an unprecedented set of criteria for gathering, analyzing, quantifying, and distributing ESG data. It basically consists of industries specific questionnaires featuring 80-120 questions aligned with the companies financially relevant economic, environmental and social factors that accompanies the conventional financial analysis. A major part of the corporate sustainability assessment is the Media and Stakeholder Analysis (MSA) which audits publicly available information and assesses whether the companies management systems are translating into performance (The RobecoSAM Corporate, 2016). The CDP framework is a tool for decision makers for them to capitalize on opportunities and manage risks via their environmental performances (We understand that, 2017).The CDP overlaps with other framework in terms of its approach through sending out questionnaires to businesses in the denomination of the investors backing the initiative, the Carbon Disclosure Project amasses information on the companies environmental activities such as the monitoring and reduction of carbon emissions. This information accommodates the investors to make apprised, climate risk-related decisions in their investment process. Predicated on the data it has amassed, the CDP withal publishes in-depth analyses on sundry environmental subjects every year, covering a wide range of geographical regions (Samuel O. Idowu, 2013) The GRI Reporting Framework is meant to be a framework accepted by all organization for reporting on their economic, environmental, and social performance, regardless their size, sector, or location. It takes into consideration the practical issues faced by various organizations ranging ones having local operations to ones dispersing their operations internationally. The GRI Reporting Framework contains general as well as sector-specific content that has been agreed by multitude of stakeholders globally to be applied generally for reporting an organizations sustainability performance. The Sustainability Reporting Guidelines, now standards in the GRI are made up of principles for which define report content and ensure the quality of reported information. It also includes Standard Disclosures consisting of Performance Indicators and other disclosure items and guidance on specific technical topics in reporting (Sustainability Reporting Guidelines, 2016, p.3). CDP provides a framework for firms to measure and disclose their Greenhouse Gas (GHG), water, and supply chain performance. While the prime objective of CDP is climate change mitigation and protection of natural resources. GRI and DJSI, on the other hand, focus on the economic, environmental, and social impact of an organizations material activities on its stakeholders. The CDP and GRI frameworks are available to the public but for data to be submitted to DJSI, companies must be invited and the results of the analysis are not available in the public domain. (Mark Sellberg, 25 Nov 2015) These frameworks also target different audiences. While CDP and DJSI target investors as their main audience. The GRI reports primary stakeholder are based upon the material issues for the company and typically include shareholders, employees, suppliers, customers, regulators, NGOs, and local communities. In Australia sustainability reporting is voluntary. Companies choosing to do so in order to inform non-shareholder stakeholders about the companys performance with regards to the three main pillars of sustainability and setting up strategies for improve their impacts while disclosing to all stakeholders how a company is dealing with material non-financial and financial risks. According to Certified Practicing Accountants Australias (CPA Australia) 2004-2007 report Sustainability, Practice, Performance and Potential, there exists a strong correlation relating sustainability reporting and low probability of corporate distress. This relationship may also indicate the producing sustainability reports are proactive versus more prominent risks to their business and can prepare long term and integrated approach to risk benefitting both shareholders and stakeholders To address the diverse needs of Australias business community, one prime principle of sustainability was identified to be flexibility so that listed entities could first consider and then disclose sustainability or non-financial information that is pertinent to the (Ian Matheson, 2012, p.2) The ASX Corporate Governance Councils Principles of Good Corporate Governance and Best Practice Recommendations views are that if the size, structure and operations of organisations differ hence flexibility must be allowed in the structures adopted to maximise individual performance. Even though, flexibility is granted, organisations should be accountable to investors for their alternative which is the if not, why not obligation. On the other hand, multiple submitters believe that there is a need for compulsory sustainability disclosures provide stakeholders with assurance that companies are doing business accountably and transparently so that players who currently ignore CSR come up to the standard, even if it is a minimum, as it will provide authorities something against which they can hold them to account. (Rod Masson, 2012, p.42) Finally, in that sense it can be seen from the ANZ banking group sustainability report that the organization has chosen a combination of sustainability framework so as to meet answer the expectations of their different stakeholders and at the same time identify areas to improve their operational or management activities, find better managerial strategies for their non-financial risks, find new markets or business opportunities and measure their performance against their competitors. (ANZ, Corporate Sustainability Review 2016)