Accounting Ly Anh Tuan s3818425 Sustainability Reporting Practice Individual Report-2-2 PDF

Preview

Summary

Understanding Financial Reports and Notes to the Financial Statements - Group Report Part A...

Description

Accounting in organizations & society Sustainability Reporting Practice Individual Report Ly Anh Tuan-s3818425 Lecturer: Pham Thi Minh Thuy

Words count: 1263 excluding table of contents, cover pages and references Contents 1.

Introduction...................................................................................................................................1

2.

Identification of similarities and differences in reporting..............................................................1

3.

‘what, how and why’ of sustainability reporting............................................................................2

4.

Conclusion.....................................................................................................................................3

5.

Reference.......................................................................................................................................4

1. Introduction In this essay, I will analyze the content and context in the sustainability reports of two companies which are Sainsburys and Vinamilk; therefore, compare theirs reports to identify all differences and similarities between them.

2. Identification of similarities and differences in reporting The structure of sustainability reports from Sainsburys and Vinamilk is quite similar. Both Vinamilk and Sainsburys provided and analyzed information into 3 topic areas which are environment, society, and governance performance basing on GRI standards (Global Reporting Initiative n.d). Looking at the environmental sector of reports, they all showed theirs interest in dealing with environmental burden such as climate change and demonstrated their actions. Both of the reports indicated how they applied cutting-edge technology in order to minimize the emission, water abstraction and waste as well as showed the statistic of percentage of reduction compared to the previous year. In order to show their concern about the surrounding, Vinamilk and Sainsburys all implemented their program to tackle and prevent the climate change such as “One million green tree for Vietnam Fund” from Vinamilk and the partnership between Sainsburys and Woodland Trust that had planted 3 million trees. Moving to the social section, those reports all included human right act and provided information about organizations’ impact upon people and community. Both the organizations not only tried to serve customers with the highest quality , safest products through strict control from input to

output but also showed committed to social cohesion with several programs like Sainsbury had helped to generate more over 35millions dollars for charity or Vinamilk with “School Milk”. But there are some differences between the sustainability report from these two companies. Sainsburys continued its environmental report by reporting how they source their products ethically and sustainably since Sainsburys is a one of the biggest retailer company in UK so coping with its suppliers is a big important part. Providing specific details about the way they source and support farmers, growers and suppliers around the world made Sainsburys’ product more sustainable, more environmentally-friendly and therefore attracted buyer easier. In addition, because of being a giant supermarket chain, Sainsburys had to indicate information about dealing with food waste, plastic and packaging as well as applying modern technologies in order to minimize emission and energy in their logistics and stores. As for Vinamilk, the company used lots of energy, resources like water and energy during its operation so they reported the volume to show they were not polluting and were sustainable in the long run. By publishing the report, along with focusing on the economics, Vinamilk is highly aware of its impact on the community and the sustainability of the society. This difference in what is being reported in social part is because of the difference in operations of the 2 companies. Sainsburys has lots of stores and required a lot of employee so company’s policy and treatment contributed significantly to employee’s engagement. Vinamilk is a manufacturing company so their report focused a lot about worker satisfaction through benefits, safety and health care and training programs. Sainsburys was more active in communities than Vinamilk may be because Sainsburys is primarily retailer and their activities are easily visible to consumers due to the large number of stores. Implementing activities related to community helps company enhance the image and legitimacy in the eye of customers and other stakeholders.

3. ‘what, how and why’ of sustainability reporting For “what is being reported”, for environmental sector, because of concern about the surrounding, manufacturing company like Vinamilk had to demonstrate specifically all information about its carbon emission, resources usage from their process such as transportation, livestock activities as well as show all certificates, technologies ,plans they used to claim that they are eco-friendly. As for Sainsburys from retailer sector, their operation required lots of logistics, supply chain and energy for its stores so their report disclosure how they had decreased emission, maximizing energy and water efficiency, and keeping food waste at minimum level. We can see that organization not only applied technologies like aerofoil technology to save energy but also collaborate with other organizations to tackle climate change, decrease the environmental impact of their raw materials such as working with Consumer Good Forum on its zero net deforestation commitment. For social part, while Vinamilk provided information about work environment, salary, policy , benefit as a way to meet employees ‘concern, Sainsburys indicated range of event supporting LGBTA , programs for the disability and

policies in order to show their commitment to respect human rights and specify how they do this in relation to coworkers, clients and suppliers .The reason for “why are they reporting it” is most likely because it will help improve company’s reputation and build and enhance stakeholder’s trust and engagement .Therefore increasing the profit since according to Forbes in 2018, nearly 90% of customers said they were willing to purchase a product or service based on a company’s support on a social issues. In addition, providing sustainability reporting is a way to build legitimacy for corporate activities as according to legitimacy theory if society is not persuaded that a company is operating in an acceptable or legitimate manner society will effectively revoke the organization’s ‘contract’ to continue its operations. (Eugénio, Lourenço & Isabel 2013). Finally, having a green workplace has benefits of keeping good employee you already have as 61% of HR professionals said their employees tended to stay because of their company’s environmental responsibility program (Stringer 2009). And by “how are they reporting it”, Sainsburys and Vinamilk each has their own approach because of different aspects. For Sainsburys, company aims to become the most trusted retailer providing ranges of products from grocery to electronics so the report has to reflect the consumption of resources usage in stores and supply chains, food waste and the way they source products from other countries to show they can make a positive impact on the economy, the environment and society. For Vinamilk, it is a different performance measurement since their activities affect the environment and society significantly so the information need to be conducted in a higher standard and provide how they attempt to decrease negative impact on environment as well as find way to use natural and energy resource effectively. Unlike retailer sector, Vinamilk reported more thorough than Sainsburys regarding safety in workplace and workforce by listing all programs, guidelines, safe condition, and health insurance because Vinamilk produced their products by their own so information has to be detailed.

4. Conclusion From my perspective, sustainability reports appear to be a tool for organizations that build transparency and accountability in the problems by dealing with highly complex and complex social, environmental, and economic environment that financial traditional reports cannot do. Non-financial performance is usually a driving factor for a business’s long-term success so a good sustainability report brings a range of benefits for company like Vinamilk and Sainsburys such as managing future risks better , improving reputation and brand loyalty, or avoiding being criticized for damaging environment, society. In term of

future trend of sustainability report, I reckon it has changed

significantly from an ambitious concept to a widely trend around the world with 86% of the companies in the S&P 500 Index® producing sustainability or corporate responsibility reports in 2018(Globenewswire 2019).The trend will continue increasing significantly in ASEAN where is still struggling with child labor, corruption, human rights abuses as GRI office has been opened in there in order to support ASEAN companies with relevant services and training, helping them identify manage

and report their most material environmental, social and governance (ESG) impacts (Globalreporting 2019).

5. Reference Vinamilk 2018, Sustainable Development Report 2018, sustainability report, Vinamilk, viewed 15 April 2020,< https://vinamilk.com.vn/static/uploads/article/1555043744c9bbd26b3ab88182c259011def719526d227eb55ea83143ed04fba61ec314474.pdf> Sainsburys 2018, Sainsburys Sustainability Report 2018, sustainability report, Sainsburys, viewed 15 April 2020,< https://www.about.sainsburys.co.uk/~/media/Files/S/Sainsburys/documents/making-adifference/Sustainability_Update_2018.pdf> Esley, W 2018, 'Why Your Company Should Be More Socially Responsible', Forbes, 30 May, viewed 15 April 2020, . Globalreporting 2019, 'Helping SE Asian companies report on sustainability', Globalreporting, 3 September, viewed 15 April 2020, . Globalreporting n.d, ' GRI AND SUSTAINABILITY REPORTING', Globalreporting, viewed 15 April 2020, . Globenewswire 2019, 'FLASH REPORT: 86% of S&P 500 Index® Companies Publish Sustainability Reports in 2018', globenewswire, 16 May, viewed 15 April 2020, . Stringer, L 2009, Green Workplace: Sustainable Strategies That Benefit Employees, the Environment and the Bottom Line, Pan Macmillan, New York. Eugénio, PT, Lourenço, CI & Isabel, AM 2013, 'Sustainability strategies of the company TimorL: extending the applicability of legitimacy theory', Management of Environmental Quality: An International Journa, pp. 570-582, viewed 17 April 2020, ProQuest Central database, ....