ACCT20071 Foundations In Accounting

The introduction covers the following points on sustainable innovation:

• Sustainable innovation is an all encompassing innovative practice that leads to greater profits, better social results and less environmental consequences.
• It includes practices like changing consumer behaviors, using more renewable technologies etc.
• It facilitates change in business practices that leads to cost reduction and helping companies to grow and evolve.

Innovation and Performance

• Most multimillion companies disregard environmental implications over financial perspective. These implications are borne by the society which in turn benefits the shareholders.
• The relationship between financial performance and ESG performance can be shown with the help of a curve called the performance frontier curve
• The steeper the downward curve, the greater  will be the negative impact  that the ESG performance will have  on the financial performance
• The steeper the upward curve, the greater will be the positive impact that the ESG performance will have  on the financial performance.

Pushing the frontier

The major innovations require a business strategy that can help develop sustainable strategies:

• Identify material ESG issues- Material ESG issues include emissions, water and energy use ,employee safety procedures.
• Quantify relationship between financial and ESG performance- It is difficult to quantify ESG performance. Financial performance is however represented by net profit, gross revenue and other financial estimates which can be estimated fully.
• Innovate products, process and business models- The performance standards need to be met according to the benchmarks set. Innovations include reducing manufacturing waste, increasing efficiency that involves minor or moderate innovations
• Communicating the company’s innovation to shareholders- Shareholders need to be communicated effectively about the sustainable innovations practices. This will enable the firm to get long term investment.

Student 2

A discussion of the company  Rio Tinto and its sustainable practices for the year 2015 will be delivered as follows:

Sustainability report for 2015

The company Rio Tinto faced lots of challenges in the years 2015 , because of reduced demand for its products. However it came out of  those tough situations with a positive attitude.

Environmental disclosures-

The disclosures include:

• Energy usage- It introduced a program called Energy Leadership programme that is aimed to reduce environmental emissions.
• Water- the company has employed a Water management plan which monitors water usage .it is also aimed in improving water recycling ..
• Other emissions- the company has made significant advancement in removing the effect of ozone .
• Biodiversity- the company wants to make a positive contribution in terms of making sure that the region gets benefitted by its presence.

Social disclosures

The disclosures include:

• Occupational health and safety- this year they had achieved their best ever health and safety standards by achieving one million hours injury free
• Health- The company clinic provides exceptional clinic facilities to its employees. It also has active wellness educators that promote health education.

Sustainability report for 2018

The company advocated the need for operating their business in a sustainable manner and maintain safety and health standards of employees in a sustainable manner.

Environmental disclosure

The environmental disclosures include:

• Low carbon emissions- the company is aiming to reduce significant amount of energy emiisons.it further plans to decarbonize their business by 2050.
• Water-the water resource management program focuses on site related risks and managing water quality/
• Biodiversity-the company plans to minimize biodiversity loss and manage biodiversity management practices.it is aimed at rehabilitation and restoration practices that is aimed to compensate negative dangers to biodiversity.

Social disclosure

The social disclosures include:

• Occupational health and safety- as a result of an employee accident in Utah, the company redoubled their efforts in maintain safety of employees. They even physically inspected two sites, one in Australia and the other one in Canada.
• Mental health in the workplace- The company provides a facility of mental health and well being that aims to balance work life and personal life.

Conclusion

• ESG and financial performance are inversely related.-If one increases, the other one will decrease and vice versa.
• Sustainable innovation in products and processes can improve both financial and ESG performance at the same time.
• The company Rio Tinto has great CSR policies, with its primary focus on employee health and safety.