The report that the company prepares stating about its social, environmental and operational activities is known as corporate social responsibility. It is important for all the stakeholders whether external or internal to get the financial and non financial information which would help them to deal with the risk arising. GRI or Global reporting initiative are the principles that are followed for the purpose of corporate sustainability. The environmental as well as social obligations that are performed by the companies must be accounted for in the most accurate manner. (Armstrong, 2015)
There are different formats used in order to provide non financial information through annual reports or sustainability reports. The adoption of GRI principles has proved to be beneficial for the government and also the businesses as it helps to identify the sustainability issues and spread awareness to the public. (Case, 2012) The adoption of these standards has helped the businesses to disclose the important information and also to manage the sustainability. There are three universal standards that the company needs to comply with so that it can provide correct quantitative and qualitative information. They are-
- GRI 101: This standard is considered to be the foundation of the CSR report.
- GRI 102: This standard comprises of the general disclosures that are required to be made by the company.
- GRI 103: This standard stands for ‘management approach’ which depicts the impact of the activities carried out by the management.
In a similar sense, we can define corporate governance as a set of guidelines and processes by which the company is being controlled as well as guided. It mainly focuses on satisfying the stakeholders – both internal and external. Corporate governance reflects the action plans that are taken in order to achieve the company’s objective and also helps to measure the performance of an entity. (Dash, 2016)
In order to compare the corporate reporting and sustaibility of two companies we need to carry out a comparative analysis. The companies that are selected by me fall under the same sector which is the mining sector. The name of the companies is Sandfire resource NL and BHP billiton limited. Now let us know about both the companies. (Donanldson, 2012)
Sandfire resource ln
Sandfire Resource Nl is one of the most leading producers of copper in australia. The company is also involved in exploration and mining of minerals. This company is the owner of DeGrussa Copper-Gold Mine which has a production of the best quality copper. This company has performed phenomenally in the past 3 years which could be seen by the movement of development, drilling, financing and construction activities. (Freeman, 2011) The achievements of this company were so remarkable that it had set a benchmark for the other companies that are based in Western Australia. The company has no only focussed on earning generating higher returns but also at satisfying the stakeholders of the company by making optimal use of its resources.
BHP Billiton Limited
This company is also one of the leading company of resources in the entire world. It is large company which is also involved in extraction and exploration of minerals. There are about 60000 employees employed in this company who are posted mainly in America or Australia and their headquarters is situated in Melbourne. The main resources of the company include iron ore, petroleum, coal and copper. The main objective of the company is to satisfy the shareholders by the way of wealth maximisation by processing, exploring and developing the natural resources. (Gow, 2016)
Pressure Of Csr Reporting On Csr Reporting
It has been observed in the past that there were various issues in relation to CSR in the mining and resources sector. There are many mining operators who are willing to comply with these CSR issues but the companies are a little afraid of being hurt in the long run. If the company fails to comply with CSR obligations then it might get affected adversely. This might lead to loss of reputation of the company and loss of trust of the stakeholders which is very difficult to be earned back. (Hubig, 2013)
The mining industry is facing a lot of pressure from certain environmentalist, activists and various other bodies that provide social services like NGO’s and other government legislation. The reason behind this pressure is that there is a huge environmental issues involved in the mining business such as the change in the climatic condition and also pollution. (Mattessich, 2016) There is one more issue apart from the environmental issue which is the global expansion because the lands that are discovered for expansion have the chances of being claimed by the public because of the growing population. It is not only important for the mining companies to comply with the standards but also the contractors should comply with it in order to avoid severe adverse situations. If the companies involved in the mining industry comply with the objectives of the CSR then it expected that it will have a good reputation in the market. This might be an additional point for the company over the competitors. Therefore, we can draw a conclusion that a lot of pressure is borne by the mining industry and its operators and the reports prepared by them not help them to enhance their public relation. (Noreen, 2015)
The Global Reporting Initiative principles have been followed by both the companies. Sandfire Resource LN and BHP Billiton limited both the companies usually conduct regular meeting with its stakeholders in order to understand the key sustainable issues. After carrying out a proper comparative analysis of the reports prepared by both the companies it has been found that the sustainability report of BHP Billiton is more impressive than Sandfire resource Ln both in terms of quantity as well as quality. One of the many objectives of CSR is to ensure that employees of the organisations stay safe and healthy. (Pratt, 2009) On reviewing BHP’s report it has been found that the discussion that has been held is divided into two sections. The first one is approach and the second one is performance. The Approach section of the report states the various activities that they undertake such as vaccinations, gym facilities and providing healthy food. It also states about the various issues that the company faces and how do they resolve them. The performance section of the report provides the users with the qualitative information which is represented in the form of graphs which depicts the improvement made by the company. It has been observed that the occupational illness of the employees was 4.2 per million hours worked the year 2017 which is 18% more when compared to the year 2016. In the case of contractors, it was 1.43 per million hours which shows that there was a 23% increase when compared to the previous year.
Now let us review the report of Sandfire resources. The report majorly consists about the mission and vision of the company which means what are the objectives of the company, the ways of achieving it and what does the company ensure. Supervisors review and awareness programs are two of the activities that are undertaken by the company. (Rogers, 2015) The mining companies has many cases of skin disease, hearing loss and silicosis but it is surprising to see that the company also accounts for minor injuries that occur to the employees. On reviewing the report for FY 2017 it was observed that there were no injuries or illness during this financial year. One more positive point was noticed that is the total recordable injury frequency rate has reduced from 7.08 per million hours to 5 in the FY 2016.
From the above diagram, it is understood that there was a further fall in the total recordable injury frequency rate. The TRIF fell from 5 per million hours to 4.2 per million hours. So we can conclude that there was an overall improvement of 9% over the period of 5 years. (Schnapf, 2011)
It is a difficult task to conclude about the reliability of the reports that is prepared by the management. The companies that are chosen operate at two different levels so it is obvious that the company operating at a higher level will obviously bear more risk than the company operating at a lower level.
After taking into consideration the current scenario, it has been proved that CSR reports are necessary to win the confidence of the stakeholders and also to survive in the long run. A business always requires high growth rate in order to flourish therefore, it must always keep the stakeholders satisfied.
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Case, P. (2012). Environmental Risk Management and Corporate Lending: A Global Perspective. Boca Raton, Fla.: CRC.
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