The Essay On Sustainability Reporting Practices In Australia Holds Significance.

Background on Sustainability Reporting Practices

Sustainability reporting practice is referred to as a report that is declared by a corporation as regards economic, environmental in addition to social influences caused by everyday operations. Sustainability reporting practices particularly in Australia is essentially concerned with proper communication of credible, pertinent information to a wide range of stakeholder groups counting members of the staff, financiers as well as potential customers (Rankin et al. 2012). A reporting entity needs to prepare proper General Purpose Financial Report that is entirely complaint with Australian Accounting Standard. However, the non-reporting entities can also prepare Special Purpose Financial Report that is not fully compliant with AAS.  Evaluation of current social issues in accounting is essentially examination of corporate reporting on particularly sustainability performance. Sustainability reporting as well as sustainability issues have received attention from firms, media, and makers of policy and accounting professionals. As such, much of this attention put focus on different sustainability information that are declared by corporations than on the impacts of sustainability which corporations are not reporting or else the manner in which sustainability can be taken into account by administration in the process of decision making. Analysis of sustainability issues include the evaluation of the extent to which information related to sustainability performance of corporations can affect the corporations’ duty of responsibility on different ethical, social as well as environmental issues to external shareholders. There are also certain issues faced in relating sustainability data amassed by corporations and assimilated within strategic management as well as decision making procedure (Drever et al. 2012).

However, corporate reporting regarding performance of sustainability requires presentation of disclosures that can be related to enhancement or else enumeration of social in addition to environmental performance. The disclosures that are important can be divided into different categories. These include disclosures expressing commitment to enhanced performance. This disclosure need to express commitment of the corporation to enumerate and augment overall social as well as environmental performance. In addition to this, there also needs to be disclosures that can present quantified measures. Furthermore, important disclosures are also necessary for identification of specified targets for particularly social as well as environmental performance. Essentially, this particular category required documentation of quantified targets rather than general pronouncements for enhanced performance (Schaltegger and Burritt 2013). Again, there are also requirements of disclosures that can present quantified data on performance against established targets. In addition to this disclosures are also necessary for the providing details of performance targets beyond the present year.  Furthermore, there is also need for disclosures that can present acknowledgement of measures that are utilized within a specific system of management. In addition to this, disclosures are also obligatory for identification of social as well as environmental factors that can influence the process of decision making or else processes of change.

Categories of Disclosures in Sustainability Reporting

As rightly indicated by Henderson et al. (2015) there is lower level of reporting on sustainability performance and diversity in approaches to assimilate sustainability performance data into specifically strategic management procedures. There is lower level of reportage on different facets of social as well as environmental performance as well as targets for performance in essentially the top 100 British as well as Australian corporation. This refers to the fact that performance has not been properly handled. According to reports, around 35% of ASX listed Corporation are expected to declare sustainability report during 2006. Again, the degree of sustainable reporting among 100 corporations in Japan as well as UK was approximately 80% and 71 % respectively. As per reports, the extent of report also varies considerably between different industries segments in Australia. Founded on the number of companies, ASX is controlled by four different industry, namely mining, manufacturing, finance as well as insurance and property and business services. Level of sustainability reporting in the mining and manufacturing sector is 24% and 29% respectively (Kpmg.at 2017).

As rightly indicated by Bebbington et al. (2014) the Australian Accounting Standards Board does not refer to specific accountabilities that can be related to management of conservational sustainability guideline. Again, characteristics of activities of AASB confines the effect of functions of (Australian Accounting Standards Board) AASB on the whole environment. Nonetheless, AASB is also conscious of liabilities to lessen different undesirable impacts. Thus, AASB also prescribes strategies along with actions for lessening of environmental impacts by means of maintenance of conformation with policies of the government associated as regards management of waste as well as energy among many others. However, AASB necessarily does not carry out and manage any kind of discretionary programs, nevertheless, the “Information Publication Scheme (IPS)”
 proposes to alter the framework of information that can particularly respond to diverse accessibility requests. This necessitates diverse agencies of Australian Government to announce significant information on periodical plans, stipulate diverse information that needs to be pronounced.

According to the annual report of the AASB, appropriate sustainability reporting on the moneys of public segment association sticks to specific directives of IPSASB pronounced by “Suggested Practice Guideline RPG 1 Reporting on Sustainability in the Long-Term of a particular Entity’s Finances” during the period of July in the year 2013.  Thus, declarations on Sustainability can be observed as a procedure of providing significant info by which different patrons can assess monetary, environmental along with social worth of a corporation (Jones and Mucha 2014). Again, this can also be simply referred to as triple bottom line procedure of reporting. By itself, sustainability reporting essentially delivers a rough draft of particular commitments, morals, and ethics along with doctrines of a business concern.

Challenges in Sustainability Data Management

As rightly indicated by Hahn and Kühnen (2013), Code of ethics for Professional Accountants announced in 2006 and thereafter corrected during the year 2008 was announced by “Accounting Professional and Ethical Standards Board (APESB)”. This necessarily presents diverse necessities of business concerns to adhere to the Global Reporting Initiative (GRI). Again, a survey undertaken by KPMG replicates the fact that majority of business concerns necessarily implements GRI and utilizes the directives as well as guidelines for sustainability reporting (Kpmg.at 2017). Again, the new processes of reporting concentrates on different procedures of reporting, emphasizes on comparatively, materiality along with accuracy in declaration of reports. Currently, there is an obligation for proper presentation of specific financial pronouncements, reports on environmental factors, and corporate social declarations along with sustainability pronouncements that required to be confirmed and simultaneously substantiated by particular specialised auditors of the corporation. Again, escalating regulatory necessities lead to expectation that businesses need to take into account and make declarations on different social together with environmental surfaces together with financial stuffs (Hahn and Kühnen 2013).

As rightly indicated by Junior et al.  (2014) the reporting framework or structure of the Global Reporting Initiative (GRI) fundamentally serves intention and purpose of commonly accepted framework for essentially reporting on economic, environmental along with social performance of a business concern. Again, the GRI framework need to be utilized by business concerns of any size of any location as well as of any sector.

As rightly indicated by Bebbington et al.  (2014) sustainability reporting can be considered as a significantly developing trend and there are certain leading firms that provide greater number of disclosures of diverse non-financial information. “sustainability reporting guidelines” contains standards that can help in describing detailed content of the report that again can assist in ensuring quality of information. GRI structure also comprises of diverse “indicator protocol” that can be related to performance indicators mentioned in the guidelines. Again, the GRI reporting also assists in deciding four diverse factors that need to be divulged and taken into account. These factors are necessarily materiality, inclusiveness of different stakeholders, and appropriate context of sustainability as well as completeness. Therefore, it can be hereby mentioned that reporting structure necessarily integrates economic, social along with environmental facets for reporting. As correctly put forward by Jones and Mucha (2014) factor of materiality in the process of reporting indicates towards inclusion of reasonable and estimable influence, risks and returns recognized by accurate inspection by individuals with detected proficiency in this particular field. In essence, materiality indicates towards approximation of global warming, identification of different vulnerable groups residing within local communities and civil society. Again, inclusiveness of stakeholders is also an important factor of GRI framework. Essentially, inclusiveness of stakeholders essentially need to take into account illustrations of different stakeholders to whom the corporation is answerable. In addition to this, the GRI framework also takes into consideration the sustainability context that necessarily includes thorough understanding as regards sustainable development, objective in addition to accessible information together with different dimensions of sustainable development (Frias?Aceituno et al. 2014). As a consequence, reports of corporations need to describe the manner in which different sustainability topics can be related to policy of the corporation, risks along with opportunities. In addition to this, the GRI framework also includes the factor of completeness where business concerns need to consider the entire chain of business enterprises both upstream along with downstream (Globalreporting.org 2016).

Regulation of Sustainability Reporting in Australia

Corporations utilize sustainability reporting for addition of values to different business operations of the corporation by maintenance of transparency concerning non-monetary performance, beginning conversation with different sponsors. This consecutively can help in avoiding reputational risk of business enterprises and direct towards augmented business procedures along with systems (Schaltegger and Burritt 2013). This essentially helps in appropriate internal management, enhanced decision making procedure that in turn directs towards reduction of costs by appropriate monitoring, enumeration of diverse issues such as consumption of energy, use of raw materials as well as proper management of waste. According to GRI, sustainability reporting can also assist in the comprehensive analysis of both strengths in addition to weakness and help in engagement with all the shareholders that is obligatory for sustainable declarations. However, the procedure of reporting can also aid in decrease of cost of amenability by proper enumeration of sustainability performance that again can help business concerns to placate different regulatory responsibilities effectively, avoid violations of cost and amass mandatory data effectively (Junior et al. 2014).

References

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Bebbington, J., Unerman, J. and O'Dwyer, B., 2014. Sustainability accounting and accountability. Routledge.

Drever, M., Stanton, P.A., McGowan, S.C., Raar, J., Sofocleous, S. and Ravlic, T., 2012. Contemporary issues in accounting. John Wiley & Sons Australia.

Frias?Aceituno, J.V., Rodríguez?Ariza, L. and Garcia?Sánchez, I.M., 2014. Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), pp.56-72.

Globalreporting.org. 2017. Global Reporting Initiative. [online] Available at: https://www.globalreporting.org [Accessed 15 May. 2017].

Hahn, R. and Kühnen, M., 2013. Determinants of sustainability reporting: a review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, pp.5-21.

Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.

Jones, K.R. and Mucha, L., 2014. Sustainability Assessment and reporting for nonprofit organizations: Accountability “for the Public Good”. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 25(6), pp.1465-1482.

Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: a historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), pp.1-11.

Kpmg.at. 2017. KPMG Austria | KPMG | AT. [online] Available at: https://www.kpmg.at [Accessed 15 May. 2017].

Rankin, M., Rankin, M., Stanton, P.A., McGowan, S.C., Ferlauto, K. and Tilling, M., 2012. Contemporary issues in accounting. Milton, Australia: Wiley.

Schaltegger, S. and Burritt, R., 2013. Contemporary environmental accounting: issues, concepts and practice.