The three possible motivations for the organisations to make voluntary social and environmental disclosures include the following:
Competitive advantage:
The organisations expect that maintaining positive relationships with their stakeholders would help them in gaining competitive advantage and thus, better economic outcomes could be accomplished. Moreover, such relationships would result in the formation of valuable capabilities and resources, which could become their competitive advantage sources, as these assets could distinguish them from their competitors (Bhattacharyya, 2014).
External pressures:
Many organisations conform to the moves of the other organisations, as they believe that not conducting the same might cause loss in terms of their survival and profitability and thus, they need to be addressed for mitigating their effects.
Societal expectations:
According to “Listing Rule 3.1 of ASX”, it is necessary for the organisations to disclose social and environmental information for meeting the materiality test. According to the guidance note of ASX, the organisations have equal responsibility to the shareholders, investors and market, which is significant for sustainability information disclosures (Aph.gov.au, 2018).
The two most significant initiatives considered after evaluating the social and environmental information disclosed by Healthscope Limited include the following:
Energy conservation and suitable use of natural resources:
For ensuring energy conservation, Healthscope Limited has installed Smart Meters, which are calibrated to deliver higher reporting capability on coverage of energy in line with policy. Power Factors Units have been installed at seven hospital sites, which has helped in minimising electricity demand and it has assisted in cost savings of 3% in 2017 (Healthscope.com.au, 2018). This initiative is important, as it would educate the employees in accomplishing sustainable work practices along with minimising environmental impact.
Commitment to support commitments:
In terms of social disclosures, Healthscope Limited has disclosed its commitments to support the Australian communities. It is involved in providing donating gold coins to various national charities, raising funds for economically backward kids and children and sustainable healthcare program for school children exposed to serious risk. This initiative is important, as it has focused on providing medical assistance, healthcare provisions as well as education opportunities to the indigenous communities (Healthscope.com.au, 2018).
In case of commitment to support communities, this initiative could be related with external pressures from the competitors. The reason is that all the organisations engage in charitable activities by donating cash and in-kind for assisting the economically backward classes and other indigenous communities. Moreover, this commitment would help Healthscope Limited to maintain its profitability and survival by developing a positive and favourable brand image in the market.
For energy conservation and suitable use of natural resources, the motivation of competitive advantage could be applied. This is because the competitors are involved in making such disclosures in order to minimise the negative impact on the environment. Therefore, with the help of this initiative, Healthscope Limited intends to maintain competitive advantage in the market by increasing its intangible resource values.
Before undertaking any investment decision, the financial health of any business organisation is always taken into consideration. The investors mainly consider liquidity, solvency, profitability and investment aspects by analysing different ratios to determine their returns on investments. The sustainability reporting initiatives are not provided adequate priority while making investment decisions. Hence, before investing in the shares of Healthscope Limited, the investors would consider the financial information and calculated ratios of the organisation.
References:
Aph.gov.au. (2018). Chapter Seven - Sustainability reporting: Current legislative and market requirements – Parliament of Australia . Retrieved 28 August 2018, from https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/Completed_inquiries/2004-07/corporate_responsibility/report/c07
Bhattacharyya, A. (2014). Factors Associated with the Social and Environmental Reporting of Australian Companies. Australasian Accounting, Business and Finance Journal, 8(1), 26-50.
Healthscope.com.au. (2018). Retrieved 28 August 2018, from https://healthscope.com.au/application/files/
Healthscope.com.au. (2018). Retrieved 28 August 2018, from https://www.healthscope.com.au/application/files/7215/0577/7988/HSO_Sustainability_report_FY17_v5.pdf
