Corporate Government and Social Responsibility

Question: Discuss about the Corporate Government and Social Responsibility. Answer: Introduction: This report separately compares the sustainability performance of two organizations. The sustainability performance is compared as per the GRI G4 guidelines. The report notes the areas of improved sustainability of the two organizations for three aspects; economic, environmental and social. In the first part, the report compares the sustainability performance of Wesfarmers Limited. Wesfarmers Limited is a leading producer and supplier of metallurgical and thermal coal for domestic power generation. The company operates Curragh Coal Mine in Queensland and Bengalla mine in New South Wales. This report compares the sustainability reports of 2014 and 2015 of the company. In the sustainability reports of last few years, Wesfarmers Limited not only focused on financial performance but also economic contribution, environment, community support, people, governance, and carbon energy (www.globalreporting.org 2016). This report is going to compare the economic stability Wesfarmers Limited ove r last two years. It will also check how Wesfarmers Limited is working towards keeping the environment pollution free and their social responsibilities. Based on the outcomes of the comparison, the conclusion can be drawn. In the second part, this report compares the 2014 and 2015 sustainability report of Fuji Xerox. Fuji Xerox is a Japan based global company. Fuji Xerox Australia is a part of Fuji Xerox co ltd and owns 25% of Fuji Xerox co ltd. Fuji Xerox provides back office solutions for different organizations. The company is globally recognized for their commitment to sustainability. The 2014 sustainability report of Fuji Xerox was produced in Australia. Whereas, the 2015 sustainability report of Fuji Xerox was produced in Japan. Therefore, some unique influences of each country influence the sustainability reports. This report aims to find out those influences. Then the overall comparison will be executed as per the G4 GRI guidelines (Ainapur, Rao, and Iacocca 2014). In the last part of this report, the writer talks about his personal development through this assignment. For this purpose, he or she will write a reflective journal. Firstly, the reflective journal discusses about his knowledge on this topic prior to write this report and how this assignment helped him to gain knowledge. Secon dly, how he developed his knowledge on few particular topics and the relevance of that knowledge in his career as an accountant or manager. Thirdly, his believes and knowledge about ASX principles before doing this assignment and its relevance in his career as accountant or manager. Fourthly, how he developed knowledge about the uses of theories of the corporate social responsibility and how this knowledge is going to help him in his career. Finally, how completion of this report or assignment required the use of integrated reporting of environmental, social, and governance and Sustainability accounting. Wesfarmers comparison: Economic: Economic sustainability means how the available resources can be utilized by various strategies. Economic sustainability is very crucial for every company to function for long time and consistently earn profit. Economic sustainability is measured in monetary terms. The total asset of the company is measured in dollars to know how much this asset is earning profit by proper use of it. Economic sustainability encourages the use of existing resources. Economic sustainability concept is straightforward concept. However, different companies may have different potential obstacles. A company cannot maintain sustainability if they cannot track their expenditures and expenses. Companies should always evaluate their economic sustainability by any neutral outside consultants. The 2015 sustainability report of Wesfarmers Limited shows improved economic sustainability than the 2014 report. In 2015, the company has hired 517 new employees. Wesfarmers Limited paid $1,578 million in levies, tax, and royalties. This is a clear indication that they have improved their economic sustainability. The company has 205,000 employees as per the 2015 report and Wesfarmers Limited paid $7,830 million to its employees as salaries and other benefits. Apart from this, the suppliers of Wesfarmers Limited got payment of $43,045 million in the year 2015. The 500,000 shareholders of Wesfarmers Limited received dividends from their shares of amount in total $2,246 million. The entire figures clearly points out that Wesfarmers Limited is having a great improvement in their economic sustainability. In 2015, 2.2% of the total revenue for Wesfarmers Limited came from their resources division (sustainability.wesfarmers.com.au 2016). Environmental: Emissions from the company plants pollute the environment and causes harm to the society. Therefore, it is important to minimize the emissions to keep the environment pollution free. From the 2014 report of the company, it is clear that the company is working towards minimizing the emissions from their all operations. Wesfarmers Limited has introduced a technology with Aurizon to minimize the pollutions from coal dust. The technology is biodegradable and non-toxic. During the coal transportation, coal dust emission causes problem to the local people and the community. The new veneering station at Curragh Mine is working to resolve this problem. Curragh Mine is following the Coal Dust Management Plan of the Queensland Government. The greenhouse gas emission from the operations of Wesfarmers Limited is gradually decreasing since 2010. In 2014, the emission was lowest. However, in 2015 the greenhouse gas emission increased a lot and highest since 2010. Therefore, Wesfarmers need to thin k about it and take necessary steps to reduce the emission. Water is one of the valuable resources of environment. Efficient and effective water management is very important for the stability of the environment. Water has the importance to many of the stakeholders of the company. From the 2014 sustainability report of the company, it is clear that the company is trying to manage the water resource at its project sites. From 2010 to 2012, the water consumption was very less. In the year 2013 and 2014, the consumption of water was much higher compared to the previous years. However, from the sustainability report of 2015, it can be observed that Wesfarmers Limited has again improved the water management and reduced the water consumption. According to the 2014 report, Department of Environment and Heritage Protection of Queensland gave show cause notice to this company. In 2013 the company breached the terms and conditions of the Curragh Mine areas environmental authority. In 2014, Curragh mines bio diversity data monitoring program identified 10 species of reptile, 49 species of bird, 20 species of mammal which includes 13 species of micro bats, five species of amphibian. The company has planned to use this data to determine the necessary future assistance. Sustainability report (2015) of the company reveals that Curragh jointly with the landholder is working to introduce some management controls covering fire management, animals erosion, weeds and rehabilitation when required (Amos and Sullivan 2016). In both the 2014 and 2015 sustainability reports, the company has shown its concern about energy efficiency. At the Curragh mine, mobile lighting units were used to work at night. However, it was expensive and caused h igh emission of greenhouse gas. In 2014, as an initiative towards energy efficiency, Curragh started investigations to implement modern LED lightning technology. The LED lights reduce greenhouse gas emission, low cost and energy efficient. The 21 new LED units replaced the old 28 metal halide lights. Fuel usage reduced by 700,000L per year because of replaced energy efficient LED lights. Greenhouse gas emission reduced nearly around 2,000 tones Carbon Dioxide because of LED lightning project. This is a great step towards energy conservation. Social aspect: Labor practice and work place safety are the fundamental priority for every company. In the 2014 sustainability report, Wesfarmers has stated that they had introduced a safety assuring system in the previous (2013) year. The employees and supervisors of Curragh Mine discuss among themselves about the safety procedures and site safety standards to reduce the workplace injury. The 2015 report shows that the injury frequency rate at Curragh Mine was lowest since 2010. It is a huge improvement in labor safety. The managers and supervisors shown great amount of dedication to make the safety interaction program successful. At the Curragh Mine, within a span of one year Total Recordable Injury Frequency Rate reduced from 15.2 to 5.1 (www.wesresources.com.au 2016). Working in Coal Mines causes different health hazards to the employees. The 2014 and 2015 sustainability report of Wesfarmers Limited states that the company is committed to take care of the wellbeing of their employees. To provide positive and healthy workplace, the company has invested in different programs and controls that ensure the benefits of the employees (www.clearlycultural.com 2016) (Cheng et al. 2014 p.663-679). Wesfarmers Limited is aware of their responsibilities towards the society and the local community. Curragh employees avail essential services from the local community. In return, the company supports those communities and people who lives there as per their needs. In 2014, Curragh adopted modified approach to engage community organizations through the grants system. Funds are distributed according to the needs of the communities. In the first quarter of 2014, the Curragh Community Contribution Program from the community investment fund provided a financial support of total $469000. Curragh distributes the funds through different organizations like Blackwater PCYC, Riding for the Disabled Blackwater, and Royal Flying Doctors Service. In 2015, the cyclone Marcia struck the Rockhampton and Yeppon towns. Employees of Curragh Mine immediately responded and provided every necessary helps to those local communities and disaster victims. Funds were directly transferred to the local organizat ions. Wesfarmers Curragh provided support to 24 organizations including schools, youth groups, junior sports teams, kindergartens and historical societies. The company provided financial support according to the needs and circumstances in the range of $800 to $1600. The women employment program of Curragh is another social initiative to empower women and reduce gender imbalances (Linnenluecke et al. 2015 p.478-487). Fuji Xerox Comparison: The 2015 sustainability report of Fuji Xerox was made in Japan and 2014 report was made in Australia. However, the 2015 report and 2014 report follow same guidelines. In the sustainability, reports made as per the G4 Sustainability Guidelines. The standard disclosures made in the 2014 and 2015 reports are Strategy and Analysis (G4-1 and G4-2), Organizational profile (G4-3 to G4-16 except the G4-13), Identified Material Aspects and Boundaries (G4-17 to G4-22, G4-22 not applicable), Stakeholder Engagement (G4-24 to G4-24 to G4-27), Report Profile (G4-28 to G4-33), Governance (G4-34 to G4-50 applicable) (G4-51, G4-52, and G4-53 not applicable), Ethics and Integrity (G4-56, G4-57, and G4-58). Apart from these, disclosures related Economic, Environment, Human Rights, and Society are also mentioned in the sustainability report of Fuji Xerox. The 2014 sustainability report of Fuji Xerox Australia is influenced by the sustainability factors of Australia. The government of Australia has introduced a set of sustainability indicators- economic capital, social and human capital, and natural capital (Benn, Dunphy and Griffiths 2014). The set of sustainability indicators for the companies doing business in Australia comprises headline indicators to provide different information related to sustainability issues, supplementary indicators to understand the headline indicator issues, and crosscutting indicators to deliver demographic information (Bachoo, Tan, and Wilson 2013 p.67-87). The Australian laws and regulations also influenced the 2014 sustainability reports. Australia is aiming to replace the fuel fossil to avoid the energy crisis. The climate change of Australia, biodiversity, water consumption, and transportation costs all these factors influenced the report of Fuji Xerox Australia (Akbar and Ahsan 2014 p.375-396), (Aust ralia 2012), (www.asx.com.au 2016). The 2015 sustainability report of Fuji Xerox co ltd was produced in Japan. Therefore, it is obvious that this was influenced by the sustainability issues of Japan. In Japan, sustainability has become a common word for every company. The Japanese companies are spreading their business in global market. Therefore, maintaining the sustainability tops the priority list in Japan. The tax laws of Japan influenced the economic sustainability of the company. The resource scarcity issue is a big problem in Japan. That is why environmental sustainability always influences the sustainability performance and report of the companies working in Japan. Japan is very straight about transparency. Therefore, transparency in governance influenced the 2015 sustainability report of Fuji Xerox. Integrating the corporate social responsibility into the business operations is another factor that influenced the 2015 report. In Japan, from the past decade CSR awareness is growing rapidly. Last but not the leas t, cross-region and cross-sector factors are responsible for influencing the 2015 sustainability report of Fuji Xerox Japan. Fuji Xerox 2014 and 2015 sustainability reports shows the companys improvements and performance growth along with their concerns about environment friendliness and served the society through different initiatives. In 2014, the company increased its sales to 49% from 37% in 2009. During 2015, the company aims to boost the recognition of the Fuji Xerox brand by increasing the sales in global market. Business process outsourcing is area of proposed development for Fuji Xerox in 2015. In 2015, as a part of the marketing strategy Fuji Xerox plans to produce products, which meets the consumer demands. Fuji Xerox can win the trust of their consumers through this policy. In 2014, a printer related product safety issue came to highlight in the market (Sachamanorom and Senoo 2016). To resolve the safety related issues, in 2015 sustainability report Fuji Xerox has mentioned their concern and planned to improve safety and quality checking technologies along with maintaining the laws and regulations. In 2015 report, there is new proposal from the company management that will successfully check the production and sales issues related to customer complaints. The 2015 sustainability report gives assurance about good governance and increased product safety. Eco friendliness and pollution is a major issue that comes out from the 2014 and 2015 sustainability reports of Fuji Xerox. In the year 2014, the CO2 emissions increased 6% from 2013. In 2015, the company has shown its concern that the emission would more increase. According to Fuji Xerox, the pollution caused was due to their business expansion and increased sales and productivity. In 2015, the company me ntioned their initiatives towards reducing the pollution by improving their work policy (reduce paper use, use gas o electricity for energy) and office management (Smith 2013). Fuji Xerox continues to show their concern for their employees for last few years by reducing work hours for their employees. Compared to 2014, in 2015 the company targets to decrease annual work per hour to 1835 from 1878 (2014). From 2014, the company started a program to train the managers to achieve better productivity and innovative ideas to run the business. In 2015, the company aims to continue this program by implementing a three training program to improve the management skills of all managers along with a new problem solving induction. The 2014 and 2015 sustainability report shows that Fuji Xerox believes in strong ethics and handles all human rights issues with utmost priorities. The 2014 and 2015 reports show that Fuji Xerox is aware of their social responsibilities. The company has taken an initi ative in 2014 to educate the poor children in the nations (mainly Asia-Pacific) where the company does business. In 2015, Fuji Xerox aims to continue this program in Philippines and other Asia-Pacific regions. Fuji Xerox has supported the local communities, groups, and government to recover the people from the East Japan earthquake. Conclusion This report until now has compared the sustainability issues of two global companies. In the first part of the report, the sustainability reports of Wesfarmers Limited for the years 2014 and 2015 have been compared as per the GRI G4 guidelines. Based on comparison, the report has highlighted the areas of improvements in 2015 compared to 2015 and few critical issues. The economical sustainability of Wesfarmers Limited is continuously increasing and there is now reason to worry about it. The economic sustainability can be increased by accurate allocation of the resources and cutting the unnecessary expenses. The major area of concern that comes out from the sustainability reports is the environmental issue. Wesfarmers Limited has to reduce the greenhouse gas emission. In 2015, Wesfarmers limited recorded highest green house gas emission 2010. The company should modify their coal production process and implement eco friendly technologies. For this purpose, Wesfarmers can consult with te chnical consultants or organizations who deal with how to implement pollution free production process. Management of water resource was not at all satisfactory in the 2014 report. In 2015, the company tried to improve water management and reduce its water consumption. Wesfarmers mainly works at Curragh, which is a coalmine. The coal production process needs huge amount of water, but the company needs to utilize the water resource in such a manner that it meets the water demand without wasting the water unnecessarily. The social sustainability of Wesfarmers is very satisfactory as they help the local communities with all kinds of their needs and crisis. In the second part of the report, the sustainability reports of Fuji Xerox for the years 2014 and 2015 have been compared. This company should develop some effective strategies of corporate social responsibility for the internal and external stakeholders of the company. This company should include social upliftment program for the people through their action of CSR. The 2014 report was produced in Australia, whereas the 2015 report was produced in Japan. As a result, some country specific factors and laws influenced these reports. The report firstly checked what were the guidelines that were followed in 2015 report compared to 2014 report. Then the report checked the probable influencing factors that could influence the sustainability reports of Fuji Xerox. Finally an overall assessment and comparison of those two reports were done as per the G4 GRI guidelines. Fuji Xerox has concentrated more in profit making and ignored the environment safety. The emission of Carbon Di-Oxide is a very critical issue in the production process of Fuji Xerox. The emission is increasing every year and the company has forecasted that the emission would increase due to higher sales demand. Fuji Xerox should try to reduce the emission using modern manufacturing machines in their plants, using alternative energy sources, reducing paper uses. Fuji Xerox should not repe at the 2014 incident related to the product safety issues (Farneti et al. 2014 p.375-389). Fuji Xerox should do quality and functionality checking of every product before releasing it from the production plant. Apart from these issues, the company has kept good sustainability in economic and social aspects along with good corporate governance. Part D Reflective journal of personal development: Through making the internal report comparing the sustainability reports, I have gained an understanding of the significance of corporate governance, ethical and moral obligations, and social responsibility concepts and essential principles. Before studying the course, I did not have proper and deep understanding of these topics. Every organization has some social responsibility towards the local community and they should take care of it. Without any business ethics and moral, a company cannot be successful in long term. Now I can use this knowledge as a manager or accountant to compare more sustainability reports and access the improvements of the company. Every company has board of directors, company structure, induction, and training program. Apart from this, the company should protect the interests of the stakeholders of the company. I just had an overview of these aspects for the smooth running of any company. However, while doing the assignment and writing this report I have gai ned deep knowledge about these things. A proper guideline from the board helps the employees to highest productivity. Existing employees need to be trained with the new concepts and technologies through the officers training programs. New comers do not know the company norms and work process. Therefore, it is important to train them properly through the induction program of the company. This knowledge is going to help me in my future career when I will work as an accountant or manager for any company. Before studying this course, I did not have any idea about the ASX principles of good corporate governance and corporate disclosure requirements. I had only a basic idea of only corporate governance but not related to ASX in any way. However, after studying this course, now I know about this topic. ASX recommends every organization listed under ASX to achieve good corporate governance outcomes. However, ASX recommendations are not mandatory for every ASX listed company because every organization adopts different strategies to achieve good corporate governance according to the size of the firm, corporate culture, complexity, and history. An investor gains confidence to invest in an organization analyzing the governance of that organization. Corporate disclosure is the necessary information that every company discloses to its investors. The knowledge I got from this will help me in my career when I will analyze any companys governance as an accountant. While doing this assignment, I ac quired knowledge about the uses of elements and main theories of corporate social responsibility (CSR) (Yaldo et al. 2014). A company should not focus only on making profit by any means ignoring their social duties and responsibilities. CSR tells how different initiatives can be taken to help the society. Helping the local community builds a good relation with local people and it is very important for every company. The company can give away a small part of their profit to the charities, help the community as per their needs or take any green society program. I think that corporate social responsibility is important for every company to maintain sustainability in their internal operations. I will utilize this knowledge when I will work as a manager of any firm. Economic, Environmental, and social aspects plays a key role to keep the sustainability (Wiek et al. 2015 p.17-31). Financial balance and improvement in net asset is crucial for the stability of any company. However, taking care of the environment and fulfilling the duties towards the society is equally important to maintain the sustainability for every organization. A company can have growth neglecting the governance issues. 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