In the current competitive business landscape, the role of sustainability and integrated reporting is immense in almost all the industrial sectors. With the help of sustainability reporting, meaningful information could be gathered regarding economic, environmental, social and governance performance of an organisation (Busco, 2016). The current report would assess the sustainability reports of the two leading companies, BHP Billiton and Rio Tinto, operating in the mining sector of Australia. It has been identified that these two organisations have formulated their sustainability reports by following the guidelines laid down in “Global Reporting Initiative (GRI)”.
BHP Billiton and Rio Tinto publish sustainability reports for certain purposes, which are enumerated briefly as follows:
BHP Billiton:
BHP Billiton delivers the necessary information to the internal and external stakeholders regrading the various sustainability actions by providing GRI. In addition, it intends to ensure the success of its clients and customers on a global scale. By adopting GRI, the organisation has the chance of operating sustainably, accountably and safely. The management of BHP Billiton views sustainability reporting as a significant influential dynamic, which helps in the formulation of long-term values for both the internal and external stakeholders. Finally, it follows GRI reporting due to developing the values related to respect, trust, safety, reliability and brilliance (Bhp.com, 2018).
Rio Tinto:
Rio Tinto is involved in providing GRI reports with the intent to accomplish supreme standards in the areas of environmental management, safety, lucidity, efficiency, safety and governance. In other words, the organisation provides GRI reporting to deliver positive environmental and societal outcome. Thus, it aims to consider the various sustainability issues of the business in relation to four significant fields. They include economic development, responsible business activities along with safe and secured workplace (Riotinto.com, 2018).
BHP Billiton:
Certain types of stakeholders are deemed to be inherent in the sustainability report of BHP Billiton in 2017 and they include the following:
Rio Tinto:
Rio Tinto has certain groups of stakeholders, which are demonstrated briefly as follows:
Similarities:
The major similarity that could be observed from the sustainability reports of both the organisations is that they have adhered to the GRI principles in order to prepare their sustainability reports. Moreover, detailed descriptions of the major sustainability issues are disclosed in both the reports, which could have material impact on the business operations (James, 2015). Furthermore, detailed accounts of the stakeholders could be found from the sustainability reports of both the organisations.
Differences:
Certain differences are deemed to be inherent in the sustainability reports of BHP Billiton and Rio Tinto. BHP Billiton has reported sustainability performance review, which is not present in the report of Rio Tinto. However, a sustainability scorecard could be found in the report of Rio Tinto, while no such scorecard is present in the sustainability report of BHP Billiton. Finally, another difference observed is that BHP Billiton has disclosed the crucial information regarding the sustainability reporting priorities, while nothing has been mentioned in the sustainability report of Rio Tinto in 2017.
The provided information quality is considered as a significant portion of sustainability reporting. There are three significant factors affecting the information quality, which are relevance, reliability and comparability (Shoaf, Jermakowicz & Epstein, 2018). It has already been observed that the two organisations have conformed to the GRI principles associated with sustainability reporting. This implies that they have provided all the necessary information regarding their sustainability issues. This ensures the internal and external stakeholders of both the organisations that the information provided is relevant. On the other hand, the main sustainability areas include social, environmental rights, safety, social rights and safety (Stacchezzini, Melloni & Lai, 2016). Both BHP Billiton and Rio Tinto has disclosed necessary information regarding risk management approach, measures to deal with climate change issue along with maintaining safe and healthy work environment. Thus, relevancy is ensured in both the sustainability reports for the stakeholders. Finally, the formats of the reports are simple for the users to understand their implications, which assures the comparability aspect of the reports.
After evaluating the sustainability reports of BHP Billiton and Rio Tinto, it has been found that both the organisations have been consistent in adhering to the GRI standards. In order to detect the materiality issues, the GRI standards that are followed by both the organisations include G4-17 to G4-23. Moreover, in order to provide effective governance information, BHP Billiton adheres to the GRI standards of G4-34 to G4-52. For environmental disclosures, it follows the standard of G4-DMA.
For Rio Tinto, the organisation adheres to the guidelines laid down in GRI 103 in order to report information associated with its water management as well as waste management. For reporting all the information associated with staff safety and other issues, the organisation has adopted the principles laid down in GRI 401 and GRI 403. In a similar manner, the organisation has adopted the standard of GRI 305. Besides, both the organisations adopt the other GRI standards in relation to sustainability reporting.
All types of stakeholders want to gain understanding of the sustainability performances of the business organisations in the current era. Due to this, information is required in terms of social and environmental performance, corporate governance and measures in assuring employee safety. In accordance with the above assessment, it is evident that both BHP Billiton and Rio Tinto deliver all the information regarding the above-depicted sustainability aspects by adhering to the GRI standards (Stubbs & Higgins, 2014). Thus, it could be stated that the stakeholders of both the organisations could accumulate various sustainability information by analysing their sustainability reports.
Conclusion:
The above discussion clearly inherits the fact that BHP Billiton and Rio Tinto have conformed to the necessary GRI standards in order to report the necessary information pertaining to sustainability performance. It could be observed that the significant stakeholders of the organisations constitute of customers, staffs, shareholders, creditors, suppliers, community and government. Both similarities and differences could be observed from the sustainability reports of both the organisations. Finally, it has been analysed that BHP Billiton and Rio Tinto have adhered to the required GRI guidelines for preparing their sustainability reports in order to meet the information needs of their stakeholders,
References:
Bhp.com. (2018). Retrieved 9 June 2018, from https://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpsustainabilityreport2017.pdf
Busco, C. A. (2016). Integrated Reporting. Springer.
De Villiers, C., Rinaldi, L., & Unerman, J. (2014). Integrated Reporting: Insights, gaps and an agenda for future research. Accounting, Auditing & Accountability Journal, 27(7), 1042-1067.
Flower, J. (2015). The international integrated reporting council: a story of failure. Critical Perspectives on Accounting, 27, 1-17.
Hughen, L., Lulseged, A., & Upton, D. R. (2014). Improving stakeholder value through sustainability and integrated reporting. The CPA journal, 84(3), 57.
James, M. L. (2015). THE BENEFITS OF SUSTAINABILITY AND INTEGRATED REPORTING: AN INVESTIGATION OF ACCOUNTING MAJORS’PERCEPTIONS. Journal of Legal, Ethical and Regulatory Issues, 18(1), 1.
Riotinto.com. (2018). Retrieved 9 June 2018, from https://www.riotinto.com/documents/RT_SD2017
Shoaf, V., Jermakowicz, E. K., & Epstein, B. J. (2018). Toward Sustainability and Integrated Reporting. Review of Business, 38(1).
Stacchezzini, R., Melloni, G., & Lai, A. (2016). Sustainability management and reporting: the role of integrated reporting for communicating corporate sustainability management. Journal of cleaner production, 136, 102-110.
Stubbs, W., & Higgins, C. (2014). Integrated reporting and internal mechanisms of change. Accounting, Auditing & Accountability Journal, 27(7), 1068-1089.
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