Integrated Reporting And Global Reporting Initiative: A Study On Wesfarmers Limited And Telstra Corporation

Overview of Integrated Reporting and Global Reporting Initiative

Discuss how the companies in Australia have adopted the Integrated Reporting and the Global Reporting Initiative.

Integrated reporting is basically a concise communication about all the aspects of the company including the strategy, the performance, its governance and internal control of the company. In short, it is the integrated representation of the financial as well as non financial factors aspects of the business. It provides the information in the greater context, with all the relevant data and helps company make the long term decision (Bizfluent, 2017). It includes the financial as well as sustainability report and is primarily aimed at providing financial allocation decisions. On the other hand, Global Reporting Initiative is an independent organization working internationally to help the businesses and the business organizations to understand, communicate and interpret the issues affecting the entire community and environment like the climate change, human rights and the corruption. There has been increasing pressure from the group of stakeholders off late including the government, investors and the debtors and creditors to be transparent in its conduct with respect to society and environment as well and so the company issues the sustainability report, the corporate governance report and the environment, social and governance report (ESG) report (Boccia & Leonardi, 2016).

Purpose and objective of business and of providing GRI and IR

The two Australian companies which have been chosen for analysis here is the Wesfarmers Limited and the Telstra corporation. While Wesfarmers is an Australian conglomerate which deals in the chemicals, fertilizers, coal mining and the industrial production, Telstra corporation is dealing in the telecommunication business and is involved in constructing and operating the networks, voice and internet, broadband, television and other entertainment products and services (Alexander, 2016). While Wesfarmers is the largest company by revenue in Australia, Telstra is the largest telecommunication company in Australia. Both the companies are listed on the Australian Stock exchange. Wesfarmers is the largest employer in Australia and is operating in countries like New Zealnd, United Kingdom, Ireland, Bangladesh and offcourse Australia. On the other hand, Telstra is having a worldwide presence and is working in almost all the major countries.

With regards to purpose and the objective of the businesses, the Wesfarmers focus on delivering value to the customers and a satisfactory return to the shareholders (Sustainability Report, Wesfarmers, 2017, pg. 26). Its long term vision includes engagement with the local communities and minimising the harmful environmental impact as far as possible (Dichev, 2017). Its short term mission includes achieving operational excellence with strong management capabilities and being accountable for strategic development (Sustainability Report, Wesfarmers, 2017, pg. 36). It’s business model comprises of core values like boldness, accountability, integrity and openness, all of which are aimed at meeting the requirements of society at large rather than restricting to only business success (Sustainability Report, Wesfarmers, 2017, pg. 44).

Analysis of Wesfarmers Limited and Telstra Corporation

On the other hand, the purpose of Telstra corporation is create value for the customers, shareholders and people at large (Dumay & Baard, 2017). Its vision is to be a world class technology company that helps the people to connect well and its mission is to empower everyone to thrive in the existing scenario (Sustainability Report, Telstra, 2017, pg. 15). It is three pillars of strategy which are delivering world class experience to customer, driving value and growth from the core and building businesses close to the core. Furthermore, the company has three strategic enablers namely networks for future, the digitization and the culture and its capabilities (Sustainability Report, Telstra, 2017, pg. 20). The purpose of both the companies to report or provide for the Global Reporting Initiative is to align with the best reporting practices and making business as transparent as possible. Telstra was one of the first companies in Australia to adopt corporate governance and the IFRS as well (Visinescu, et al., 2017). Where Telstra aims to achieve the global recognition in terms of digitization through involving all in the value chain, Wesfarmers aims to achieve the best for the community, its employees and society as a whole (Sustainability Report, Telstra, 2017, pg. 38)

Stakeholders and their interest

There can be many stakeholders who could be interested in the given reports as because each of the Integrated Reporting and the Global Reporting Initiative has a lot to do with the measurement of performance of the companies as to whether or not they are meeting the expectations. The stakeholders can be internal as well as external (Werner, 2017). Internal stakeholders include debtors, creditors, employees and their families, the management and the existing shareholders. External stakeholders include the banks and the financial institutions, the government and the tax authorities, the institutions who are monitoring the environmental damage and the impact of companies’ activities on it. This is applicable to both the companies and the table below shows the relevant stakeholders for each of the companies.

Companies	Type	Stakeholders
Wesfarmers Limited	Internal	Debtors, creditors, employees and their families, the management and the existing shareholders
External	Banks and the financial institutions, the government and the tax authorities, other legal departments and environmental pretection and conservation authorities
Telstra Corporation	Internal	Debtors, creditors, employees and their families, the management and the existing shareholders
External	Banks and the financial institutions, the government and the tax authorities, other legal departments and environmental pretection and conservation authorities

All of them are interested for different objectives like the prospective investor wants to know that if the company is complaint of the law and regulations, is not into any litigations and is earning and making profits reasonably. Furthermore, the government authorities are interested to know if the company is investing in sustainability measures and how the company is ensuring compliance to the corporate governance. It also wants to the know that whether the company is paying taxes on time (Sustainability Report, Telstra, 2017, pg. 25). The internal employees, debtors and creditors are concerned and interested in the integrated reporting becuase of the fact that whether both the companies are making contributions to the social and employee welfare, whether are meeting the safety and quality standards with respect to the sale of products (Vieira, et al., 2017). Finally, auditors are one more interested party to the disclosures in the report as they want to ensure that the company is meeting all the laws and regulations, they are meeting all the requirements of the conceptual framework.

Applicable Stakeholders

Important similarities and differences between the reports

There are many similarities in which the reporting has been done in the annual reports with respect to the Global Reporting Inititative. Both the reports have enclosed the Sustainability and the Corporate Governance Report individually (Sithole, et al., 2017). Futhermore, both the companies have also shown who are the directors, the KMPs,  the senior management personnels and the directors report enlisting the remuneration details of the directors. Wesfarmers as the biggest company in Australia has taken steps to do welfare for Australia as a whole in terms of increasing local sourcing and giving more opportunities to the local vendors, improving product quality undergoing multiple testings, introducing diversity at workspace by having as much as 2.7 of indigenous workforce, ethical sourcing and contributing to improving health and safety in the country (Sustainability Report, Telstra, 2017, pg. 45). The company has also contributed in community contributions to the extent of $ 73 Mn and has also invested in settin up renewable energy resources for the local people, thus also contributing towards climate change. On the other hand, Tesltra has invested in digitization of media for local people and mitigating the climate change impacts and improving the resource efficiency (Sustainability Report, Wesfarmers, 2017, pg. 67). It is making a meaningful impact in the area of reusing and recycling the electronic waste. In terms of the differences in reporting, Wesfarmers has included a separate section on the risks and opportunities being faced by the business in the coming future, etc whereas the same does not appears in Telstra’s GRI Report.  The other point of difference has been the code of conduct and the policy frawework for the customers and people in order to have good business practices and satisfy corporate governance, which has been disclosed by Telstra and not by Wesfarmers

From all the above discussion and the analysis it can be concluded that the sustainable report has become inevitable means of information on the annual report. This is so because of the type of information that is being contained in it. The same should be there in order to comply with the corporate governance norms as it shows what all sustainable activities the company has been involved in and whether or not the only objective of the company has been profit making or taking social initiatives as well.

Report evaluation and Conclusion

From the abive analysis and study of the sustainability report, it acnbe concluded that both the companies have complied with the gri 102 norms and have given sufficient diclosures on the social, cultural and environmental engagements that the companies have been involved into. Both the companies have specifically focused on creating value in the chain besides adhering to the governance norms in the sustainability process  (Raiborn, et al., 2016). It is in compliance with the sustainability standards and the needs and expectation of the relevant stakeholders have been given due importance. While the Coles and Departmental stores have focused on the employee safety and investment in the employee improvement, the office works and industrial division of Wesfarmers has mainly focused on contributing to the society in terms of funds. They have also improved big time in dropping the injuries rate in each of the above division which is now the lowest in the last 5 years  (Linden & Freeman, 2017). Telstra on the other hand, has focused mainly on the employee improvement, safety measures and using renewable sources of energy as it has a huge energy requirement. It has also been focusing well and improving with regards to the dumping of the biodegradable waste and electronic waste. The company has also been able to reduce the carbon emmissions over the past few years. All in all, the information which has been disclosed in these reports by Telstra and Wesfarmers can be said to be satisfying all the needs of the stakeholders as the company has included all the financial information with the relevant supporting and facts in the sustainability report (Knechel & Salterio, 2016). They has listed all the activities they have done in pursuit of making society and environment a better place with the help of sutainability report and the corporate governance report.

References

Alexander, F., 2016. The Changing Face of Accountability. The Journal of Higher Education, 71(4), pp. 411-431.

Bizfluent, 2017. Advantages & Disadvantages of Internal Control. [Online]
Available at: https://bizfluent.com/info-8064250-advantages-disadvantages-internal-control.html
[Accessed 07 december 2017].

Boccia, F. & Leonardi, R., 2016. The Challenge of the Digital Economy. Markets, Taxation and Appropriate Economic Models, pp. 1-16.

Dichev, I., 2017. On the conceptual foundations of financial reporting. Accounting and Business Research, 47(6), pp. 617-632.

Dumay, J. & Baard, V., 2017. An introduction to interventionist research in accounting.. The Routledge Companion to Qualitative Accounting Research Methods, p. 265.

Knechel, W. & Salterio, S., 2016. Auditing:Assurance and Risk. fourth ed. New York: Routledge.

Linden, B. & Freeman, R., 2017. Profit and Other Values: Thick Evaluation in Decision Making. Business Ethics Quarterly, 27(3), pp. 353-379.

Raiborn, C., Butler, J. & Martin, K., 2016. The internal audit function: A prerequisite for Good Governance. Journal of Corporate Accounting and Finance, 28(2), pp. 10-21.

Sithole, S., Chandler, P., Abeysekera, I. & Paas, F., 2017. Benefits of guided self-management of attention on learning accounting. Journal of Educational Psychology, 109(2), p. 220.

Vieira, R., O’Dwyer, B. & Schneider, R., 2017. Aligning Strategy and Performance Management Systems. SAGE Journals, 30(1).

Visinescu, L., Jones, M. & Sidorova, A., 2017. Improving Decision Quality: The Role of Business Intelligence. Journal of Computer Information Systems, 57(1), pp. 58-66.

Werner, M., 2017. Financial process mining – Accounting data structure dependent control flow inference. International Journal of Accounting Information Systems, Volume 25, pp. 57-80.

Sustainability Report, 2017, Wesfarmers, pp. 16-86

Sustainability Report, 2017, Telstra Corporation, pp. 9-6