Discuss about the Sustainability Reporting Style of Wesfarmers Limited and Woolworths Limited.
In the recent era, massive progress can be seen in the businesses all over the world and the businesses are expanding is a very fast pace. Thus, the companies are able to generate more amounts of revenues and profitability. However, it has been seen that the business activities of these companies have negative effects on the environment, community and the people of community. For this reason, it is the responsibility of the companies to adopt the strategies of Corporate Social Responsibility and Sustainability. In this situation, the Global Reporting Initiative (GRI) is considered as a major tool to promote sustainability and corporate social responsibility in the companies. The main aim of this repost is to compare and contrast the sustainability reporting style of two Australian companies that use GRI guidelines for sustainability. For this report, two Australia corporations are selected; they are Wesfarmers Limited and Woolworths Limited.
It can be seen that both Woolworths and Wesfarmers use to prepare well-structured sustainability report according to the guidelines of GRI. In case of both the companies, there are some major purpose behind the development of sustainability reports. They are discussed below:
The major purposes of sustainability reporting in Woolworths are discussed below:
People: Creating diversity in the workplace is a major purpose of sustainability reporting in Woolworths. Women should occupy 40 percent of the position of executives and senior manager’s posts in Woolworths as per the sustainability strategy of the country. In addition, the company has taken major initiatives to reduce the wage gap between men and women. According to the initiative of Federal Government’s Employment Parity Initiative, including indigenous people in the workforce is a major purpose of the sustainability reporting of Woolworths (woolworthsgroup.com.au 2017).
Planet: Another major sustainability reporting purpose of Woolworths is to make a healthy Australia by reducing environmental pollution. There are two sub purpose sunder this initiative. They are to work towards zero food wastage and to reduce carbon emission below 10% level (woolworthsgroup.com.au 2017).
Prosperity: Another major purpose of sustainability of Woolworths is to establish a trusted relation with their stakeholders. In this context, the purpose of Woolworth is to inspire the customers to buy their products in the healthy and sustainable way. With the help of sustainability reporting, Woolworths is determined to get the top quality ranking (woolworthsgroup.com.au 2017).
The sustainability reporting purpose of Woolworths is discussed below:
People: Development of people is one prime purpose of sustainability reporting in Wesfarners. It is the sustainability objective of Wesfarmers to provide safe workplace to the employees of their company. The employees of Wesfarmers get better opportunities to enhance their career (wesfarmers.com.au 2017).
Sourcing: Another major purpose of sustainability reporting in Wesfarmers is to maintain a good relationship with the suppliers of their company. The company is determined to source products in a responsible way without harming the environment.
Community: It is the purpose of Wesfarmers’s sustainability initiatives to provide their customers with safe products in order to make positive contribution towards the community (wesfarmers.com.au 2017).
Environment: Another major purpose of sustainability reporting of Wesfarmers is to reduce the amount of carbon emission in order to reduce the negative effects of climate change. In this process, waste reduction is another sustainability purpose of Wesfarners. As a result of this purpose, the company has taken many crucial initiatives to reduce the negative effects of environmental pollution (wesfarmers.com.au 2017).
Governance: Another major purpose of the sustainability reporting as per GRI in Wesfarners is to maintain robust policies for corporate governance.
It needs to be mentioned that every business organization develop the sustainability reports for some of the key stakeholders of their organizations. There is not any exception of this fact in the cases of Woolworths and Westerners. In this context, it needs to be mentioned that both Woolworths and Wesfarmers have the same stakeholders, which are interested in the sustainability reports of these companies. The first stakeholder is the investors. As the people of Australia become more environment and sustainability conscious, they consider the sustainability reports before investing (wesfarmers.com.au 2017). The second stakeholder is the community people. It can be seen that the operational activities of the companies affect the environment and the community people. For this reason, the people of community are interested in the sustainability reports of these companies as the sustainability actions will bring good for them. The next stakeholder is the young Australian that is in need of jobs. It needs to be mentioned that it is one of the major sustainable objectives of both the companies to create jobs in the market. Due to this, the young Australian will be interested in the sustainable reports of these companies (woolworthsgroup.com.au 2017). Thus, these are the major stakeholders of these two companies for sustainability reports.
From the above discussion, it can be seen that both Woolworths and Wesfarmers use to publish their sustainability reports on yearly basis. In this context, it is crucial to mention that both the companies use the guidelines of GRI at the time to prepare their sustainability reports. The overall objective of both Woolworths and Wesfarmers is same for sustainability reporting. However, there are some major differences between the sustainability reporting of Woolworths and Wesfarmers. The major difference can be seen in the purpose of sustainability reports of Woolworths and Wesfarmers. The three major purpose of the preparation of sustainability reports of Woolworths are people, planet and prosperity (wow2016cr.qreports.com.au 2017). Based on these three aspects, Woolworths uses to develop their sustainability reports. As per 2016 sustainability report of Woolworths, different type of description and information is provided in it. However, in case of Wesfarners, it can be seen that the company has different set of purpose of sustainability reports. Apart from the common purposes of sustainability, some additional sustainability purposes can be seen for Wesfarmers; they are sourcing and governance. It needs to be mentioned that the 2016 sustainability report of Wesfarners also includes all the details and information regarding the purpose of sustainability (sustainability.wesfarmers.com.au 2017).
Apart from the purposes, differences can be seen in the structure of the sustainability reports of these two companies. It can be seen that there are four sections in the 2016 sustainability report of Woolworths; they are performance highlight, group review, business review and other information (wow2016cr.qreports.com.au 2017). However, the structure of 2016 sustainability report of Wesfarners is different. There are four major parts in 2016-sustainability report of Wesfarners; they are sustainability at Wesfarners, managing director’s welcome, detail about the company’s major principles and details about the business of the company. By observing the sustainability repots of both Woolworths and Wesfarmers, it can be seen that the details about GRI reporting have been provided in different formats. In case of Woolworths, all the GRI indexes are provided at the end of the report with the page numbers. However, in case of the 2016 sustainability report of Wesfarmers, the GRI indexes are provided in the form of footnotes in each page (sustainability.wesfarmers.com.au 2017). Thus, as per this discussion, it can be observed that there are some crucial differences between the sustainability reports of Woolworths and Wesfarmers.
It needs to be compulsory for the companies to publish their sustainability reports based on the guidelines of GRI. The major reason is that the there are many benefits for the sustainability report preparation as per the guidelines of GRI. They are discussed below:
Building Trust: Sustainability reports help in bringing transparency about non-financial performance of the companies that helps in the reduction of reputation risks of the companies (globalreporting.org 2017).
Improved Systems and Processes: With the help of GRI guidelines, business organizations become able to examine the effectiveness of internal management and business decision-making processes of the companies (James 2015).
Vision and Strategy: Sustainability reporting helps the companies to properly engage with their stakeholders. This particular process leads to the development of robust visions and strategies for the businesses (Toppinen et al. 2012).
Reduction in Compliance Cost: The measurement of sustainability performance helps the companies in complying with the regulatory requirements and this process reduces compliance cost for the companies (Toppinen and Korhonen?Kurki 2013).
Competitive Advantage: With the help of sustainability reporting, companies can build goodwill in the market. This process provides them with the necessary competitive advantages (Fernandez-Feijoo, Romero and Ruiz 2014).
According to the above discussion, it can be observed that there are many benefits of the adoption of GRI guidelines for the preparation of sustainability reports. For this reason, it is compulsory for the business organizations to prepare sustainability reports based on the principles of GRI.
Conclusion
The above discussion shows the analysis and evaluation of sustainability reporting of Woolworths and Wesfarmers. The above discussion shows that both the companies have different purpose for the preparation of sustainability reports based on the guiding principles of GRI. The analysis shows that there are some key differences between the sustainability reports of Woolworths and Wesfarmers. They are the structure, content and information in the sustainability reports and others. The study also shows that there are many benefits of developing sustainability reports based on the principles of GRI. Thus, it is compulsory for the companies to adopt it.
References
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Commitment to corporate social responsibility measured through global reporting initiative reporting: Factors affecting the behavior of companies. Journal of Cleaner Production, 81, pp.244-254.
globalreporting.org. (2017). The benefits of sustainability reporting. [online] Available at: https://www.globalreporting.org/resourcelibrary/The-benefits-of-sustainability-reporting.pdf [Accessed 28 Oct. 2017].
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), p.1.
sustainability.wesfarmers.com.au. (2017). 2016 SUSTAINABILITY REPORT. [online] Available at: https://sustainability.wesfarmers.com.au/media/1835/edited-extract-of-wesfarmers-2016-sustainability-report.pdf [Accessed 28 Oct. 2017].
Toppinen, A. and Korhonen?Kurki, K., 2013. Global Reporting Initiative and social impact in managing corporate responsibility: a case study of three multinationals in the forest industry. Business ethics: A European review, 22(2), pp.202-217.
Toppinen, A., Li, N., Tuppura, A. and Xiong, Y., 2012. Corporate Responsibility and Strategic Groups in the Forest?based Industry: Exploratory Analysis based on the Global Reporting Initiative (GRI) Framework. Corporate Social Responsibility and Environmental Management, 19(4), pp.191-205.
Wesfarmers.com.au. (2017). Our approach to sustainability . [online] Available at: https://www.wesfarmers.com.au/investor-centre/company-performance-news/our-approach-to-sustainability [Accessed 28 Oct. 2017].
Woolworthsgroup.com.au. (2017). Corporate Responsibility – Woolworths Group. [online] Available at: https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility/corporate-responsibility [Accessed 28 Oct. 2017].
Woolworthsgroup.com.au. (2017). Environment and sustainability – Woolworths Group. [online] Available at: https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility/environment [Accessed 28 Oct. 2017].
wow2016cr.qreports.com.au. (2017). 2016 CORPORATE RESPONSIBILITY REPORT. [online] Available at: https://wow2016cr.qreports.com.au/xresources/pdf/wow16cr-full.pdf [Accessed 28 Oct. 2017].
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