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Casestudy
Since its
inception in 2011, Treasury Wine Estates (TWE) has become one of the world’s
largest wine companies. Originally the business was a division of the Foster’s
Group, but was demerged from the rest of the Group in 2011. TWE operates in
four global regions: Australia and New Zealand; The Americas; Asia; and Europe.
TWE focuses on grape growing and sourcing; winemaking and marketing, and
employs over 3,400 people. TWE is one of Australia’s largest wine companies, accessing over 13,000 hectares of vineyards.
You have been
employed by the company as an accountant aftergraduatingfrom RMIT University
two months ago. After reviewing your CV andnoticingthat you have successfully
completed several sustainability relatedcoursesduring your study, the Chief
Executive Officer (CEO) of TWEassignedthree independent but related tasks to
you. The three tasks are asfollows.
(Note: TWE is a real-life entity. All of your
research,analysis,discussions and recommendations relating to this case study
shouldbebased on real world information andconditions.)
AssignmentTwo
Contentrequirements
AssumetheCEOissatisfiedwithyourreport(AssignmentOne)andwithinAssignment
One you have recommended TWE to
producesustainabilityreportstoexternalstakeholders.Tofollowup,theCEOasksyouand your colleagues to completeasecond
business report to address his followingrequirements:
Why should TWE provide
a sustainability report?
To whom should these
reports beaddressed?
What information
should bereported?
How should the
information bereported?
Withinthereport,theCEOalsoasksyour
grouptoapplyonetheoryintoyourdiscussiontoexplainandjustifyyourrecommendationsastowhy,towhom,
what and how information should bereported.
Submissionrequirements
Submitted:
A group of
three or four students (this is a group assignment). Individual assignments
will not be accepted.
As this is a
group assignment submitted by one student representative of a team, an
Assignment Coversheet completed and signed by all members of that team is
required.
·
WordLimit:
Maximum 2,500 words (notincluding executive summary, table ofcontents,references and appendices). Word count includes every word in the bodyoftext (from your Introduction section to the end of Conclusionsection,includingfigures,tables,headings,etc).Every100wordsabovethewordlimit attracts 0.5 marks deduction of availablemarks.
Below is a Sample Paper. You Can Order a Custom Essay Written From Scratch From Our Website. Click Here to Order.
SUSTAINABILILITY
REPORTING
Student’s
Name
Professor’s
Name
Institution
Course
Date
Executive Summary
Sustainability
reporting (SR) is an essential aspect of the business. The strategy brings
about numerous benefits to an organization’s operations. Some of which include cost-efficiency
and creating competitive advantage in the market. Following the legitimacy theory, a business practices should observe
both social and environmental factors. Due to the ‘social constructs’ of the
model, the intended audience should thereby be the stakeholders. TWE should
implement annual SR through the company’s website.
Contents
Executive Summary. 2
1.0 Introduction. 4
1.1 Background
Information. 4
1.2 Purpose. 4
1.3 Scope. 4
1.4 Limitations. 4
1.5 Assumptions. 5
2.0 Discussions. 5
2.1 Reasons Why
TWE Should Provide Sustainability Report. 5
2.2 Intended
Audience for Sustainability Reports. 7
2.3 The Type of
Information to Report 8
2.4 Ways in Which
Information should be Reported. 10
3.0 Conclusions. 12
Sustainability
Reporting
1.0 Introduction
1.1 Background Information
A sustainability report is a
corporate social responsibility disclosure that presents a reasonable performance
over a specified period (Global Reporting Initiative, n.d., 40). According to
Global Reporting Initiative (2013, p.3), 95% of the globe’s 250 most
significant firms are already generating sustainability reports. Corporations
seem to be considerably embracing sustainability reporting (SR). Treasury Wine
Estates (TWE) should implement SR addressing it to the company’s stakeholders.
1.2 Purpose
This
report aims to examine the role SR plays in a company as well as to determine
the type of audience and information suitable for SR. The assignment also
purposes on identifying an appropriate manner in which reporting could be done.
1.3 Scope
The task covers some of the reasons
to why sustainability reporting would be of significance to TWE. The assignment
also identifies the appropriate audience for TWE’s SR. Another thing that report
assesses is the kind of information that TWE should report. Finally, the assessment
provides ways in which knowledge should be communicated at TWE.
1.4 Limitations
The
main obstacle was lack of sufficient evidence. There is little research done concerning
sustainability reporting. Time was also challenging since there was minimal
information available.
1.5 Assumptions
Just like corporate social
responsibility, sustainability reporting results in continuous positive
business performance.
2.0 Discussions
2.1 Reasons Why TWE Should Provide Sustainability
Report.
Worldwide, there
is an increasing focus for corporations to embrace SR over the last ten years
(Global Reporting Initiative, 2013, p.3). The massive embracement of producing
formal statements could probably be due to the broad nature of the
sustainability concept. The aspect of
sustainability is entirely broad as it entails three building blocks namely
economic, social and environmental concerns (Petrini & Pozzebon,
2010, p.363). For the social aspect, a company
should much value people who include its employees and the neighboring society.
Employees should be prioritized, and a firm should even consider strategies
related to giving back to the community (Mujtaba,
& Cavico, 2013, p.59). In regards to
the environmental concept, it is the role of the company to ensure prevention
of damage to nature as a result of its business practices such as manufacturing
and consumption of the firm’s products (Sutton, 2004, p.18). Under the economic dimension, the business is expected
to meet its profitability margin legally and morally (Fontaine, 2013, p.111). The concept of sustainability
is diverse, and any diversion would bring about adverse impacts to the company.
Sustainability
reporting would be of significance to TWE in numerous areas. Global Reporting
Initiative (2013, p.2) asserts that SR creates a culture of transparency which
would bring about a highly accountable and responsible corporate surrounding.
Trust would be established at TWE, and this would elevate the value of the
brand as well as boost the company’s performance. Information in regards to the non-financial
elements of the business is also critical for the market’s sufficient
functioning. Besides, SR would create the competitive advantage to TWE.
Enterprises perceived as innovators and leaders can be in a more powerful
bargaining stand when it comes to things like alluring investment and entering
new markets (Global Reporting Initiative, 2013, p.7). In fact, due to the
decreased prices of products as a result of minimal production expenditure
increases customer loyalty especially when there is zero switching costs in the
market.
SR is also a
cost-efficient strategy for the business. First, it helps in minimizing
expenditures related to compliance (Global Reporting Initiative, 2013, p.3). Analyzing
sustainability performance can help TWE meet its regulatory requirements
appropriately, and thus this would help the company prevent costly breaches.
Secondly, SR increases innovation. Enhancement of processes and systems brings
about continuous positive performance and raises accountability (Global
Reporting Initiative, 2013, p.3). Costs associated with overall production
would consequently decline at TWE. According to
the legitimacy theory, a company should continuously seek to make sure that
their operations are within the bounds of their respective areas (Cuganesan,
Ward & Guthrie 2016. p.4). TWE should embrace SR since the legitimacy model
is based on the ‘social contract’ concept between an organization and the
community in which it operates. The survival of an organization is threatened
if the society’s views are that the enterprise has breached its commitment (Cuganesan
et al., 2016. p.4). TWE should, therefore,
provide reports since its transparency would offer proof to the society of its positive
contributions to the environment and the aspect of people. Through submissions
of SR, TWE would substantially boost its reputation in the global community.
2.2 Intended Audience for
Sustainability Reports
Sustainability
reports should be addressed to TWE’s stakeholders. Lee
(2007, p.5) assert that stakeholders are individuals interested in the
occurrences of the business and they include the community, shareholders, government,
consumers, employees and the management.
Besides, the concept of sustainability involves several entities in regards to
its social, economic and environmental issues.
According
to Mohamed, Olfa, Faouzi (2014, p.215) the legitimacy theory is grounded upon
two notions. The initial concept is that enterprises should legalize their
operations. In this case, TWE should address its reports to the government to show
their compliance to the expected standards. TWE may include things like some of
its policies it has incorporated in its organization. Failure to adhere to the anticipations
may result in sanctions (Mohamed et al., 2014, p.216). TWE needs to acknowledge
the government to avoid unnecessary penalties. The second idea is that
companies can gain through a legalized action founded on social responsibility
practices. The legitimacy theory shows that an organization should address the
rights of the public on the whole and not just those of its shareholders and
investors (Faisal, Tower, &
Rusmin, 2012, p.21; Mohamed et al., 2014, p.215). Thereby, TWE should
significantly consider the society as one of its audience as this would
substantially meet the expectations of the community. Showing its compliance
towards the rights of the public such as proper disposal of wastes would
increase TWE’s chances of operating in it various regions and perhaps venture
into new markets due to its global reputation.
In regards to
the legitimacy theory, one of the social roles a company has is looking after
its workforce (Mohamed et al., 2014, p.209).
Employees are of utmost importance to a company (Hanson,
Hitt, Ireland, & Hoskisson (2017, p.110). Without the workforce, the
primary purpose of a company which is attaining sustainability through making
adequate profits would not be met. Profitability is reached through customer
satisfaction and retention. Only staffs can bring about consumer loyalty since
most workers tend to have direct contact with clients on a daily basis.
Addressing the reports to the employees would not only inform them of TWE’s present
position but would also be motivating enough as they would feel significantly
involved and part of the business. Employee engagement considerably results in
high numbers of satisfied consumers and increased profit levels (Hanson et al.,
2017, p. 110).
Over the years,
the expectations of consumers to the role of enterprises have risen. Thus,
businesses should be accountable enough to all of its entities. The legitimacy
theory, in fact, shows that companies have the responsibility of social
accounting for its stakeholders such as its customers. The social pressure filters out irresponsible
firms which could pose a danger to the users. A shareholder is an individual
who owns at least a share of an enterprise’s stock (Office of the Director of
Corporate Enforcement, n.d., p.1). As owners of the company, shareholders at
TWE deserve to be notified of the financial and non-financial status as the
organization continues to transform into a brand-led, high-performing company.
A report is more of feedback concerning previously planned actions which have
been implemented. Based on the formal statement provided, appropriate approaches
are formulated for implementation towards a better future than the present.
Highlighting the current position of the firm offers the direction towards
which the organization needs to head. Hence, shareholders can provide clear
insights based on the information provided.
2.3 The Type of Information to
Report
Sustainability reporting
involves the creation of formal statements about corporate social
responsibility (CSR). According to Ismail (2009, p.199), the concept of CSR
entails taking responsibility of the effect of a business’ practices on not
just the shareholders but also other entities such as the community, employees,
suppliers and the environment. CSR include approaches in which organizations
conduct their operations in a manner that is ethical and legal. Uddin, Hassan
& Tarique (2008, p.199) depicts the economic, social and environmental as the
main components that make-up CSR. SR should thereby use knowledge regarding the
aspect of people, economic dimensions, and the business surrounding. Besides, the
legitimacy theory asserts that corporations tend to have a responsibility to
the community and the environment as well.
Ecological
dimensions are a key pillar in CSR (Uddin et al., 2008, p.207). Gathering
information regarding the environment it would help identify TWE’s business practices
which can have a detrimental impact on the environment. TWE would be in a
position to determine some of its unfavorable activities to the surrounding such
as pollution, loss of biodiversity, deforestation, overuse of natural resources
and climate change. TWE should include in its report some of the measures it
has taken to analyze its environmental impact. Depending on where TWE stands
based on it ecological information, the company can be able to depict some of
the suitable counter-measures which can be implemented efficiently such as
thorough ecological footprint. The company, TWE, can also highlight some of its
transitions over the years in regards to its commitment to nature. For
instance, it could be that presently TWE has relatively cleaner production than
in the past. Outlining information that depicts TWE an organization responsible
for the environment, it would increase its chances of survival in the market.
The economic
element of CSR is another type of information that TWE should incorporate in
its SR. The financial dimension would ensure that several factors such as the
company’s economic impacts are captured. In regards to the economic effect, TWE
should determine the expected profit levels and revenue to be generated for the
company and the government respectively.
TWE’s report
should also include information about the social dimensions of CSR. The social
element of sustainability involves the individuals within the enterprise,
society, customers and the firm’s supply chain (Uddin et al., 2008, p.205). TWE
should include information which reflects the company’s obligation to make
decisions and execute actions that will participate towards the welfare and
interests of the community and those of the business. As the legitimacy theory
asserts, companies have a social responsibility for its consumers and
employees. TWE should project its level of adherence to the expectations of its
workforce and the clients. These obligations may include after-sales services,
product safety and fair advertising for consumers. As for staffs, some of the
social roles that TWE would do would include the provision of job security, personnel’s
well-being, and motivation strategies. Further, TWE can encompass content
revolving around its responsibility towards the society. According to (Uddin et
al., 2008, p.206), an organization’s prosperity is dependent on the stability,
success, and health of the community in which it operates. TWE should indicate
some of the activities it intends to do for the company. Some of which would
include vocational training, cultural events, and charity activities. TWE
should consider integrating social, economic and environmental elements of CSR
in its sustainability reporting.
2.4 Ways in Which Information should
be Reported.
The report for
TWE should be prepared according to the standards Global Reporting Initiative
(GRI).The reporting guidelines comprise of principles which define diverse
content for reports and ensures the quality of the information that is to be
reported (Global Reporting Initiative, 2015, p.24). The framework also entails
Standard Disclosures which consist of performance indicators (Global Reporting
Initiative, n.d., 3). Besides, the guideline explores the central issues
depicted by the legitimacy theory which include both the social and the
environmental contexts as described by Tilling
(2004, p.2). TWE will consistently report on its sustainability
operations on an annual cycle.
The TWE
sustainability report will be done electronically on the company’s website in
the form of portable document format (PDF) annually. According to Haasbroek
& Toit (2003, p.2), a PDF is a file format created by Adobe Corporation for
generating documents similar to the original printed one. Using PDFs will help
retain the original color, images, fonts and formatting on different computer
platforms. Annual reports will be of
great help to the stakeholders. The main benefit of digital interaction is
instant accessibility to current information (Mousa
& Hassan, 2015, p.43). Changes will be readily available, and there
will be no need of holding numerous conferences for updates. The cost
associated with accessing annual digital reports is relative low. Shareholders
will be able to obtain information and save on things such as traveling
expenditures. The web users will be in a position to retrieve information once
it is published. In this case, electronic communication tends to increase the
timeliness of the provided knowledge.
With PDF, large
volumes of free information will be available. There has been massive growth in
the percentage of 3rd party sites (Haasbroek & Toit (2003, p.3)
who assemble and analyze business information. Uploading PDFs on the company’s
web page will facilitate investors save on not only their time but also effort.
Third parties tend to add value to the information and provide a variety of
sources of data. Relevant information
will be available to potential investors to make informed decisions based on
their risk assessment. Furthermore, PDF allows hyperlinks to other data, and
this enhances the readability of annual formal statements and client access to knowledge.
Annual
electronic reports will also be of significant benefit for TWE. Haasbroek &
Toit (2003, p.5) depicts the Web as a convenient manner to converse with stakeholders
and potential shareholders. It is a platform designed to encourage various
entities to access information and offer feedback to an enterprise. Moreover, the
regular maintenance of online pages brings forth constant updating of
information. The material which is out of date can either be eliminated
promptly or archived on the website. More so, digital platforms have unlimited
space as suggested by Walia (2016, p.181).
Numerous data can be uploaded to a site unlike in the case with paper versions.
Using the internet as a platform for reporting sustainability practices for TWE
will bring about substantial benefits to the company and its stakeholders.
3.0 Conclusions
Sustainability
reporting plays a considerable part of the company as it covers the economic,
environmental and social aspects. It is even of much importance when formal
statements are delivered electronically. The strategy is cost-efficient and
dramatically increases transparency. SR embraces innovations, and thus
expenditures are significantly cut down within the company’s operations.
Provision of genuine information builds trusts even with the society, and this
is regarded as of paramount importance by the legitimacy theory since it is
based upon ‘social constructs.’ Stakeholders are therefore the suitable audience
for SR since the term revolves around the aspect of people with great interest
in the company’s transactions. TWE should incorporate SR in its operations to
boost its business performance.
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