29th April, 2011 Essay Example
Key Features of an Effective Sustainability Report and Evaluation a Company’s Sustainability Report
29th April, 2011
52.0 Sustainability Reporting
52.1 Key Features of an Effective Sustainability Report
52.1.1 Economic Element of Sustainability Reporting
62.1.2 Environmental Element of a Sustainability Report
62.1.3 Social Element
73.0 Evaluation of Foster’s sustainability Report
73.1 The Economic Element of Foster’s Sustainability Report
73.2 Environmental Element of Foster’s Sustainability Report
83.3 Social Element of Foster’s Sustainability Report
Sustainability reporting involves reporting on the social, economic and environmental impacts of the performance of the organization. The three elements (society, environment and economy) form the basic structure of a sustainability report. Due to changes in the world that have led to globalization and the need for sustainability, companies have adopted different ways of survival. The need for sustainability reporting is one of the adopted ways. GRI provides guidelines that should be followed when writing a sustainability report. In this report, an evaluation of Foster’s sustainability report is conducted to determine its compliance with such guidelines and conclusion made on whether it is a good report or not. GRI guidelines are briefly described.
Over the past decade there have been changes in the world that pressure companies to conduct their business responsibly and in an open manner. There have been changes in technology bringing up new methods, strategies, machines and so many others to work with, consumer needs have been changing and globalization has affected the system of operation for companies.
Other influencing factors are:
Increased influence of non-governmental organization as a result of the growth of civil society activism
Increased influence and size of companies
Improvements in communication technology and
The increased value/importance given to intangibles (Brown, 2005, pp. 86-87)
Activism for example has influenced the fight against pollution making companies comply with environmental pollution and conservation guidelines. For the activists and even the consumers to know that the companies care about their health and environment, the companies have to incorporate non-financial data (environmental conservation strategies or responsibilities) indicating that they comply with the rules and therefore support working in a sustainable environment. It is for this reason that companies nowadays include non-financial data into their reports. It is for their long term survival (Brown, 2005, p. 86). Non-financial data is not on environmental issues only but it includes economic and social issues as well.
2.0 Sustainability Reporting
Sustainability reporting is a new emerging practice. It involves reporting on the social, economic and environmental impacts of the performance of the organization. Organizations involved in business and industries have realized the importance of sustainability and so have learnt to deal with challenges, opportunities and issues that sustainability brings to businesses and industries. A sustainability report should therefore have strategies on how these issues, challenges and opportunities that a business and its industry face, should be addressed (Brown, 2005, p. 88 and Schaltegger, Bennett & Burritt, 2006, p. 307).
The report should address all the relevant elements of sustainability. These are: social, economic and environmental elements. A business or an organization has key issues such as governance commitment, public policy positions and risk management procedures. Since a sustainability report is a strategic report, it should incorporate these issues (CSR, 2008, p. 50).
2.1 Key Features of an Effective Sustainability Report
There are three elements of a sustainability report and these are:
Environmental aspects (Adams, 2001; Tulder & Zwart, 2006, p. 247 and RG & FSSS, 2008, pp. 31-37)
2.1.1 Economic Element of Sustainability Reporting
This dimension describes the impacts of an organization on stakeholders’ economic condition and on national, local or global level economic systems. This is done through the use of economic indicators which show the impact of the organization on the society and how capital flows among different stakeholders (RG & FSSS, 2008, p. 31 & Adams, 2001). It is illogical to contribute to the sustainability of the local, national and global economic system without a good or sustainable financial performance. In any sustainability report therefore, a company’s financial performance has to be indicated to show its own sustainability even though this information is already reported in the financial accounts. Information about financial performance should just show what contribution the organization is making to the whole society’s economy (RG & FSSS, 2008, p. 31).
2.1.2 Environmental Element of a Sustainability Report
This section of the report contains the impact of the organization on the natural systems considering both living and non living systems. Examples of natural systems considered are; the ecosystem, water, land and air. Indicators of impacts on natural systems are performance related outputs such as effluents, emissions and waste among others and performance related inputs such as water, material and energy among others. The indicators also cover biodiversity related performances, environmental compliance performances and any relevant information for example the effect of the company’s product or service on the environment, and environmental expenditure (RG & FSSS, 2008, p. 33 & Adams, 2001).
2.1.3 Social Element
This section of the report contains the impacts of the organization on the social system in the area in which it operates. A company that operates globally has to show what impacts it has on the global social system. Again in this case, there have to be social indicators. There are four social indicators for which the organization’s performance has to be assessed to determine its impact. These are; the society, human rights, product responsibility and labor practices (RG & FSSS, 2008, p. 35 & Adams, 2001).
3.0 Evaluation of Foster’s sustainability Report
3.1 The Economic Element of Foster’s Sustainability Report
The report should contain a management approach that describes the organization’s indirect economic impacts, economic performance and its market presence. It has the following indicators; a well developed risk register with sustainability priorities mapped in it, stakeholder engagement and a high rated global assessment plan. It has a total of $5,601.0m as economic value generated and $6.5m reported as community investment (Foster Group, 2009, p. 4 and 1).
3.2 Environmental Element of Foster’s Sustainability Report
The report has to show its impacts on the environment and this, according to GRI, has to be through indicators mentioned above. Foster’s sustainability report has the following indicators;
Reduction in GHG emissions
0.14% energy performance and
-2.96% water efficiency performance (Foster, 2009).
The report has a specific section “Energy, Water and Climate Change” (Foster Group, 2009, p. 16) in which an approach of reducing both direct and indirect impacts of the organization on environment has been described. According to the report, the company updated its global environmental policy and aligned business priorities with environmental goals. The following were achieved in 2009;
Introduction of global environmental policy
Improvements in efficiency in the energy and water efficiency program
Development of reporting standards and a database for global environment performance metrics
Contribution to the improvements made in the Markaranka Floodplain biodiversity project through delivery of 2.2 GL (Foster Group, 2009, p. 16).
The company has also reported on how it manages its operational waste and its achievements in 2009. It is indicated in the report that the company won an award on waste reduction (The WRAP award) which is an indication of its effective management of operational wastes to reduce harm to the environment or for environmental sustainability. It identified waste streams on global basis and the company also has an integrated waste management board that encourages good management operational wastes (Foster, 2009, p. 22).
3.3 Social Element of Foster’s Sustainability Report
Does foster show its impact on the society through the elements described in GRI report?
These are; the society, human rights, product responsibility and labor practices (RG & FSSS, 2008, p. 35 & Adams, 2001).
The report indicates an approach to stewardship which includes; the release of Wolf Blass Green Label wine in PET and life cycle assessments, reduction of packaging weight by 4.76%, development of an audit tool for FSQM assessments, assessment of sites and suppliers for compliance with FSQM, completion and implementation of Food Safety & Quality Manual (FSQM) and assessment of the company’s warehouses for compliance with the Customer Supply Chain Manual (CSCM) (Foster, 2009, p. 24)
Indicators of contribution to the society are; temporary achievement of Foster’s Food, Safety & Quality Manual by the suppliers and Foster’s sites and16% reduction of critical complaints (Foster, 2009, p. 24).
There is also a well described approach to community contribution with 2009 achievements as; 20% of employees involved in community program, $6.535 million total investment in the community and sustained membership with a community investment group (London Benchmarking Group) (p. 26).
Labor practices and human rights are covered in people and safety section of the report. The report reveals an approach by the company on how it handles its employees as required by labor laws and human rights. It also shows the following accomplishments; 350 manager fundamental sessions, 1100 new hires and 30% improvement on yearly basis RCIFR (Foster Group, 2009, p. 6).
There is also a section of the report that (about safety) describes how responsible it is in its consumption. The approach described as at 2009 had updated educational materials and developed a program on health safety materials related to alcohol consumption, developed a team to review the program’s and campaign against irresponsible drinking policies and invested ($2.290) on low alcohol consumption (Foster Group, 2009, p. 12).
Sustainability is all about a better working environment that does not jeopardize future working conditions and environments. It considers the impact of the organization on the local, national and global economy currently and in the future, the effect of the organization on social systems and the impact of the organization on the environment. A sustainability report has so many sections but the key features are the impacts of the organization or the contributions the organization makes to the economy, environment and society. There is no one way of determining a company’s contribution to the economy, society or the environment. Each key feature has its performance indicators. In the above evaluated report, there is disclosure of management approaches in each section. This is part of the requirements of the GRI sustainability reporting guidelines. It has also shown the impact and contribution of the organization to the society economically, socially and environmentally. Foster’s sustainability report’s evaluation shows that it has all the key features of a sustainability report. It is also written according to GRI guidelines on sustainability reporting.
Adams, R., 2001, Sustainability Reporting And The Global Reporting Initiative, Retrieved from:
Brown, C. S., 2005, The Sustainable Enterprise: Profiting From Best Practice, (2nd Ed), London:
Kogan Page Publishers.
CSR, 2008, Sustainability Reporting: Towards Corporate Excellence, Perspective, pp. 50-52.
RG & FSSS, 2008, Sustainability Reporting Guidelines & Financial Services Sector Supplement,
GRI. Retrieved from:
Schaltegger, S., Bennett, M. D., Burritt, R., 2006, Sustainability Accounting and Reporting,
New York: Springer.
Tulder, R. and Zwart, A., 2006, International Business-Society Management: Linking Corporate
Responsibility And Globalization, London: Routledge.
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