Analysis of Corporate Sustainability and Financial Performance

This assignment provides an in-depth analysis of corporate sustainability and financial performance. It covers various aspects such as triple bottom line (TBL) analysis, CSR reporting, and e-governance concepts. The assignment also delves into the importance of sustainability in energy-efficient lighting and examines the relationship between corporate reputation and quality of CSR reporting. Furthermore, it includes a review of financial statements and discusses determinants of financial performance in commercial banks. This comprehensive analysis is essential for students seeking to understand the complexities of corporate sustainability and financial performance.

Critical evaluation of the
organization sustainability and CSR

Table of Contents
INTRODUCTION...........................................................................................................................1
Concept of triple bottom line..................................................................................................1
CSR expectations from British Airways................................................................................2
Sustainable development agenda of British Airways.............................................................3
Execution of corporate governance........................................................................................3
Interpretation of Ratio Analysis of British Airways...............................................................4
Impact of CSR on financial performance of British Airways................................................4
APPENDIX 1.........................................................................................................................6
Ratio analysis of British Airways...........................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Corporate social responsibility is an important factor to be considered for the sake of
stakeholders. It focuses on the responsibility that a company have towards the society in which it
is functioning (Chilamakuri and et.al., 2014). British Airways is an aviation company involved in
manufacturing products and systems that can be deliver military capability, protect national
security and keep the infrastructure secure. The report discusses the concept of triple bottom line
which are social, financial and environmental responsibilities. It also ponders of CSR
expectations that people have from British airways. Moreover, it also practices of CSR adopted
by British Airways.
Company Overview and its CSR practices
British Airways, the leading airline company involved in manufacturing products and
services leading to military capability, helps in protecting national security and keep critical
information and infrastructure secure. It provides point to point services all around the globe
covering various destinations. The services provided by the organization are makes it a
sustainable model. It makes the travel easy and affordable to people by offering user friendly
services to its customers (Pinto and et.al., 2012).
BA makes positive contribution to the society by fulfilling corporate responsibility. It
provides fair services to all the stakeholders including customers, people, partners and the
environment in which it is operating. The main priority of the company is to provide safety to its
customers before any other responsibility (Liu, and et.al., 2015). It adopts and monitors all the
functions for safe take off and landing. It is involved in a business which creates carbon emission
in the environment. It is an important aspect that is taken care of by BA. It considers modern
fleet and high load factor in order to reduce the emission to the maximum. A new introduced
fleets of BA increased the fuel efficiency significantly. Further, it adopts all the measures related
to reduction in air pollution for safe environment (Hahn, and et.al., 2017).The sex ratio of pilots
have been very fluctuating. In order to promote females in this industry, the company is adopting
a policy of recruiting more female pilots in the organization. Further, it also brings more females
for senior ranks and management roles (Prabhu, 2013).
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Concept of triple bottom line
According to Odriozola and Baraibar‐Diez (2017) Corporate social responsibility ensures
the organisation about legislations, ethical standards, and global norms. These activities help the
company in establishing social image as it works beyond the interests of maximizing profits. By
Following these measures of CSR activities company can help in eradicating discrimination from
the society.
According to Vilela and et.al., (2014) organisation and its employees should work
ethically in order to maintain social, cultural, environmental and economic issues is social
responsibility. However, in contrast this, Functioning of organisation keeping in mind the social
responsibilities help the company to develop its brand name in the society.
Triple bottom line is categorised into three parts, social, financial and environmental
responsibilities which are people, profits and planet. It gives a broader prospects of the
organization for performance evaluation which helps in creating greater business value.
Sustainability is one of the major goals of the organization to pursue growth. Triple bottom line
tend to increase the sustainability goal in which the entity is required to focus beyond profits
which include addressing of social and environmental issues also (Cláudio and et.al., 2012).
People in the bottom line is an element is social responsibility which focus on equal
treatment to be given to the workforce and take care of the stakeholders. It includes providing
fair practices in the communities where the enterprise is conducting the business (Lindstrom, and
Middlecamp, 2016).
Profits is an element of financial responsibility which adds to the profits of the company.
It includes the revenue which has been generated by the organization by adopting social and
environmental standards.
Planet in the bottom line is an element of environmental responsibility. It focuses on the
implementing sustainable activities which reduces bad impact on the environment. It includes
recycling programs run by the companies. Other green initiatives adopted by the entities to save
environmental resources and practice sustainability.
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CSR expectations from British Airways
BA is involved in aviation services hence it is expected from the company to follow all
the guidelines which have been issued to be followed by all the airlines. Further, it is expected
that the company will adopt all the measures that can reduce the carbon emission to the
minimum leading to minimal destruction to the environment.
Therefore, the airline company is also expected that the quality of services provided will
be up to mark and take care of the interest of stakeholders. Also, the entity is required to take
measures related to managing waste on board and off board as well.
Sustainable development agenda of British Airways
As per Bagnoli and Watts (2017). Adoption of CSR have helped the company to grow
and develop the customer base leading to financial growth of the organization. It has helped to
grow its customers all over the world. The customers have become brand loyal which have
resulted in higher profits for the entity. The company's profitability shares have been increased.
Further, it has also grown its market share in the aviation sector.
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Illustration 1: Factors of Triple Bottom Line

Execution of corporate governance
Good corporate governance helps in corporate success and financial growth of the
organization. It helps in maintaining the trust of the investors which helps in raising the capital in
efficient manner.
According to Vilela and et.al. (2014), corporate governance means rules and practices
adopted by the company in order to meet the expectations of the stakeholders in a balanced
manner. The stakeholders include shareholders, management, customers, suppliers, government
and community. It takes care of every sphere of management. According to Denis and
McConnell, (2009), there is a direct impact on shareholders based on the activity of corporate
governance followed by the organization. British Airways have multiple shareholders, it derives
the plan in such a way that it helps in growth of the organization in near future. However, as per
the views of Claessens and Yurtoglu (2013), most important activity of corporate governance is
to attain the organizational objectives as it is important to manage internal control and action
plans.
British Airways have been committed towards corporate governance in order to enhance
company's performance. The management of the company keep on examining the formed
policies for successful implementation. Further, review is conducted after every specific interval.
It is equipped with knowledgable top level management who examines the reports based on
which further decision making is performed (Appiah, Awunyo-Vitor, and Awuah-Nyarko,
2017).
The airline follows fair remuneration policy and review it after every interval. All the
employees are provided with equal chances to get promoted. It also makes fair disclosure of
financial statements in order to give fair display of company's conditions to its stakeholders.
(Andrews, and et.al 2017).
Interpretation of Ratio Analysis of British Airways
Ratio analysis (Attached in Appendix 1) of airlines indicated the financial performance of
the enterprise. It helps to assess that how the company is performing in last 5 years (Higgins,
2012).
Fixed Assets turnover ratio have decreased significantly inn the current years. BA is
recommended to increase its sales in order to maintain this ratio. Moreover, sales of the airline
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have increased but there is no significant increase in ROCE. It reveals that the company have
increased operating expenses which it needs to control upon.
The data depicts that BA the there is a significant increase in sales of the company which
shows that CSR has helped the enterprise to improve its brand image and customer loyalty
(Grant, 2016). However, the company can prepare strategies in better way in order to improve its
financial performance (Brochet, Jagolinzer and Riedl, 2013). The company is required to
concentrate on its liabilities and take long term loans in order to reduce its short term liabilities.
BA can improve its functioning and corporate social responsibility plans in order to gain the
impact in its financials.
Impact of CSR on financial performance of British Airways
BA compares the impact of CSR on its financial every year in order to build better social
strategies. It helps to maintain the level of CSR activities which further, helps the company to
grow and improve its customer base. The ethnic environment followed by the entity at workplace
helps the employees to work efficiently and effectively (Ongore and Kusa, 2013).
Controlling carbon emission have been an effective method to contribute towards the
society. The company has effectively used this method which has resulted in increase of
enterprise sales and profits. However, it required upgraded technology which has resulted in rise
of cost. Further, the customer base of the entity has increased as the enterprise is following all
the safety regulations issued for the airline industry (Vogel, 2014). The customers feel safe while
travelling through this airline and are satisfied enough with the services. The company has
appointed a team which takes care of CSR activities of the enterprise. It takes better decisions
which are beneficial for the society and the company both.
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Ratio analysis of British Airways
Financial statements are analysed based on the reports provided by the company for last
five years (Financial statements. 2016). According to researchers, the liquidity of asset of BA has
continuously increased from 1.27 in 2012 and 1.35 in 2015 and again decreased to 1.25.
Further, Scholars stated that the liability of airlines in 2012 and 2013 was same that 0.43
and then declined to 0.37 in 2014 and further increased to 0.42 in 2015 and again a decrease to
0.38 in liability of company, so it can be said that the airline is facing fluctuating in current
liabilities continuously from past 5 years.
Moreover, as per the research British airways had continuous and rapid increase in Cost
of goods sold till 2013 and further it declined in next year and after that it rapidly increased from
1.71 to 1.79 in 2016.
According to data collected by Scholars, equity of British airways was 1.53 in 2012, and
with continuous fluctuation of increase and decrease it ended at huge increase in equity which
was 11.61 till 2016.
Researchers analysed that net sales of British Airways in 2012 was 2.59 which increased
in 2013 till 3.14 and ended at 3.44 in 2016 with continuous increase and decrease.
Besides scholars evaluated that, operating profit of airline business was 108 percent in
2012 and losses faced by the firm because of recession and many more economic condition its
operating profit declined till 2014 to 86 percent but the company managed work and promotion
through CSR activities it increased its operating profit to 714 percent.
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CONCLUSION
From the above report, it can be inferred that British Airways have improved CSR team
which takes care of all the stakeholders who shares interest in the entity. It has set rules with
respect to carbon emission that results in affecting less to the environment (Delen, Kuzey and
Uyar, 2013). Further, it has also been able to improve its sales due to increase in loyalty of
customers and employees. In the end it has been suggested that the company is required to
reduce its operating expenses in order to increase its profits through CSR activities.
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REFERENCES
Books and journals
Andrews, A., and et.al 2017. Corporate governance and executive perquisites. Review of
Accounting and Finance. 16(1). pp.21-45.
Appiah, K.O., Awunyo-Vitor, D. and Awuah-Nyarko, S., 2017. Corporate governance and
financial performance of listed banks: evidence form emerging market. International
Journal of Economics and Accounting. 8(1). pp.29-42.
Bagnoli, M. and Watts, S. G., 2017. Voluntary assurance of voluntary CSR disclosure. Journal
of Economics & Management Strategy. 26(1). pp.205-230.
Brochet, F., Jagolinzer, A. D. and Riedl, E. J., 2013. Mandatory IFRS adoption and financial
statement comparability. Contemporary Accounting Research.30(4). pp.1373-1400.
Chilamakuri, C. S. R. and et.al., 2014. Performance comparison of four exome capture systems
for deep sequencing. BMC genomics. 15(1). p.449.\
Cláudio, A. F. M. and et.al., 2012. Optimization of the gallic acid extraction using ionic-liquid-
based aqueous two-phase systems. Separation and purification technology. 97. pp.142-
149.
Delen, D., Kuzey, C. and Uyar, A., 2013. Measuring firm performance using financial ratios: A
decision tree approach. Expert Systems with Applications.40(10). pp.3970-3983.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hahn, T., and et.al., 2017. Advancing research on corporate sustainability: Off to pastures new or
back to the roots?. Business & Society. 56(2). pp.155-185.
Higgins, R. C., 2012. Analysis for financial management. McGraw-Hill/Irwin.
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Lindstrom, T. and Middlecamp, C., 2016. A Triple-Bottom-Line Analysis of Energy-Efficient
Lighting. In Learner-Centered Teaching Activities for Environmental and Sustainability
Studies Springer International Publishing. (pp. 187-193).
Liu, J., and et.al., 2015. Sustainability. Systems integration for global sustainability. Science
(New York, NY). 347(6225). pp.1258832-1258832.
Odriozola, M. D. and Baraibar‐Diez, E., 2017. Is corporate reputation associated with quality of
CSR reporting? Evidence from Spain. Corporate Social Responsibility and
Environmental Management. 24(2). pp.121-132.
Ongore, V. O. and Kusa, G. B., 2013. Determinants of financial performance of commercial
banks in Kenya. International Journal of Economics and Financial Issues. 3(1). p.237.
Pinto, R. J. and et.al., 2012. Antibacterial activity of optically transparent nanocomposite films
based on chitosan or its derivatives and silver nanoparticles. Carbohydrate Research. 348.
pp.77-83.
Prabhu, C. S. R., 2013. E-governance: Concepts and case studies. PHI Learning Pvt. Ltd.
Vilela, C. and et.al., 2014. The quest for sustainable polyesters–insights into the future. Polymer
Chemistry. 5(9). pp.3119-3141.
Vogel, H. L., 2014. Entertainment industry economics: A guide for financial analysis.
Cambridge University Press.
Denis, D. K. and McConnell, J. J., 2009. International corporate governance.Journal of financial
and quantitative analysis. 38(1). pp.1-36.
Claessens, S. and Yurtoglu, B. B., 2013. Corporate governance in emerging markets: A
survey. Emerging markets review. 15. pp.1-33.
Online
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Financial statements. 2016. [Online].Available though
<http://financials.morningstar.com/balance-sheet/bs.html?t=BA&region=usa&culture=en-US>.
[Accessed on 16th August 2017].
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APPENDIX 1
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